Senate Study Bill 1208
SENATE FILE
BY (PROPOSED COMMITTEE ON
COMMERCE BILL BY
CHAIRPERSON WARNSTADT)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to franchises for the provision of cable service
2 or video service including providing for fees and providing an
3 effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 2128XC 82
6 rn/cf/24
PAG LIN
1 1 Section 1. PURPOSE. It is the purpose of this Act to
1 2 encourage competition in the provision of cable service and
1 3 video service in this state, to encourage new providers of
1 4 cable service and video service, and to provide consumers
1 5 additional choices in cable service and video service.
1 6 Sec. 2. NEW SECTION. 477A.1 DEFINITIONS.
1 7 As used in this chapter, unless the context otherwise
1 8 requires:
1 9 1. "Cable operator" means the same as defined in 47 U.S.C.
1 10 } 522.
1 11 2. "Cable service" means the same as defined in 47 U.S.C.
1 12 } 522.
1 13 3. "Cable system" means the same as defined in 47 U.S.C. }
1 14 522.
1 15 4. "Competitive cable service provider" means a person who
1 16 provides cable service over a cable system in an area other
1 17 than the incumbent cable provider providing service in the
1 18 same area.
1 19 5. "Competitive video service provider" means a person who
1 20 provides video service other than a cable operator.
1 21 6. "Franchise" means an initial authorization, or renewal
1 22 of an authorization, issued by the secretary of state or a
1 23 municipality, regardless of whether the authorization is
1 24 designated as a franchise, permit, license, resolution,
1 25 contract, certificate, agreement, or otherwise, that
1 26 authorizes the construction and operation of a cable system or
1 27 video service provider's network in a public right=of=way.
1 28 7. a. "Gross revenues" means all consideration of any
1 29 kind or nature, including but not limited to cash, credits,
1 30 property, and in=kind contributions received from subscribers
1 31 for the provision of cable service over a cable system by a
1 32 competitive cable service provider or for the provision of
1 33 video service by a competitive video service provider within a
1 34 municipality's jurisdiction.
1 35 b. "Gross revenues" does not include any of the following:
2 1 (1) Revenues not actually received, even if billed,
2 2 including bad debt.
2 3 (2) Revenues received by any affiliate or any other person
2 4 in exchange for supplying goods or services used by the person
2 5 providing cable service or video service.
2 6 (3) Refunds, rebates, or discounts made to third parties,
2 7 including subscribers, leased access providers, advertisers,
2 8 or any municipality or other unit of local government.
2 9 (4) Revenues derived by the holder of a certificate of
2 10 franchise authority from services not classified as cable
2 11 service or video service, including, without limitation,
2 12 revenue received from telecommunications services, revenue
2 13 received from information services, revenue received in
2 14 connection with advertising, revenue received in connection
2 15 with home=shopping services, or any other revenues attributed
2 16 by the competitive cable service provider or competitive video
2 17 service provider to noncable service or nonvideo service in
2 18 accordance with any federal communications commission rules,
2 19 regulations, standards, or orders.
2 20 (5) Revenues paid by subscribers to home=shopping
2 21 programmers directly from the sale of merchandise through any
2 22 home=shopping channel offered as part of the cable services or
2 23 video services.
2 24 (6) Revenues from the sale of cable services or video
2 25 services for resale in which the purchaser is required to
2 26 collect the franchise fee from the purchaser's customer.
2 27 (7) Revenues from any tax of general applicability imposed
2 28 upon the competitive cable service provider or competitive
2 29 video service provider or upon subscribers by a city, state,
2 30 federal, or any other governmental entity and required to be
2 31 collected by the competitive cable service provider or
2 32 competitive video service provider and remitted to the taxing
2 33 entity, including but not limited to sales or use tax, gross
2 34 receipts tax, excise tax, utility users tax, public service
2 35 tax, and communication taxes, and including the franchise fee
3 1 imposed under section 477A.7.
3 2 (8) Revenues forgone from the provision of cable services
3 3 or video services to public institutions, public schools, or
3 4 governmental entities at no charge.
3 5 (9) Revenues foregone from the competitive cable service
3 6 provider's or competitive video service provider's provision
3 7 of free or reduced=cost video service to any person,
3 8 including, without limitation, any municipality and other
3 9 public institutions or other institutions.
