Academic journal article Federal Communications Law Journal

Statewide Cable Franchising: Expand Nationwide or Cut the Cord?

Academic journal article Federal Communications Law Journal

Statewide Cable Franchising: Expand Nationwide or Cut the Cord?

Article excerpt


     A. Communications Act of 1934
     B. Carter Mountain Transmission Corporation v. FCC
     C. United States v. Southwestern Cable Company
     D. Cable Communications Act of 1984
     E. Telecommunications Act of 1996

     A. State of Texas--September 2005
     B. State of New Jersey--August 2006
     C. State of California--September 2006
     D. State of Florida--May 2007

     A. Franchise Fees
     B. Public, Educational, and Governmental Access
        Channels (PEGs)
     C  Public Rights-of-Way Management
     D. Regulatory Oversight
     E. Redlining and Build-Out Provisions

     F. Pricing and Broadband Access



The cable television business traces its roots to John Walson, an appliance storeowner in mountainous eastern Pennsylvania, and his creation of Community Antenna Television ("CATV"). (1) In June of 1948, seeking to provide broadcast channels from Philadelphia to improve television set sales, Walson placed an antenna at the top of a mountain on the outskirts of town to receive the broadcast signal and then delivered it down to the residents of Mahanoy City, Pennsylvania. (2)

By 1952, Walson's idea spread beyond Pennsylvania to seventy CATV systems with approximately 14,000 subscribers. (3) That exponential growth would continue as operators realized the value of bringing in distant programming to a market as opposed to simply relaying the local stations. (4) Eight hundred cable systems were in place by 1962, servicing 850,000 subscribers. (5) By 1990, cable had reached nearly fifty-three million subscribers nationwide. (6) However, the phenomenal growth was also "accompanied by rising prices for consumers, incurring growing concern among policy makers." (7)

The cable television market has been subject to significant foundational changes in response to policy makers' concerns and technological developments. Twenty years ago, the industry operated with the benefit of local monopolies and competition coming only from broadcast stations and the C-Band (8) satellite market. (9) In 1994, the satellite broadcasting industry changed when DIRECTV (and later DISH Network) entered cable's market space with the introduction of the direct broadcast satellite ("DBS") technology. (10) Adoption of the technology was swift; since that time, the two major direct broadcast satellite players in the United States have grown to account for over thirty-three million subscribers. (11) In 2005, the efforts of traditional phone companies to introduce further competition began to get traction in various state legislatures. As of 2011, AT&T and Verizon account for approximately 7.4 million video subscribers (12) and have been instrumental in the passing of laws encouraging their establishment of cable franchises in twenty-five states. (13) With approximately fifty-nine million subscribers, traditional cable companies remain the dominant force in the marketplace. (14) Yet even without the effects of competition, changes are occurring within their business model as a result of the legislation that passed in various forms. (15)

This Note will explore the approaches taken by four states to invite competition into the cable marketplace to encourage price reductions, improve service offerings, and reduce the digital divide by increasing the broadband service footprint. Part II describes the efforts of Congress, the FCC, and the Supreme Court to create and apply the law to the nascent cable industry. Part III discusses the differences in approaches taken by selected states. Part IV outlines the most significant areas to account for when considering cable franchise reform and analysis of the pros and cons of the different approaches to the various areas of concern. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.