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HomeMy WebLinkAboutAgenda - 08-16-2005-5uORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: August 16, 2005 Action Agenda Item No. 5.-U SUBJECT: Opposition to Proposed Federal Legislation To End Local Cable Franchise Fees DEPARTMENT: County Manager PUBLIC HEARING: (Y!N) No ATTACHMENT(S): Background E-mail from The People's Channel Draft Letter to Congressional Delegation & Senate Committee Members INFORMATION CONTACT: Gwen Harvey, Assistant County Manager, ext 2300 TELEPHONE NUMBERS: Hillsborough Chapel Hill Durham Mebane 732-8181 968-4501 688-7331 336-227-2031 PURPOSE: To provide information on pending legislation before Congress that would abolish local cable franchise fees and consider a formal letter of opposition from the BOCC, BACKGROUND: Staff has learned through the Triangle .I Cable Consortium consultant, Bob Sepe of Action Audits, that on July 27, Senators Jahn Ensign and Jahn McCain introduced S. 1504, the Ensign/McCain Broadband Investment and Consumer Choice Act, which would abolish cable franchising; reduce cable franchise fees; grant video providers the right to use public rights of way in perpetuity; and potentially abolish all zoning of cellular towers, telephone franchises, and in other ways prevent governmental regulation in the provision of public communication services. Municipalities across the nation are being cautioned to take S, 1504 very seriously and promptly contact the Senate Commerce Committee responsible far drafting the bill to register an opposing view, In Orange County, annual revenues from the cable franchise amount to aver $250,000, and the BOGG is fully aware of extensive negotiations currently underway with the local franchise operator to secure more favorable terms for governmental access programming and service extensions. Bab Sepe has prepared a model letter for Cable Consortium member governments to use to make their concerns and opinions known immediately to Congress, Attached is a background e-mail on the proposed legislation circulated by The People's Channel. Also attached is a draft letter to be signed by the BOCC Chair and forwarded to Representative David Price and Senators Elizabeth Dole and Richard Burr as well as the Senate Commerce Committee members, FINANCIAL. IMPACT: There is no fiscal impact associated with forwarding this letter to Congress, Orange County stands to lase significant revenue if S. 1504 is enacted into law, RECOMMENDATION(S): The Manager recommends that the BOCC review the proposed draft and authorize the Chair to send a letter to Representative Price, Senators Dole and Burr, and the members of the Senate Commerce Committee, Gwen Harvey -IMPORTANT Information Regarding Cable Franchises! Page 1 lam/ From: "Chad A, Johnston" <johnston@thepeopleschanneLorg> Date: 7/28/2005 5:06:22 PM Subject: IMPORTANT Information Regarding Cabie Franchises! , Good day to you all, This is Chad A. Johnston, Station Director at The Peoples Channel. I came to work today with a floury of emails dealing with cable franchising authority and a specific bill which has been introduced in the House and Senate. The bill was introduced yesterday, S. 1504, the Broadband Investment and Consumer Choice Act, and would in essence render Cable Franchise Agreements null and void. This means, limited or no franchise fees, no local control, and potentially no channel space for public, education, or government access (PEG). I urge you to read the two articles below and/or the attached summery, and contact your representatives on this matter. Feel free to contact me if you would like any other background information. There are also links on our web site with more information: www.thepeopleschannel.org/newhome.htm Thank you for your time and commitment to municipal authority, the public right of way, and PEG access. Sincerely, Chad Johnston -Station Director The Peoples Channel 300AC South Elliott Road Chapel Hill, NC 27514 919.960.0088 v/ww thepeopleschannel.org "Don't be too timid and squeamish about your actions. All life is an experiment. The more experiments you make the better," Ralph Waldo Emerson "If I had my life to live over... I'd dare to make more mistakes next time" Nadine Stair "Laws alone can not secure freedom of expression; in order that every man present his views without penalty there must be spirit of tolerance in the entire population" Albert Einstein "Yesterday legislation was introduced in Washington to abolish cable franchises, and which is likely to substantially reduce cable franchise fees and franchise or similar fees paid by telephone companies. The bill is likely to cost municipalities nationwide on the order of $3 billion per year in lost revenues from cable and telephone companies. Zoning for cell towers is also apparently preempted. Letters are immediately needed to Washington opposing the bill, S, 1504. More specifically . Gwen Harvey -IMPORTANT Information Regarding Cable Franchises! _ Page 2 ~..