Calif. OKs Statewide-Franchise Rules

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The California Public Utilities Commission approved the rules under which video franchises will be issued on a statewide basis -- an action that was cheered by new providers such as Verizon Communications but derided by consumer groups and municipalities.

Cities including Los Angeles asserted that the wording of the Digital Infrastructure and Video Competition Act meant that cities could retain rights to renew pacts with incumbents.

But the PUC commissioners rejected that argument, stating that the legislature meant for the state agency to be the sole regulator of video providers. The PUC commissioners also said the agency would only regulate in areas specified under the new state law.

Incumbent cable operators with expired franchises may apply for statewide authority Jan. 2, 2008. They can also apply for franchises for areas they don't currently serve. The PUC also clarified that operators with franchises that will expire between now and Jan. 2, 2008, can indicate their intent to seek state franchising, which will trigger an automatic extension of their current operating agreement.

Operators had expressed concern that local governments would seek franchise concessions during the next 10 months or penalize them for working without valid franchises while they waited to apply for state certificates.

Verizon lauded the decision. The company has already activated systems, beginning with its first state franchise in Beaumont, Calif. The company has not stated specific subscriber numbers for the state.

Verizon West region vice president Tim McCallion said his company will file its state-franchise applications as soon as possible.

But consumer groups criticized the PUC action, as the commission refused to allow subscriber advocates to intervene in future disputes on behalf of broadband and video customers. Those groups are afforded that right for utility customers, but the PUC noted that video service is not a utility.

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