La., N.J. Bills Reach Governors

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New Jersey and Louisiana have sent bills to their respective governors that will speed entry into the video market by telephone companies and other competitors to cable operators.

The Louisiana version will allow incumbent cable operators to immediately opt into state franchises. That bill passed June 19, the last day of the state’s legislative session. Gov. Kathleen Blanco must now sign it, before it takes effect.

If the bill is signed, new competitors will file affidavits requesting certification to the office of the Secretary of State. That office will have 10 days to act on the request or the affidavit will automatically become effective.

The franchise will be for a 10-year term. New providers will describe the areas they intend to serve. Build-out requirements are forbidden.

New providers must pay a franchise fee on their gross revenues to local governments. The amount will match the fee paid by the incumbent video provider.

But the new providers must also pay 15 cents per month per subscriber to help fund public, educational and government production studios and equipment.

Cheryl McCormick, CEO of the Louisiana Cable & Telecommunications Association, said the latter term was added in recognition of the financial support provided in the past by incumbent operators.

The bill seeks to prevent discrimination in service deployment, based on the average income for an area, but it also said a provider can consider technology issues and construction costs when deciding whether to serve an area. Discrimination complaints are to be directed to the state attorney general.

Though the bill would give incumbents the ability to apply for state franchises immediately, McCormick expressed doubt any current provider would pursue one.

The New Jersey State Senate gave its final approval to a bill reforming state video franchising policy also on June 19. If signed by the governor, the bill will assign franchising authority to the Board of Public Utilities, which will have 45 days to grant the franchise applications.

The legislation requires the authorized video competitors to build out systems in communities with populations of 7,111 per square mile and to county seats. Those requirements should require coverage of the state’s 60 largest communities, which cable incumbents noted were concentrated in North New Jersey.

Once the bill is officially presented to Gov. Jon Corzine, he will have 45 days to sign it into law.

In other states:

  • A reform bill in California is now scheduled for Senate committee hearing June 27. Incumbent operators are pushing for amendments that would allow them to opt out of local agreements, while city officials are pushing for better consumer and revenue protections in the proposal.
  • Nearly identical bills are progressing through the North Carolina House and Senate. The proposals would give franchising authority to the Secretary of State. Once an application is approved, the applicant has 120 days to begin service. However, service to even one home satisfies that requirement.

Build-out requirements are prevented. The bills contain protections for provision of public, educational and government channels, including a 7% tax on new providers to support programming infrastructure.

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