A Comparison of the Cable Franchising Provisions in House-Passed H.R. 5252 and in H.R. 5252 as Amended by the Senate Commerce Committee, 109th Congress

CRS Report for Congress
A Comparison of the Cable Franchising
Provisions in House-Passed H.R. 5252 and in
H.R. 5252 as Amended by the
th
Senate Commerce Committee, 109 Congress
August 29, 2006
Charles B. Goldfarb
Specialist in Industrial Organization and Telecommunications Policy
Resources, Science, and Industry Division


Congressional Research Service ˜ The Library of Congress

A Comparison of the Cable Franchising Provisions in
House-Passed H.R. 5252 and in H.R. 5252 as
Amended by the Senate Commerce Committee,
109th Congress
Summary
H.R. 5252, the Communications Opportunity, Promotion, and Enhancement
(COPE) Act of 2006, was passed by the House, and subsequently was amended in the
nature of a substitute by the Senate Commerce Committee. Both versions of H.R.
5252 include provisions that seek to foster competitive entry into the cable television
market by streamlining the process by which new entrants obtain a franchise to offer
service. Both would expand the authority of the Federal Communications
Commission (FCC) to set and enforce streamlined requirements, though the Senate
version would allow local franchise authorities to retain greater authority.
Under the House version, an applicant would apply to the FCC for a national
franchise, identifying the local areas it intended to serve. In contrast, under the
Senate version, which was originally introduced as S. 2868 and which renames the
legislation the Advanced Telecommunications and Opportunities Reform Act, an
applicant would apply directly to the local franchise authority for a franchise, though
the application form, itself, as well as most of the requirements, would be crafted by
the FCC. In each case, when certain conditions have been met, incumbent cable
service providers also would be eligible to use the new, simplified franchise
procedures and requirements.
Under each version, the FCC is instructed to issue a number of national rules
and is given certain enforcement and appeals responsibilities, but local franchise
authorities retain authority over management of rights-of-way. Each version would
eliminate a number of the requirements currently imposed on cable operators in Title
VI of the Communications Act. But there also are many significant differences in
these bills. Both versions include provisions relating to:
!the eligibility of new entrants and of existing cable providers for the
streamlined franchising procedures;
!certification, application, and notification requirements;
!the identification of the geographic areas covered by the franchise;
!renewal and revocation procedures;
!franchise fees;
!public, educational, and governmental (PEG) channels;
!institutional networks;
!financial support for PEG channels and institutional networks;
!rights-of-way authority and management;
!national consumer protection and customer service standards;
!procedures for consumer protection and customer service complaints
and appeals; and
!redlining prohibitions.
However, each version has different requirements in each of these areas.
This report will be updated as warranted.



Contents
Overview ........................................................1
Eligibility ....................................................4
Certification, Application, and Notice..............................6
Identification of Each Franchise Area..............................7
Renewal and Revocation........................................8
Franchise Fees................................................9
PEG Channels and Institutional Networks..........................12
Audits Relating to Fees........................................15
Rights-of-Way ...............................................16
Consumer Protection and Customer Service........................17
Redlining and Buildout........................................20
Miscellaneous Provisions.......................................22
Definitions ..................................................26
List of Tables
Table 1: Side-by-Side Comparison of Major Cable Franchising Provisions in
House-Passed H.R. 5252 and in H.R. 5252 as Amended by theth
Senate Commerce Committee, 109 Congress.......................4



A Comparison of the Cable Franchising
Provisions in House-Passed H.R. 5252 and
in H.R. 5252 as Amended by the Senate
th
Commerce Committee, 109 Congress
Overview
On June 8, 2006, H.R. 5252, the Communications Opportunity, Promotion, and
Enhancement (COPE) Act of 2006, was passed by the House. Subsequently, that
legislation was amended in the nature of a substitute by the Senate Commerce
Committee; that amended version was released on August 4, 2006. Both versions of
H.R. 5252 include provisions that seek to foster competitive entry into the cable
television market by streamlining the process by which new entrants obtain a1
franchise to offer service. Both would amend the Communications Act in important
ways. Both would expand the authority of the Federal Communications Commission
(FCC or Commission) to set and enforce streamlined requirements, though the Senate
version would allow local franchise authorities to retain greater authority.
Under the House version, an applicant would apply to the FCC for a national2
franchise, identifying the local areas it intended to serve. In contrast, under the
Senate version, which was originally introduced as S. 2686 and which renames the
legislation the Advanced Telecommunications and Opportunities Reform Act, an
applicant would apply directly to the local franchise authority for a franchise, though
the application form, itself, as well as most of the requirements, would be crafted by
the FCC.3 In each case, when certain conditions have been met, the incumbent cable
service providers also would be eligible to use the new, simplified franchise
procedures and requirements.


1 47 U.S.C. 541 et seq.
2 Other provisions in the COPE Act address enforcement of the principles incorporated in
the FCC’s broadband policy statement, the obligations and rights of providers of voice over
internet protocol (VoIP) service, municipal provision of broadband services, mandatory
provision of stand-alone broadband access service, and the development of seamless
mobility.
3 Other provisions in the Advanced Telecommunications and Opportunities Reform Act
address call home and interoperability requirements related to the war on terrorism,
universal service reform and interconnection, municipal provision of broadband services,
wireless innovation networks, digital television, child pornography, the internet consumer
bill of rights, low power FM radio, cellphone tax moratorium, truth in caller ID, rural
wireless and broadband service, and a number of miscellaneous issues.

