TML's Cable and Video Franchising Bill

To review the bill which became a PC932, see the Naifeh's Negotiated Cable Compromise

Highlights of SB 4021/ HB 3959

Offered by Senator Burchett and Chairman Curtiss

1. Preserves local franchising and authorizes a new state franchising process.

Affords new providers entering the market the option of choosing either a local franchise or state franchise, and allows providers operating under an existing local franchise to either remain under the local franchise agreement or to opt for a state franchise.
Allows state franchisee to define its own service area.
The Tennessee Regulatory Authority (TRA) would receive and review applications, deny or award state franchises, suspend or revoke franchises, and impose civil penalties up to $10,000 per day for violations of the agreement. The TRA would also remedy complaints filed by cities concerning providers operating under a state franchise.
Preserves cities’ ability to protect and enforce rights-of-way ordinances.

2. Creates the Tennessee Cable and Video Services Authority (TCVSA)

TCVSA is appointed by the lieutenant governor and the speaker of the House, comprised of 15 members; including: the chair of the TRA, the comptroller, the commissioner of ECD, 6 members nominated by TML, and 6 members nominated by Tennessee County Services Association.
The TCVSA would write the terms, conditions and requirements of the state franchise agreement and meet periodically to review the efficacy of the agreement and make any changes warranted.
The TCVSA would establish the franchise fee to be paid by providers operating under a state franchise and define “gross revenues,” upon which such fee is based.
Requires the TCVSA to develop and enforce customer service standards and consumer protections for providers operating under a state franchise and to establish a process for resolving complaints.

3. Requires build-out / deployment plan

Requires the state franchise agreement to include deployment standards developed by the TCVSA that afford the citizens of this state greater access to cable and video services and facilitate compliance with the anti-discrimination protections adopted pursuant to this part. The deployment standards must: (1) Comply with applicable federal and state laws and regulations; (2) Seek to balance the goal of offering the state’s citizens improved access to cable and video services with the economics affecting providers seeking to offer such services in a state with varying concentrations of its population and densities of households.
Requires any applicant for a state franchise to submit a deployment plan, consistent with the deployment standards adopted by the TCVSA that includes a schedule detailing its planned deployment of service within its defined service area.
Requires a franchisee to commence its deployment plan within 120 days of being granted a state cable or video franchise. Allows the TRA to extend this time under certain circumstances, if the provider has made substantial and continuous effort to meet the requirements.

4. Mutual agreements between local governments and state franchisee

Allows for mutually agreed upon side agreements between a local governmental entity and a state franchisee, provided such agreements: (1) Are consistent with federal law; (2) Are approved by the local governing body and the TRA; (3) Are no more favorable or less burdensome than any existing local cable franchise in effect in the municipality or county; (4) Do not reduce customer service or consumer protections afforded under the state franchise agreement; (5) Do not involve a derogation of municipal or county powers; and (6) Are solely intended to expand access to cable or video service, facilitate compliance with anti-discrimination requirements, or enhance services afforded subscribers within the municipality or county.

5. Preserves Public Education Government channels and funding levels

Preserves the existing number of channels, any PEG channel funding and the current level of programming and quality of services afforded by the incumbent provider under a local franchise agreement, while also allowing for the addition of new channels in those municipalities offering PEG programming on the date of enactment.
Allows for the establishment of PEG channels and the transmission of PEG programming in those municipalities where PEG channels and programming do not exist on the date of enactment.
Requires that a state franchisee designate a sufficient amount of capacity on its network to allow the provision of PEG channels required under the bill. Requires that each channel shall, with respect to the transmission of an analog signal or channel, be capable of carrying a television signal equal to or superior to a National Television System Committee (NTSC) and shall, with respect to the transmission of a digital signal or channel, be capable of carrying a television signal equal to or superior to a digital cable channel or high definition cable channel, should the PEG provider choose to adopt the HDTV format.
Provides that PEG channels shall all be carried on the basic tier and available to the widest possible range of customers without the need for any equipment or hardware other than that which may be required to receive the lowest cost tier of service.
Provides that, to the extent possible, the PEG channels shall be the same channel numbers used by the incumbent cable operator under a local franchise agreement on the date of enactment. States that PEG channels shall not be changed without the agreement of the local entity.
Ensures the continuation of the existing allocation of costs, under a local franchising agreement, associated with capital investment, the purchase and maintenance of equipment, operation and maintenance of PEG facilities as well as the formatting of PEG programming for transmission in those municipalities in which PEG channels are transmitting on the date of enactment. In the event more than one cable or video service provider is offering service within a municipality, the costs associated with capital investment, the purchase and maintenance of equipment, the operation and maintenance of PEG facilities and the transmission of PEG programming is proportionately borne by all providers offering service within the municipality.
Provides that an incumbent provider that is required to pay a PEG fee, grant or any similar payment to a municipality under the terms of a local franchise agreement shall continue to make such payments in full to the municipality if such provider either allows its local franchise agreement to expire and chooses not to seek a renewal of a local franchise or voluntarily terminates its local franchise agreement but continues to offer cable or video service within the municipality under a state franchise agreement. In the event that more than one provider is offering service within the municipality, then any payments required under this subsection shall be allocated among all providers proportionately.
Provides that, with respect to any new PEG channel established pursuant to this part, the costs associated with capital investment, the purchase and maintenance of equipment, operation and maintenance of PEG facilities as well as the formatting of PEG programming for transmission shall be borne by the cable or video provider. In the event that more than one provider is offering service within the municipality, then any payments required under this subsection shall be allocated among all providers proportionately.
Provides that the costs associated with transmission equipment and installing, connecting, and maintaining the interconnectivity between a PEG facility and the provider’s head end shall be borne by the provider
Prohibits the state franchisee from taking actions that alter or otherwise adversely affect the functionality, formatting or transmission of PEG programming that result in deterioration of the functionality of PEG signals, the transmission of PEG programming, the picture quality, or the absence of closed captions and Secondary Audio Programming. The PEG access signal and capacity shall be of similar quality and functionality to that offered by commercial channels.
Prohibits the operator from appropriating PEG programming for use on any other channel or in any other jurisdiction covered by the operator without the consent of the PEG channel.
Requires a state franchisee, to the extent required under federal law, to provide an institutional network (I-NET) to those municipalities within its service area.
Protects cities’ right to conduct audits of providers operating under a state franchise and to report insufficient payments to the board for remedy and enforcement.