FCC Cable Order – What Comes Next for Cities?

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Nearly two months after a final order from the Federal Communications Commission upending the cable franchise system went into effect, cities remain uncertain about the future of their franchises. After the order was finalized, NLC joined more than forty municipalities and local government organizations in a legal alliance to challenge the order. NLC also joined its local government allies in a motion to the FCC requesting a stay, or pause, in the implementation of the order.

Unsurprisingly, the FCC denied that request for a stay, but its denial of that request has thrown some aspects of the cable order’s implementation into confusion. In its denial, the FCC indicated that NLC had not adequately demonstrated the potential for harm to cities, because “If [franchise] negotiations fail, the terms in the franchise remain in effect unless and until a cable operator challenges those terms and proves that the terms violate the Order’s requirements.” That would seem to indicate that when cable providers bring amended terms to cities, those communities could simply decline to agree to them, and keep the current franchise agreement in place.

Organizations representing cable providers have filed a petition for clarification of that part of the FCC’s denial. The Internet & Television Association (NCTA) argued that the FCC’s statement in that denial of stay conflicted with the terms laid out in the final cable order. The FCC has opened that petition up to public comment – a move that both further muddies the legal waters around what cities may or may not do in their negotiations with cable providers, and delays the process of legal challenge while this issue is resolved at the agency. Comments may be filed until December 6, and reply comments until December 13, using MB Docket No. 05-311.

In the meantime, communities are already feeling the impact of the order. Many communities have reported that cable providers have either halted ongoing franchise or renewal negotiations or have requested substantive changes beyond fee obligations that could have major impacts for local oversight of cable providers in their communities. These changes, if agreed to, could allow cable providers to stop providing cable television service altogether. When combined with the preemption provisions in the new cable order, this would allow providers to avoid franchise oversight altogether by only providing over-the-top streaming video, broadband, and VoIP telephone service over their cable networks – services that state and local governments are now prohibited from franchising. Combined with the downward trends in many franchise revenues from cord-cutting, communities are facing serious threats to local media supported through franchises.

As many local leaders know, most Americans currently obtain broadband service via cable, which offers technological advantages over DSL in areas without comprehensive fiber coverage. The reason these cable broadband networks are so ubiquitous is because of franchise buildout obligations established decades ago, when cable service only included television. Without vigorous local involvement and oversight, American communities risk an increase in the digital divide and digital redlining, as network upgrades and new buildouts, free of franchise requirements, go only to the most profitable communities and neighborhoods.

NLC and its allies will continue to fight this industry handout by the FCC. Communities concerned about the impact of the order, and any potential expansion of its reach by the FCC, should contact their members of the House Energy & Commerce Committee, which will hold an oversight hearing of the FCC on Thursday, December 5. While the committee is likely to focus on the planned auction of C Band spectrum to make room for 5G, cities must make sure that these important local and consumer issues remain on the committee’s agenda.

AP

About the Author: Angelina Panettieri is the Legislative Manager for Information Technology and Communications at the National League of Cities. Follow her on twitter at @AngelinainDC.