7A, Cable Franchise Agreement - Laserfiche WebLink

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NORTH SUBURBAN CQMMUN1CATiONS COMMISSION CABLE FRANCHISE RENEWAL FACT SHEET What does the cable franchise renewal t�rocess in�oive? The formal franchise renewal process is ane vf administrative litigation. The process itself is spelled out ir� federal law in Settion 626 of the Cabie Comr�unications PolityAct of 1984 (the "Cable Act"), ar�d It is designed to pratect the rights o�the incumE�ent tabEe provider while afso ensuring thai a cammunity's present and future cab�e-refated needs and ir�terests are satisfied, taking cost into consideration. Formal franchise rer�ewal begins with the cable provider notifying the franGFtising authority of its desire to renew its cable franchise agreement_ The franchisir�g authority then hegi�s by e�aluating the cable provider's performance under the existing franchise, including the engineering of the cabfe sysiem, and by ascertaini�g t�e cable and communicatians needs of the community. This typically in�ol�es hiring experienced engineering, legaf, financial and ascertainment consultants ancE can take 6 to 12 months (or more) ta complete. The franc�ising autharity then may request tha# the cable provider subrnit a proposal showing how it will meet the r�eecfs identified in the ascertainment. The formal pracess also requires public input an the cable pro�iders past performan�e and or� the needs ascertainment While fede�af taw also �ermits tf�e use of informal franchise renewal negotiations wi#h the cable pro�ider at any time (inc�udir�g simultaneousfy with the farmai process}, a franchising authority rnust be prepared to follow the requir�ments af the formal process because either side may choose to return ta that process at any tirne during the renewal proceedings. Typically, the renewal proceedings afternate between the formal and in�ormal processes several times. Can we ne�otiate w_ith more than o�e cable pro�ider? T�e fecEeral franchise renewal process is i�tencEed for the franchise af the incumbent cable provider. None of the franchises of the NSCC member cities are excfusive, howe�er, so member cities may nEgotiate a new franchise with anat�er cable pro�ider at any tirr�e. That ha�ing been said, cable system overbuifds are not camrnon because the new pravider must invest a significant amouni of money in the canstruction af a network with no customer income until the new system is built. In the meantime, the incumbent controls 60-65% o# the market, and sateiiite providers ha�e most of the rest. O�erbuilding is a very difficult ancE expensi�e proposition requiring very deep pocicets and iang-term commitment. in recent years, the anly pro�iders tha# have tried o�erbuilding are #radi#ionaf telephane comPanies Verizon and AT&T, neither of which ha�e landline telephone tompanies in Minnesata. Furthermore, both �ave halted all new construction in arderto cancentra�e on the systems they ha�e already built. Meanwhile, Qwest has shawn no Credible interest in constructing an ad�anced wireline network #hat can compete with Comcast's cable systern in the NSCC's member cities. Can we s+mplv extend the existin� cable franc�ise? i"his is a possibility, although the incumbent pro�ideF is not likely to want to do so. A typical goal of providers in franchise renewal is ta eliminate and/or trim back obligations in the curren� �ranchise agreements, including the Enstitutional IVetwork, the number of pubiic, educational and governrnent (PEG) access channels, and the financial support af those channels. Nevertheless, the commission wi�l explore that option with tF�e cornpany. Wh should we have the NSCC and its staff handle our #ranchise renewal rather than doin it oursei�es? Firs�, cable frar�chising and reRewai law is very complex, in�ol�ing the interplay betweer� federal, statE and Iocal laws and regulations with 30-44 years of legal and legislative history. It also is constantly changing and e�ol�ing. Secand, Comcast is the largest cable company in the LJnited States (if not the warld] and has a full-time