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CABLE FRANCHISE RENEWALS

What is cable television?

Cable started in the fifties with the advent of broadcast television. Rural and mountainous communities located too far away from large cities to receive ABC, CBS and NBC, put up towers and hung coaxial cable on utility poles so people could receive TV signals. In the seventies three technologic advances converged to make cable a marketable venture in municipalities: NASA launched communications satellites, the silicon chip was developed which made managing cable operations affordable on smaller computers, and program packages such as CNN and HBO were created which offered customers choices beyond three broadcast networks.

How did cable franchising start?

The National Science Foundation developed a franchising model for building cable systems. Even though cable was considered as non-essential, entertainment medium, operators needed to reach homes by placing coaxial cable on poles or in underground utility corridors located in public-right-of-way. Right-of-way is nine feet of publicly owned land on each side of every road, maintained by taxes. By granting access to right-of-way, municipalities allowed private monopolies to lease or rent public land assets. Cable franchising created a competitive market entry process during which cities evaluated bidders’ packages and selected the company offering the best services to the community. As compensation for granting monopoly use of public land local governments received franchise fees, channels for public, education and government access, facilities, equipment and institutional networks.

Have advances in technology and regulatory changes affected cable franchises?

Tectonic shifts in telecommunications networks now allow telephone, cable and fiber companies to use the same infrastructure. The latest, state-of-the-art technology, exceeding wireless broadband is fiber-to-the-premises (FTTP) networks. FTTP availability changes the way cities approach franchise renewals. Federal laws designed to deregulate telecom support the industry's desire (both cable and telephone) to retain non-competitive monopolies that rely on obsolete technology which limits the introduction of new applications.

Legally, cities have no choice but to undertake a standard cable renewal process, continuing the tradition of maintaining one telephone and cable company in every town. However, we know from experience that this approach does not result in the creation of competitive last mile infrastructure. The industry doesn’t have the resources or the will to build wireless broadband or FTTP networks that are shared with competitors. Cable franchise renewals provide the opportunity for local government to explore all options regarding a community’s need for upgraded last mile networks.

In the nineties, technology converged so that voice, video, data and Internet services are carried digitally on interconnected telephone, cable, fiber, satellite, microwave, and wireless networks. However, the telecom regulatory environment that protects public interests remains fragmented. The telecom industry has been effective in lobbying federal and state levels of government to usurp local authority and remove provisions that protect the public interest in cable franchises.

What do cable franchise renewals have to do with economic development?

In the 21st Century, local governments must compete in a global economy. Education, job creation and economic development depend on the availability of advanced telecom infrastructure, which must include, at a minimum, wireless broadband mesh networks or what’s even better, a fiber-to-the-premises (FTTP) telecom delivery system.

Ranking fifteenth in the world with Internet speeds of 1.5-3 Mbps available in only metro areas, the U.S. lags behind most of Europe and Asia where, for the same price, 25-100 Mbps Internet speeds are available to homes and businesses. Franchise renewals offer cities a window of opportunity to develop broadband telecom deployment strategies to acquire state-of-the-art telecom technology. Local governments can take control of their economic destiny, no matter their size or location or the limitations of private telecom providers.

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