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i <br />Robert J. V. Vose <br />Attorney at Law <br />Direct Dial (612) 337-9275 <br />Email: rvose@kennedy-graven.com <br />MEMORANDUM <br />TO: Clients <br />FROM: Bob Vose <br />DATE: March 8, 2007 <br />RE: FCC Cable Franchising Rules <br />On December 20, 2006, the Federal Communications Commission adopted a Report and Order <br />and Notice of Proposed Rulemaking ("Order") regarding franchising of cable competitors. On <br />March 5, 2007, the FCC finally released the text of the Order. <br />The FCC concluded that local franchising authorities have unreasonably impeded franchising of <br />cable competitors. The Order: <br />• imposes time limits for processing a competitive franchise application; <br />• prohibits imposition of unreasonable build-out requirements on competitors, and; <br />• restricts franchise application fees, franchise fees, and PEG and I-Net support <br />obligations on competitors. <br />However, only the application timelines discussed below are embodied in actual <br />rules/regulations. The remainder of the Order consists of declarations that certain franchise <br />conditions are unreasonable and prohibited. <br />Executive Summary <br />The Order's impact in Minnesota is limited because the Order only preempts "local laws, <br />regulations, practices, and requirements ... not specifically authorized by state law." In <br />Minnesota, cable franchising is comprehensively governed by state law. Thus, Minnesota's <br />cable franchising regime is not preempted by the Order. <br />Minnesota law specifically mandates that local franchises put incumbents and competitors on a <br />"level playing field" regarding franchise fees, build-out/service area, and PEG obligations. <br />Accordingly, the imposition of these obligations on competitors is primarily the result of state <br />law, not local requirements. Local governments simply implement the state requirements by <br />adopting appropriate local franchises. <br />