3 10 (10) Revenues from sales of capital assets or sales of
3 11 surplus equipment.
3 12 (11) Revenues from reimbursements by programmers of
3 13 marketing costs incurred by the competitive cable service
3 14 provider or competitive video service provider for the
3 15 introduction or promotion of new programming.
3 16 (12) Directory or internet advertising revenues including
3 17 but not limited to yellow page, white page, banner
3 18 advertisement, and electronic publishing.
3 19 (13) Copyright fees paid to the United States copyright
3 20 office.
3 21 8. "Incumbent cable provider" means the cable operator
3 22 serving the largest number of cable subscribers in a
3 23 particular franchise service area on July 1, 2007.
3 24 9. "Municipality" means a county or city.
3 25 10. "Percentage of gross revenues" means the percentage
3 26 set by the municipality and identified in a written request
3 27 made under section 477A.7, subsection 1, which shall be not
3 28 greater than the most recent percentage paid by the incumbent
3 29 cable provider as a franchise fee or five percent, whichever
3 30 is less.
3 31 11. "Public right=of=way" means the area on, below, or
3 32 above a public roadway, highway, street, bridge, cartway,
3 33 bicycle lane, or public sidewalk in which the municipality has
3 34 an interest, including other dedicated rights=of=way for
3 35 travel purposes and utility easements. "Public right=of=way"
4 1 does not include the airwaves above a public right=of=way with
4 2 regard to cellular or other nonwire telecommunications or
4 3 broadcast services or utility poles owned by a municipality or
4 4 a municipal utility.
4 5 12. "Video programming" means the same as defined in 47
4 6 U.S.C. } 522.
4 7 13. "Video service" means video programming services
4 8 provided through wireline facilities located at least in part
4 9 in the public right=of=way without regard to delivery
4 10 technology, including internet protocol technology. "Video
4 11 service" does not include any video programming provided by a
4 12 provider of commercial mobile service as defined in 47 U.S.C.
4 13 } 332, or cable service provided by an incumbent cable
4 14 provider or a competitive cable service provider.
4 15 Sec. 3. NEW SECTION. 477A.2 CERTIFICATE OF FRANCHISE
4 16 AUTHORITY REQUIREMENT.
4 17 1. After July 1, 2007, a person providing cable service or
4 18 video service in this state shall not provide such service
4 19 without a franchise. The franchise may be issued by either
4 20 the secretary of state pursuant to section 477A.3 or by a
4 21 municipality pursuant to section 364.2.
4 22 2. A person providing cable service or video service under
4 23 a franchise agreement with a municipality prior to July 1,
4 24 2007, is not subject to this section with respect to such
4 25 municipality until the franchise agreement expires or is
4 26 terminated pursuant to this chapter.
4 27 3. For purposes of this section, a person providing cable
4 28 service or video service is deemed to have executed a
4 29 franchise agreement to provide cable service or video service
4 30 with a specific municipality if an affiliate or predecessor of
4 31 the person providing cable service or video service has
4 32 executed a franchise agreement with that municipality.
4 33 4. A competitive cable service provider or competitive
4 34 video service provider shall provide at least thirty days'
4 35 notice to each municipality with authority to grant a
5 1 franchise in the service area in which the competitive cable
5 2 service provider or competitive video service provider is
5 3 granted authority to provide service under a certificate of
5 4 franchise authority that the competitive cable service
5 5 provider or competitive video service provider offers or
5 6 intends to offer cable services or video services within the
5 7 jurisdiction of the municipality.
5 8 5. As used in this section, "affiliate" includes but is
5 9 not limited to a person that directly, or indirectly through
5 10 one or more intermediaries, controls, is controlled by, or is
5 11 under common control with a person receiving, obtaining, or
5 12 operating under a franchise agreement with a municipality to
5 13 provide cable service or video service through merger, sale,
5 14 assignment, restructuring, or any other type of transaction.
