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City Council Regular Meeting Minutes January 23, 2007 Page 2 1 Ms. Coralie Wilson, North Suburban Cable Commission, reported Congress adjourned last year 2 without successfully adopting legislation changing telecommunication and franchising rules for 3 local governments. She stated the bad news is that the FCC took up the slack. Ms. Wilson stated 4 that in 2005 AT &T and Verizon petitioned the FCC for relief from local cable franchising rules 5 as they had plans to build new networks to provide competition to the local cable companies, 6 however, they could not do that if they had to speak to every City Council. 8 Ms. Wilson informed Council that when it became evident Congress would not be able to pass 9 the Senate bill, Chairman Martin moved the Notice of Proposed Rulemaking to the December 10 20, 2006 meeting agenda with a draft rule making. She mentioned the rule was adopted on a 3/2 11 vote with the authority to continue to draft the rules. Ms. Wilson indicated it would not go into 12 effect until printed in the Federal Register. She stated this usually takes 30 -60 days after it is 13 printed. She stated the Cable Commission believes it would apply to new competitors only and 14 not to the current cable company. 15 16 Ms. Wilson explained that current applicants in a City's public rights -of -way, such as Quest, 17 must apply for a franchise and the City Council or local franchising authority must grant or deny 18 the franchise within 90 days. She clarified that the City Council could not require the new 19 applicant to serve the entire city. She mentioned the City could ask for an institutional network, 20 public educational, and/or government access support, but that support, at the company's 21 valuation and if in kind, is deducted from the five percent franchise fee. Ms. Wilson pointed out 22 the order included a further Notice of Proposed Rule Making that would apply to existing 23 franchisees. She indicated it appears the inclination is to say yes, but not until the existing 24 franchise expires in 2013 for St. Anthony. 25 26 Ms. Wilson reported the local Government associations in Washington, D.C., including those the 27 North Suburban Cable Commission belongs to, are planning a lawsuit. She indicated the national 28 associations are in the process of selecting legal council and strategy. She reported there has 29 been backlash from the national associations. Ms. Wilson explained one challenge to the rule 30 making would include that the Commission exceeded its legislative authority by attempting to 31 make its own law. She reported that secondly, it is not based on the rule on the record. Ms. 32 Wilson explained extensive comments were filed in the Notice of Proposed Rule Making stating 33 there was not a problem. She explained that since 2005, Verizon acquired more franchises than 34 it could keep up with. She indicated AT &T had not been seeking franchises because they do not 35 need to and their product plan is not working. She indicated AT &T is asking for franchises but 36 only in areas that do not require them to serve an entire city. 37 38 Ms. Wilson reported a hearing is scheduled on February 1, 2007 between the Senate Commerce 39 Committee and the Chairman of the FCC. She stated questions for Minnesota Senator 40 Klobuchar to ask would be forwarded. 41 42 Ms. Wilson stated she would keep Staff informed as the issue progresses. She indicated they 43 might ask for an injunction to keep this from going into effect. She mentioned these cases 44 generally take years to run through the court system. 45