INFORMATION #4 12-03-2007 - Laserfiche WebLink

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However, certain issues addressed in the Order will apply in Minnesota. First, Minnesota law establishes a specific franchise application process including two weeks' published notice, certain application requirements, and a public hearing before final action. However, Minnesota law does not establish a timeline for final action. Thus, the FCC's new timelines for action on competitive franchise applications will apply. The Order also mandates that municipalities not impose "unreasonable build-out mandates." For example, the Order indicates that it would be unreasonable to require a competitor to build-out in a shorter time than the incumbent or to lower density areas than the incumbent is required to serve. This portion of the Order should not apply in Minnesota. A competitor's service area is subject to the state level playing field requirement and statutory provisions governing the speed of build- out to that service area. The Order does not preempt these state statutory requirements. The Order also purports to limit franchise fees in several respects. It is difficult to determine the extent to which this portion of the Order will apply in Minnesota. Most significantly, the Order suggests that competitors cannot be required to provide "in-kind" support. -- such as live feeds, free institutional services, or data connectivity -- over and above a 5% franchise fee. However, if the incumbent operator agreed to provide such support the state level playing field requirement may require that a competitor be subject to the same or similar obligation. These issues will need to be evaluated on a case-by-case basis. Disputes seem likely. Finally, the Order indicates that a competitor cannot be required to provide PEG operational support in addition to a 5% franchise fee. Federal law distinguishes PEG capital support, which is excluded from franchise fees, from operating support which must be funded from franchise fee payments. However, some incumbents have accepted franchises establishing a PEG fee to support both PEG capital and operational needs over and above franchise fees. The Order may encourage competitors to refuse comparable franchise provisions and demand that all operational support come from franchise fees. But, again, the state statutory level playing field requirement remains applicable. Impact of Order in Minnesota The Order's impact in Minnesota is limited because only local ordinances and policies are preempted, not state law. The FCC indicates that it does not have a sufficient record to find that state requirements impede competition, stating: At that [sic] outset of this discussion, it is important to note that we do not preempt state law or state level franchising decisions in this Order. Instead, we preempt onl. ly ocal laws, re ulations, practices, and requirements to the extent that: (1) provisions in those laws, regulations, practices, and agreements conflict with the rules or guidance adopted in this Order; and (2) such provisions are not specifically authorized by state law. As noted above, we conclude that the record before us does not provide sufficient information to make determinations with respect to franchising decisions where a state is involved, issuing franchises at the state level or enacting laws governing specific aspects of the