5 15 6. a. If an incumbent cable provider and one or more
5 16 competitive cable service providers or competitive video
5 17 service providers are providing cable service or video service
5 18 within the jurisdiction of a municipality, an incumbent cable
5 19 provider with an existing franchise agreement with the
5 20 municipality may request that the municipality modify the
5 21 terms of the existing franchise agreement to conform to the
5 22 terms and conditions of a franchise granted to a competitive
5 23 cable service provider or competitive video service provider
5 24 as a holder of a certificate of franchise authority that
5 25 includes the municipality. The incumbent cable provider
5 26 requesting a modification shall identify in writing the terms
5 27 and conditions of the existing franchise that are materially
5 28 different from the franchise of the holder of a certificate of
5 29 franchise authority, whether such differences impose greater
5 30 or lesser burdens on the incumbent cable provider. Upon
5 31 receipt of such request from an incumbent cable provider, the
5 32 incumbent cable operator and the municipality shall negotiate
5 33 the franchise modification terms in good faith for a period of
5 34 sixty days. If within sixty days, the municipality and the
5 35 incumbent cable provider cannot reach agreeable terms, the
6 1 incumbent cable provider may file a modification request
6 2 pursuant to paragraph "b".
6 3 b. If an incumbent cable provider and one or more
6 4 competitive cable service providers or competitive video
6 5 service providers are providing cable service or video service
6 6 within the jurisdiction of a municipality, an incumbent cable
6 7 provider may seek a modification of the existing franchise
6 8 terms and conditions to conform to the terms and conditions of
6 9 a franchise of a competitive cable service provider or
6 10 competitive video service provider as a holder of a
6 11 certificate of franchise authority that includes the
6 12 municipality pursuant to the provisions of 47 U.S.C. } 545.
6 13 In an application for modification, an incumbent cable
6 14 provider shall identify the terms and conditions of the
6 15 existing franchise that are materially different from the
6 16 terms and conditions of the franchise of the holder of a
6 17 certificate of franchise authority, and whether such
6 18 differences impose greater or lesser burdens on the incumbent
6 19 cable provider. The municipality shall grant the modification
6 20 request within one hundred twenty days, and after a public
6 21 hearing, for any provisions where there are material
6 22 differences between the existing franchise and the franchise
6 23 of the holder of the certificate of franchise authority. Any
6 24 provision of the existing franchise may be modified. If an
6 25 incumbent cable provider is denied a modification request
6 26 pursuant to this paragraph, the existing franchise shall be
6 27 null and void and the incumbent cable provider may apply for a
6 28 certificate of franchise authority under section 477A.3.
6 29 Sec. 4. NEW SECTION. 477A.3 APPLICATION REQUIREMENTS ==
6 30 CERTIFICATE OF FRANCHISE AUTHORITY.
6 31 1. The secretary of state shall issue a certificate of
6 32 franchise authority under this chapter within fifteen business
6 33 days after receipt of a completed application and affidavit
6 34 submitted by the applicant and signed by an officer or general
6 35 partner of the applicant. The application and affidavit shall
7 1 provide all of the following information:
7 2 a. That the applicant has filed or will timely file with
7 3 the federal communications commission all forms required by
7 4 the commission in advance of offering cable service or video
7 5 service in this state.
7 6 b. That the applicant agrees to comply with all applicable
7 7 federal and state statutes, regulations, and rules.
7 8 c. That the applicant agrees to comply with all applicable
7 9 state laws and municipal ordinances and regulations regarding
7 10 the use and occupation of a public right=of=way in the
7 11 delivery of the cable service or video service, including the
7 12 police powers of the municipalities in which the service is
7 13 delivered.
7 14 d. A description of the service area to be served and the
7 15 municipalities to be served by the applicant which may include
7 16 certain designations of unincorporated areas. This
7 17 description shall be updated by the applicant prior to the
7 18 expansion of cable service or video service to a previously
7 19 undesignated service area and, upon such expansion, notice
7 20 shall be given to the secretary of state of the service area
7 21 to be served by the applicant.
7 22 e. The address of the applicant's principal place of
7 23 business and the names of the applicant's principal executive
7 24 officers.
7 25 2. The failure of the secretary of state to notify the
7 26 applicant of the completeness of the applicant's affidavit or
7 27 issue a certificate of franchise authority before the
7 28 fifteenth business day after receipt of a completed affidavit
7 29 shall constitute issuance of the certificate of franchise
7 30 authority applied for by the applicant without further action
7 31 by the applicant.
