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Massachusetts cable franchising bill, Senate No. 1975, proposes elimination of local cable franchising

COMMITTEE HEARING SET FOR TUESDAY, JUNE 5th 10 AM - DETAILS BELOW

TIME:
The Hearing begins at 10:00am and will end promptly at 1:00pm
(they only have the room for 3 hours)

LOCATION:
Room A2 - this is not a large room

ORAL TESTIMONY:
If you would like to speak you may sign up when you come in.
Those giving oral testimony will be given 1 minute

WRITTEN TESTIMONY:
Is encouraged and given equal weight to oral testimony.

Mail testimony to:
Joint Committee on Telecommunications, Utilities and Energy
Attention: Representative Brian Dempsey
Room 473B
State House
Boston, MA 02133
617-722-2263

Learn about the pending Massachusetts cable licensing bill. Attend the hearing.
The full text of the bill may be found at the following link:
http://www.mass.gov/legis/bills/senate/185/st01/st01975.htm

ADOBE ACROBAT
NEW - List of Legislators on the Telecommunications, Utilities Committee
NEW! Summary of Bill, Committee Members and NEW Sample Letter
Sample Letter to Legislators
Sample Letter to Editor

MS WORD
NEW! Summary of Bill, Committee Members and NEW Sample Letter
Sample Letter to Legislators
Sample Letter to Editor

Name of bill: AN ACT Promoting Consumer Choice and Competition or Cable Service;
Senate Bill No. 1975; House Bill No. 3385.

Legislative Docket #s and Sponsors: Although the bill has not yet been assigned a regular bill number, it can be accessed at the Statehouse as Senate Docket 1975, sponsor Senator Steven Panagiotakos, Lowell; or House Docket 1298, sponsor James Vallee, Franklin.)

Summary of Key Sections of New Verizon-Proposed State Cable Licensing Bill to Eliminate Local Franchising, filed Jan. 10, 2007

Highlights of the bill include:

* The bill transfers license approval from municipalities to the State, allowing the state 15 days for state level review and approval. (Section 4(D))

State review would be superficial at best with only 15 days to review a license application.
There is no provision in the bill for public hearings or public input.

* The bill provides that if the cable license application is complete, it must be approved.

(Section 4(D))

* The bill ties government's hands, as the State must approve the application if it is a complete application. Thus the bill provides NO mechanism for state or local negotiation of better terms regarding service area or provision of Institutional Network. Therefore a new company can pick and choose ("cherry pick") which neighborhoods it serves, and neither the state nor the municipality can negotiate better terms. There is no provision for negotiation of Institutional Networks or other community-specific benefits.

* In a radical departure from decades of prior law, the bill does not provide for any state review of the qualifications of a new cable company. This would be very problematic with respect to new entrants that do not have proven qualifications. Unqualified, high risk, speculative companies could apply for and take over the last remaining pole and street space available for this important service.

* Even the process of license transfer approval is eliminated so the cable licensee can transfer its system to any entity, without any public hearing or public input. (Section 4(G))

* The bill provides that cable operators would pay the municipality a franchise fee not to exceed a total of 5% of "gross revenues" as defined by the bill, and as established by the municipality. (Section 7(B)). However, the bill is harsh on existing public access facilities, as follows. Although the new company would initially have to match the incumbent company's support for public, educational and governmental (PEG) access, the bill specifically provides that when the incumbent cable operator's franchise expires, then such PEG Access support shall not exceed 1% of the franchise holder's gross revenues. (See Section 8(C)). This could result in loss of funding to PEG Access facilities depending on how other franchise fees are allocated. In any event, because there is no requirement that Verizon negotiate or match other Comcast obligations, e.g., service area or INet obligations, Comcast would seek reductions of PEG obligations so that it would operate in "level playing field" conditions, as discussed below.

* Existing Comcast licenses all provide that if Verizon (or any cable competitor) does not match what Comcast is providing, Comcast may seek relief and reduce what it is currently providing, going down to the competitor's level of local support. As the new bill would result in Verizon providing less than Comcast (in terms of service area construction and Institutional Network), the new bill (if adopted) could result in Comcast being able to seek relief to reduce its existing obligations to go down to the new lower level. The areas where Comcast would seek relief are PEG Access and/or INet support, because those are the main areas where Comcast can reduce monetary payments to redress level playing field inequalities.

* Access Channels: The new bill requires only 2 access channels for new entrants in communities with populations under 50,000. Many communities with population under 50,000 now have 3 access channels, so the bill could result in a loss of access channels. Larger communities would have 3 access channels. (Section 8(B)). Another problem for municipalities: Under Section 8(B) the cable operator could reclaim community channels used for non-repeat programming less than 8 hours per day.

* Interconnection of Incumbent and New Company Access Channels: The bill appears ambiguous about access channel interconnect, as it provides for reasonable efforts to negotiate interconnection, creating the risk of dispute concerning what constitutes reasonable effort. Section 8(H). Another problem for municipalities: the bill provides that the municipality shall be responsible for the operation and content of access channels. (Section 8(d)). The bill also makes the municipality responsible for access channel interconnections by providing, "The must municipality must ensure that all transmissions, content or programming to be transmitted over PEG access channel or facility…are provided in a manner or form that is capable of being accepted and transmitted by the franchise holder." (Section 8(E)). The foregoing shift responsibilities to the municipality that the municipality can now shift to third parties through a local franchise.

* Term of License: Existing law (Mass. Gen. Laws ch. 166A) provides for license of up to 10 years for renewals and up to 15 years for initial licenses. Expiration of license term has been of enormous benefit to towns and cities because at expiration, the parties have renewal negotiations to update terms and conditions. This is the practice in the overwhelming majority of states. Under the proposed new law, once a state license is approved, there is no expiration of license terms, eliminating critical renewal negotiation opportunities.

* Emergency Alert System: Cable operator only to com