Transcript DIVISION OF STRATEGIC PLANNING

DIGITAL INFRASTRUCTURE & VIDEO COMPETITION ACT
ROLE OF THE
CALIFORNIA PUBLIC UTILITIES COMMISSION
Los Angeles
October 10, 2007
Michael Morris
Video Franchising & Broadband Deployment
Communications Division
California Public Utilities Commission
DIVCA’s GOALS

Create a fair and level playing field for all market competitors that does
not disadvantage or advantage one service provider or technology over
another.

Promote the widespread access to the most technologically advanced
cable and video services to all California communities in a
nondiscriminatory manner regardless of socioeconomic status.
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Protect local government revenues and their control of public rights-ofway.
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Require market participants to comply with all applicable consumer
protection laws.
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Complement efforts to increase investment in broadband infrastructure
and close the digital divide.
STATE FRANCHISING AUTHORITY
COMMISSION’S RESPONSIBILITIES

Issue and renew 10-year state franchises

Enforce build out and nondiscrimination
requirements
 Holders submit data regarding households offered
service (video and broadband), subscribers and
demographic data annually

Annual reports to legislature and governor
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Protect against cross-subsidization
STATE FRANCHISING AUTHORITY
FRANCHISING PROCESS

Video providers are not utilities
 No protests or interveners

$2000 application fee

Confirm Technical, Managerial, Financial Qualifications
 Bond requirement ($100,000 to $500,000)
 $100,000/20,000 households
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Affidavit re lawful operation
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Definition of franchise territory

Demographic information re households/low income by census block
group
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List of affected local entities
STATE FRANCHISING AUTHORITY
FRANCHISING PROCESS

Ministerial process

Within 30 days – determine if application is complete

If incomplete – notify applicant
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Restart 30-day clock
If complete – issue franchise within 14 days or it is deemed
issued
Notify affected local entities
STATE FRANCHISING AUTHORITY
FRANCHISING PROCESS

Proposed rules were released in January – final vote on March 1st
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Modification and Resolution changing forms
Phase II underway (small LECs; additional data requirements)
Phase III to examine certain procedural questions

Established a Video Franchising Team and began accepting
applications for state franchises on March 2nd

The Commission has approved franchises for Verizon, AT&T and
Cox and Wave
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Verizon application received March 2nd; franchise granted March 8th
AT&T application received March 7th; franchise granted March 30th
Cox application received April 11th; franchise granted April 27th
Wave application received August 9th; franchise granted Sept. 7th
STATE FRANCHISING AUTHORITY
BUILD OUT REQUIREMENTS

Holders may not discriminate against or deny access to service to any
group of potential residential subscribers because of the income of the
residents in the local area in which the group resides

Holders or their affiliates with fewer than 1,000,000 telephone customers
satisfy this section if they offer video service to all customers within their
telephone service area within a reasonable time, as determined by the
Commission


Phase II proposes “safe harbor” equal to large LEC test
Holders or their affiliates with more than 1,000,000 telephone customers
shall provide access to its video service 25-35 percent of the customer
households in the holder’s telephone service area within two years after it
begins providing video service, and to a number at least equal to 40-50
percent of those households within five years (see fine print)
STATE FRANCHISING AUTHORITY
NONDISCRIMINATION REQUIREMENTS

State franchisee may not discriminate against or deny
access to service to any group of potential residential
subscribers because of the income of the residents

A holder with more than 1,000,000 telephone customers
satisfies this requirement if all of the following conditions
are met:

Within three years after it begins providing video service, at least
25 percent of households with access to the holder’s video
service are low-income households, and within five years, 30%
are low-income

It provides service to community centers in underserved areas,
as determined by the holder, without charge, at a ratio of one
community center for every 10,000 video customers.
STATE FRANCHISING AUTHORITY
COMPLAINTS

Local governments may bring complaints alleging violations
of the build out or nondiscrimination requirements
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or the Commission may open an investigation on its own motion
public hearings are required

The Commission may suspend or revoke the franchise

The Commission may impose a fine not to exceed 1 percent
of the holder’s total monthly gross revenue received from
provision of video service in the state each month from the date
of the decision until the date that compliance is achieved
DIVCA
LOCAL ENTITY RESPONSIBILITIES

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Franchise fees
Customer service standards
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½ of fines to Digital Divide Account
CEQA review
Encroachment permits
Emergency alert
PEG channels/support