Save Access, March 27, 2007

Opponents of video franchise reform in N.Y. told an Assembly committee that the bill to shift franchising from municipalities to the PSC would impose unreasonable buildout requirements on new entrants, weaken municipalities' powers to protect their citizens and hold video franchises hostage to compliance with network neutrality regulations.

Opponents also said the bill seeks to address a market entry problem that doesn't exist. Verizon told the Assembly Corporations, Commissions & Authorities Committee that AB-1423's buildout requirements would operate without regard to economic or technical feasibility. The proposed standard would require buildout to areas with 7,100 people a square mile within 3 years and to areas having 501 people a square mile within 6 years. Currently, the PSC requires "substantial" buildout the first year and completion the next 5 years, but leaves to the provider proposing how to meet the requirement.

Verizon also assailed the bill's provision prohibiting video entrants from favoring any particular network destinations or types of applications. It said network neutrality is a federal not state issue, and this provision would violate federal Internet deregulation policies. It also attacked a clause that it said would require termination of a state video franchise if a new entrant failed to abide by the network neutrality
provision.

The N.Y. Cable TV & Telecom Assn. criticized the bill for assuming current municipal video franchising practices present a barrier to competitive video entry. It said existing law prohibits unreasonable municipal franchise conditions and imposes a 6-month "shot clock" for deciding on applications.

The cable group said prompt competitive entry could be accomplished by another pending bill (AB-4871) that would require local action on franchise applications within 30 days if a new entrant agreed to the same terms as in an existing cable franchise.

The N.Y. Conference of Mayors & Municipal Officials said the franchise bill would strip municipalities of power to deal with consumer complaints or use of public access channels. It said the bill allows municipal mediation of complaints and setting of guidelines for use of public access channels but would require an overburdened PSC to act as the "resolution center" if mediation fails or guidelines are ignored. Currently, the group said, municipalities work directly with the cable incumbent to resolve complaints and public access channel uses, as prescribed in franchise agreements.

But Consumers Union representatives supported the bill because it would ease competitive entry. They said that since 1996, cable rates nationwide have gone up 67% on average, but in markets with landline video competition, rates have declined an average 15%.

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