Cable Television Franchising Following the Cable Act
| Jurisdiction | United States,Federal |
| Citation | Vol. 07 No. 1987 Pg. 1219 |
| Pages | 1219 |
| Publication year | 1987 |
1987, July, Pg. 1219. Cable Television Franchising Following the Cable Act
The Cable Communications Policy Act of 1984(fn1) ("Cable Act") established a national cable television policy that has significantly impacted local governments, including cities, counties and metropolitan districts. Although the Cable Act grand-fathered the provisions of existing cable television franchises for the life of the franchise, those franchise provisions which are in direct conflict with particular provisions of the Cable Act are superseded(fn2) Moreover, the procedures for renewals and franchise modifications are significantly affected by the Cable Act.
This article discusses the highlights of the Cable Act and its procedures for renewals, transfers and modifications.
The long-standing 3 percent franchise fee cap has been increased to 5 percent of gross revenues from the operation of a cable system. The Cable Act does not contemplate unilateral increase of the franchise fee to 5 percent where the existing franchise provides a franchise fee of, for example, 3 percent. The franchising authority must wait for a "window of opportunity" to increase the franchise fee such as a modification, transfer or renewal.(fn3)
A recent federal decision involving Erie, Pennsylvania, has held that franchise fees paid by cable companies to local governments are constitutional.(fn4) The cable company had alleged that the funds were not being used by the municipality to regulate the cable company and that the requirements denied the company's free speech rights on equal protection grounds because no other communications media have to pay such fees.
Probably the most significant change of the Cable Act is the deregulation of rates for basic service after December 29, 1986, except in communities where there is "no effective competition" as determined under regulations adopted by the Federal Communications Commission ("FCC").(fn5) The FCC regulations provide that effective competition exists where three or more over-the-air broadcast signals are theoretically available; that is, where such signals place a grade B contour over any portion of the cable community, are significantly viewed in the cable community or translate to stations licensed to serve the cable community.
This regulation, along with the Cable Act and the FCC definition of "basic cable service,"(fn6) means that only a few communities may continue to regulate basic cable service rates and generally may do so only with respect to the lowest single tier of service. Certainly, few if any cities in Colorado now find themselves with any effective rate regulation authority under the Cable Act and the rules promulgated thereunder.
Other provisions of the Cable Act explicitly authorize municipalities to own cable systems(fn7) and provide that the franchising authority may establish and enforce customer service requirements and construction schedules.(fn8) Customer service requirements include those related to interruption of service, disconnection, rebates and credits to consumers, deadlines to respond to consumer requests and complaints, the location of the cable operator's consumer service offices, and the provision to customers of information on billings or services. All of these may be provided for by separate ordinance and apply to the cable operator so long as they are not inconsistent with the provisions of the Cable Act.
Additional provisions include leased access requirements that apply to systems with thirty-six or more channels and subscriber privacy standards. The Act also includes equal employment opportunity requirements, theft of service prohibitions, cross-ownership provisions, criminal penalties for obscene programming, pole attachment provisions and provisions for allowing private individuals to use earth stations to receive satellite-delivered...
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