7 32 3. The certificate of franchise authority issued by the
7 33 secretary of state shall contain all of the following:
7 34 a. A grant of authority to provide cable service or video
7 35 service in the service area designated in the application.
8 1 b. A grant of authority to use and occupy the public
8 2 right=of=way in the delivery of cable service or video
8 3 service, subject to the laws of this state, including the
8 4 police powers of the municipalities in which the service is
8 5 delivered.
8 6 c. A statement that the grant of authority provided by the
8 7 certificate is subject to the lawful operation of the cable
8 8 service or video service by the applicant or the applicant's
8 9 successor.
8 10 4. A certificate of franchise authority issued by the
8 11 secretary of state is fully transferable to any successor of
8 12 the applicant to which the certificate was initially issued.
8 13 A notice of transfer shall be filed by the holder of the
8 14 certificate of franchise authority with the secretary of state
8 15 and the affected municipality within fourteen business days of
8 16 the completion of the transfer of the certificate of franchise
8 17 authority.
8 18 5. The certificate of franchise authority issued by the
8 19 secretary of state may be terminated by a person providing
8 20 cable service or video service by submitting written notice to
8 21 the secretary of state.
8 22 Sec. 5. NEW SECTION. 477A.4 APPLICABILITY TO FEDERAL
8 23 LAW.
8 24 To the extent required by applicable law, a certificate of
8 25 franchise authority issued under this chapter shall constitute
8 26 a "franchise" for the purposes of 47 U.S.C. } 541(b)(1). To
8 27 the extent required for the purposes of 47 U.S.C. } 521==561,
8 28 only the state of Iowa shall constitute the exclusive
8 29 franchising authority for competitive cable service providers
8 30 and competitive video service providers in this state.
8 31 Sec. 6. NEW SECTION. 477A.5 MUNICIPALITY RESTRICTIONS.
8 32 1. A municipality shall not require a holder of a
8 33 certificate of franchise authority to do any of the following:
8 34 a. Comply with a mandatory build=out provision.
8 35 b. Obtain a separate franchise.
9 1 c. Pay any additional fees, except as provided in this
9 2 chapter.
9 3 d. Be subject to any additional franchise requirement by
9 4 the municipality, except as provided in this chapter.
9 5 2. For purposes of this section, a "franchise requirement"
9 6 includes any provision regulating rates or requiring build=out
9 7 requirements to deploy any facilities or equipment.
9 8 3. Section 364.2 shall not apply to a holder of a
9 9 certificate of franchise authority issued pursuant to this
9 10 chapter.
9 11 Sec. 7. NEW SECTION. 477A.6 PUBLIC, EDUCATIONAL, AND
9 12 GOVERNMENTAL ACCESS CHANNELS.
9 13 1. Not later than one hundred eighty days after a request
9 14 by a municipality in which a competitive cable service
9 15 provider or a competitive video service provider is providing
9 16 cable service or video service, the holder of the certificate
9 17 of authority for that municipality shall designate a
9 18 sufficient amount of capacity on the certificate holder's
9 19 communications network to allow the provision of a comparable
9 20 number of public, educational, and governmental channels that
9 21 the incumbent cable provider in the municipality has activated
9 22 and provided in the municipality under the terms of a
9 23 franchise agreement with a municipality prior to July 1, 2007.
9 24 If no such channels are active, the municipality may request a
9 25 maximum of three public, educational, and governmental
9 26 channels for a municipality with a population of at least
9 27 fifty thousand, and a maximum of two public, educational, and
9 28 governmental channels for a municipality with a population of
9 29 less than fifty thousand.
9 30 a. The public, educational, and governmental content to be
9 31 provided pursuant to this section shall be the responsibility
9 32 of the municipality receiving the benefit of such capacity.
9 33 The holder of a certificate of franchise authority shall be
9 34 responsible only for the transmission of such content, subject
9 35 to technological restraints.