Under each version, the FCC is instructed to issue a number of national rules
and is given certain enforcement and appeals responsibilities, but local franchise
authorities retain authority over management of rights-of-way. Each version would
eliminate a number of the requirements currently imposed on cable operators in Title
VI of the Communications Act.4 Both versions include provisions relating to:
!the eligibility of new entrants and of existing cable providers for the
streamlined franchising procedures;
!certification, application, and notification requirements;
!the identification of the geographic areas covered by the franchise;
!renewal and revocation procedures;
!franchise fees;
!public, educational, and governmental (PEG) channels;
!institutional networks;
!financial support for PEG channels and institutional networks;
!rights-of-way authority and management;
!national consumer protection and customer service standards;
!procedures for consumer protection and customer service complaints
and appeals; and
!redlining prohibitions.
However, each version has different requirements in each of these areas. Most of
these differences have to do with the degree of state and local vs. federal authority,
with the Senate version leaving more authority in the hands of state and local
jurisdictions. For example, in both versions, consumer protection and customer
service regulations would be promulgated by the FCC, and appeals of any local
franchising authority orders in this area would be made to the FCC. But in the Senate
version, those regulations would be enforced by the local franchising authority, which
may refer a matter for enforcement to the state attorney general or state consumer
protection agency on a case-by-case basis. In contrast, in the House version, a person
may file a complaint either with the local franchising authority or with the FCC, and
any local franchising authority order would be enforced by the FCC. Similarly, in the


4 For example, both versions would eliminate Sec.621(a)(4)(A), the so-called “build-out”
provision, which states that “[i]n awarding a franchise, the franchising authority shall allow
the applicant’s cable system a reasonable period of time to become capable of providing
cable service to all households in the franchise area.” Without this provision, there are no
build-out requirements for franchisees.

House version enforcement of the redlining (anti-discrimination) provision would be
performed by the FCC, while in the Senate version such enforcement would be
performed by the state attorney general.
Table 1 compares the major franchising provisions in the bills. It incorporates
the differences in terminology in the two versions – for example, the House version
continues to refer to “cable service” and “cable operators”, while the Senate version
refers to “video service” and “video service providers”. Table 1 also provides the
section number that the provision would be assigned in an amended Communications
Act.



CRS-4
Table 1: Side-by-Side Comparison of Major Cable Franchising Provisions in House-Passed H.R. 5252 and in H.R.
5252 as Amended by the Senate Commerce Committee, 109th Congress
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
ibility
nAn eligible applicant may elect to obtain a national franchise to provide
cable service in a franchise area, or it may obtain a franchise from an
existing state or local franchising authority. Sec. 630(a)(1) and
(a)(4)(B).
iki/CRS-RL33630eral FranchiseSec. 617 of the Communications Act, relating to local franchisingSec. 617 of the Communications Act, relating to local franchising
g/wquirementsauthority approval of the sale or transfer of a franchise, is repealed.authority approval of the sale or transfer of a franchise, is repealed.
s.or
leakA video service provider may not provide video service without a
franchise. Sec. 621(a)(2).
://wiki
httpA franchising authority may not grant an exclusive franchise. Sec.
621(a)(1)(A).
ibility of newNew cable providers may obtain a national franchise on the date ofThe amendments to the Communications Act made by this version will
le/video serviceenactment of this law. Sec. 630(d).take affect six months after its enactment into law. In the interim, the
idersFCC shall initiate proceedings needed to implement the amendments
and as soon as those requirements are in place new entrants may apply
for a franchise under the new provisions. Sec. 381(a)(1) and (2).
ibility of existingExisting providers of cable service may obtain a national franchise for aExcept as provided by a competition trigger, the new franchise
le/video servicefranchise area if there is a competitive provider in that franchise area. provisions shall not apply to a cable operator with a franchise agreement
idersSec. 630(d).in effect on the date of enactment. The old franchise provisions shall
continue to apply until the earlier of the expiration date of the existing



CRS-5
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
franchise agreement or the date on which a competition-triggered new
franchise agreement that replaces the existing franchise agreement takes
effect. Sec. 381(b)(1).
Competition trigger: If a franchising authority authorizes a video service
provider to provide video service in an area in which cable service is
already being provided under an existing franchise agreement, when the
new video provider commences video service in that area a cable
operator with an existing franchise may submit an application for a
franchise under the new franchise provisions. When the franchise is
iki/CRS-RL33630granted, (i) the terms and conditions of the new franchise agreement
g/wsupersede the existing franchise agreement, and (ii) the new franchise
s.orprovisions in the Communications Act shall apply. Sec. 381(b)(2).
leak
The old franchise provisions shall continue in effect after the date of
://wikienactment with respect to any cable operator to which they applied
httpbefore that date until the earlier of (i) the expiration date of the franchise
agreement under which the cable operator was operating on the date of
enactment, and (ii) the date on which a new franchise agreement takes
effect due to the competitive trigger provision. Sec. 381(c).
chise Change IfIf only one cable operator is providing cable service in a franchise area
le Competitionand that cable operator had obtained a national franchise when there had
esbeen more than one cable operator in that area, the local franchising
authority may file a petition with the FCC requesting that the FCC
terminate the national franchise for that franchise area. If the FCC finds
there is only one cable provider in that franchise area, it shall issue an
order granting the petition, which would take effect one year from the
date of such grant if no other cable operator offers cable service in that



CRS-6
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
area during that one year. The cable operator that lost its national
franchise may obtain a franchise from the local franchising authority.
Sec. 630(b)(1)(G).
tification, Application, and Notice
tification/An applicant for a national franchise must file a certification with theAn applicant for a video service franchise must file with the local
plication/FCC that provides contact information, identification of each franchisefranchising authority a standardized application form (to be created by
tification Processarea in which the applicant seeks authority to offer cable service, and athe FCC). The filed application must include contact information for
declaration that it will comply with the rights-of-way requirements ofthe applicant, the period for which the franchising agreement shall be in
iki/CRS-RL33630the franchising authority in the locality for which it seeks a franchiseand the consumer protection and customer service rules adopted by theeffect, the physical location of the headend (or its equivalent), and adescription of the video service to be provided. It also must include a
g/wFCC. Sec. 630(a)(2) and (3).signed declaration that the applicant agrees to comply with all
s.orapplicable federal and state statutes and regulations and all applicable
leakOn the day of filing a national certification for a franchise area, themunicipal regulations and police powers regarding the use of rights-of-
://wikiapplicant must transmit a copy of the certification to the localfranchising authority for that area. Sec. 630(a)(4)(A).way, and geographically identifying the franchise area in which itintends to offer cable service. Sec. 603(a)(1) and (2) and 612(a)-(c).
http
The application form also must include blank spaces, to be filled in by
the franchising authority, for the franchise fee percentage; the number
of public, educational, and governmental (PEG) access channels to be
provided; the percentage fee to support PEG access facilities and
institutional networks; and the franchising authoritys point of contact.
Sec. 603(a)(1).
The franchising authority must publish public notice of receipt of a
complete application within 15 days if public notice is required by state
or local law. The franchising authority must complete the information it
is required to add to the application form and return the form to the



