FCC Issues New Cable Rules: Implements Congressional Preemptions of Municipal Authority
Shafroth, Frank, Nation's Cities Weekly
The Federal Communications Commission (FCC) issued an order (CS Docket No. 96-85) on March 29, 1999 to implement so-called "cable reform" provisions of the Telecommunications Act of 1996. The rules address a number of issues relating to changes Congress enacted in the Cable Act, including a number relating to municipal authority to protect consumers in cities and with regard to franchise renewal negotiations for cable operators.
NLC, together with the city of Los Angeles and the National Association of Telecommunications Officers and Advisors (NATOA), had originally filed comments on these issues in June of 1996.
For cities, the most important issues addressed in the rules include: defining "effective competition" for purposes of determining when cable rates may be regulated, revised procedures for filing complaints against cable programming service tier rates, federal preemption of local cable system equipment and transmission technology requirements, and subscriber notice.
The most critical issue for cities involved the interpretation of Congress' provision in the 1996 act stating: "No state or [local] franchising authority may prohibit, condition, or restrict a cable system's use of any type of subscriber equipment or any transmission technology." Depending upon how the rule is eventually interpreted by the courts, it could sharply limit traditional municipal franchise renewal authority.
The law confirmed the FCC's ability to establish minimum technical standards for cable system technical operation and signal quality. In a win for cities, the FCC Order finds that municipal cable franchising authorities may exercise oversight and enforcement of the FCC's technical standards, but cities are preempted from imposing technical standards different from FCC standards.
The FCC determined that "transmission technology" includes an operator's use of digital or analog transmissions and its use of coaxial cable, fiber optic cable, or microwave facilities. In addition the FCC acknowledged municipalities' roles in determining local needs and access channel requirements, institutional network requirements, as well as a review of an operator's qualifications and management of public rights-of-way.
Industry had argued, and will likely appeal, that the new federal law preempts municipal authority to enforce the FCC's technical standards, and preempts municipalities from imposing several types of cable system facility requirements, such as minimum system megahertz capacity, fiber optic facilities, and minimum homes-per-node that cities have traditionally imposed as part of the franchise renewal or initial franchise granting process.
While industry did not prevail on the first issue, the order is ambiguous on the second.
The order makes clear that cities "may not control whether a cable operator uses digital or analog transmissions nor determine whether its transmission plant is composed of coaxial cable, fiber optic cable or microwave radio facilities. …