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Municipalities Fear The Impact of FCC’s Section 621 Order on Local Cable Franchise Fees



Photo of Rick Ellrod from his website

September 5, 2020 — Local telecommunications officials involved in renewing local cable franchises criticized the consequences of the Federal Communications Commission’s ruling on the topic called the Section 621 order.

The conversation among members of the National Association of Telecommunications Officers and Advisors annual conference, meeting virtually on Monday, centered around the experiences local franchising authorities are having renewing their franchises with some of the largest video service providers: Comcast, Charter, Cox, and Verizon.

Many of them complained about the Section 621 order, which implements provisions in the Cable Communications Policy Act of 1984.

The lastest installment of the multi-decades saga over this provision went into effect in September 2019. NATOA members said that the FCC’s most recent order is stifling operations, raising the amount cable operators charge local authorities, and making cable franchise renewals increasingly difficult for local authorities.

The move “has complicated negotiations on issues that used to be rather straight forward,” said Brian Grogan, attorney with Moss and Barnett.

The FCC ruled that local cable franchising authorities cannot regulate a cable operator’s broadband service. It further established that in-kind services or equipment, which operators require local cable franchisers to provide, must count toward the law’s five percent cap on franchise fees.

“This is the most consequential order for local cable franchisers that the FCC has had,” said Rick Ellrod, director of the communications policy and regulation division of Fairfax County’s Department of Cable and Consumer Services.

“We were making progress on franchising renewals until the order came out,” he said.

A long history of court appeals appeals over the language of cable franchising fees

The FCC’s decision in September – the third order on the topic – is currently being reviewed by the Sixth Circuit Court of Appeals in Cincinnati, which has ruled on the two prior disputes about cable franchise fees between the FCC and the cable companies on the one hand, and the municipalities on the other.

When the FCC’s third order was issued, the agency refused to “stay,” or halt implementation, until a final decision by the appeals court. In March, that appeals court upheld the refusal to stay the FCC order.

“And though we remain open to any argument that the franchising authorities choose to make in their merits briefing, their arguments in the motion to stay do not, at this stage, persuade us that the FCC’s interpretation of ‘franchise fee’ is mistaken,” wrote judges David McKeague, Richard Allen Griffin and Raymond Kethledge in their ruling (PDF).

“Our decision in the last appeal should make clear to everyone that we take seriously the franchising authorities’ disagreements with the FCC regarding interpretation of the Act,” the judges continued in their unanimous opinion. “But in essence the franchising authorities have asked us to enjoin what appears to be a correct interpretation of a federal statute.”

The FCC’s latest Section 621 order has already affected municipalities

Throughout the conversation on Monday, the NATOA officials were clearly rooting for the municipalities on the merits of the case as it continues before the appeals court. A final decision on the matter is not expected until the Spring of 2021.

According to many of the webinar participants, the Section 621 order has already begun to affect local franchising authorities by increasing the cost of cable franchise fees.

The order promises to “effect public educational and governmental access channels, courtesy services, and I-NET,” said Timothy Broering, executive director at the Telecommunications Board of Northern Kentucky, which may lead to increased rates.

Broering argued that these were amenities originally “built and paid for by cable subscribers,” yet some local franchisers are being charged by operators for these services today.

“Cable operators need to prove that they have current costs,” said Broering, adding that “there is no fair market value of PEG transfer, it was paid for by cable subscribers.” He was referring to the public, educational and governmental channels that are often a condition of video franchise licenses.

The order is further affecting the ability of local authorities to access high definition channels.

“We’re producing HD everywhere except cable channels right now,” said Ellrod, detailing his team must originally produce their show in high-definition video and then down-convert.

“Verizon is not going to offer HD channels” to local franchisers, added Ellrod.


Proposed Rules to Improve National Alert System Unnecessary, Say Critics

Proposed rules to improve EAS security and operational readiness are unnecessary, say commenters.



Photo of Federal Emergency Management Agency

WASHINGTON, January 18, 2023 – Participants to the national public warning system claim that the Federal Communications Commission’s October rulemaking to improve its security and operational readiness will unduly increase resource and monetary burdens on participants. 

The national warning system is composed of the Emergency Alert System, which transmits important emergency information to affected areas over television and radio, and the Wireless Emergency Alert System, which delivers that information to the public on their wireless devices. Participation in the system is voluntary for wireless providers, but radio and television broadcasters are required to deliver Presidential alerts via the EAS. 

In the Notice of Proposed Rulemaking, the FCC sought comment on ways to strengthen the operational readiness of the warning system by requiring EAS participants to report compromises of equipment and WEA participants to annually certify to having a cybersecurity risk management plan in place. It further asked that commercial mobile service providers “take steps to ensure that only valid alerts are displayed on consumer devices,” citing several instances where false alerts were given following a system hack. 

Measures are unnecessary 

Participants argued that such measures are unnecessary in reply comments to the Commission.  

The proposals in the Notice are “unnecessary and will not meaningfully enhance operational readiness or security of EAS,” stated the National Association of Broadcasters in its comments, claiming that the Notice “presents only scant evidence of EAS equipment failures and new security threats, and thus does not justify the myriad measures proposed.” 

Furthermore, NAB claimed, the notice fails to present a clear rationale for how the Commission’s heightened situational awareness would improve EAS readiness. 

ACA Connects, a trade association representing small and mid-sized telecom and TV operators, added that the Notice identifies only two EAS security breaches in the past ten years, which, as the company said, is “hardly an epidemic.” 