10 1 b. The municipality receiving capacity under this section
10 2 shall ensure that all transmissions, content, or programming
10 3 to be transmitted by the holder of the certificate of
10 4 franchise authority are provided or submitted to the
10 5 competitive cable service provider or competitive video
10 6 service provider in a manner or form that is capable of being
10 7 accepted and transmitted by the competitive cable service
10 8 provider or competitive video service provider, without
10 9 requirement for additional alteration or change in the
10 10 content, over the particular network of the competitive cable
10 11 service provider or competitive video service provider, which
10 12 is compatible with the technology or protocol utilized by the
10 13 competitive cable service provider or competitive video
10 14 service provider to deliver services. The provision of such
10 15 transmissions, content, or programming to the competitive
10 16 cable service provider or competitive video service provider
10 17 shall constitute authorization for such holder to carry such
10 18 transmissions, content, or programming, at the holder's
10 19 option, beyond the jurisdictional boundaries stipulated in any
10 20 franchise agreement.
10 21 2. Where technically feasible, a competitive cable service
10 22 provider or competitive video service provider that is a
10 23 holder of a certificate of franchise authority and an
10 24 incumbent cable provider shall use reasonable efforts to
10 25 interconnect the cable or video communications network systems
10 26 of the certificate holder and incumbent cable provider for the
10 27 purpose of providing public, educational, and governmental
10 28 programming. Interconnection may be accomplished by direct
10 29 cable, microwave link, satellite, or other reasonable method
10 30 of connection. A holder of a certificate of franchise
10 31 authority and an incumbent cable provider shall negotiate in
10 32 good faith and an incumbent cable provider shall not withhold
10 33 interconnection of public, educational, or governmental
10 34 channels.
10 35 3. A court of competent jurisdiction shall have exclusive
11 1 jurisdiction to enforce any requirement under this section.
11 2 Sec. 8. NEW SECTION. 477A.7 FEES.
11 3 1. a. In any service area in which a competitive cable
11 4 service provider or a competitive video service provider
11 5 holding a certificate of franchise authority offers or
11 6 provides cable service or video service, the competitive cable
11 7 service provider or competitive video service provider shall
11 8 calculate and pay a franchise fee to the municipality with
11 9 authority to grant a certificate of franchise authority in
11 10 that service area upon the municipality's written request. If
11 11 the municipality makes such a request, the franchise fee shall
11 12 be due and paid to the municipality on a quarterly basis, not
11 13 later than forty=five days after the close of the quarter, and
11 14 shall be calculated as a percentage of gross revenues. The
11 15 municipality shall not demand any additional franchise fees
11 16 from the competitive cable service provider or competitive
11 17 video service provider, and shall not demand the use of any
11 18 other calculation method for the franchise fee.
11 19 b. Upon the expiration of an existing franchise agreement,
11 20 if the incumbent cable provider elects to possess a
11 21 certificate of franchise authority, the incumbent cable
11 22 provider shall pay a franchise fee to the municipality in an
11 23 amount equal to the same percent of gross revenues as had been
11 24 assessed immediately prior to the termination of the incumbent
11 25 cable operator's franchise.
11 26 c. A provider who is both a competitive cable service
11 27 provider and a competitive video service provider shall be
11 28 subject to and only be required to pay one franchise fee to a
11 29 municipality under this subsection regardless of whether the
11 30 provider provides both cable service and video service.
11 31 d. At the request of a municipality and not more than once
11 32 per year, the auditor of state may perform reasonable audits
11 33 of the competitive cable service provider's or competitive
11 34 video service provider's calculation of the franchise fee
11 35 under this subsection. The municipality shall bear the costs
12 1 of any audit requested pursuant to this subsection.
12 2 e. A competitive cable service provider or competitive
12 3 video service provider may identify and collect the amount of
12 4 the franchise fee as a separate line item on the regular bill
12 5 of each subscriber.
12 6 2. A municipality may require a competitive cable service
12 7 provider or competitive video service provider to pay a permit
12 8 fee if the municipality imposes the same permit fee on the
12 9 incumbent cable provider, and any permit fee shall not exceed
12 10 the actual, direct costs incurred by the municipality for
12 11 issuing the relevant permit. In no event may a permit fee
12 12 under this subsection be levied under any of the following
12 13 circumstances:
12 14 a. If the competitive cable service provider or
12 15 competitive video service provider already has paid a permit
12 16 fee of any kind in connection with the same activity that
12 17 would otherwise be covered by the permit fee under this
12 18 subsection or is otherwise authorized by law or contract to
12 19 place the facilities used by the competitive cable service
12 20 provider or competitive video service provider in the public
12 21 right=of=way.
