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story category Local CA Video Franchises: 'Terminated'
After telcos spend $20 million on the effort
(old news - 10:40AM Saturday Sep 30 2006)
tags: legal · Video · competition · business
California Governor Arnold Schwarzenegger signed a bill on Friday giving the telcos their requested statewide franchise system for offering video services, eliminating the existing city by city system. This Reuters report doesn't go into much detail, simply quoting telco execs who promise utopian competition for all. The San Francisco Chronicle gives voice to criticism of the bill, which says the new law "is long on promises to provide better service and prices but short on regulations to ensure that they deliver on those promises."

As we previously mentioned, AT&T and Verizon spent close to $20 million in three months to influence the vote on this bill. We discussed earlier this week how despite telco lobbyist arguments that the traditional system was slowing deployment, Verizon seemed to be having no problem when it comes to negotiations to deploy FiosTV. The telcos are pushing for a federal franchise bill, but aren't in a rush to have it pass this session because they're succeeding at passing these on the state level.

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Forums » Local CA Video Franchises: 'Terminated'
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old_wiz_60

join:2005-06-03
Bedford, MA

Franchises

We definitely have the best government money can buy.

TKJunkMail
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4 edits

More info on this bill not in newspapers

Link to bill's text:
»www.leginfo.ca.gov/pub/bill/asm/···led.html

Some provisions:
This bill would enact the Digital Infrastructure and Video Competition Act of 2006 and would establish a procedure for the issuance of state franchises for the provision of video service, which would be defined to include cable service and open-video systems, that would be administered by the Public Utilities Commission. The commission would be the sole franchising authority for state franchises to provide video services.

The bill would provide that cities, counties, cities and counties, or joint powers authorities would receive state franchise fees in exchange for the use of public rights-of-way for the delivery of video services provided within their jurisdictions, based on gross revenues, pursuant to a specified formula.

The bill would also authorize local entities to establish a fee to support the costs of PEG channel facilities, in the amount of 1% of gross revenues, or more in specified circumstances.

The bill would also require the local franchising entity to enforce customer service and protection standards and to enact an ordinance or resolution providing a schedule of penalties for any material breach of those standards

The bill would provide that a state franchise is valid for 10 years and would require a provider to apply to the commission for renewal of the franchise for any additional 10-year period.

The bill would prohibit the commission from permitting a telephone corporation that is providing video service pursuant to a state franchise to authorize an increase in rates for residential basic service until January 1, 2009

The amount of the state franchise fee shall be 5 percent of gross revenues, as defined in subdivision (d) of Section 5860, or the percentage applied by the local entity to the gross revenue of the incumbent cable operator, whichever is less. If there is no incumbent cable operator or upon the expiration of the incumbent cable operator's franchise, the amount of the state franchise fee shall be 5 percent of gross revenues, as defined in subdivision (d) of Section 5860, unless the local entity adopts an ordinance setting the amount of the franchise fee at less than 5 percent.
So, in effect, the localities still get to control service levels and safety. They get 5% franchise fee plus a 1% peg fee. They get basic telephone rates frozen until 1/1/2009. What are the localities giving up, but the ability to blackmail special deals out of the telcos and cable companies to feather local pols nests.

Edit: Added link to description put together so that the legislators could understand what they were voting on:
»www.leginfo.ca.gov/pub/bill/asm/···oor.html

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rit56

join:2000-12-01
New York, NY

Re: More info on this bill not in newspapers

what are they giving up? how about self determination, the ability to have a say to insure that there is some local programming to reflect the community at large rather than the controlled content the big media corporations want to deliver. the boring national reports that most people I know never watch. even local news here is pathetic. right now the Republican Congress has been outed for covering for a pedophile Congressman from Florida, a sexual predator going after young boys and it is not being fully reported. they sure got themselves in a huff over Clintons antics but it's ok for a Republican Congressman to harass underage boys? the local news is talking today about Autumn foliage. pathetic. Liberal media? Right wing controlled media is the reality now. and all the cable co's are helping to provide cover for this administration. now that I'm on a roll here check out Woodwards new book. The President of the United States and Karl Rove telling fart jokes. pulling fart jokes in Cabinet meetings. The President of the United States enjoying fart jokes at cabinet meetings? go ahead and defend that. it is just incomprehensible that the President is a dumb frat boy and enjoys fart jokes in cabinet meetings. . God help us.

