Video Franchise Requirements

Background

In the Federal Communications Act, Congress created a decentralized process for approving video service providers. The act states that companies seeking to sell services to area residents must first negotiate and contract with city governments and other local franchising authorities. Congress recognized that local jurisdictions could more easily oversee video service providers, and were thus more likely to maximize the benefits for each community and all of its citizens. Consequently, cities and towns typically negotiate for various consumer protections and provisions tailored to the jurisdiction’s needs.

The largest incumbent local-exchange carriers (ILECs) have been rebuilding their networks so as to use telephone lines for transmitting advanced digital television service. The emergence of the ILECs in the video-delivery marketplace could create more market competition, and with it, more rewards for consumers, including more and better services, advanced technology, and lower prices.

However, the ILECs contend that being required to negotiate separate agreements with the many local authorities would significantly delay their deployment of TV service. Moreover, they assert, such a delay might prevent them from competing with cable companies as alternative providers of video programming. The ILECs are therefore campaigning for changes in state and federal laws that will allow them to avoid the franchising process. Opponents of such changes argue that phone companies could easily obtain franchise agreements on the same terms as the local cable company.

Video Franchise Requirements: Policy

Protecting consumer access to service

In this policy: FederalLocalState

If policymakers consider overriding local control of video franchises in favor of establishing a state or national franchise process, they should also adopt explicit provisions that maintain the benefits and protections consumers received under the local franchising process.

Regardless of what jurisdiction regulates this process, at a minimum these provisions should:

  • prevent economic redlining and generally ensure that all providers make their service available in all neighborhoods;
  • ensure access to education, government, and local public-access channels;
  • establish customer service standards and enforcement mechanisms;
  • ensure that local jurisdictions have the authority to manage the disruption caused by installing and maintaining infrastructure in city streets and public rights-of-way; and
  • ensure that video-service providers offer compensation in the form of franchise fees for the benefit of using public property and rights-of-way.