~ On July 27 Senators John Ensign and John McCain introduced S. 1504, the Ensign/McCain Broadband Investment and Consumer Choice Act, which among other things, abolishes cable franchising; reduces cable franchise fees (perhaps substantially); apparently (we say apparently because the bill is not entirely clear on these points) grants video providers the right to use public rights of way in perpetuity; apparently abolishes all zoning of cellular towers; apparently abolishes telephone franchises and fees; and attempts to prevent governments from providing the public with communications service Municipalities need to take this bill seriously, and promptly contact their legislators to oppose it, as it was drafted at the request of Senator Ted Stevens, the Chair of the Senate Commerce Committee, and apparently expresses his views Committee Chairs carry great weight in the Senate. In addition, the cosponsor ship of the bill by Senator John McCain gives the bill more weight. Copies of the bill, a more detailed analysis of it and sample letters to use in writing Congress are on our website, www,varnumlaw,com/cable/legislation." John Pestle Varnum, Riddering, Schmidt & Howlett LLP *NEIL J. LEHTO* *Attorney and Counselor at Law* 4035 IVERNESS LANE WEST BLOOMFIELD, MICHIGAN 48323-1714 TELEPHONE AND FACSIMILE (248) 851-4276 E-MAIL nlehto@municable.com TO: Municipal Clients and Others FROM: Neil J Lehto RE: S 1504 DATE: July 28, 2005 Yesterday, Senators John Ensign (R-Nevada) and .lohn McCain (R-Arizona) introduced S. 1504, the Broadband Investment and Consumer Choice Act, Gwen Harvey -IMPORTANT Information Regarding Cable Franchises! Page 3 which among other things, abolishes cable television franchises, slashes and puts into jeopardy cable television franchise fees. This is most far-reaching of several bills introduced over the last few months in the 1 t)9^th Congress.. If adopted, communities which negotiated franchises requiring future delivery of capital grants and payment of cash support for public, educational and government ("PEG") access channels would be particularly hard hit because these requirements of even existing franchises would be federally preempted. Also, the bill would allow no more than four PEG channels. The bill is significant because Sen, Ensign is chairman of the Senate Commerce Committee's sub-committee on technology, innovation and competitiveness and its ranking Democratic member, Senator John F, Kerry (D- Massachusetts), yesterday praised plans by Verizon and SBC to begin offering video services in competition with cable television and satellite companies. Verizon, SBC, and other telecommunications companies have lobbied against being required to obtain franchises. In a speech yesterday, Kerry said, "This decision [to offer service] provides a promise of enhanced competition in the video market," he said, without mentioning either company by name. "We should encourage the development and seek balance between competing interests." He was noncommittal on whether he would offer his own telecom legislation. "We'll see," he told reporters, noting that Ensign had already introduced a sweeping measure. During his speech, Kerry emphasized that affordable access to telecom services, consumer protection and increased competitiveness should be top priorities for lawmakers. "We have a moral obligation to get this right," he said of telecom reform because legislation will directly impact emergency responders and the level of access that inner city and rural citizens receive. Section 13 of the bill would preempt the State Constitutions, laws and any local ordinances requiring any video service provider to either (1) obtain a municipal franchise or (2) extend its system throughout a community. Franchise fees would be capped at five percent of gross revenues derived from video service subscribers, eliminating advertising and home shopping revenues from payments due to municipalities and would be paid only an annual basis, The language of section 13 puts what remains of franchises fees in further jeopardy by allowing municipalities to require video service providers "to pay a reasonable video service fee . ,for the