12 22 b. For general revenue purposes.
12 23 c. If an incumbent cable provider pays any fee to a
12 24 municipality for public, educational, and governmental access
12 25 channels, any subsequent holder of a certificate of franchise
12 26 authority that includes that municipality shall pay this fee
12 27 at the same rate. All fees collected pursuant to this
12 28 subsection shall be used only for the support of the public,
12 29 educational, and governmental access channels.
12 30 Sec. 9. NEW SECTION. 477A.8 CUSTOMER SERVICE STANDARDS.
12 31 The holder of a certificate of franchise authority shall
12 32 comply with customer service requirements consistent with
12 33 those contained in 47 C.F.R. } 76.309.
12 34 Sec. 10. NEW SECTION. 477A.9 NONDISCRIMINATION BY
12 35 MUNICIPALITY.
13 1 1. A municipality shall allow the holder of a certificate
13 2 of franchise authority to install, construct, and maintain a
13 3 communications network within a public right=of=way and shall
13 4 provide the holder of a certificate of franchise authority
13 5 with open, comparable, nondiscriminatory, and competitively
13 6 neutral access to the public right=of=way.
13 7 2. A municipality shall not discriminate against the
13 8 holder of a certificate of franchise authority in providing
13 9 access to a municipal building or through a municipal utility
13 10 pole attachment term.
13 11 Sec. 11. NEW SECTION. 477A.10 PROVIDER DISCRIMINATION
13 12 PROHIBITED.
13 13 1. The purpose of this section is to prevent
13 14 discrimination among potential residential subscribers.
13 15 2. A competitive cable service provider or competitive
13 16 video service provider holding a certificate of franchise
13 17 authority shall not deny access to any group of potential
13 18 residential subscribers because of the income of residents in
13 19 the local area in which such group resides.
13 20 3. The holder of a certificate of franchise authority may
13 21 use direct=to=home satellite service or another alternative
13 22 technology that provides comparable content, service, and
13 23 functionality to satisfy the requirements of this section.
13 24 Sec. 12. NEW SECTION. 477A.11 APPLICABILITY OF OTHER
13 25 LAW.
13 26 1. This chapter is intended to be consistent with the
13 27 federal Cable Act, 47 U.S.C. } 521 et seq.
13 28 2. Except as otherwise stated in this chapter, this
13 29 chapter shall not be interpreted to prevent a competitive
13 30 cable service provider, competitive video service provider,
13 31 municipality, or other provider of cable service or video
13 32 service from seeking clarification of any rights and
13 33 obligations under federal law or to exercise any right or
13 34 authority under federal or state law.
13 35 Sec. 13. NEW SECTION. 477A.12 RULES.
14 1 The secretary of state shall adopt rules necessary to
14 2 administer this chapter.
14 3 Sec. 14. EFFECTIVE DATE. This Act, being deemed of
14 4 immediate importance, takes effect upon enactment.
14 5 EXPLANATION
14 6 This bill relates to franchises for the provision of cable
14 7 service or video service.
14 8 Under current law, each city has the authority to grant a
14 9 franchise for the provision of cable television service under
14 10 Code section 364.2. The bill requires a person providing
14 11 cable service or video service, as defined by the bill, to
14 12 apply for and receive a certificate of franchise authority
14 13 from the secretary of state or a municipality to provide cable
14 14 service or video service in a specified service area. Persons
14 15 providing cable service or video service under a franchise
14 16 agreement with a municipality prior to July 1, 2007, are not
14 17 required to apply for a certificate of franchise authority
14 18 until the franchise agreement expires or is terminated as
14 19 provided by the bill. A competitive cable service provider or
14 20 competitive video service provider shall provide at least 30
14 21 days' notice to each municipality in the service area granted
14 22 under the certificate of franchising authority that the
14 23 provider offers or intends to offer cable service or video
14 24 service. The bill specifies procedures whereby incumbent
14 25 cable providers, as defined in the bill, may request a
14 26 modification of an existing franchise agreement with a
14 27 municipality to conform that agreement with the terms and
14 28 conditions of a franchise granted to a competitive cable
14 29 service provider or competitive video service provider as
14 30 holder of a certificate of franchise authority where the
14 31 franchise covers the municipality.
