Establishes statewide cable franchises for the purposes of competitive cable service, promoting the widespread development of high-capacity broadband internet access, and increasing the availability and quality of services in this key economic development area, and ensuring the safety, reliability, and affordability of telecommunications services.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5947
SPONSOR: Brennan TITLE OF BILL: An act to amend the public service law, in relation to
authorizing statewide cable franchises for the purposes of competitive
cable service, promoting the wide-spread development of high-capacity
broadband internet access, and increasing the availability and quality
of services in this key economic development area and ensuring the safe-
ty, reliability and affordability of telecommunications services
PURPOSE OR GENERAL IDEA OF BILL: To provide cable service choices to
consumers, called the "consumer cable choice act."
SUMMARY OF SPECIFIC PROVISIONS: Creates a new Article 11-A titled
"Statewide Cable Franchising and Regulation."
§ 231 Definitions.
allow, but not require, cable operators to file statewide franchises
with the Public Service Commission (PSC).
§ 233 Responsibilities of the Public Service Commission. The Act will
give the PSC oversight responsibilities as well as set forth the terms
and conditions of the application process. In addition, it will require
the PSC to establish an online complaint form for violations of this
article.
§ 234 Application of a statewide franchise. Sets forth the requirements
a cable operator must submit in an application for a statewide franchise
including the footprints of the proposed areas to be served, and forms
required by the Federal Communications Commission (FCC), the cable oper-
ator's business and corporate information, as well as other require-
ments. This section will establish the review process including: requir-
ing a series of public hearings and the administrative hearing process
for denied applications. Finally, it would require a $5,000.00 applica-
tion fee.
§ 235 Length of a statewide franchise. The Act will set the initial
statewide franchise for 10 years. Renewals of franchises would be for an
additional 15 years.
§ 236 Termination of a statewide franchise. This section will establish
rules that allow the PSC to terminate a statewide franchise if the cable
operator violates provisions of this article. As part of the Act's
requirements will be to call for network neutrality-which would require
that cable companies do not favor particular network destinations or
classes of applications over others to preserve the free flow of ideas
and information on any Internet capable networks. If a cable company
does violate the terms and provisions of net neutrality it establishes
grounds for termination of such franchise.
§ 237 Abandonment of service. The Act will create rules for abandoning
service including giving the power to the PSC to approve all abandonment
of services,
§ 238 Municipal power and regulation over franchise holders. The Act
will retain municipalities' cable regulatory powers.
§ 239 Payment and remittance of franchise fees The Act will set the
franchise fees at 5%.
§ 240 PEG channels The Act will require that the current regulations
governing PEG channels be followed in addition for additional PEG chan-
nels and services not contained in the current regulations. For example
every statewide franchise will have to allot analog channels of six
megahertz bandwidth as well as the creation of a separate PEG access
fund.
§ 241 Cable operator's community commitment. The Act will require cable
operators to provide free cable and high speed Internet service to
hospitals, schools, firehouses and other important community/municipal
organizations.
§ 242 Consumer protection rules. Requires cable companies follow the as
well as includes additional consumer protection rules and requirements.
§ 243 Neutral internet and broadband networks. Requires that broadband
and other Internet networks follow the long-standing policy of net
neutrality.
§ 244 Deployment requirements for statewide cable franchise. The Act
will require that and cable operator awarded a statewide franchise
deploy the infrastructure and service to particular areas at certain
specified dates to ensure that consumers do get a real choice in
service., Specifically, within three years the cable operator would have
to deploy service to areas with a population of 7,100 person per square
mile and within six years of the franchise will have to expand service
to areas with a population density of 501 people per square mile.
§ 245 Discrimination in the provisioning of service is prohibited. The
Act includes anti-redlining provisions. If the PSC finds that a cable
operator is redlining, the Commission may terminate the franchise as
well as impose fines and penalties on the cable operator.
§ 246 Enforcement.
Section 2 of the bill is the enactment date.
JUSTIFICATION: The State has a responsibility to promote adequate,
affordable and efficient cable services to its residents and encourage
the optimum development of community-service potentials of the cable
television medium. Technology is ever-changing and it is imperative that
the State of New York allows for many sources of technological competi-
tion to provide the goal of adequate and affordable cable services to
residents.
This Act is a step in providing a balanced approach to providing consum-
ers cable choice and allowing for areas of the State to have access to
developing broadband technologies. Currently, other states have enacted
laws to provide choice for cable service including: California, India-
na, New Jersey, Michigan, Kansas, North Carolina, South Carolina, Texas
and Virginia.
Other states have also moved statewide franchise bills through the
legislative process including Pennsylvania, Connecticut, Georgia,
Missouri, New Hampshire and Tennessee, among others. Contrary to various
reports, this bill protects all municipal power, save the power to
approve the franchise, and sets the fees, public access and other social
protections at a ceiling so that municipalities, community groups and
other interested parties have the most progressive and comprehensive
franchise possible_ In the end this section is to protect the consumer
and strengthen the economy, while preserving locality's power to regu-
late franchises.
The GAO, FCC and other studies show that only statewide franchises cause
rate reductions of 20-25%. In addition, Towns, cities and villages will
receive a 40% increase in payments from cable companies.
A. ADDITIONAL CONSUMER AND LOCAL GOVERNMENT: PROTECTIONS
While other states have enacted laws to provide choice, this bill would
require other important protections to protect local input, community
input, citizen access to television channels, the free flow of ideas and
information on broad-brand networks and other consumer protections. This
is the most progressive statewide cable franchise in the country that
will protect consumers, bring choice, protects the power of munici-
palities and require social responsibility on behalf of cable providers.