ropeguru
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Re: More info on this bill not in newspapers

said by rit56 See Profile :

what are they giving up? how about self determination, the ability to have a say to insure that there is some local programming to reflect the community at large rather than the controlled content the big media corporations want to deliver. the boring national reports that most people I know never watch. even local news here is pathetic. right now the Republican Congress has been outed for covering for a pedophile Congressman from Florida, a sexual predator going after young boys and it is not being fully reported. they sure got themselves in a huff over Clintons antics but it's ok for a Republican Congressman to harass underage boys? the local news is talking today about Autumn foliage. pathetic. Liberal media? Right wing controlled media is the reality now. and all the cable co's are helping to provide cover for this administration. now that I'm on a roll here check out Woodwards new book. The President of the United States and Karl Rove telling fart jokes. pulling fart jokes in Cabinet meetings. The President of the United States enjoying fart jokes at cabinet meetings? go ahead and defend that. it is just incomprehensible that the President is a dumb frat boy and enjoys fart jokes in cabinet meetings. . God help us.
I don't know what national news you have been watching, but just about every political oriented news story I have seen lately has been bashing Bush and the republicans up one side and down the other. I have no idea where you are getting that the entire media is covering for them.

And I would like to see video of the fart jokes in cabinet meetings. If you have links then I will believe it.
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pnh102
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said by rit56 See Profile :

The President of the United States enjoying fart jokes at cabinet meetings? go ahead and defend that.
Well i can understand being angry about that if they were really bad fart jokes.
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1 edit
said by rit56 See Profile :

what are they giving up? how about self determination, the ability to have a say to insure that there is some local programming to reflect the community at large rather than the controlled content the big media corporations want to deliver. the boring national reports that most people I know never watch. even local news here is pathetic. right now the Republican Congress has been outed for covering for a pedophile Congressman from Florida, a sexual predator going after young boys and it is not being fully reported. they sure got themselves in a huff over Clintons antics but it's ok for a Republican Congressman to harass underage boys? the local news is talking today about Autumn foliage. pathetic. Liberal media? Right wing controlled media is the reality now. and all the cable co's are helping to provide cover for this administration. now that I'm on a roll here check out Woodwards new book. The President of the United States and Karl Rove telling fart jokes. pulling fart jokes in Cabinet meetings. The President of the United States enjoying fart jokes at cabinet meetings? go ahead and defend that. it is just incomprehensible that the President is a dumb frat boy and enjoys fart jokes in cabinet meetings. . God help us.
I fully agree with all this but I think we can solve this by enacting a rule about X local channels every provider MUST carry and additional 2-3 extras that local munis can request as well.... how about this?

marigolds
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said by TKJunkMail See Profile :

So, in effect, the localities still get to control service levels and safety. They get 5% franchise fee plus a 1% peg fee.
It doesn't say that.
It says the state will get a 5% franchise fee and the city, county, and state will each receive a piece of that.
Also notice that while the PEG fee is a facitilies fee only. Facilities fees are difficult to authorize in comparison to equipment fees and operational fees (and can only be used for education and government, not public access), which are the more important fees in PEG support. These parts are typically supported by pass through fees rather than gross revenue percentage fees, and pass through fees are banned by the bill. Any locality without existing percentage fees (i.e. that uses pass-through fees), can not collect such fees.

The definition of "gross revenue" is modified by the bill. "Gross revenue" is defined as the lowest gross revenue earned by any provider in the franchise area, not by the franchise holder.

Notice also that there are no density based buildout requirements in the bill. Instead, providers are required to buildout to 40% of households within 5 years with no requirement to buildout to more than 40% of households (and with an option to extend the deadline if less than 30% of builtout households have subscribed).

The last most important aspect is that despite the assurance that "So, in effect, the localities still get to control service levels and safety," only the state courts have exclusive jurisdiction to enforce provisions on fees, PEG channels, and I-nets and only the PUC and state courts can enforce buildout standards.

And of course the most important part of the bill: it prohibits local emergency service notification requirements.
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Re: More info on this bill not in newspapers

said by marigolds See Profile :

said by TKJunkMail See Profile :

So, in effect, the localities still get to control service levels and safety. They get 5% franchise fee plus a 1% peg fee.
It doesn't say that.
It says the state will get a 5% franchise fee and the city, county, and state will each receive a piece of that.
And exactly where does it say that ?, because that is NOT in the analysis of the bill at this link:
»www.leginfo.ca.gov/pub/bill/asm/···oor.html
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ropeguru
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Re: More info on this bill not in newspapers

said by TKJunkMail See Profile :

said by marigolds See Profile :

said by TKJunkMail See Profile :

So, in effect, the localities still get to control service levels and safety. They get 5% franchise fee plus a 1% peg fee.
It doesn't say that.
It says the state will get a 5% franchise fee and the city, county, and state will each receive a piece of that.
And exactly where does it say that ?, because that is NOT in the analysis of the bill at this link:
»www.leginfo.ca.gov/pub/bill/asm/···oor.html
It does say that the state will get 5%, but nothing about the localities getting a piece of that.
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TKJunkMail
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Re: More info on this bill not in newspapers

