7A, Cable Franchise Agreement - Laserfiche WebLink

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staff that does na�hing �aut cable franchise renewa! negotiatipns. As a resuit, the company's renewal staff and attorneys are �ery knawfedgeahle about the iaw and how to use it to the company's advantage. Success o� the local government's side depends or� having equally knowledgeable staff and ]egal counsef, devoting adequate resources to the renewal process and rnaintaining a united front. Sharing the cost of the staff, as weli as the cor�sultant expertise for the technical cort�pliance review and needs ascertainment, has aiways rr�ad� sense, but, in these difficult economic times, it is e��n more irriportant. Further, ha�ir�g a number of cities {and their cable subscribers) on the local goverr�ment side of the tabfe provides more le�erage against the attempts �y Comcast to eliminate or diminish its franchise qb�igations. Wh does Comcast need a cable franchise? As a cabfe pro�tder, Comcast is required by 6o�h federai and state law to secure a Franchise from the locai governme�t—typically a city, but the franthising au#hority can also be a coliection of cities or a county— in order to �ravide cab�e televisiqn ser►rice using pubEic rights-of-way. This franchise a1[ows the cable pro�ider to build its cable network in the public rights-of-way withaut having to n�gotiate with every property owner_ !n return for a franchise to use the rights-of-way, which are scarce and �aiva6le pubfic property, the cabie provider pays a franchise #ee, tapped by federallaw at 5% of gross re�enues, and usually has obligations to #�ravide channel capacity and financial support for public, educationaf and ga�ernment access channeis and to pro�icie an Institut�anal Network for local government use. Wh should we 6other wi#h franchise fenewal when all televisian is mo�in ta the �ntern�t? Although a IQt of �ideo, including many traditional television prograrr3s, is now avaiiable o�er the internet, it wilf be many years 6efore all tele�ision programming currently distributed �ia cable and satellite pro�iders is a�ailabl� ov�r the Intemet. In fact, there is same caRcern that th� lr�ternet as currently structured does not ha�e enougf� capacity ta f�andie that �olume pf video programming. Further, to date, we are not seeing any of the traditional programming networks abandon cable and satelNte distribution, and new pragramming networks -- inclucEing �he recentfy introduced Oprah Winfrey Network (OWN) — are still being developed and introduced for cable and satelfite distributian. So, given the state of the industry, technoiagy and the market, focal franchisir�g autharities and caE�le providers must wcr�c ;�rit� the laws and reg�iations that are currently ir� p�ace. C,an a renewal request be der�ied? Yes, bath legally and practicalfy. Although friost communities do eventuaEiy renew the incurnbent cabie operatars #ranchise, se�era! comrnunities ha�e successfiully denied renewal. The Cable Act permits a cornrn�nity ta deny renewal if past performance has beer� inadequate; or if tF�e incumbent operator is legally unqualified or is unwiliing or unahle ta devvte the necessary technical skills and financial resaurces tn the community; or if the opera�vr is unwilling to reasor�ably satisfy the future, Cable-related nee�ds and interes#s of the camr�unity cansidering t�e cost of ineeting those needs and interests. The ot�erator says e�erl+thinQ a loca!_franchisin� authoritV asks for will �e passed through to subscrihers in rates. Is #hat true? Not necessarily. tn rate regulated franchise ar�as {such as the NSCCs member cities}, an operator can pass through increases in its external casts to subscribers. Some Franchise requirements, such as PEG and francF�ise fee requirecnents, are external costs, but not all are. In addition, because ihe operator is only entitled ta pass through tf�e increase in those costs, renewal fra�chisE requirerr�ents do not necessari�y result in rate increases, depending in par# on what was required under the prior franchise, the length of the prior #ranchise, a�d the operator's retau�ry schedul�. January I7, 2011