1. It maintains and exceeds financial commitments to local governments.
The Act has a progressive franchise fee schedule that includes a 5%
franchise fee, free cable and Internet service to municipal buildings
and agencies and a separate fund to maintain and build quality
PEG.channels. Finally, tax loopholes and other financial gimmicks used
by the cable companies to reduce municipal payments are outlawed.
2. It maintains municipal oversight to tailor the providers commitment
to the community's needs.
The Statewide franchise will allow municipalities the various powers to
retain all their historic powers including:
*The power of municipalities to exercise their power over public rights-
of-way;
*Receive, mediate and resolve cable service quality complaints from a
franchise holder's customers within the municipality;
*Require a franchise holder who is providing cable service within the
municipality to register with the municipality, maintain a point of
contact, and provide notice of any franchise authorization transfer to
the municipality within fourteen business days after the completion of
the transfer; and
*Establish guidelines regarding the use of public, educational, and
governmental access channels within the municipality.
3. It protects and allows for progressive public access.
In many parts of the State, PEG channels are woefully inadequate in
providing access and programming opportunities to citizens. This bill
would create a strong system of PEG channels for it provides the neces-
sary funding and channel space. The Act will require that the current
regulations governing PEG channels be followed including additional PEG
channels and services not contained in the current regulations. For
example every statewide franchise will have to allot analog channels of
six megahertz bandwidth. In addition, the Act would create a separate
fund specifically for PEG channels to maintain a reliable service and
community network. This is the most progressive language in the State or
country.
4. It requires a continued commitment to the community.
The Act will require cable operators to provide free cable and high
speed Internet service to hospitals, schools, firehouses and other
important community/municipal organizations. In addition, the Act
includes anti-redlining provisions. If the PSC finds that a cable opera-
tor is redlining, the Commission may terminate the franchise as well as
impose fines and penalties on the cable operator.
B. REQUIRING .COMPANIES TO PROVIDE COMPETITIVE SERVICES AND STOPPING THE
"CHERRY PICKING" PROBLEM.
Contrary to various reports, this Act would mandate that cable operators
fulfill their obligation to provide choice by requiring certain build-
out dates as well as impose fines to any company that is found to
discriminate against a class or race of people by not providing service.
to communities. Specifically, any evidence of redlining by a company
results in significant penalties.
This bill will require that the franchisee provide service to a majority
of New Yorkers to ensure that competition is offered throughout the
State. This bill would require that any statewide franchise provide:
service to over half the State's consumers (including in the upstate,
western, central and downstate portion of the State) within three years
of receiving a statewide franchise, and service to over 85% of New York-
ers within five years. This is among the most progressive deployment
requirements in the country.
C. WHY THE NEED FOR THE STATEWIDE FRANCHISE?
It has been argued that there is no need for a statewide franchise
because any company can file for a local franchise now and further, that
it is unfair to companies that have had to file for local franchises to
now compete with a statewide model. However, the technology and market
has changed considerably since the first cable franchises. It took years
for cable companies to offer cable service and broadband service to the
entire State, so a local franchise-by-local franchise approach will not
deploy and create the competitive market that consumers deserve.
Moreover, a review of franchises throughout New York has shown that many
municipalities get shortchanged. This bill sets protects municipalities
by statutorily requiring the financial and community incentives that are
needed in franchises. Finally, and most importantly, in the end the
consumer wins because of lower cable rates.
D. THE STATEWIDE FRANCHISE PROVIDES CHOICE, CREATES JOBS AND SPURS THE
ECONOMY
The Cable Choice Act provides residents all the consumer protections and
statutory requirements for adequate, efficient and affordable service
while providing choice of service providers. This carefully constructed
legislation will promote and facilitate the deployment of advanced tech-
nologies and new reliable and affordable services to all classes and
communities and protect New York's ability to compete in the national
and international marketplace for industry and jobs.
E. PROTECTING THE NEUTRALITY OF THE INTERNET
The proposal includes net neutrality language-whereby networks would not
be able to favor one particular network destination or class of applica-
tions over others--to ensure that the free flow of ideas of the Inter-
net. Although the Federal Government has eliminated net neutrality
rules, the State has every right and obligation to build this important
consumer protection in as a condition of a new model of cable and broad-
band deployment.
Net Neutrality is not in itself a new idea. Its roots date back to the
1860's with Common Carrier legislation for telegraphs. Those laws made
it unlawful for anyone owning or operating a telegraph line to refuse to
receive dispatch from any other company or person owning or operating
any telegraph line in the state, or refuse or willfully neglect to tran-
smit the same in good faith, without partiality. The offense would
result in the forfeiture of all right and franchises associated with
telegraph transmission in the state. In 2005 the Federal Communications
Commission incorrectly decided that common carder status need not apply
to telecommunication providers. There is no logical reason to overturn
statutes that have worked for over 140 years. Our legislation will
update an existing statute in order to ensure consumer protection and
public safety by providing equal telecommunications access for all New
Yorkers.
PREVIOUS LEGISLATIVE HISTORY:
A. 11549 of 2006. A1423 (2007-2008). A4469 of 2009 10; A6032 of 2011-12
- in Corporations Committee.
FISCAL IMPLICATION: Not known.
EFFECTIVE DATE:; This act shall take effect immediately.
