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Cable Television Update 2015
A Look at Federal Regulatory
Developments
NATOA’s 35th Annual Conference – San Diego, CA
Sept...
FCC 621 Order – Part III
 Jan. 21, 2015
 State Level Franchising
• 621 Orders apply only to actions or inactions
 at th...
FCC 621 Order – Part III
 In-kind payments
• noncash payments, such as goods and services
• FCC held
“Non-incidental in-k...
FCC 621 Order – Part III
 Cable Act provides:
• Requirements or charges “incidental” to the
award or enforcement of the f...
FCC 621 Order – Part III
 “Incidental” includes
• Payments for bonds
• Security funds
• Letters of credit
• Insurance
• I...
FCC 621 Order – Part III
 FCC held that “Incidental” does not
include
• Consultant fees
• Application fees
 that exceed ...
FCC 621 Order – Part III
 Mixed use Networks
• Under the Cable Act -
• LFAs have jurisdiction only over the
provision of ...
FCC Open Internet Order
 March 12, 2015 (3-2 vote)
 Order appealed to DC Circuit Court by
• United States Telecom Associ...
FCC Open Internet Order
 The FCC’s 2010 Net Neutrality Order was
challenged:
• In 2014 the DC Circuit Court struck down t...
No Blocking
 A person engaged in the provision of
broadband Internet access service
• Shall not block
 lawful content
 ...
No Throttling
 A person engaged in the provision of broadband
Internet access service
• Shall not impair or degrade lawfu...
No Paid Prioritization
 Fast lanes
 “Paid prioritization” refers to the management
of a broadband provider’s network to ...
FCC Order Preempting TN & NC
Municipal Broadband Restrictions
 March 12, 2015 (3-2 vote)
 FCC preempts certain challenge...
Effective Competition Order
 June 3, 2015 (3-2 vote)
 FCC concludes that all cable operators
are subject to
• “Competing...
Effective Competition Order
 First update of Effective Competition
rules, in over 20 years
 FCC states the below reasons...
Effective Competition Order
 August 31, 2015 challenge filed in DC Circuit
• National Association of Broadcasters (NAB)
•...
Effective Competition Order
 NATOA has stated that the order
is in conflict with a congressional
directive to simply stre...
MVPD Proceeding
 In re Franchising Innovation & Competition
in the Provision of Multichannel Video
Programming Distributi...
MVPD Proceeding
 Managed linear IP video service
• AKA – plain old cable service
• FCC tentatively determines that
• It i...
MVPD Proceeding
 Over The Top (OTT) video programming
 FCC tentatively concludes that
• A Cable Operator's OTT video pro...
21
Brian T. Grogan, Esq.
Moss & Barnett, A Professional Association
150 South Fifth Street, Suite 1200
Minneapolis, MN 554...
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Cable Television Update 2015 – A Look at Federal Regulatory Developments

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A presentation by Moss & Barnett attorney, Brian T. Grogan, at NATOA's 35th Annual Conference held in San Diego, CA, on September 8-11, 2015

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Cable Television Update 2015 – A Look at Federal Regulatory Developments

