INFORMATION #4 12-03-2007 - Laserfiche WebLink

Home Browse Search

phone company] points to no federal law regulating (or prohibiting) service-area or build- out requirements. Moreover, a competitor must build-out the service area at a rate specified by state law. Minn. Stat. § 238.084, Subd. 1(m). The Order should not significantly impact the establishment of competitive service areas because these state statutory requirements are not preempted. Franchise Fees The Order purports to limit franchise fees that a competitor can be obligated to pay, indicating that: (1) Revenues from non-cable services, including Internet access, are not included in the revenue base for purposes of calculating franchise fees. Order, ¶ 98. (2) "[A]pplication or processing fees that exceed the reasonable cost of processing the application" and franchise "acceptance fees" are deemed not to be "incidental" and therefore must be collected from or included in the calculation of franchise fees. This is intended to clarify the exclusion of "charges incidental to the awarding or enforcing of a franchise" from franchise fees. 47 U.S.C. § 622(g)(2)(D). The FCC appears to limit such incidental charges to actual, internal costs of processing an application and exclude consultant's fees. Order, ¶¶ 103 and 104. (3) Any in-kind payments or "requests made by LFAs" that are "unrelated to the provision of cable services by a new competitive entrant" must be collected from or included in the calculation of franchise fees. However, under Minnesota law a competitor's franchise fee obligation must also be "no more favorable or less burdensome" than the incumbent's obligation. Minn. Stat. § 238.0$, Subd. 1(b). Because each franchise may address the incumbent's franchise fee obligation in a different way, it is difficult to determine the extent to which this portion of the Order will apply to a competitive application. For example, an incumbent operator may have agreed to provide certain in-kind support such as live feeds, data connectivity, or free services to certain institutions in addition to franchise fees. A competitor may argue that it is not required to provide similar support under the Order because such support is unrelated to the provision of cable service. However, the inclusion or exclusion of this in-kind support in the franchise fee calculation may be subject the state level playing field requirement. If so, a competitor must accept the same or similar obligation. These issues will need to be evaluated on a case-by-case basis. PEG and I-Net Support The Order indicates that PEG capital costs "collected only for the cost of building PEG facilities" are not subject to the 5% franchise fee cap. Order, ¶ 109. The Order further indicates