Requires the holder of a state franchise to pay rent to each
local entity
where it provides video service a franchise fee
based on the gross revenue, as defined in the statute, for the
use of the public right-of-way. If there is an incumbent cable
operator in that jurisdiction the fee shall be 5% of the holder's
gross revenue or the percentage applied to the incumbent's gross
revenue, whichever is less.
If there is no local franchises or
after all local franchise have expired, the franchise fee will be
5% of gross revenue or a lower level set by the local government
thru ordinance.
I'd like to see where you believe you are right. All I saw was you claiming it. No section of law cited.
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JakCrow

join:2001-12-06
Palo Alto, CA
It's amazing how many people sell out the consumer for the empty promises of corporations that have been shown to lie time and time again. What's up with that?

jslik
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1 edit
said by TKJunkMail See Profile :

What are the localities giving up, but the ability to blackmail special deals out of the telcos and cable companies to feather local pols nests.
Like what? The vast, vast majority of the franchise so-called 'extras' are things that help and support the citizens of these cities. One good example is fiber networks that helps public safety and that cities use for reduced telecom/data/video costs. Gee, better communication for police and fire and reduced costs to government? How is that bad?

Also, no state PUC will have the time, staff, or inclination to haul providers into court. Even if they do, who ends up paying for it all?

ropeguru
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And to think...

they could have just left things as they were and spent that 20 million on something that would have actually benefited the customer.
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cybercrimes

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1 edit

Arnold Schwarzenegger for US President

If Arnold Schwarzenegger ran for President would you vote for him i know i would
Thaler
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join:2004-02-02
Encino, CA

Re: Arnold Schwarzenegger for US President

said by cybercrimes See Profile :

If Arnold Schwarzenegger ran for President would you vote for him i know i would
*shrugs* Not like it could do any worse. The puppet changes, but never the puppeteers.

brooklynman4

join:2004-09-07
Brooklyn, NY

Re: Arnold Schwarzenegger for US President

att and verizon are going to put there boxing gloves now lol

JakCrow

join:2001-12-06
Palo Alto, CA

Re: Arnold Schwarzenegger for US President

Like hell. They'll still collude to keep out of each others territories, like it's always been.

MadMANN
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said by Thaler See Profile :

said by cybercrimes See Profile :

If Arnold Schwarzenegger ran for President would you vote for him i know i would
*shrugs* Not like it could do any worse. The puppet changes, but never the puppeteers.
Nothing more true can be said.

So is this the average they are willing to spend on each state? I don't know how many states do not have local franchise agreements, but lets say 25 do and 25 do not: $20million x 25 = $500 million!

Do you mean to tell me that it would have cost more to just follow the existing laws? I don't buy it for one second. If I am a stockholder, I would be UPSET. Something is going on that we do not know about. I am all for competition, but I just don't trust this company with a state franchise. I guess time will tell if Californians are happy in a couple of years.
unoriginal

join:2000-07-12
San Diego, CA
Nice thought but he can't run. You have to be born in the US to be prez, he came from Austria (?).

BF69

join:2004-07-28
Camden, TN

So how does this work?

Ok say this was law in my state. Right now I have Charter. So now Charter, Comcast, Time Warner and Cox could all come in and offer service? Of course Charter is not likely to allow those other to use their stuff so basically all of them would have to build thier own system in my area. Not that they would, but that would be A LOT of cable being laid everywhere. And this is good? Every fricken month there would be digging going on because of upgrades from 4 or more different cable companies?

Of course the costs would be prohibitive for any other cable company to move in, so basically I'd still be stuck with Charter. So I don't see how this helps the consumer one bit.

logcabinboy

join:2001-07-23
Whitmore, CA
clubs:

1 edit

Re: So how does this work?

I would think that any new companies would simply buy the existing companies. There would be no economic benefit to them to spend all that money in constuction, for a gamble. This wouldn't apply to laying fiber optic cable for telcos.

BF69

join:2004-07-28
Camden, TN

Re: So how does this work?

said by logcabinboy See Profile :

I would think that any new companies would simply buy the existing companies. There would be no economic benefit to them to spend all that money in constuction, for a gamble. This wouldn't apply to laying fiber optic cable for telcos.
They can do that now under current law. So that means just ONE cable company servicing my area. So once again all this stuff that eliminating local franchises bringing in more competition is pure BS.
Forums » Local CA Video Franchises: 'Terminated'


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