purpose of compensating such local government for the cost that it incurs in managing the public rights-of-way by such provider" That language invites litigation. Furthermore, municipal plan review and construction-related fees currently applicable to video service providers digging in the public rights-of-way would be prohibited. Most provisions of the U.S. Cable Communications Policy Act of 1984, as amended, and existing franchises are preempted. The bill would abolish leased access channel and local emergency alert requirements, direct the Federal Communications Commission to re-write regulations with respect to customer service and consumer protection for enforcement, not locally, but by the state utility commissions. Gwen Harvey -IMPORTANT Information Regarding Cable Franchises! ~ Page 4 Finally, the bill prohibits municipalities from building their own communications networks except upon alevel-playing field with any interested commercial provider. The language of section 15 protecting commercial providers from undue government competition is particularly unclear regarding the rights of existing cable television and telecommunications companies in such a situation. SBC and Verizon have announced plans to begin offering video services over their networks using Internet protocol technology. Verizon is seeking local franchises in some places across the country. In others, its going ahead with construction and upgrading its system without doing so, explaining that it would obtain any franchise needed before it starts offering video service. SBC is not seeking franchises anywhere, saying they are not needed because they already have statewide franchises to use the public right of way to install wires and provide telecommunications service. Meanwhile, both SBC and Verizon are pressing hard across the country for legislation creating new state and federal regulatory schemes preempting local cable franchising by putting into place a model statewide or national franchise. Efforts at the state level in Virginia and Texas have, so far, failed. However, Senator Ensign's bill and others introduced in the U. S. Senate and House of Representatives which would rewrite telecommunications laws to have one set of rules for telephone companies providing voice, broadband and video services. Cable operators are opposed to the idea but are asking that any such legislation include them, too. U.S. House and Senate leaders have expressed support for changes in the law, which would speed competition by easing the burden on SBC and Verizon of obtaining thousands of local franchises. Existing municipal franchises held by cable television companies are contractual obligations, which could not be unaffected or preempted by changes in state law under the Contract Clause of the U.S. Constitution, which prohibits states from impairing the obligation of contract. However, changes in the federal law may do so in ways limited under the Commerce and State Reservation of Rights Clauses of the U.S. Constitution because the U.S. Congress may regulate interstate but not intrastate commerce. Therefore, for example, the U.S. Cable Communications Policy Act of 1984 preserved local franchising, franchise fees, PEG channel, facility and equipment requirements, bonds, insurance, relocation, and other right-of-way related matters while broadly deregulating cable television service itself, Any law adopted by the U. S. Congress should balances local, state, and federal authority in a manner that respects the Commerce and State Reservation of Rights Clauses. Clearly, Senator Ensign's bill does not. So, I am less concerned about pending action in the U.S Congress than some others. Encouraging competition in the telecommunications marketplace is a very high priority across the country. National policy has for many years sought to build a nationwide broadband system for the delivery of voice, data, and video, I know that most municipal leaders I Gwen Harvey -IMPORTANT Information Regarding Cable Franchises! Page 5 would welcome another competitor but not if the price of doing so is gutting all existing municipal cable television franchises.. ORANGE COUNTY HILLSBOROUGH NORTH CAROLINA lt'e ~if/a6lilet~J7i2 August 11, 2005 The Honorable Elizabeth Dole Russell Senate Office Building, Room 120 Pennsylvania Ave. Washington, DC 20510 The Honorable Richard Burr Russell Senate Office Building, Room 217 Pennsylvania Ave. Washington, DC 20510 RE: S. 1504, the Ensign/McCain Broadband Investment and Consumer Choice Act Dear Senators Burr and Dole: Please oppose the Ensign/Mc,Cain