CRS-7
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
applicant within 90 days. A franchising agreement shall take place 15
calendar days after the date that the completed application is received by
the applicant unless the applicant notifies the franchising authority
within those 15 days that the terms offered are not accepted. Sec.
603(a)(3) and (4).
DeemedA national franchise shall be effective within 30 days of the date of theIf a franchising authority fails to act within the 90-day period on a
ed/ Date offiling of a completed certification, for a term of 10 years. Sec.franchise application that meets the requirements, the franchise
fect and Duration630(b)(1) and (2)(A).application shall be deemed granted:
iki/CRS-RL33630effective on the 91st day;
g/wfor a term of 15 years;
s.or
leakwith a franchise fee set at the same percentage of gross revenue as that
://wikipaid by the cable operator with the most subscribers in the franchisearea, or if there is no cable operator offering cable service in the
httpfranchise area, with a franchise fee of 5 percent of gross revenue;
with an obligation to provide the number of PEG use channels required
by Section 611 of the Communications Act. Sec. 603(b).
A franchising authority may grant a franchise for a term of 5 to 15
years. Sec. 621(a).
ach Franchise Area
entification of EachThe applicant must identify each franchise area in which it intends toThe applicant must geographically identify in its application the
chise Areaoffer cable service pursuant to the national certification. Because somefranchise area in which it intends to offer cable service. Sec. 612(b)(3).


of the national franchise requirements explicitly require the franchisee

CRS-8
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
to meet the franchise requirements currently imposed on cable
companies with local franchises, the bill requires that applicants define
their proposed franchise areas in a fashion that does not overlap the
boundaries of existing cable franchises. Specifically
a franchise area must be the entirety of a franchise area in which an
incumbent cable operator is authorized to provide cable service; or
if the applicant seeks to serve a geographic area for which currently
there is no authorized cable provider [currently, more than 95% of U.S.
iki/CRS-RL33630households are located in a geographic area that at least one cable
g/wcompany is franchised to serve], the franchise area must cover the
s.orentirety of the jurisdiction of a unit of general local government. If the
leakapplicant also seeks to serve a contiguous geographic area for which
currently there is an authorized cable provider, the certification must
://wikispecify separate franchise areas for the currently unserved and currently
httpserved areas; or
if the applicant seeks to serve a geographic area that includes areas that
are within the jurisdiction of different franchising authorities (e.g.,
contiguous counties), the certification must specify each such area as a
separate franchise area. Sec. 630(a)(3)(F).
al and Revocation
ewal and RevocationA national franchise shall be renewed automatically upon expiration ofA video service provider may submit a written application for renewal
the 10-year period. During the last year of the 10-year period, a localof its franchise to a franchise authority not more than 180 days before
franchising authority may request a public hearing to identify cable-the franchise expires. Any such application shall be made on the
related community needs and interests and to assess the performance ofstandard application form created by the FCC and shall be treated in the



CRS-9
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
the cable operator that holds the national franchise (hereinafter referredsame manner as any other franchise application. Sec. 625(a).
to as the “national franchisee”) in that franchise area. A franchise may
be revoked by the FCC for willful or repeated violation of any federal orA franchising authority make revoke a video service provider’s
state law or Commission regulation relating to the provision of cablefranchise if it determines, after notice and an opportunity for a hearing,
service in the franchise area, for false statements or material omissionsthat the video service provider has violated any federal or state law or
in FCC filings, for willful or repeated violation of rights-of-wayFCC regulation relating to the provision of video services in the
management laws or regulations, or for willful or repeated violation offranchise area, made false statements or material omissions in any filing
the anti-discrimination requirement. A national franchisee whosewith the franchising authority or FCC, violated the rights-of-way
franchise has been revoked for a specific franchise area may seekmanagement laws or regulations of any franchising authority in the
reinstatement. Sec. 630(b)(2)(C) through (F).franchise area, or violated the terms of the franchise agreement. Sec.
iki/CRS-RL33630 625(b)
g/w
s.orA franchising authority may not revoke a franchise unless it first
leakprovides written notice to the video service provider of the alleged
violation on which the revocation would be based and a reasonable
://wikiopportunity to cure the violation. Sec. 625(c).
http
Any decision of a franchising authority to revoke a franchise is final for
purposes of appeal. A video service provider whose franchise is
revoked may avail itself of procedures in Sec. 635 for action in federal
or state court. Sec. 625(d).
chise FeeA national franchisee shall pay to the franchising authority a franchiseA franchising authority may impose and collect a franchise fee from a
fee of up to 5% of gross revenues from the provision of cable servicevideo service provider, but may not discriminate among video service
within the franchise area. Sec. 630(c)(1).providers in imposing or collecting any fee. Sec. 622(a).