Participating mobile service providers have cyber risk management plans in place already, making any separate cyber certification requirement for WEA unnecessary and likely to cause fragmentation of service-specific plans, claimed wireless trade association, CTIA. 

Increased participant burden 

The Federal Emergency Management Agency, which is responsible for national-level activation and tests of the systems, stated in its comments that it is concerned about the potential increased burden placed upon participants. 

EAS participants voluntarily and at no cost provide state and local alerts and mobile service providers voluntarily participate in WEA without compensation. FEMA argued that some stakeholders may “have difficulty justifying additional resources necessary to comply with increasing regulation.” 

The proposed reporting, certification, and cyber management obligations are far too complex for many EAS participants to implement, stated NAB, claiming that the Commission’s estimation of costs are “wildly unrealistic,” not considering additional hires such a plan would require. 

Mobile provider AT&T added that requirements for updating cybersecurity plans would divert valuable resources from the ongoing, broad cybersecurity efforts that participants engage in daily. The proposed authentication would inhibit the timely release of critical emergency alerts without completely eliminating false WEA messages, it continued.  

The Center for internet Security, however, supported the FCC’s proposed actions, claiming that it moves forward with “critically important” measures to protect the nation’s alert systems from cyber threats. 

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CES 2023: Commissioner Starks Highlights Environmental Benefits of 5G Connectivity

Starks also said federal housing support should be linked to the Affordable Connectivity Program.



Photo of FCC Commissioner Geoffrey Starks (left) and CTA’s J. David Grossman

LAS VEGAS, January 7, 2023 – Commissioner Geoffrey Starks of the Federal Communications Commission spoke at the Consumer Electronics Show Saturday, touting connectivity assistance for individuals who benefit from housing assistance as well as the potential environmental benefits of 5G.

The FCC-administered Affordable Connectivity Program subsidizes monthly internet bills and one-time devices purchases for low-income Americans. Although many groups are eligible – e.g., Medicaid and Supplemental Nutrition Assistance Program enrollees – Starks said his attention is primarily on those who rely on housing support.

“If you are having trouble putting food on your table, you should not have to worry about connectivity as well,” Starks said. “If we are helping you to get housed, we should be able to connect that house,” he added.

Environmental benefits of 5G

In addition to economic benefits, 5G-enabled technologies will offer many environmental benefits, Starks argued. He said the FCC should consider how to “ensure folks do more while using less,” particularly in the spheres of spectral and energy efficiency.

“This is going to take a whole-of-nation (approach),” Starks said. “When you talk to your local folks – mayors – state and other federal partners, making sure that they know smart cities (and) smart grid technology…making sure that we’re all unified on thinking about this is exactly where we need to go to in order to drive down the carbon emissions.”

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FCC Commissioners Tout 5G, Spectrum and Permitting Reform

Commissioner Geoffrey Starks argued that expanding connectivity would enable sustainable, environmentally-friendly technologies.



Photo of FCC Commissioner Geoffrey Starks

WASHINGTON, December 15, 2022 – High-level Federal Communications Commission officials addressed the 40th Annual Institute on Telecommunications Policy and Regulation on Thursday, touting 5G technologies, increased spectrum access, and permitting reform as the broadband industry braces for what promises to be an action-packed 2023.

In his keynote, Commissioner Geoffrey Starks argued that expanding connectivity would enable sustainable, environmentally friendly technologies such as 5G-enabled precision agriculture. During a subsequent panel, Joel Taubenblatt, acting chief of the FCC’s Wireless Telecommunications Bureau, predicted robust innovation in 5G-powered technology sectors including transportation, energy and finance.

Starks, Taubenblatt, and Commissioner Brendan Carr each voiced support for robust spectrum availability. Carr reiterated his outspoken opposition to popular social-media app TikTok, and earlier in the day, Commissioner Nathan Simington proposed raising cybersecurity requirements on wireless device manufactures.

The Infrastructure, Investment and Jobs Act allocated $65 billion to broadband, the largest single investment to date. Policymakers and industry leaders have voiced concern that regulatory mismanagement could blunt the funds’ impact. Testifying before a U.S. Senate subcommittee Tuesday, representatives from trade groups US Telecom and NCTA – The Internet & Television Association warned lawmakers against onerous regulation, especially opaque permitting processes on federal lands.

To ensure the efficient use of unprecedented broadband funding initiatives, federal and state authorities should streamline permitting processes, Carr said. The commissioner told Broadband Breakfast he supports expanding small cell infrastructure reforms, such as approval shot clocks and limitations on unreasonable fees, to the wireline sector.

Carr, in his featured remarks, said regulators should craft policy to avoid overbuilding and prioritize building to the least unserved communities. He once again advocated tech-neutral policies that allow fixed-wireless and satellite broadband to fairly compete with fiber.

Permitting and access barriers at multiple levels of government

Representatives from broadband industry groups detailed potential regulatory barriers to deployment in a webinar held Wednesday.

At the local level, providers must obtain access to utility poles, which can be owned by a range of entities including municipalities and utility companies. State broadband offices could likely coordinate with providers and regulators to ease this process, suggested Teresa Ferguson, senior director of broadband and infrastructure funding at the National Rural Telecommunications Cooperative.

At the federal level, Congress has signaled interest in streamlining permitting processes, said Angela Simpson, general counsel and vice president of legal and regulatory affairs at the Competitive Carriers Association, noting the body introduced 28 reform bills this session. Earlier this month, a bipartisan coalition of senators wrote to the U.S. Departments of Interior, Agriculture, and Commerce, urging them to update federal permitting guidelines.

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