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HomeMy WebLinkAbout1992-11-30 Harris Beach & Wilcox to Charles Gutman ESQ City Attorney City of IthacaNovember 30, 1992 Charles Gutman, Esq. City Attorney City of Ithaca 108 East Green Street Ithaca, New York 14850 Dear Mr. Gutman: HARRIS BEACH& WILCOX ATIORNEYS AT LAW 1611 NORTH KENT STREET SUITE 1000 ARLINGTON, VIRGINIA 22209 (703) 528-1600 Ed Hooks has asked me to provide you a brief summary of certain of the steps Ithaca must take over the next several weeks to comply with those provisions of the Cable Television Consumer Protection And Competition Act of 1992 which impact the local franchising and regulation of cable television. The Act, which becomes effective December 4, 1992, radically changes federal regulation of the cable television industry and the local franchising process. The changes made by the Act are so sweeping that both the Federal. Communications Commission and the Congressional Budget Office estimate that the FCC will need additional funding of $20-25,000,000 per year to enforce the Act. The Act requires the FCC to promulgate very detailed rules implementing certain of its provisions. So far, the FCC has issued proposed rules concerning: (i) must -carry signals/ retransmission consent; (ii) indecent programming; and (iii) the ownership of in-home cable wiring. I expect the FCC to initiate a total of 13 separate rule making proceedings to develop rules required by the Act. At its December 3, 1992 meeting, the FCC will issue its proposed rules concerning rate regulation and other matters relating to local franchising and regulation. Interested parties will, of course, be able to submit comments to the FCC regarding all of its proposed rules. However, the comment periods will be brief so local authorities will need to move quickly if they wish to recommend any changes in the proposed rules. I expect comments to be due late in January on the proposed new rules applicable to franchising and local regulation of cable television. Enclosed is a summary of those provisions of the Act which most significantly impact cable franchising and local regulation. Please let Ed'or me know if you would like detailed analyses of either the FCC's proposed rules or the Act and precisely how they will affect Ithaca's relationship with its cable system. THE GRANITE BUILDING 130 EAST MAIN STREET 50 FOUNTAIN PLAZA SUITE 1260 ROCHESTER, NEW YORK 14604-1687 (716) 232-1440 BUFFALO, NEW YORK 14202-2212 (716) 854-5300 20 CORPORATE WOODS BOULEVARD 121 EAST SENECA STREET P.O. BOX 580 ALBANY, NEW YORK 12211-2391 (518) 427-9700 ITHACA, NEW YORK 14851 (607) 27316144 Charles Gutman, Esq. November 30, 1992 Page Two HARRIS BEACH & WILCOX If you find that there are provisions of the FCC's proposed rules which would create particular problems for your community, we recommendthat you file comments detailingthose problems and urging that the FCC change those provisions before it finalizes the rules. In the past, the FCC has been generally responsive to the views of local authorities and we would expect that to be the case in these proceedings. We would, of course, be pleased to assist Ithaca in preparing comments if you wish. If there is sufficient interest, we can prepare joint comments on behalf of a group of Upstate communities. The submissionof joint comments would permit communities to have their views considered by the FCC at minimum cost to each community. We expect the views of most local authorities to be quite similar so we would not expect to have significant problems accommodating conflicting views ina joint filing.. Please also let either Ed or me know if you would be interested in attending a seminar on the FCC's proposed rules, the Act and the steps local authorities must take in the very near future to comply with the Act. If there is sufficient interest, we willschedule one or more seminars for local government representatives. Sincerely, Enclosure cc: Edward C. Hooks, Esq. James R. Cooke November, 1992 Cable Television Consumer Protection and Competition Act of 1992 HARRIS BEACH & WILCOX The Cable Television Consumer Protection and Competition Act of 1992 ("Act") dramatically alters federal regulation of the cable television industry and its relationship withlocal franchising authorities. Many of the former federal CATV regulations which Congress eliminated through the Cable Communications Policy Act of 1984 are reinstated -- including federal regulation of rates and the local franchising process. The Act becomes effective only 60 days after it was passed over the President's veto. In fact, it will become effective before the Federal Communications Commission even commences rule making proceedings to develop some of the rules needed to implement certain of its provisions. Some of the more important dates under the Act are: Effective date of Act: December 4, 1992. Deadlines for comments in FCC rule makings: Various dates from December 9, 1992 to early 1993 (predominantly January and February, 1993). Effective dates of FCC rules: Various dates in 1993, commencing February 2, 1993 with most effective by late - Spring. (The only major exception is that the "retransmission consent" rules will not become fully effective until 1994.) Following are brief descriptions of the principal provisions of the Act