CRS-10
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
The franchise fee imposed for any 12-month period may not exceed 5%
of the video service provider’s gross revenue derived in that period.
Sec. 622(b)(1).
inition of FranchiseThe termfranchise fee” includes any fee or assessment of any kindThe termfranchise fee” includes any tax, fee or assessment of any kind
imposed by a franchising authority or other governmental entityimposed by a franchising authority or a state or local governmental
imposed on a cable service provider or subscriber, solely because ofentity imposed on a video service provider or subscriber, or both, solely
their status as such. It does not include:because of their status as such. It does not include:
any tax, fee or assessment of general applicability;any tax, fee or assessment of general applicability;
iki/CRS-RL33630any fees assessed for support of PEG use and institutional networks; any fees assessed for support of PEG use and institutional networks;
g/w
s.orrequirements or charges for the management of public rights-of-way,requirements or charges incidental to the use of public rights-of-way,
leakincluding payments for bonds, security funds, letters of credit,including payments for bonds, security funds, letters of credit,
://wikiinsurance, indemnification, penalties, or liquidated damages; orinsurance, indemnification, penalties, or liquidated damages;
httpany fee imposed under title 17, United States Code. Sec. 602(p)(2).any fee imposed under title 17, United States Code; or
costs of fines, penalties, or recoupment. Sec. 622(g)(1).
inition of GrossGross revenues means all cash, credits, property, and in-kindGross revenue” means all cash, credits, property, and in-kind
venue(s)contributions (services or goods) received by the cable operator for thecontributions (services or goods) received by a video service provider
provision of cable service within the franchise area. Gross revenuesfrom the provision of video service within a franchise area. Gross
include — revenue includes
charges and fees paid by subscribers for the provision of video service,
charges and fees paid by subscribers attributable to the provision ofsold individually or as part of a package or bundle;
cable services, sold individually or as part of a package or bundle;
compensation received for promotion or exhibition of any product or
compensation received for promotion or exhibition of any products orservice on the provider’s video service;



CRS-11
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
services over the cable system;compensation received for carriage of video programming on the
provider’s system;
compensation for carriage of video programming or other programming
service on that operator’s cable service;
compensation arrangements for advertising.
compensation arrangements for advertising and
advertising commissions paid to an affiliated third party for cable
services advertising; and
franchise fees imposed on the cable operator that are passed on to
iki/CRS-RL33630subscribers.
g/w
s.orGross revenue does not include — Gross revenue does not include:
leak
://wikirevenues not actually received, even if billed, such as bad debt notrecovered;revenues not actually received, even if billed, such as bad debt notrecovered;
http
refunds, rebates, credits, or discounts to subscribers or to a municipality,refunds, rebates, credits, or discounts to subscribers or to a municipality;
attributable to the cable service;
revenues received by a video service provider or its affiliates from the
revenues received by the cable operator or its affiliates from theprovision of services or capabilities other than video service, including
provision of services or capabilities other than cable service, includingvoice, Internet access, or other broadband-enabled applications that are
telecommunications services, Internet access services, and non-cablenot video service, and non-video services bundled with video services;
services bundled with the cable service;
revenues for the provision of directory or Internet advertising, including
yellow pages, white pages, banner advertisement, and electronic
revenues for the provision of directory or Internet advertising, includingpublishing;


yellow pages, white pages, banner advertisement, and electronic

CRS-12
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
publishing;any tax, fee, or assessment of general applicability imposed on a
subscriber or transaction by federal, state, or local government,
any tax, fee, or assessment of general applicability imposed on thecollected by the video service provider and required to be remitted to
customer or the transaction by a federal, state, or local government orthe taxing authority;
any other governmental entity, collected by the provider, and required to
be remitted to the taxing entity;sales of capital assets or surplus equipment;
sales of capital assets or surplus equipment;reimbursement by programmers for marketing costs incurred by the
video service provider for the introduction of any new programming;
reimbursement by programmers of marketing costs actually incurred by
iki/CRS-RL33630the cable operator for the introduction of new programming; orthe sale of cable services for resale to the extent that the purchaser
g/wcertifies in writing that it will resell the service and pay any applicable
s.orthe sale of cable services for resale to the extent the purchaser certifiesfranchise fee;
leakin writing that it will resell the service and pay a franchise fee. Sec.
630(o).revenues paid by subscribers to a home shopping programmer directly
://wikifrom the sale of merchandise through any home shopping channel (but
httpexcluding any commissions paid to the video service provider as
compensation for promotion or exhibition of any product or service).
Sec. 622(g)(2).
s and Institutional Networks
blic, Educational, andA national franchisee shall provide channel capacity for PEG use that isA video service provider that obtains a franchise shall provide channel
vernmental (PEG)not less than the channel capacity required of the cable operator with thecapacity for PEG use that is not less than the channel capacity required
annel Requirementsmost subscribers in the franchise area on the effective date of theof the cable operator or video service provider with the greatest number
national franchise. of PEG use channels in the franchise area on the effective date of the
franchise. If there is no other video service provider in the franchise
If there is no other cable operator in the franchise area required toarea on the effective date of the franchise, the video service provider
provide channel capacity for PEG use, the national franchisee shallmay be required to provide up to 3 channels. Sec. 611(a).



CRS-13
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
provide the channel capacity for such use determined by FCC rule.
Every 15 years, a franchising authority may require a video service
Every 10 years, a franchising authority may require a nationalprovider to increase the channel capacity designated for PEG use, and
franchisee to increase the channel capacity designated for PEG use bythe channel capacity designated for such use on any institutional
the higher of one channel or 10% of the PEG channel capacity requirednetworks required, not to exceed the greater of 1 channel or 10% of the
of that operator prior to the increase. Sec. 630(e)(1) and (3).PEG channel capacity required of that provider prior to the increase.
Sec. 611(b).
er Public,PEG programming carried by the cable operator must be available to allPEG programing carried by the video service provider must be available
ucational, andsubscribers in a franchise area. Sec. 630(e)(4)(A). to all subscribers in a franchise area. Sec. 611(d)(1).
iki/CRS-RL33630vernmental (PEG)annel RequirementsThe production of any PEG programming is the responsibility of theThe production of any PEG programming is the responsibility of the
g/wfranchising authority. Sec. 630(e)(4)(B). franchising authority. Sec. 611(d)(2).
s.or
leakThe cable operator is responsible for the transmission from the signalThe video service provider is responsible for the transmission from the
://wikiorigination point of the programming, or from the point ofinterconnection with another cable operator, to the cable operatorssignal origination point of the programming, or from the point ofinterconnection with another video service provider already offering the
httpsubscribers, of any PEG programming produced by or for thePEG programming, to the video service provider’s subscribers, or any
franchising authority and carried by the cable operator. Sec.PEG programming produced by or for the franchising authority and
630(e)(4)(C). carried by the video service provider. Sec. 611(d)(3).
Unless 2 video service providers otherwise agree to the terms for
Unless 2 cable operators otherwise agree to the terms forinterconnection and cost sharing, such video service providers shall
interconnection and cost sharing, in a franchise area where there is morecomply with regulations prescribed by the Commission providing for
than one cable operator and at least one is a national franchisee, thethe interconnection between the 2 video service providers for
cable operators must either agree to interconnection and cost sharingtransmission of PEG programming without material degradation of
terms, or abide by FCC interconnection and cost-sharing regulations forsignal quality or functionality and reasonable allocation of the costs of
the transmission of PEG programming without material deterioration insuch interconnection. Sec. 611(d)(4).


signal quality or functionality. Sec. 630(e)(4)(D).

