Current Issue

New Law Ends City Control Over Cable Franchises

Posted by tbaker |
SB101

Senator Jake Files (R)

Sponsors: Primary — Files and Wright
Secondary — Bookout, D. Sanders, J. Woods, Ratliff, Wren, Branscum, Gilliam, Linck, Slinkard, Cozart, J. Dismang, Perry, Steel, D. Altes, J. Key, Rapert and Vines

By Terrah Baker

Lobbyists and proponents for a bill passed in the state Senate on Feb. 27 and the house March 5, claim it will allow competition to flourish in the cable-video provider industry; while opponents say it strips cities and citizens of their rights to public land and access television.

“We’ve had a very good relationship [with our cable service providers] we thought, but now there’s been a national move by the TV/cable companies like Cox [Communications]… What [the bill] does is take power away from the cities and makes it a state franchise agreement,” explained Fayetteville City Attorney Kit Williams.

Under the bill, the Secretary of State would hold ministerial powers over companies who file with their office as a cable service provider, leading the company to become a state franchise. Under current law, city’s hold franchise agreements with cable companies that hold companies to a 5 percent franchise fee, and other obligations that potentially favor citizens.

Williams cited an example: When Cox was moving to digital cable from analog, certain subscribers — although Cox would not release how many — would not have access to television for lack of proper technology. When Cox wanted to charge those residents for transcriber boxes, the city negotiated — under the federal law that requires all citizens have access to government channels — that Cox would provide a free transcriber box for two years for members with a basic cable package.

“This [bill] means that instead of us being able to put specific terms in to help our citizens and make sure that they’re protected as best we can, now the cable companies just file with the Secretary of State, and pay him 1,500 bucks and that’s that,” Williams said.

Under this bill, companies also have full access to city rights-of-way without local government oversight, as long as current laws of property damage and construction are being followed.

“Right now, the rights-of-ways of our city are owned by the people. Say, if there needed to be work done on a right-of-way, because we have some control, we can say ‘that’s an historic wall, we need you to cross over to the other side of the street,’ which we have had to do,”   Fayetteville Communication Director Lindsley Smith explained. “We can’t do that anymore [under this bill]. They get total control.”

The cable companies also obtain rights under this bill to limit the number of Public, Government and Educational (PEG) Channels made available, as well as how many subscribers will have access to those channels — 50 percent of subscribers as mandated by the bill.

“Cox’s lobbyist testified [in the state Senate Insurance and Commerce Committee meeting where the bill was passed] that they wouldn’t cut access channels, but if you read the bill, it says if you have an existing franchise then they’d allow three channels. But if you’ve never had one, then you only get one,” Smith said.

This means in places like Little Rock where they currently have five, and Fayetteville where there are four (Fayetteville school district, government, public and UA) the city must decide which to cut, after investing years into their programs. This is why Little Rock City Attorney Thomas Carpenter spoke out against the bill during the committee meeting, along with Morrilton Mayor Stewart Nelson.

So far, similar bills have been proposed and passed in multiple states, including Michican, South Carolina, Idaho, Tennessee and now Arkansas, in a move by cable companies over the last three years to “create a more competitive environment.” So far, states that have enacted similar bills as law do not see an increase in providers, but have seen the removal of franchise fees to the cities, Williams explained.

“In some other states after the state franchise has been in effect, the legislatures who don’t see the money going to the cities say ‘we’re going to eliminate the franchise fee,’ ” Williams said.

Williams, Chief Information Officer of Fayetteville School District Susan Norton and Smith gave a report to the Fayetteville Telecom Board on Feb. 21, which led the board to unanimously pass a resolution in opposition to the bill. The Fayetteville City Council did the same on Tues., March 5.

To learn more about this law and how it can impact you, contact Lindsley Smith at the city of Fayetteville lsmith@ci.fayetteville.ar.us.

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