12-14-2015 Council Packet - Laserfiche WebLink

Home Search

Industry Prices found the price per channel for expanded basic service is 13.5 percent lower in effective competition areas. Id. at ¶ 16. The FCC has also recognized some of the challenges of being the second cable operator in the marketplace. In its 621 Order, the FCC found, [T]he circumstances surrounding competitive entry are considerably different than those in existence at the time incumbent cable operators obtained their franchises. Incumbent cable operators originally negotiated franchise agreements as a means of acquiring or maintaining a monopoly position. [A second] entrant cannot assume that it will quickly -- or ever -- amass the same number or percentage of subscribers that the incumbent cable operator captured. 621 Order at ¶ 26 (emphasis added, footnotes omitted). Applicants for competitive cable franchises, unlike an incumbent cable provider, "do not have the promise of revenues from video services to offset the costs of such deployment." 621 Order at ¶ 3. The competitor faces "financial risk" and "uncertainty" when entering the market. Id. at ¶ 28. Section 3 The Incumbent Franchised Cable Operator — Comcast The history of cable franchising within the NMTC goes back to the 1980s. Each member city of the NMTC initially granted a cable communications franchise to Meredith Cable in 1983, by enacting a cable franchise ordinance. See e.g. Blaine Ord. No. 83-786. Several changes in ownership, structure and name took place after 1983. Eventually, the franchise was transferred to Comcast in 2002. See e.g NMTC Res. No. 2002-04. In 2002, the franchise was renewed. See e.g. Blaine Ord. No. 02-1957. Late last year, the NMTC member cities conditionally approved the transfer of the franchise to GreatLand Connections. See e.g. Blaine Res. No. 15- 016. If the conditions in the resolution are met, the Comcast franchise will be transferred to a new company called GreatLand Connections. Since the franchise was granted in 1983, no other cable franchise has been granted in any of the member cities. Section 4 The NMTC's Authority to Franchise State law requires that "[a] municipality shall require a franchise or extension permit of any cable communications system providing service within the municipality." Minn. Stat. § 238.08, Subd. 1(a). The member cities, through a joint powers agreement have delegated certain cable franchising responsibilities to the NMTC, such as commencing the franchising process and recommending cable franchises to the member cities. Each member city retains the authority to franchise. Prior to providing cable service, a cable service provider is required by federal law to obtain a cable franchise from the local franchising authority, in this case each member city of the NMTC. See 47 U.S.C. § 541(b)(1). 2