IP Democracy: FCC Launches Video Franchise Proceeding

As Chairman Kevin Martin promised last week, the FCC launched today a proceeding to develop new rules on video franchising. To the delight of phone companies, which have had to contend with local franchising authorities in gaining the rights to deliver multichannel video services, the FCC concluded that a provision in the 1984 Cable Act that bars cities from granting exclusive franchises gives it the authority to ensure that local governments don’t unreasonably refuse to grant competitive “cable” franchises.

Moreover, in a statement which will become clearer once the FCC releases the actual text of its notice of proposed rulemaking, the Commission also said it will look at a “broader range of behaviors” by cities that make it difficult for cable competitors to offer service. Presumably this refers to the frequent demands by franchising authorities for goodies, such as TV studios, new libraries, donations to city causes, etc., before issuing cable contracts.

While Martin and the three current FCC Commissioners support the idea of opening up the local market to competition, Democrat Jonathan Adelstein in a separate statement raised a red flag over the FCC’s legal justification for potentially usurping local authority over cable franchising.

The Commission needs to tread with caution and care before it asserts any authority to interpose itself with LFAs to the extent Congress specifically delegated power to local officials. We are going out on limb already by creating a “de facto” refusal theory and tentatively concluding that the Commission has the ability to determine whether an LFA [local franchising authority] is “unreasonably refus[ing] to award a competitive franchise.”

Posted by Cynthia Brumfield on November 3, 2005 3:24 PM to IP Democracy