  1. 1. Cable Television Update 2015 A Look at Federal Regulatory Developments NATOA’s 35th Annual Conference – San Diego, CA September 8-11, 2015 Presented by: Brian T. Grogan, Esq 1
  2. 2. FCC 621 Order – Part III  Jan. 21, 2015  State Level Franchising • 621 Orders apply only to actions or inactions  at the local level where a state has not specifically circumscribed the LFA’s authority. • Prior 621 rulings on • Franchise fees • PEG and I-Net obligations • Non-cable related services and facilities  Do not apply to state level franchising 2
  3. 3. FCC 621 Order – Part III  In-kind payments • noncash payments, such as goods and services • FCC held “Non-incidental in-kind fees must count toward the 5 percent franchise fee cap, and does not limit the franchise fee exception to in-kind payments that are unrelated to cable service.” 3
  4. 4. FCC 621 Order – Part III  Cable Act provides: • Requirements or charges “incidental” to the award or enforcement of the franchise are exempt from franchise fees. • See Section 622(g)(2)(D) 4
  5. 5. FCC 621 Order – Part III  “Incidental” includes • Payments for bonds • Security funds • Letters of credit • Insurance • Indemnification • Penalties • Liquidated damages • Other “minor” expenses 5
  6. 6. FCC 621 Order – Part III  FCC held that “Incidental” does not include • Consultant fees • Application fees  that exceed reasonable costs • Acceptance fees • Free or discounted services • Leased LFA equipment above market rates 6
  7. 7. FCC 621 Order – Part III  Mixed use Networks • Under the Cable Act - • LFAs have jurisdiction only over the provision of “cable services” over “cable systems.” • FCC held “LFAs may not use their franchising authority to regulate non-cable services provided by either an incumbent or new entrant.” 7
  8. 8. FCC Open Internet Order  March 12, 2015 (3-2 vote)  Order appealed to DC Circuit Court by • United States Telecom Association • Cellular Telephone Industries Association • AT&T, Wireless • Internet Service Providers Association • CenturyLink • American Cable Association • National Cable & Telecommunications Association 8
  9. 9. FCC Open Internet Order  The FCC’s 2010 Net Neutrality Order was challenged: • In 2014 the DC Circuit Court struck down the FCC’s 2010 conduct rules against blocking and unreasonable discrimination.  Verizon v. FCC 740 F.3d 623 (D.C. Cir. 2014).  The Verizon court affirmed the FCC’s conclusion that: • “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.”  New FCC order – Three key issues 9
  10. 10. No Blocking  A person engaged in the provision of broadband Internet access service • Shall not block  lawful content  applications  services or  non-harmful devices • subject to reasonable network management  Consumers must get what they paid for • access to all (lawful) destinations on the Internet. 10
  11. 11. No Throttling  A person engaged in the provision of broadband Internet access service • Shall not impair or degrade lawful Internet traffic on the basis of  Internet content,  Application  service or  Use of a non-harmful device, • subject to reasonable network management.  Order creates a separate rule to guard against degradation targeted at specific uses of a customer’s broadband connection 11
  12. 12. No Paid Prioritization  Fast lanes  “Paid prioritization” refers to the management of a broadband provider’s network to directly or indirectly favor some traffic over other traffic. • Prohibits  Traffic shaping  Prioritization  Resource reservation, or  Other forms of preferential traffic management. • Either in exchange for consideration (monetary or otherwise) from a third party, or  to benefit an affiliated entity. 12
  13. 13. FCC Order Preempting TN & NC Municipal Broadband Restrictions  March 12, 2015 (3-2 vote)  FCC preempts certain challenged provisions of Tennessee and North Carolina law restricting municipal provision of broadband service pursuant to section 706 of the Telecommunications Act of 1996.  Based on petitions of • The Electric Power Board of Chattanooga, Tennessee • The City of Wilson, North Carolina  FCC concluded that TN and NC state laws were barriers to broadband infrastructure investment and thwart competition. 13
  14. 14. Effective Competition Order  June 3, 2015 (3-2 vote)  FCC concludes that all cable operators are subject to • “Competing Provider Effective Competition”  LFAs are prohibited from regulating basic cable rates - unless • LFA successfully demonstrates that the cable system is not subject to Competing Provider Effective Competition  Burden of proof shifted entirely to LFA 14
  15. 15. Effective Competition Order  First update of Effective Competition rules, in over 20 years  FCC states the below reasons for order • Reflect the current MVPD marketplace • Reduce the regulatory burdens on all cable operators, especially small operators, and • More efficiently allocate the FCC’s resources. 15
  16. 16. Effective Competition Order  August 31, 2015 challenge filed in DC Circuit • National Association of Broadcasters (NAB) • NATOA • Northern Dakota County Cable Communications Commission  NAB is concerned because the order may result in no obligation for cable operators to carry broadcasters channels • Under negotiated retransmission consent agreements which typically require carriage on the basic service tier that must be offered to every subscriber. 16
  17. 17. Effective Competition Order  NATOA has stated that the order is in conflict with a congressional directive to simply streamline the effective competition process for “small cable providers” • NATOA argues that the order will result in higher consumer prices • May result in the removal of PEG and local broadcast channels from the basic tier of service. 17
  18. 18. MVPD Proceeding  In re Franchising Innovation & Competition in the Provision of Multichannel Video Programming Distribution Services • Released December 2014  2 key issues raised 18
  19. 19. MVPD Proceeding  Managed linear IP video service • AKA – plain old cable service • FCC tentatively determines that • It is a “Cable Service” under the Cable Act • 47 U.S.C. § 522(6) • If an entity crosses a ROW with a closed transmission system  Or where affiliates have a significant interest in such system • Then = “Cable Operator” of a “Cable System” 19
  20. 20. MVPD Proceeding  Over The Top (OTT) video programming  FCC tentatively concludes that • A Cable Operator's OTT video programming is not a “cable service. • If this tentative conclusion is maintained • Could have massive ramifications for cities nationwide  Franchise fees  PEG fees  PEG programming carriage 20
  21. 21. 21 Brian T. Grogan, Esq. Moss & Barnett, A Professional Association 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 (612) 877-5340 phone / (612) 877-5031 facsimile E-mail: Brian.Grogan@lawmoss.com Web site: www.lawmoss.com Questions

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