INFORMATION #4 12-03-2007 - Laserfiche WebLink

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FCC cannot alter existing agreements or violate contractual rights. Thus, local governments commented that if the First Order were extended at all, such extension could only happen at renewal. Conversely, incumbents argued that findings in the First Order regarding franchise fees and PEG/I-Net requirements were made pursuant to sections of the federal Cable Act that are applicable to all operators, not just new entrants, and should apply immediately. Second Order, ¶ 18. The FCC claims to have found middle ground in the Second Order. The FCC indicates that its interpretations of statute are valid immediately, nationwide. However, the FCC recognizes that: ... franchise agreements involve contractual obligations and ... some terms may have been implemented as part of a settlement agreement regarding rate disputes or past performance by the franchisee. As a result, we believe that the facts and circumstances of each situation must be assessed on a case-by-case basis under applicable law to determine whether our statutory interpretation should alter the incumbent's existing franchise agreement. This Order should in no way be interpreted as giving incumbents a unilateral right to breach their existing contractual obligations. (FN: Additionally, nothing in this Order can be used as an independent basis for obtaining retrospective relief.) Instead, if an incumbent asserts that the terms of its franchise should be amended as a result of this Order, we encourage LFAs and incumbents to work cooperatively to address those issues. Second Order, ¶ 19. The FCC goes on to note that if cooperative efforts fail, disputes may be resolved pursuant to dispute resolution provisions, most favored nation clauses, statutory franchise modification processes, or litigation. As an initial matter, it appears that a local government should evaluate whether the Second Order is at odds with the incumbent's franchise or related agreements. This evaluation should also include Minn. Stat. § 238.084, Subd. 1(b) which provides that a franchise must contain a provision "requiring the franchisee and the franchising authority to... conform to federal laws and regulations regarding cable as they become effective." In turn, this evaluation may result in an effort to work cooperatively with the incumbent. Conclusion As with the First Order, the FCC approved the Second Order on 3-2 vote. Commissioners voting in favor issued statements generally arguing that the Second Order will create a level playing field and allow incumbents and new entrants to compete more fairly. The dissenting commissioners argued that the Second Order will limit local government's ability to effectively maintain necessary local regulatory control. Specifically, Commissioner Adelstein stated that the FCC "has converted the entire cable franchise fees and PEG/I-Net's support regime into a regulatory minefield for local governments that will likely impact the ability of local government to provide critical, state of the art services when it matters most." Commissioner Copps stated "the genie is out of the bottle for now, I