CRS-14
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
A cable operator shall display program information for PEG channelsThe video service provider shall display the program information for
on any navigational device, guide, or menu containing other videoPEG programming in any print or electronic program guide in the same
programming that is made available to subscribers in the franchise area. manner in which it displays program information for other video
Sec. 630(e)(4)(E).programming in the franchise area. Sec. 611(d)(5).
A video service provider shall not exercise any editorial control over
any PEG use of channel capacity, but a video service provider may
refuse to transmit any public access program or portion of a public
access program that contains obscenity. Sec. 611(c).
iki/CRS-RL33630blic, Educational, andvernmental (PEG)A national franchisee shall pay an amount equal to 1% of the cableoperator’s gross revenues in the franchise area to the franchisingA video service provider may be required to pay a fee equal to:
g/wnnel andauthority for the support of PEG use and institutional networks. Sec.not more than 1% of its gross revenue in the franchise area to the
s.orstitutional Network (I-630(e)(2).franchising authority for the support of PEG access facilities and
leakt) Financial Supportinstitutional networks; or
://wikithe value, on a per subscriber basis, of all monetary grants or in-kind
httpservices or facilities for PEG access facilities provided by the cable
operator in the franchise area with the most cable service subscribers in
the calendar year preceding the date of enactment of this act, pursuant to
that cable operator’s existing franchise in effect on the date of
enactment. Sec. 622(b)(4).
isting InstitutionalA cable operator that provided cable service in a franchise area on theA franchising authority may require a cable operator or video service
orksdate of enactment of the act and then obtains a national franchise mustprovider with a franchise in effect on the date of enactment of the act to
continue to provide any institutional network that it was required tocontinue to provide any institutional network it was required to provide
provide on the day before its national franchise became effective. Sec.on the date of enactment, notwithstanding the expiration or termination
630(e)(2) of that franchise pursuant to that cable operator or video service
provider obtaining a franchise under the new rules in this act. Sec.
622(b)(4)(C)(i).



CRS-15
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
A franchising authority may not require a national franchisee toA franchising authority may not require a video service provider to
construct a new institutional network. Sec. 630(e)(2).construct a new institutional network. Sec. 622(b)(4)(C)(ii).
udits Relating to Fees
porting, Records, andA national franchisee shall make periodic reports to the FCC and theA franchising authority may require a cable operator to provide
dits Relating to Feesfranchising authority to verify compliance with fee obligations. Sec.information sufficient to calculate the per-subscriber equivalent fee to
630(m)(1). provide PEG and institutional network financial support. The
information shell be treated as confidential and proprietary business
Upon request by a franchising authority or the FCC, a nationalinformation. Sec. 622(b)(4)(B).
iki/CRS-RL33630franchisee shall make available its books and records for periodic audit. A franchising authority may review the business records of a cableNo more than once a year, a franchising authority may conduct an audit
g/woperator, to the extent needed to ensure proper payment of fees, notof a video service provider’s business records to the extent reasonably
s.ormore than once in a 12-month period. Sec. 630(m)(2) and (3).necessary to ensure payment of the required fees. The video service
leakprovider shall make its books and records available for such periodic
://wikireview. Sec. 622(e)(1) and (2).
httpTo the extent that the review identifies an underpayment of more than
5% of any fee, the video service provider shall reimburse the
To the extent that a review identifies an underpayment of franchise feesfranchising authority the reasonable costs of any such review conducted
or PEG/institutional network fees, the cable operator shall reimburse theby an independent third party with respect to such fee. The costs of any
franchising authority the reasonable costs of any such review conductedcontingency fee arrangement between the franchising authority and the
by an independent third party. The FCC shall determine by rule theindependent reviewer shall not be subject to reimbursement. Sec.
minimum percentage underpayment that requires cost reimbursement. 622(e)(3).
Sec. 630(m)(4).
Any fee that is not reviewed by a franchising authority within three
years after it is paid or remitted shall not be subject to later review by
Any fee that is not reviewed by a franchising authority within threethe franchising authority. Sec. 622(e)(4).


years after it is paid or remitted shall not be subject to later review by

CRS-16
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
the franchising authority. Sec. 630(m)(5).All financial determinations and calculation shall be made in accordance
with generally accepted accounting principles (GAAP). Sec. 622(f).
ute ResolutionA franchising authority or a national franchisee may file a complaint at
the FCC to resolve a dispute with respect to the amount of any fee
required, if the franchising authority or the national franchisee provides
the other entity written notice of such dispute and if they have not
resolved the dispute within 90 calendar days after receipt of such notice.
A complaint must be filed within three years of the period to which the
disputed amount relates. The FCC shall issue an order resolving any
iki/CRS-RL33630complaint within 90 days of filing. Sec. 630(m)(6).
g/wghts-of-Way
s.or
leakthority To Use PublicA national franchise authorizes the construction of a cable system overAny franchise shall be construed to authorize the construction of a video
ghts-of-Waypublic rights-of-way and through easements within the area to be servedservice system over public rights-of-way, and through easements, that
://wikiby the cable system. Sec. 630(f)(1).have been dedicated for compatible purposes, within the area to be
httpserved by the video service system. Sec. 621(a)(3).
ictions onA national franchisee can use local rights-of-way and easements subjectA franchisee can use local rights-of-way and easements subject to
chisees Use ofto assurance that:assurance that:
ght s-o f-W a y
the safety, functioning, and appearance of the property and thethe safety and functioning of the property and the safety of other
convenience and safety of other persons are not adversely affected bypersons are not adversely affected by the installation or construction of
the installation or construction of facilities; Sec. 630(f)(1)(A)facilities; Sec. 621(a)(3)(A) and
the cost of the installation, construction, operation, or removal of suchthe cost of the installation, construction, operation, or removal of such
facilities will be borne by the cable operator or subscriber, or afacilities will be borne by the video service provider or subscriber, or a
combination of both; Sec. 630(f)(1)(B) andcombination of both. Sec. 621(a)(3)(B).



