Party-Line Split Expected in LFA Vote Thursday; Carr Pushing Edits

Commissioner Brendan Carr proposed edits he believes are likely to get in to the draft, an FCC official said. Chairman Ajit Pai's office didn't comment. Those edits include language ensuring rights of way owned by states or shared between states and municipalities can't get duplicative fees, allowing modification of franchise agreements that makes clear franchises not complying with federal law are pre-empted and clarifying that temporary public, educational, and government access transport lines used for specific events would be considered an operating cost and count against the franchise fee cap instead of as a capital cost, the official said.

Carr is pushing a definition of fair-market value for when in-kind contributions are calculated that would use the price of what the cable provider would charge for the service in the marketplace, a clarification that LFAs can't ask cable operators to waive some provision in the order as a condition for the granting of or renewal of a franchise, language making clear cable systems include equipment attached to the system to provide wireless services, and a clarification that an LFA can't charge duplicative fees on an cable operator and an affiliate, the official said.

Shentel Vice President-Programming, Regulatory, Business Development Chris Kyle emailed that the item -- limiting cable-related, in-kind contributions required by local franchise authorities and LFAs' ability to regulate non-cable services like broadband delivered over cable systems -- "sends clear guidance for the LFAs to limit all of the 'free' stuff some of them ask of us." He said most LFAs "want to partner with us," accelerating company telecom services investments there, but some "believe that we should also pay them separate fees for the privilege to serve their communities, in addition to providing free broadband access to all municipal facilities, premium cable TV channels and anything else they may need at the time of a new franchise agreement."

The draft has gotten heavy lobbying by cable and -- particularly -- locality interests and allies in recent days. NCTA, in a phone conversation with Media Bureau Chief Michelle Carey, debated a litany of locality assertions, according to a docket 05-311 ex parte posting Monday. It said LFAs are wrongly conflating buildout obligations with carrying PEG channels and providing institutional networks, when buildout costs can be recouped over time and those of PEG channels and I-Net are incurred by the cable operator and its customers, even though those costs aren't essential to providing cable services. So it's fair for the FCC to treat those costs as in-kind contributions covered by the statutory franchise fee cap, it said.

Ed Markey of Massachusetts and 14 other Senate Democrats urged the FCC Monday to “forego any proposal" that “puts at risk critical funding” for PEG stations, “which are vital resources for residents across the country,” the senators wrote Pai in a letter released Tuesday. “Your proposal would force local governments to decide between supporting PEG stations and supporting other important services for critical community institutions like schools and public safety buildings.” The proposed order “creates a no-win situation” for LFAs “and the residents they serve,” they said. “We encourage you to explicitly exclude support for PEG channels -- including the provision of channel capacity -- from the five percent statutory franchise fee cap governing these contracts.” Markey is one of several Hill lawmakers who previously raised concerns about the PEG implications of the LFA proposal (see 1904010046 and 1904080065).

Senate Minority Leader Chuck Schumer and Sen. Kirsten Gillibrand, both D-N.Y., also warned Pai about the proposal's PEG implications in a letter posted Tuesday. The order, if adopted, would "threaten the livelihood of PEG channels and I-Nets throughout New York and the nation," they said. The draft order "would fundamentally change the terms of the carefully negotiated governing agreements between cable operators" and LFAs.

College Park, Maryland, Mayor Patrick Wojahn told us the city is trying to balance between issues like 5G access and its interest in ensuring maintenance of municipal rights-of-way, including an appropriate level of revenue for ROW use. College Park was among several local community signers of a letter last week calling the draft order "substantially defective." Wojahn told us the draft order, if adopted, "would really hamper the ability of cities ... to find an appropriate balance [and] put a thumb on the scale" for telecom companies. The draft order also prioritizes 5G over other utilities by pre-empting localities' control of the ROW as they try to balance its use among all the different utilities needing access. Local governments understand and share the interest in deploying 5G infrastructure but want it done "in a way that makes sense," he said.

Fees for accessing municipal ROWs aren't a large source of income for the city, but a chief reason for charging them is to ensure infrastructure projects don't automatically look to public property first instead of paying a private property owner a market-based amount for access, Wojahn said.