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����� <br />Moss � �arnett <br />A Professional Association <br />2. �.�As would be prohibited from mandating any particular build-out requirements <br />against new competitors, although apparently these same criteria would not <br />apply to state issued franchises and possibly state statutory level playing field <br />requirements. <br />a. This is one area where the actual text of the FCC Order will be particularly <br />important. It appears the FCC has attempted to appease concerns raised <br />by states such as Texas, California, Michigan, Kansas and others where <br />franchising is now conducted at the state level. The Order allows <br />competitors to avoid locally mandated build-out requirements unless the <br />state issues the franchise or perhaps where state law establishes build-out <br />criteria. It is difficult to determine the precise requirement from the FCC <br />press release without the benefit of the actual language of the Order. <br />b. Minnesota Statutes at Section 238.08, subd. �,{�) provides that a city shall <br />not grant an additional franchise for cable service on terms more <br />favorable or less burdensome with respect to the area served (this same <br />standard also applies to PEG access requirements and franchise fees). <br />c� If the Order preempts state law regarding build-out requirements it would <br />allow competitors to serve only a portion of a given municipality. I f this <br />proves to be true it would render moot one of the telephone industry's <br />main concerns with Minnesota Statutes Chapter 238. <br />d. Possible impacts. <br />According to the cable industry, telephone companies will cherry <br />pick the most lucrative areas of cities leaving less desirable areas <br />with a single provider. Municipalities and consumer advocacy <br />groups argue that such cherry picking will result in affluent <br />neighborhoods having better quality systems, offering enhanced <br />services at lower prices. On the contrary, economically <br />disadvantaged areas will likely remain served by a single provider <br />and potentially may be forced to subsidize competition in other <br />portions of a community. <br />ii. I f certain undesirable areas are not served by a competitor the <br />incumbent operator may, at a certain point, choose to no longer <br />serve such areas and/or may chose not to invest capital to provide <br />system enhancements. <br />� <br />