CRS-17
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
the owner of the property be justly compensated by the nationalState or local government may require that a property owner be justly
franchisee for any damages caused by the installation, construction,compensated by a video service provider for damage caused by the
operation, or removal of such facilities by the national franchisee. Sec.installation, construction, operation, or removal of facilities by the video
630(f)(1)(C).service provider. Sec. 621(a)(2)(C).
anagement of PublicA state or local government (including a franchising authority) retainsA state or local government shall apply its laws or regulations in a
ghts-of-Wayits authority over a national franchisee to manage, on a reasonable,manner that is reasonable, competitively neutral, nondiscriminatory, and
competitively neutral, and nondiscriminatory basis, the public rights-of-consistent with state police powers, including permitting, payments for
way and easements. A state or local government or franchisingbonds, security funds, letters of credit, insurance, indemnification,
authority may impose charges for such management and may requirepenalties, or liquidated damages to ensure compliance with such laws
iki/CRS-RL33630compliance with such management and charges. Sec. 630(f)(2).and regulations. Any permitting fees imposed by a state or localgovernment shall be for the purposes of compensating that government
g/wfor costs incurred in managing public rights-of-way. Any law that
s.ormeets the requirements of this subparagraph shall not be held to have
leakthe effect of prohibiting a video service provider from offering video
://wikiservice. Sec. 621(a)(2)(B).
httpghts-of-Way DisputeIf a dispute arises, the sole recourse of any party to the dispute shall be
lutionto file an action in a court of competent jurisdiction. Sec. 621(a)(1)(D).
le AttachmentsNothing in the act or the amendments made by this act will affect the
application or interpretation of Sec. 224 of the Communications Act,
which regulates pole attachments. Sec. 104.
Protection and Customer Service
tional ConsumerNo state or local law or regulation shall impose on a national franchisee
ection and Customerany consumer protection or customer service requirement other than
ice consumer protection or customer service requirements of general
ardsapplicability. Sec. 630(g)(1).



CRS-18
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
Within 120 days of enactment of this act, the FCC shall issue a reportWithin 120 days of enactment of this act, after receiving comment from
and order that updates for national franchisees the national consumerinterested parties, the FCC shall promulgate regulations, including
protection and customer service rules currently in section 632(b) of thepenalties to be paid to subscribers, with respect to customer service and
Communication Act, taking into account the national nature of aconsumer protection requirements for video service providers. The
franchise and the role of state and local governments in enforcing, butregulations shall take effect 60 days after the date on which the final
not creating, consumer protection and customer service standards. Sec.rule is promulgated by the Commission. Sec. 632(a)(1) and (2).
630(g)(2).
The national rules shall address, in addition to requirements in section
632(b), the following service issues: billing, billing disputes,
iki/CRS-RL33630discontinuation of service, when and how late fees may be assessed (but
g/wnot the amount of such fees), loss of service or service quality, changes
s.orin channel lineups or other cable services and features, and the
leakavailability of parental control options. Sec. 630(g)(3)(A).
://wikiThe FCC’s revised consumer protection rules shall provide for forfeiture
httppenalties, customer rebates, refunds, or credits, and shall establish
guidelines with respect to violations of such rules. These guidelines
shall provide for increased forfeiture penalties for repeated violations of
the standards in the rules and establish procedures for payments by the
cable operator directly to the affected franchising authority. Sec.
630(g)(3)(B).
nsumer ProtectionA person may file a consumer protection or customer service complaintThe consumer protection and customer service regulations promulgated
d Customer Servicewith respect to an alleged violation of the FCC’s revised consumerby the FCC shall be enforced by franchising authorities. A franchising
mplaintsprotection rules by a national franchisee either with the local franchisingauthority may refer a matter for enforcement to the state attorney
authority or with the FCC. Sec. 630(g)(4)(A).general or state consumer protection agency on a case-by-case basis.
Sec. 632(c).


On its own motion or at the request of a person, a local franchising

CRS-19
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
authority may initiate its own complaint proceeding with respect to anA video service provider may appeal any enforcement action taken
alleged violation or may file a complaint with the FCC regarding suchagainst that provider by a franchising authority to the FCC. Sec. 632(d).


an alleged violation. The local franchising authority or the FCC shall
render a decision on any complaint filed within 90 days of its filing.
Sec. 630(4)(B) and (C).
In a proceeding commenced by a franchising authority, the franchising
authority may issue an order requiring compliance with the FCC’s
consumer protection rules, but may not create any new standard or
regulation or expand or modify the FCCs rules. In such a proceeding,
iki/CRS-RL33630the franchising authority may issue an order requiring the filing of any
g/wdata, documents, or records that are directly related to the alleged
s.orviolation. A franchising authority may charge a national franchisee a
leaknominal fee to cover the costs of issuing orders. Sec. 630(g)(5)(A), (B),
and (C).
://wiki
httpAn order of a franchising authority shall be enforced by the FCC if the
order is not appealed to the FCC, if the FCC does not agree to grant
review, or if the order is sustained by the FCC on appeal. Sec. 630
(g)(6)(A).
Any party may file with the FCC a notice of appeal of an order of a
franchising authority. Such appeal shall be deemed denied after 30-days
unless the FCC agrees within such period to grant review of the appeal.
If the appeal is not denied, the FCC shall render a decision within 90
days of such filing. Sec. 630(g)(6)(B) and (C).

