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Oregon local government officials are united in decrying the severe and negative impact of the new FCC rule on Oregon communities.

March 6, 2007

FOR IMMEDIATE RELEASE
March 5, 2007
CONTACTS:
Andrea Fogue – 503 588-6550 (Salem)
David Olson – 503 823-5290 (Portland)
Mary Beth Henry – 503 823-5414 (Portland)

SALEMand PORTLAND– Local officials throughout Oregon reacted today in opposition to the newly-released final version of a Federal Communications Commission (FCC) rule on competitive video franchising which broadly pre-empts numerous longstanding local video franchising requirements and procedures. The new rule (approved in concept by the FCC December 20,2006 on a 3-2 vote) spells out the details of far-reaching action which voids or undercuts longstanding local authority, and calls into question hard-won public benefits—including requirements that all residents and businesses be served with advanced technology, and support for community channels be continued as previously agreed.

Oregonlocal government officials are united in decrying the severe and negative impact of the new FCC rule on Oregoncommunities. “The rule is really a blow to local communities not only financially but in terms of a local voice,” said La Grande Mayor Colleen Johnson, Chair of the League of Oregon Cities Telecommunications Committee. “I believe that communities should decide what constitutes community interest, not some bureaucrat in WashingtonD.C.” “It is disappointing to see the FCC support the ability of the telecommunications industry to—in effect—seize control of public property for additional profit,” said Estacada Mayor Bob Austin, President of the League of Oregon Cities.

On December 20, 2006the FCC, led by Chairman Kevin Martin, voted 3-2 to implement new rules affecting how cable television franchising is regulated at the local level. The split FCC vote came without benefit of public input since the text of the written rule was not circulated in advance, and actual details were not released until publication today in the Federal Register.

Oregonlocal government officials agree that these new rules will have three profoundly negative impacts on Oregoncities and counties.

1. Only a fraction of households will be served. The FCC Rule allows
new providers to avoid upgrading facilities in poorer neighborhoods
while affluent neighborhoods receive cutting-edge services and lower
prices. Local regulations to eliminate “cherry-picking” of affluent
customers and the resulting digital isolation of other neighborhoods
are preempted. “I am most concerned that these new FCC rules will
deepen the digital divide,” said Portland City Commissioner Dan
Saltzman. “Competition should benefit everyone, not just a wealthy
few.”

2. Unreachable process deadlines are imposed, which can only guarantee failure of negotiations. Communities will have only 90 days to issue a franchise to new entrants. In Oregonthis includes Verizon and Qwest, among other companies. If parties can’t reach agreement within the 90-day time frame, the rules deem that a cable franchise is automatically granted. “Clearly this puts our City at a disadvantage in the negotiating process. What motivation will a company have to reach agreement?” said Pendleton Mayor Phillip W. Houk. “It is worth noting that the new rules purport to require local governments to issue a complex franchise in just 90 days,” added Lane County Commissioner Bobby Green, President of the Association of Oregon Counties. “Yet the FCC itself has taken nearly that amount of time just to write and issue the text of its own rule. The irony is inescapable.”

3. Critical support for community services (schools, libraries and media) is eliminated. Fees to support public, educational and government (PEG) access would be deducted from the 5 percent franchise fees communities currently receive. For example, Portlandreceives a 5 percent (just over $4 million annually) franchise fee and a 3 percent PEG fee (just under $3 million annually) from Comcast. The PEG fee would be in jeopardy under the new rule. Schools, libraries and Oregon’s citizen television outlets such as CCTV, PCM and MCTV will all be negatively impacted. Currently schools and libraries throughout Multnomah County have high-speed connectivity at low cost through the INET. Oregon’s citizen television outlets produce TV programming that reflects the local community including City Council meetings, parades, football games and school board meetings. “These programs are very important in many communities in Oregon,” said Salem City Councilor Bruce Rogers
and a member of Capitol Community Television (CCTV) Board of Directors.

Hillsboro Mayor Tom Hughes pronounced the rules dead on arrival. “The proposed rules, which the public had no opportunity to review before their vote, are illegal, unnecessary and counter productive. Our national organizations will fight to have this FCC action reversed.”

Smaller municipalities could be among the most hard-hit by new regulations. Maupin Mayor Dennis Ross said, “We wholeheartedly support competition, but towns of our size would likely be among the last to receive the benefits of competition under these rules. We do not receive cable service now, and under these new FCC rules, getting a provider to serve Maupin would be nearly impossible.”

The National League of Cities, the National Association of Counties, NATOA and the Alliancefor Community Media all oppose the rules and are expected to file for injunctive relief. Many Oregon local governments are expected to join in the effort, pledging to fight, in the words of Hillsboro Mayor Hughes, the “illegal, unnecessary and counter productive” FCC action.
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