City, Other Franchise Filings Telegraph Oral Arguments
Cities, Bells and a cable group telegraphed positions on FCC video franchising rules that they may make in court in oral arguments when they submitted filings to 6th U.S. Appeals Court, Cincinnati. Groups representing municipalities said late Wednesday that section 621 of the Communications Act did not authorize a March commission order streamlining the franchise process. The section, on which the commission relied heavily in issuing the order (CD April 24 p2), leaves it to local franchising authorities (LFAs) to set conditions under which they permit cable operators, Bells and others to sell pay-TV, the municipalities said. USTelecom, AT&T and Verizon, in a joint filing June 29, disagreed.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The telcos said the FCC was within its authority under section 621 in giving LFAs 90 days to approve or reject franchise requests by companies that already have right-of- way access in an area. The telcos’ said the 6th Circuit should not grant municipal groups’ recent request to stay enforcement of the franchise rules (CD June 21 p13). Municipalities failed to show they would be hurt financially by the so-called FCC shot clock provision, and in any case they improperly went to court before seeking reconsideration from the commission, the telcos said. LFAs still can deny franchise applications, said USTelecom, AT&T and Verizon. “All the order requires is a timely yes-or-no answer,” they said. “A stay would also cause economic harm to new video entrants such as Verizon and AT&T, impede their exercise of First Amendment rights, and impair the rights of potential customers to receive the speech that these new entrants provide.”
Section 621 assigns franchising decisions to LFAs, not the FCC, said Wednesday’s filing by the Alliance for Community Media, National Association of Counties, National League of Cities and others in Alliance for Community Media v. FCC. They said video providers frustrated by the franchise process can go to state or federal court under section 635 of the Act. “Instead, the FCC seeks to, in effect, add a third clause to Section 635(a) that would allow local franchising matters under Section 621(a)(1) to be ruled upon by the FCC,” said the city groups. The 90-day FCC shot clock for franchise rulings runs afoul of the Act, which gives LFAs 120 days to decide whether to modify an existing video agreement’s terms or transfer a contract to another company with no changes, said the municipal filers. “Yet somehow the FCC has found that an LFA should have less time to negotiate all terms than to negotiate none.”
A cable group agreed with the municipalities that the FCC lacks authority to enforce section 621. The National Cable & Telecommunications Association (NCTA) slammed the regulator for applying some rules to new video entrants and others to incumbent cable operators. “The Commission has used Section 621(a)(1) to create a two-tiered regulatory framework,” said NCTA. “It has no authority to do so.” Lawyers on both sides of the franchise debate expect the 6th Circuit to hear oral arguments in the case later this year or early next. The cities believe they have a strong case that the franchise order violates their constitutional rights, said Alan Fishel, a lawyer representing the municipal groups. “In addition to constitutional issues, we think they did not have the authority to make the rules they did,” he said. “We don’t believe they interpreted the Act. They really re-wrote it.” - Jonathan Make