CRS-20
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
ly Termination ofIt is unlawful for a video service provider to charge a subscriber an
bscriptionsamount in excess of one months subscription fee as a penalty or service
charge for terminating a subscription to the video service providers
service before the date on which the subscription term ends. Sec.
632(a)(2).
C Report on Within one year of the enactment of this section, and annually
nsumer Protectionthereafter, the FCC shall submit a report to the House and Senate
d Customer ServiceCommerce Committees on the implementation of this complaint
mplaint Processprocess, including the number of complaints filed with franchising
iki/CRS-RL33630authorities; any trends concerning complaints, such as increases in thenumber of particular types of complaints or in new types of complaints;
g/wthe timeliness of the response of franchising authorities and the results
s.orof complaints not appealed to the FCC; the number of complaints filed
leakdirectly with the FCC; the number of appeals filed with the FCC and the
://wikinumber of such appeals that the FCC agreed to hear; the timeliness ofthe FCCs responses to such complaints and appeals; and the results of
httpsuch complaints and appeals filed with the FCC. Sec. 630(g)(7)(A).
The FCC may request that franchising authorities submit information
about the complaints filed with the franchising authorities, including the
number of such complaints and the timeliness of the response and the
results of such complaints. Sec. 630(g)(7)(B).
ining and Buildout
ti-discriminationA national franchisee shall not deny cable service to any group ofA video service provider may not deny access to its video service to any
edlining)potential residential cable subscribers in the franchise area because ofgroup of potential residential video service subscribers because of the
the income of that group. Sec. 630(h)(1).income, race, or religion of that group. Sec. 642(a).



CRS-21
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
A franchising authority may file a complaint against a nationalThis section may be enforced by the state attorney general through a
franchisee with the FCC, after providing the franchisee with notice andcomplaint-initiated adjudication process under which a complaint may
the opportunity to respond. Sec. 630(h)(2)(A) and (B).be filed by a resident of the franchising area who is aggrieved or by a
franchising authority on behalf of residents of its franchise area. Within
Upon receipt of a complaint, the FCC shall give notice of the complaint180 days of receiving the complaint, a state attorney general shall act on
to the national franchisee. In investigating a complaint, the FCC maysuch complaint either by filing a complaint with a court of competent
require the national franchisee to disclose such information andjurisdiction or notifying the resident or franchising authority that the
documents as the FCC deems necessary to determine whether thestate attorney general will not file such a complaint. The totality of the
national franchisee is in compliance, subject to confidentialityvideo service provider’s deployments in its service areas shall be
protections. The FCC shall issue a determination with respect to eachconsidered in any adjudication pursuant to an enforcement action. Sec.
iki/CRS-RL33630violation alleged in the complaint within 60 days. Sec. 630(h)(2)(D),642(b)(1) and (2).
g/w(E), and (F).
s.orIf a court determines that a video service provider has violated
leaksubsection (a), it shall ensure that the video service provider remedies
If the FCC determines that a national franchisee has discriminatedany violation and may assess a civil penalty in such amount as may be
://wikiagainst a group on the basis of income, it shall ensure that the nationalauthorized under state law for the franchising area in which the violation
httpfranchisee extends access to that group within a reasonable period ofoccurred for violation of that state’s anti-discrimination laws. Sec.
time. Sec. 630(h)(2)(G).642(c).
The maximum forfeiture penalty applicable to a violation of thisIt is not a violation if video service is denied because technical
subsection is $750,000 for each day of the violation. Payment of anyfeasibility, commercial feasibility, operational limitations, or physical
forfeiture payment shall be made directly to the franchising authoritybarriers preclude the effective provision of video service. Sec.
involved. Sec. 630(h)(2)(H).642(d)(1).
Nothing in this section authorizes the use of quotas, goals, or timetables
as a remedy. Sec. 642(d)(2).
ildout RequirementThe buildout requirement currently in Sec. 621(a)(4)(A) is eliminated.The buildout requirement currently in Sec. 621(a)(4)(A) is eliminated.
ildout ReportA national franchisee must submit to the FCC and the franchisingBeginning three years after the date of enactment, each franchising



CRS-22
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
authority, within 180 days of obtaining the franchise and thenauthority shall report to the FCC on video service provider deployment
biannually, a report identifying the geographic areas in the franchisein its franchise area. The Commission shall develop and make available
area where the cable operator offers cable service and describing theto franchising authorities a standardized, electronic data-based, report
cable operators progress in extending cable service to other areas in theform to be used in complying with this section. A video service
franchise area. Sec. 630(h)(2)(C).provider shall provide such information to the franchising authority as is
needed to complete the report. Sec. 642(e)(1).
Beginning four years after the date of enactment, and every four years
thereafter, the FCC shall report to the Senate and House Commerce
Committees on the buildout of video service. Sec. 642(e)(2).
iki/CRS-RL33630
g/wiscellaneous Provisions
s.ord Local LawsNothing in this title is intended to affect state or local laws of general
leakapplicability, except to the extent that such laws are inconsistent with
://wikithis title. Sec. 604.
httpNo state or local government may regulate direct broadcast satellite
(DBS) services. This does not prevent state taxation of a DBS provider
and does not preempt state or local laws of general applicability. Sec.
605.
No state or local law may prohibit, or have the effect of prohibiting, a
video service provider from offering video service. Sec. 621(a)(2)(A).
Nothing in this section shall be construed to modify, impair, supersede,
or authorize the modification, impairment, or supersession of, any state
or local law pertaining to taxation. Sec. 622(d).
ild PornographyThe FCC shall promulgate regulations to require a national franchisee to



CRS-23
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
prevent the distribution of child pornography over its network. Sec.
630(i).
ed AccessThe provisions of section 612(I) of the Communications Act regarding
the carriage of programming from a qualified minority programming
source or from any qualified educational programming source shall
apply to a national franchisee. [Under current law, to promote diversity
of program sources, a cable operator is required to set aside a certain
percentage of its channel capacity for commercial use by persons
unaffiliated with the operator. Section 612(i) allows the cable operator
iki/CRS-RL33630to use up to 33% of that set-aside channel capacity for the provision ofprogramming from a qualified minority programming source or from a
g/wqualified educational programming source.] Sec. 630(j).
s.or
leaknicipal OperatorsA local or municipal authority may operate as a multichannel video
programming distributor in the franchise area. Sec. 612(f).
://wikienabled VideoIP-enabled video service is an interstate service and is subject only to
httpvicefederal regulations. Sec. 642(a).
IP-enabled video service” means a video service provided over the
public Internet [undefined] utilizing Internet protocol, or any successor
protocol that is not offered by, or not offered as part of a package of
video services offered by, a video service provider or its affiliate. Sec.
642(b).
The FCC may not impose any rule on, apply any regulation to, or
otherwise regulate the offering or provision of IP-enabled video service.
Sec. 642(c).



