Calif. Franchise Bill Clears Another Hurdle

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A California video-franchise-reform bill, which has been amended with some build-out requirements for competitors and local opt-out provisions for incumbent operators, has been unanimously approved by the state Senate's energy, utilities and communications committee.

Cable operators said they would not oppose the bill if current providers could apply for state franchises as soon as local competition begins.

Local governments remain the bill's major opponents. Their trade group, the League of California Cities, sends out nearly weekly pleas for mayors and other officials to appeal to legislators to retain local control. Local officials also believe the bill doesn't go far enough to protect public, educational and government channels and their funding, and they are fearful that state regulation will curb local rights-of-way regulatory power and franchise-fee revenues.

In response to critics, including incumbent cable operators, the bill (AB 2987) was amended to require large competitors using fiber to deliver video, such as Verizon Communications, to reach 25% of its current homes passed within two years and 40% within five years. AT&T -- which is not deploying fiber but will deliver video via the Internet -- would be required to pass 35% of homes passed in three years and 50% in five years.

To prevent red-lining, 25% of the video homes passed must be low-income, defined in the bill as residents with $35,000 or less per year in income.

During bill discussions Thursday, committee members asked that the bill’s language be refined to clarify that new technology must be deployed to meet the build-out. It must be clear that current technology bundles -- including digital-subscriber-line service paired with direct-broadcast satellite television -- do not count in the build-out.

State franchising would be handled by the Public Utilities Commission, which would have 14 days to vet applications from new providers.

The bill will not be addressed again until August, when it will be heard by the Senate appropriations committee.

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