Broadband Investment and Consumer Choice Act, In the cable and broadband area this bill will: • Abolish cable franchising, which ensures that the services cable companies meet our local needs, provide protections for the public, and allow these provisions to be changed over time as needs change and teciurology evolves; • Unlike any other utility service, abolish requirements that cable service be provided wherever in a community there is sufficient population density to make service economical. Phone and electric service are not provided only where the provider elects to provide service-all areas with sufficient population density are served. Cable and broadband should be the same; • Allow cable companies to "redline" and deny service on the basis of race, sex, senior citizen status. So if a customer apposes action by their provider, the provider can deny service, even though the customer has paid the bill in a timely manner; • Reduce (perhaps substantially) the cable franchise fees providers pay to use public property; • Apparently (we say apparently because the bill is not entirely clear on these points) grants video providers the right to use public rights of way in perpetuity, without even the protections that the courts impose when the government condenms property. • Does not adequately preserve local ability to manage the streets, such as requiring providers to relocate lines at their expense when streets are straightened or widened.. • Does not have meaningful provisions on channels for public, educational or govenunental use, and lacks provisions requiring the provider to provide funds to support these chamrels. • Does not have provisions to safeguard the public if the provider causes damage to the right-of-way or enters bankntptcy, AREA CODE (919) 245-2300 688-7331 FAX (919) 644-3004 Ext. 2300 D Page 2 There are other deficiencies associated with the cable and broadband portion of the bill. Some of the provisions which are particularly objectionable are those that: • Apparently abolish all zoning of cellular towers, so towers can be put anywhere in a comnrrmity, without regard to whether they are needed or their effect on property values. • Abolish telephone franchises and fees, even though these companies have and should continue to pay "rent" to use the public way; and • Attempt to prevent local governrnents the option of providing the public with wireless broadband conununications services. Orange C_otmty supports video competition and believes it is being adequately addressed locally, The Ensign/McCain bill does not offer comparable benefits to local govenunents nor the public. It ignores local "community needs" which are addressed through the current cable franchising process. And, its apparent needless abolishing of wireless tower zoning, telephone franchises and utility taxes saddles restrictions on local govenm7ent communications systems. For these reasons, we ask that you oppose this bilk Sincerely, Moses Carey, .Jr., Chair Orange County Board of Commissioners co; The Honorable Ted Stevens 522 Senate Hart Office Building Washington, DC 20510-0201 The Honorable Daniel Inouye 722 Senate Hart Office Building Washington, DC 20510-1102 The Honorable .John McCain 241 Senate Russell Office Building Washington, D.C. 20510-030.3 The Honorable .John Ensign 364 Senate Russell Office Building Washington, D.C. 20510-2805 The Honorable Conrad Burns 187 Senate Dirlesen Office Building Washington, DC 20510-260.3 i4 Page 3 The Honorable David Price 2162 Rayburn House Office Building Washington, DC 20515 The Honorable .Joe Barton 2109 Rayburn House Office Building Washington, DC 20515-4.306 The Honorable Fred 1Jpton 2161 Rayburn House Office Building Washington, DC 20515-2206 The Honorable Tolur Dingell 2.328 Rayburn House Office Building Washington, DC 20515-2215 The Honorable Edward Markey 2108 Rayburn House Office Building Washington, D.C.20515-2107 The Honorable Charles W. Pickering 229 Cannon House Office Building Washington, D,C. 20515-2403 Ms. Cheryl Leauza Principal Legislative Counsel National League of Cities 1301 Pennsylvania Avenue NW Suite 550 Washington D.C. 20004 Mr~ .Jeffrey Arnold Deputy Legislative Director National Association of Counties 440 First Street, N.W. 8th Floor Washington DC 20001 Mr. Ron Thaniel Assistant Executive Director U.S. Conference of Mayors 1620 I Street Fourth Floor 1J Page 4 Washington, DC 20006 Robert F, Sepe Action Audits, LLC 101 Pocono Lane Cary, NC 27513 Fax:919-467-5.392 Chad .lolmston, Director The People C_hamlel .300 AC South Elliott Road Chapel Hill, NC 27514