CRS-24
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
Nothing in this section shall be construed to interfere with any lawful
activity of law enforcement or to modify, impair, supersede, or
authorize the modification, impairment, or supersession of, any state or
local law. Sec. 642(d) and (e).
ergency AlertsA state or local government may access the emergency alert system of a
national franchisee to transmit local or regional emergency alerts. Sec.
630(l).
s to ProgrammingA cable programming vendor in which a cable operator has anA video service programing vendor in which a video service provider
r Shared Facilitiesattributable interest shall not deny a national franchisee access to videohas an attributable interest may not deny a video service provider with a
iki/CRS-RL33630programming solely because the national franchisee uses a headend forfranchise access to video programming solely because that video service
g/wits cable system that is also used, under a shared ownership or leasingprovider uses a headend for its video service system that is also used,
s.oragreement, as the headend for another cable system. [This provision isunder a shared ownership or leasing agreement, as the headend for
leakintended to protect small cable operators that share facilities with otheranother video service provider. [This provision is intended to protect
cable operators.] Sec. 630(n)small cable operators that share facilities with other cable operators.]
://wikiSec. 628(a).
httpeservation of BasicThe basic tier regulation requirements in Sec. 623 of the current Title VI
er Regulationshall continue to apply in any franchise area until a franchising authority
receives a notice that a competitive provider has commenced the
provision of video service in the service area. Sec. 381(c)(2).
port on Cable ServiceThe FCC shall, commencing not later than one year after the date of
ploymentenactment of the act, issue a report annually on the deployment of cable
services pursuant to the amendments in this title. In its report, the FCC
shall describe in detail the following:
With respect to deployment by new cable operators
the progress of deployment of such service within the telephone service
area of cable operators, if the operator is also an incumbent local



CRS-25
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
exchange carrier, including a comparison with the progress of
deployment of broadband services not defined as cable services within
such telephone service areas; the number of franchise areas in which
such service is being deployed and offered; where such service is not
being deployed and offered; and the number and locations of franchise
areas in which the cable operator is serving only a portion of the
franchise area, and the extent of such service within the franchise area.
The number and locations of franchise areas in which a cable operator
with a franchise under section 621 of the Communications Act on the
iki/CRS-RL33630date of enactment of this act withdraws service from any portion of the
g/wfranchise area for which it previously offered service, and the extent of
s.orsuch withdrawal of service within the franchise area.
leak
The rates generally charged for cable service.
://wiki
httpThe rates charged by overlapping, competing multichannel video
programming distributors and by competing cable operators for
comparable service or cable service.
The average household income of those franchise areas or portions of
franchise areas where cable services are being offered, and the average
household income of those franchise areas, or portions of franchise
areas, where cable service is not being offered.
The proportion of rural households to urban households, as defined by
the Bureau of the Census, in those franchise areas or portions of
franchise areas where cable service is being offered and where it is not
being offered, including a state-by-state breakdown of such data and a



CRS-26
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
comparison with the overall ratio of rural and urban households in each
state; and
A comparison of the services and rates in areas served by national
franchisees and the services and rates in other areas.
The FCC is authorized to require cable operators to report all of the
information that the FCC needs to compile the report and to require
cable operators to file the same information with the relevant
franchising authorities and state commissions. Sec. 103.
iki/CRS-RL33630
g/wni ti ons
s.orinition of CableThe termcable operator” means any person or group who providesThe termvideo service provider” means a facilities-based provider of
leakicecable service over a cable system and directly or through one or morevideo service that utilized a public right-of-way in the provision of such
://wikiovider affiliates owns a significant interest in such cable system, or whootherwise controls or is responsible for the management and operationservice (including cable operators and providers offering open videosystems under Sec. 653), regardless of the transmission technology used
httpof such a cable system. This includes a person or group with a nationaland regardless of how the subscriber interacts with the service, but does
franchise. Sec. 602(5) as clarified by Sec. 630(p).not include satellite service, video programming using radio
communication directly to the recipient’s premises, or service via
commercial mobile service. Sec. 314(25).
The termcable operator” includes a local exchange carrier that
provides video services to video service subscribers in its telephone
service area through an open video system that complies with the
requirements of Sec. 653 of the Communications Act. Sec. 381(d)(1).
inition of CableThe termcable service” meansThe termvideo service” means
rvice/Video Service
(i) the one-way transmission to subscribers of video programming, or(i) the transmission to subscribers of video programming, interactive on-



CRS-27
ProvisionHouse-Passed H.R. 5252H.R. 5252 as Amended by the Senate
Commerce Committee
other programming service; anddemand service, or other programming service; and
(ii) subscriber interaction, if any, which is required for the selection or(ii) subscriber interaction, if any, required for the selection or use of
use of such video programming or other programming service; orsuch video programming, interactive on-demand service, or other
programming service regardless of the transmission technology used
the transmission to subscribers of video programming or otherand regardless of how the subscriber interacts with the service. Sec.
programming service provided through wireline facilities located at least314(24).


in part in the public rights-of-way, without regard to delivery
technology, including Internet protocol technology, except to the extent
that such video programming or other programming service is provided
as part of a commercial mobile service or an Internet access service.
iki/CRS-RL33630
g/w
s.or
leak
://wiki
http