which relate to the local franchising and regulation of cable systems. Despite the protracted Congressional debate over the Act, a few of its provisions remain ambiguous and will have to be clarified by the FCC or the courts. First, if a cable system is not subject to "effective competition", then its rates for "basic" cable service are subject to rate regulation. The Act contains a multi -part definition of effective competition. If applicable, rate regulation must commence by June, 1993. A local franchising authority may regulate rates -- pursuant to FCC established formulas -- if it timely adopts rate regulations consistent with the requirements of the Act and the rules to be adopted by the FCC pursuant to the Act. If the local authority fails either to act timely or to comply with the federal criteria, rates will be regulated by the FCC. The Act directs the FCC to: prescribe the criteria to be used in identifying unreasonable rates; and establish the procedures to be followed in reducing and refunding unreasonable rates. - 2 - To exercise regulatory jurisdiction, a local franchising authority must first file a written certification with the FCC attesting that it: (i) will adopt and administer regulations consistent with the requirements established by the FCC; (ii) has the legal authority to adopt such regulations and the personnel to administer them; and (iii) will provide a reasonable opportunity for consideration of the views of interested parties. The FCC may disapprove a franchising authority's certification if it concludes that the local regulations are inconsistent with the threshold federal criteria. If the certification is disapproved, or if the FCC otherwise determines that the franchising authority has failed to comply precisely with the Act or the rules promulgated by the FCC, the franchising authority loses its right to regulate rates. If a cable system is subject to "effective competition", then it is not subject to rate regulation by the FCC, the state or any local franchising authority. - A government-owned and operated cable system is not subject to rate regulation even if it is the only cable system within the jurisdiction. Second., the technical and operational standards adopted by the FCC in the MM Docket No. 91-169 become effective December 30, 1992. Under the Act, these standards pre-empt any state or local technical regulations. Third, by April 5, 1993 the FCC must adopt final rules setting minimum customer service requirements governing such matters as minimum office hours, billing and refund procedures and response times for service calls. Inconsistent state and local regulations will be preempted. Fourth, by April 5, 1993 the FCC must also adopt finalrules concerning severalaspects of basic cable service -- including limitations on indecent programming. Those rules, will be applicable to any public, educational or governmental access programming required by the franchise. Fifth, the Act provides that local authorities may not grant an exclusive cable television franchise and may not unreasonably refuse to award anadditional competitive franchise. Any exclusivity provisions in previously -issued franchises become null and void on December 4, 1992. - 3 - Sixth, the Act requires that a franchising authority give a second cable franchisee a reasonable amount of time to provide cable service to all households in its franchise area. Seventh, the Act includes provisions governing local. franchise renewal proceedings. The franchising authority may, on its own initiative, and during a specific time window, commence a proceeding to review the performance of the cable operator. The cable operator can also request the commencement of a renewal proceeding at any time from the 30th to the 36th month before its franchise expires. These requirements are effective December 4, 1992. Eighth, the Act imposes certain restrictions on the sale of cable systems, including a 3 -year holding requirement. This restriction includes certain exception and waiver provisions. After the 3 -year period, a franchising authority must approve or reject any proposed sale or transfer within 120 days after its approval is requested. This provision is also effective December 4, 1992. Ninth, as before, the franchising authority may require that the cable operator provide public, educational and governmental- access channel capacity, facilities and/or financial support. Tenth, the franchising authority may also continue to require that a cable operator have the financial, technical and legal qualifications to provide cable service and that it provide service throughout the franchise area within a reasonable period of time. Eleventh, the Act permits a local, public or quasi -public body, without securing a franchise, to operate as a "multichannel video programming distributor" ("MVPD") within areas already served by one or more cable television franchisees. An MVPD is defined as an entity which makes multiple channels of video programming available for purchase. An MVPD includes, but is not limited to, a cable system, a multi -channel multi -point distribution service, a direct -broadcast satellite service or a television receive -only satellite program distributor. Twelfth, the Act provides some limitations on the liability of franchising authorities. # # #