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from: News Register

Cities to fight federal cable television ruling

Published: March 15, 2007

By NICOLE MONTESANO
Of the News-Register

Across the country, city officials are denouncing a Federal Communications Commission ruling restricting city and county authority to regulate cable TV and assess cable TV franchise fees.

Cities have traditionally assessed franchise fees against utilities laying lines in city rights of way. That includes Verizon and others in addition to Comcast, the local cable TV provider.

In Comcast's case, the city funnels almost half of the revenue into Channel 11, the local public access channel.

The FCC ruling is intended to make it easier for telephone companies to enter the cable television and Internet access markets, as Verizon is already doing aggressively in Portland, and for cable TV companies to enter the telephone and Internet access businesses, which Comcast is already doing aggressively in many parts of its Oregon service area.

Both types of companies want to offer packages combining "voice, high-speed Internet access and video services," the FCC said it making its December ruling. Its three Republican members said expensive demands from cities were getting in the way, and outvoted the panel's two Democrats in amending the rules in response.

The commission majority said it felt compelled to act because many cities and counties were "unreasonably refusing to award competitive franchises." In making the action, it said, "We anticipate that the rules and guidance we adopt today will facilitate and expedite entry of new cable competitors into the market for the delivery of video programming, and accelerate broadband deployment consistent with our statutory responsibilities."

But cities say the ruling may have been improperly enacted. And they said it would harm residents by eliminating funding for public, educational and government access, imposing unreasonable deadlines designed to give companies the upper hand in driving deals and eliminating requirements for companies to ensure low-income neighborhoods get service comparable to that given high-income neighborhoods.

"It's 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.

According to the league, the text of the written rule was not circulated in advance, and actual details were not released until weeks after the rule's adoption. The chairman allowed no public testimony at the hearing, it alleged.

Cable franchise fees currently account for about 5 percent of the city's total revenue. However, the ruling only applies to new agreements, not might not pose a major immediate threat.

During its 2006-07 fiscal year, ending June 30, the city expects to take in $2.1 million in franchise fee payments. A little less than half is earmarked for McMinnville Community Media, which oversees Channel 11.

The city also assesses public, educational and governmental access fees under the so-called PEG program. This year, it is expecting $75,000, which has been earmarked for Channel 11 equipment needs.

Under the program, each cable subscriber pays $1 a month, and Comcast passes this money onto the city. But the FCC ruling puts that in jeopardy, warning, "It would be an unreasonable refusal to award a competitive franchise if the (city or county) denied an application based on a new entrant's refusal to undertake certain obligations relating to public, educational, government and institutional networks."

Multnomah County schools and libraries use institutional networks to provide high-speed Internet access at low cost, and many communities depend on PEG and franchise fees to fund their public access channels.

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

The FCC adopted the ruling in late December, but did release the 109-page document in which details are spelled out until March 6.

The Alliance for Community Media, a national non-profit organization that represents public, educational and governmental access organizations and community media centers, says it intends to file a challenge in court. It has retained counsel in partnership with the National League of Cities, National Association of Counties, National Association of Telecommunications Officers and Advisors, and Alliance for Communications Democracy.

According to the League of Oregon Cities, many cities and counties in this state are pledging to join in the legal challenge.

McMinnville is waiting to hear more from the league before deciding whether it will be one of them. But City Manager Kent Taylor said, "The city generally concurs with the position voiced by LOC - that the city would object to any usurping of local governments to control what happens in their rights of way."