August 11, 2006

Cable Television Legislation Update
Click here for more information about important provisions in SB 1247

At the 2006 State Convention, PSATS members set a specific course for the Association in the legislative storm currently raging around cable TV service and, in particular, townships’ role in regulating that service. That course was set by the adoption of several resolutions that essentially direct PSATS to oppose any legislation which would prohibit township officials from protecting the township’s rights-of-way and the consumer rights of their citizens.

Earlier this year, Senator Dominic Pileggi (Delaware County) introduced Senate Bill 1247 which, in its current form, would significantly restrict local government’s authority to regulate telecom services. Essentially, SB 1247 would preserve certain cable TV fees for townships but, at the same time, would eliminate townships’ authority to negotiate the use of municipal rights-of-way.

Until recently, Internet, telecommunications, and cable TV were activities separate and distinct from each other. Technological advances, however, have moved the three closer and closer together to the point where a company engaged in any one of these areas, is finding the other services accessible to it and potentially profitable. A number of telephone companies, led by Verizon, now seek to provide video services to consumers through their telephone lines. To help their way into the video market, dominated by the long-entrenched cable TV companies, the telephone companies are campaigning for legislation that favors their interests. SB 1247 is the product of that campaign. Promoted by the companies under the banner of “free competition,” SB 1247 would preserve townships’ cable franchise fees (subject to several definition problems) but would otherwise virtually eliminate local government’s capacity to negotiate cable TV franchise agreements that meet the needs of the community and their residents.

The PSATS policy set at the state convention this year actually preceded SB 1247, but fortunately it accurately anticipated the essence of the bill and the nature of the ensuing legislative debate. The resolutions and the explanations offered by their supporters on the floor of the state convention, directed PSATS to oppose the elimination of township powers in this area and to seek a resolution which allowed businesses to freely compete with one another without compromising local government’s responsibility to protect the municipal rights-of-way and the consumer rights and needs of their residents.

Immediately following the convention, the PSATS staff contacted the three other major Pennsylvania local government associations whose members will be affected by SB 1247 or similar legislation and formed a coalition to present and defend the common interests of local government, and to oppose where necessary the well funded and professional lobbying blitz being conducted by supporters of SB 1247.

Thus far, the coalition has retained special counsel versed in the telecommunications laws and franchise negotiations; we met with SB 1247’s prime sponsor to make our position known and to establish a working dialogue; and adopted a set of core principles, which both guide our efforts and inform the legislators of our commitment to protect the public welfare through the preservation of reasonable local control. The coalition’s principles are . . . foster free competition; ensure good video customer service through service provider compliance with local regulations; require timely full build-out of community-wide video service; retain local governments responsibility and authority over the municipal rights-of-way; preserve franchise fee revenues and foster the development of public, educational and governmental channels; and, streamline the franchising process through innovative procedures that are consistent with these principles.

The first hearing on SB 1247 was held at Penn State University’s Delaware County Campus in Media. PA, on August 8. PSATS Executive Board Chairman John Haiko testified on behalf of PSATS and the local government coalition, affirming the importance of these principles. Additionally, he and his colleagues from Pennsylvania’s cities, boroughs and townships of the first class pointed out the factual errors which underlie the Bill.

These local officials showed that local government’s role does not stifle competition; that franchise agreements are being successfully negotiated in the present environment; and, that local regulation is a significant protector of the public welfare. Further, the coalition’s testimony showed the attending legislators the flaws and omissions of the telephone companies’ proposed legislation in its failure to require any community–wide build-out, as is required in many negotiated franchise agreements; its ambiguities and loopholes in defining franchise fee revenue sources; its denigration of local control over municipal rights of way; and, its creation of a regulatory vacuum in which video service providers would, effectively, be exempt from any regulation.

The final outcome of this issue is still very much in doubt. The telephone companies’ lobbying effort is powerful, comprehensive and extremely well-funded. PSATS has effectively countered the telephone companies’ case and will continue to do so and to seek a legislative solution that serves the legitimate interests of all parties. Our chances of achieving a workable and equitable solution depend not only upon the merit of our position but, equally important, upon the public sentiment that is expressed to legislators by local officials and their residents. Legislators need to understand that local participation in the video franchising process is important to local officials and the residents they serve. Call your state Representative and Senate and tell them SB 1247 is bad for local government; bad for the public good; and an unfair special benefit to certain private companies competing in a well established, free and non-exclusive franchising system.

There will likely be additional hearings on the telecom legislation held across the state until the General Assembly returns in late September. PSATS and the coalition will give testimony at each of these hearings. But that may not be enough. This legislation will almost certainly be on a fast-track when the legislature reconvenes and if we are to have any chance to strike a reasonable accord, we need township officials and residents alike to contact their legislators now!!

PSATS will continue to keep you apprised of any and all developments on the telecom proposals. In the meantime if you have any questions, please do not hesitate to contact us.