14 32 The bill provides for certain application requirements to
14 33 receive a certificate of franchise authority, including an
14 34 affirmation of compliance with certain federal requirements,
14 35 agreement to comply with municipal right=of=way ordinances, a
15 1 description of the service area, and the address of the
15 2 applicant's principal place of business. The bill provides
15 3 for the certificate of franchise authority to contain certain
15 4 information, including an explicit grant of authority of the
15 5 holder of the certificate to provide cable service or video
15 6 service in a specific service area described by the
15 7 certificate. A certificate of franchise authority is
15 8 transferable. The bill requires a holder of a certificate of
15 9 franchise authority to file a notice of transfer with the
15 10 secretary of state at least 14 days prior to transfer. The
15 11 holder of a certificate of authority may terminate the
15 12 certificate by providing written notice to the secretary of
15 13 state.
15 14 The bill provides that a certificate of franchise authority
15 15 shall be considered a "franchise" within the meaning of
15 16 certain federal laws and that only the state of Iowa shall be
15 17 considered the franchising authority for competitive cable
15 18 service providers and competitive video service providers in
15 19 this state.
15 20 The bill prohibits municipalities from requiring a holder
15 21 of a certificate of franchise authority to comply with
15 22 mandatory build=out provisions, obtain a separate franchise,
15 23 pay additional fees other than as provided in the bill, and
15 24 comply with additional franchise requirements other than as
15 25 provided in the bill. The bill provides that Code section
15 26 364.2, relating to the powers of cities to grant franchises,
15 27 shall not apply to a holder of a certificate of franchise
15 28 authority.
15 29 Upon request by a municipality, the bill requires a holder
15 30 of a certificate of franchise authority granted by the
15 31 municipality to designate capacity on the certificate holder's
15 32 communications network to allow for the provision of channels
15 33 or capacity for public, educational, or governmental
15 34 programming by a competitive cable service provider or
15 35 competitive video service provider. The bill requires a
16 1 holder of a certificate of authority and an incumbent cable
16 2 service provider to use reasonable efforts to combine the
16 3 cable or video network of the certificate holder and incumbent
16 4 provider to provide public, educational, and governmental
16 5 programming.
16 6 The bill requires a competitive cable service provider and
16 7 a competitive video service provider to calculate and pay a
16 8 franchise fee to a municipality in which the provider is
16 9 offering cable service or video service. The franchise fee
16 10 must be requested by the municipality and paid not later than
16 11 45 days after each quarter. The franchise fee shall be
16 12 calculated as a percentage of gross revenues as defined by the
16 13 bill. The municipality may not demand any additional
16 14 franchise fees or another method of calculation of the
16 15 franchise fee. The municipality may only charge one franchise
16 16 fee per competitive provider regardless of whether the
16 17 provider provides both cable service and video service. The
16 18 municipality may charge a permit fee to a competitive cable
16 19 service provider or competitive video service provider if the
16 20 municipality imposes the same fee on the incumbent cable
16 21 provider of the municipality.
16 22 The bill provides for nondiscrimination with respect to
16 23 holders of certificates of franchise authority by a
16 24 municipality regarding the installation, construction, and
16 25 maintenance of a communications network in the municipality's
16 26 right=of=way. The municipality cannot discriminate against a
16 27 holder of a certificate of authority regarding access to a
16 28 municipal building and a municipal utility pole attachment
16 29 term.
16 30 The bill prohibits a competitive cable service provider and
16 31 competitive video service provider with a certificate of
16 32 franchise authority from denying access to the provider's
16 33 services to any group of potential residential subscribers due
16 34 to the residents' income.
16 35 The bill contains a general applicability clause for
17 1 consistency with the federal Cable Act. The bill provides
17 2 authority for the secretary of state to adopt rules necessary
17 3 to administer new Code chapter 477A.
17 4 The bill is effective upon enactment.
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