Louisiana Passes Franchise-Reform Bill

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A franchise-reform bill that will allow incumbent cable operators to immediately opt into state franchises has been approved by the Louisiana State Legislature.

The bill passed Monday, the last day of the state's legislative session. It must now be signed by Gov. Kathleen Blanco in order to become effective.

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.

The new providers will describe the areas they intend to serve, and build-out requirements are forbidden under the new law.

New providers must pay a franchise fee on their gross revenues, remitted to local governments. The amount will match that 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.

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

"I know of no one who's expressed interest," she said.

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