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2006_0123_Packet
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2006_0123_Packet
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�4��� �� � <br />��.,.. �- - - � , _ _ � � � <br />Memo <br />To: Mayor and Council <br />Neal Beets, City Manager <br />From: Chris Miller, Finance Direct�� <br />� <br />Date: January23,2006 <br />Re: Update on Potential Changes in Local Cable Television Regulation <br />Date: O1/23/06 <br />Item: 2.e <br />Cable TV Regulation <br />Introduction <br />As the Council is probably aware, over the past year there has been an increasing amount of <br />discussion regarding the future of cable television regulation. Across the country, both the <br />federal and some state governments have either passed new legislation or have pending <br />legislation that potentially changes the regulatory role of local governments. In addition, we've <br />seen some policy shifts by the Federal Communications Commission (FCC) which regulates the <br />cable television industry. <br />While there are many changes being observed, perhaps the most applicable to the City of <br />Roseville (and all other local governments) is the definition of 'cable television'. While <br />traditional cable companies such as Comcast and Time Warner continue to provide cable <br />television services, other companies such as Qwest, Verizon, and SBC are moving from their <br />traditional roots of providing telephone service to also providing cable television. <br />These new market entrants (i.e. Qwest), are lobbying hard to preserve their business <br />classification as a telephone company, thereby keeping them exempt from most local franchising <br />requirements. This obviously does not sit well with Comcast and other traditional cable <br />companies which are subject to local franchising requirements. Companies subject to local <br />franchising requirements must pay the local government up to 5% of gross revenues derived <br />from cable television services. Clearly the company that has to pay these franchise fees is at a <br />competitive disadvantage to one that does not — hence the brewing conflict. <br />While its way too early to predict which way all of this will go, there are some potential impacts <br />that could effect the City. <br />Potential Impacts <br />On one end of the spectrum, we could see federal and state legislation that would require all <br />cable tv providers to be subject to local franchising requirements. In this instance, Comcast, and <br />other potential providers such as Qwest, would all pay franchise fees to the City. This would <br />result in the City capturing much higher revenue streams to support its Communications <br />function. <br />3 <br />
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