La. Mulls Possible Franchise Reforms

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Telephone and cable lobbyists will argue over two versions of franchise reform legislation in Louisiana.

A state Senate version, submitted at the March 17 pre-filing deadline and backed by BellSouth Corp., would create a new bureaucratic agency, the Louisiana Competitive Cable Board. That body would be filled with three gubernatorial appointees; one recommended by the Louisiana Municipal Association, one suggested by the Police Jury Association and one appointed at large. The only restriction in the draft: no municipal official may serve from a city that has its own cable operation.

New providers would apply to the new board seeking permission to use the rights of way. The applicants would also list their business officers. Within 10 days, the board must issue a certificate, good for 25 years.

The new provider would have to pay 5% franchise fees to that state board, or an amount equal to that paid by the incumbent cable provider, whichever is higher. The board will retain 1% of the fees paid, and remit the balance to local communities served.

Local build-out requirements, and local fees, are prohibited under the proposal. Denial of service to neighborhoods based on an area's residential wealth is prohibited. Those who believe they have been subjected to discrimination can complain to the office of the secretary of state.

Perhaps in a nod to AT&T Inc., which intends to acquire BellSouth, language in the bill notes video operations that do not fit the federal definition of a “cable service” can be certificated for state operations. AT&T has said that its planned U-verse video product is not a cable service because it will be delivered on demand as packets of data over the Internet. The bill draft said “non-cable services” do not have to define themselves as cable products in order to gain state certification.

A House version is less detailed and would rely on current bureaucracy, in the form of the Louisiana Public Service Commission, to become the state certifier. It, too, would be mandated to issue certification within 10 days to a new provider that swears to abide by state and federal rules on video services; that provides a local business address and names communities to be served.

This bill also calls for certification with 25-year terms.

Both bills bind incumbent cable operators to the terms of their current local franchises.

Cheryl McCormick, CEO of the Louisiana Cable & Telecommunications Association, said she believes telecom reform is not on the top of the agenda of any legislator. Hurricane Katrina recovery will likely be the session's focus, she said.

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