INFORMATION #4 12-03-2007 - Laserfiche WebLink

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"level playing field" provision which generally requires parity between an incumbent and new entrant regarding franchise fees, build-out/service area, and PEG obligations. The Second Order may have more significant impacts. In the Second Order, the FCC found that: ^ its findings that certain compensation required by local authorities must be counted toward the federal 5% franchise fee cap should be extended to incumbents; ^ many of its determinations relating to PEG and institutional networks ("I-Nets") should be extended to incumbents; and ^ its findings regarding mixed-use networks also apply equally to incumbents. The FCC also found that: ^ its conclusions regarding build-out and time limits for processing a franchise application only apply to new entrants, not incumbents; and ^ local or state cable customer service requirements cannot be preempted, and local franchising authorities and cable operators cannot be prevented from agreeing to customer service standards that are more stringent than the FCC's rules. The Second Order will be effective 30 days after publication in the Federal Register. The most serious concerns are addressed below. PEG Support Since 1984, federal cable law has distinguished PEG capital support from operational support. The term "franchise fee" excludes any "capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities." 47 U.S.C. § 542(g)(2)(C). Thus, PEG capital support is not subject to the 5% franchise fee cap, while support for PEG operations is subject to the cap. The First Order addressed this distinction between PEG capital and operating support, stating: Accordingly, payments of this type, if collected only for the cost of building PEG facilities, are not subject to the 5 percent limit. Capital costs refer to those costs incurred in or associated with the construction of PEG access facilities. These costs are distinct from payments in support of the use of PEG access facilities. PEG support payments may include, but are not limited to, salaries and training. First Order, ¶ 109. This language appeared to suggest that PEG capital support is limited to only the cost to build or construct facilities. Many parties filed comments with the FCC noting that this interpretation of "capital costs" is too narrow.