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Executive Summary - HB 227: State Issued Video/Cable Franchises

Status
Signed by the Governor.
 
Effective Date
July 1, 2007.
 
Cable/Video Franchising
A cable or video provider, at its option, may utilize local rights of way to offer service through a franchise issued under one of three options:
  • State issued franchise;
  • Local franchise; or
  • Operate under the identical terms of a current locally issued franchise
Any local renewal or new franchise issued after January 1, 2008 will remain as a local franchise until its natural expiration date.

Application for State Issued Franchise
Forty five days prior to offering service an entity seeking a state issued franchise must pay a $500 application fee to the Secretary of State's office and provide the following information:
  • Statement declaring its compliance with all federal, state and local laws, including rights of way requirements that are generally applicable to all users of the rights of way and the Georgia Utility Facility Protection Act.
  • A written description of the area to be served or a clear and legible map of its proposed service area.
  • Location of principal place of business including the names of officers and payment and equipment return locations.
  • Notice to local government requesting amount of franchise fee (up to 5%). If a providers opts for a state issued franchise, the local government must select the franchise fee percentage that it wants to receive, and must send that information to the holder of the state issued franchise and to the Secretary of State. If no percentage is provided to the holder of the state issued franchise and to the Secretary of State, franchise fees will not be collected and the local government will not receive franchise fees.
A state issued franchise is for a 10 year term and is subject to notice to the local government and the Secretary of State prior to a change of ownership. A local government may object to the issuance of a state franchise if the applicant has not been in the jurisdiction's rights of way as of January 1, 2008. The local government must object prior to the issuance of the state franchise by the Secretary of State.
 
Franchise Fees
Holders of a state issued franchise are required to pay the local government a quarterly franchise fee based on a broad definition of gross revenue, which includes home shopping and advertising, up to the current 5% federal maximum. This fee is subject to local audit once annually. The audit, if challenged in court, must be brought within three years from when the disputed charges relate. A local government may change its fee once every two years, up to 5 percent.
 
Local Control of Rights-of-Way
Holders of a state issues franchise are allowed to use local rights-of-way (ROW). Local governments may not charge providers any permit fees to reimburse the city for the cost of regulation, however, local governments are allowed to enforce their ROW ordinances as well as ensure that any damages to the ROW are repaired by the franchisee.
 
Public, Education and Government (PEG) Access Channels
Holders of a state issued franchise must provide local governments that do not have PEG channels under the incumbent service provider's franchise agreement as of January 1, 2008 with PEG channels per the following guidelines:
  • Municipalities with populations greater than 50,000 may have up to three channels on the basic or analog tier based on certain usage requirements; municipalities with populations less than 50,000 may have up to two channels.
    • 1st channel: 15 hours of non-duplicative original programming per month. Two or more governments may join together to meet the requirement in order to share a channel. If the requirement is met, this channel is available on the basic or analog tier.
    • 2nd channel: In order to be eligible for the second PEG channel, the 1st channel must be substantially utilized with 12 hours of continuous programming per day during a quarter. This channel will be on the basic or analog tier.
    • 3rd channel: 8 hours of non-duplicative programming. This channel is available only on the non-basic digital tier. A municipality with a population of less than 50,000 is not eligible for this channel.
PEG Requirements for Incumbent Cable Operators that Opt Into a State Issued Franchise
  • Financial support continues as it existed under an unexpired local franchise as of January 1, 2007 until July 1, 2012.
  • The current number of activated channels as of January 1, 2007 continue until July 1, 2012.
  • The current number of public safety channels activated as of January 1, 2007 will continue until July 1, 2012.
  • The holder of a state issued franchise not providing service before January 1, 2008 must provide comparable PEG funding based on the number of subscribers of the largest incumbent provider in the franchise area as of January 1, 2007
Customer Service Rules
Customer service rules and penalties for noncompliance are established by the Governor's Office of Consumer Affairs after a rule making which will be concluded by December 31, 2007. Customer service is initially handled at the local government level with any unresolved complaints transferred to the Office of Consumer Affairs by the local government. Once 50% of potential subscribers in an area covered by a statewide franchise are served by two or more providers, the local government may discontinue its customer service monitoring by resolution or ordinance.
 
Complimentary Service to Government Facilities
Each holder of a state issued franchise is required to provide one complimentary basic service connection to a government building within 125 feet of a point of connection and complimentary basic cable service to each public school and library. Holders of a state issued franchise may voluntarily provide additional connections and service at their option. Any complimentary service provided under a local franchise in effect as of January 1, 2007 remains until the natural expiration of that agreement.
 
Extension of Service
There are no requirements for the holder of a state issued franchise to build out its service to all potential subscribers in a jurisdiction. The local government may require the holder of a state issued franchise to provide an annual update of where service is offered and maintain a point of contact available during normal business hours.
 
Nondiscrimination Provisions
The holder of a state issued franchise cannot deny service to any group of residential customers based on the income of residents in the area in which the group resides. There is a procedure for any group claiming discrimination to resolve its claim through nonbinding mediation and the court system.
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WHY GMA?
With over 20 years of expertise dealing with cable and telecommunications companies on behalf of cities, we are experienced experts who can negotiate with those companies as your advocate. For your city, that means cable and telecommunications agreements structured by experts that benefit you. From our experience with cities, we routinely see:
  • Returns on investment far exceeding the low annual cost of our services.
  • Cities recouping past underpaid fees, often in the thousands of dollars.
  • Increased rent and right-of-way fees so that you are not undervaluing your city’s property and assets.
Since 2012, a total of over $2 million has been recovered through franchise fee audits for local governments participating in the Telecommunications & Right of Way Management service.