Read All the Details on the FCC's Proposed Policy

Overview
(Thanks to Bea Bedard @ Open Signal Portland Community Media Center)

The Federal Communications Commission (FCC) has introduced proposed policy changes that, if enacted, will result in a severe reduction in local government regulatory authority, substantial loss of revenue for Belmont Media Center / Town of Belmont and may defund community media throughout the country.

The proposed policy, Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as Amended by the Cable Television Consumer Protection and Competition Act of 1992, and implementation of the Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment policy make major changes to existing policy which, when combined, will cause serious and potentially catastrophic local regulatory and funding problems for cities and community media nationwide.

The three major changes that will hurt cities and community media are:

1. The Town's ability to regulate businesses using the public rights of way will be severely reduced.
2. The Town's ability to charge reasonable fees for access to the public rights of way for cable television, mixed use services, and ISPs would be eliminated resulting in millions of dollars in lost revenue in our community alone, and billions of lost revenue nationwide.
3. The Town's ability to negotiate cable television franchises that include public benefits at no cost to the Townwill be eliminated, and may result in lost revenue for the Town or the elimination of Public, Educational and Government (PEG) community media services.

Regulation Terms and Understanding the Public Rights of Way

The public rights of way are those areas that are owned and managed by the Town of Belmont for the public benefit. This includes sidewalks, streets, public easements, and other spaces where utilities install poles and antennas, bury pipes, or run wires to deliver services to your home. Businesses delivering services using the rights of way pay the Town fees for construction, maintenance and access to these spaces.

Some of the businesses using the rights of way are considered utilities. A utility is defined as a business or service, which may be publicly or privately owned, engaged in supplying the public generally with an essential commodity or service, such as electricity, gas, water, or transportation. Utilities are regulated at local, state and federal levels to ensure costs of service are fair, service to all community members is equal, and that these essential services are available to everyone in the community regardless of neighborhood, income level or ethnicity.

Some of the businesses using the rights of way are considered telecommunications providers which establishes them as common carriers. A common carrier is any business entity whose main business is transporting things on behalf of people. This includes mail delivery, railroads, package delivery services, taxis, public transportation, and telecommunications services starting with telegraph (it’s an old law) and evolving with technology to include telephone and cable television.

Common carrier law ensures that the business being paid to transport goods, people, or data must do so in a way that is agnostic to the thing being transported¹. Common carriers are required to provide these services to all community members equally and at a fair price regardless of the thing being transported, and regardless of the neighborhood, income level, ethnicity, etc. of the person requesting the service. Common carriers are regulated like utilities at the local, state and federal level.

When the Open Internet (Net Neutrality) rules were implemented by the FCC in 2015 ISPs were designated as telecommunications providers, and were subject to local, state and federal regulation to ensure their services were non-discriminatory based on the content being requested over the system, and in the way they operated within a community.

When the current FCC replaced the Open Internet rules with the Restoring Internet Freedom rules they removed the telecommunications provider designation from ISPs which eliminated the ability for local, state or federal regulation of these businesses beyond basic infrastructure compliance. These businesses are currently identified as Information Services ². The FCC has asserted that this definition excludes ISPs from common carrier responsibilities.

By continuing this assertion through these major proposed and enacted policies the FCC has effectively abdicated their own responsibility (handing policing authority over to the FTC), removed all meaningful regulatory capacity from local municipalities and states, and have diminished the ability of local municipalities to charge for access to the rights of way.

This means the Town cannot require ISPs to be good neighbors, to contribute to the upkeep of the Town or Town services, to provide the community with a basic level of customer service (or any customer service), to build out their systems to everyone in the community regardless of the income level/potential of the neighborhood, to provide services at the same rate to all community members, and so on.

And if the Town or State determined that it wanted to enact its own Net Neutrality rules as a requirement of having access to the rights of way, this policy will remove their legal ability to do so. Local communities will have no control, will see no benefit, and will lose revenue that supports essential local services.

Cable companies will continue to be regulated as a telecommunications provider (common carrier), but if this policy is enacted, it’s very likely that the cable television companies will petition for a change in their designation from a telecommunications provider to an information services provider.

Mixed-use providers (cable companies that also offer broadband internet services) will be regulated as a common carrier for their cable television service, and as an information service for their internet and data services.

Fees for Access to the Public Rights of Way

The Town's responsibility for the management of the rights of way is extensive and impacts everyone in the community.

The Town must ensure that they are approving access to businesses and service providers who will be able to complete the project once they have begun, who will complete their projects on or before schedule, that essential services will not be interrupted as a result of the approved project, that construction is to code and won’t end up killing anyone, and so on. There is an extensive vetting process for obtaining access to the rights of way.

In addition to this, the town manages the rights of way to ensure they support the needs of the community for transportation and access to their individual properties.

And last, but not least, the Town acts as an agent between the property owner and the business providing the service. If the Town didn’t play this role, the business would have to employ hundreds, maybe thousands of people specifically to make direct connection to each individual property owner to negotiate services and prices.

The FCC’s proposed policy limits the Town to charging for application fees and minimal maintenance fees. As a result of this the Town and by contract, Belmont Media Center may losr hundreds of thousands of dollars every year.

Local Franchise Authority, Public Benefit Services and Reductions in Funding for PEG

The Cable Act identifies federally regulated aspects of cable television services. This includes a provision for cable channels dedicated to PEG programming, and a “franchise fee” paid by the cable operator to the City or local municipality in which the cable service is provided.

The franchise fee is limited to 5% of the cable operator’s gross revenues derived in a 12-month period from the operation of the cable system to provide cable services. This revenue funds Town services as well as provides capital funding for Belmont Media Center.  This structure exists in communities all over the country.

What is the Reason for the Change in Policy?

The FCC is attempting to reduce regulation of cable and internet service providers in general. Their opinion is that current regulation and right of way access fees impede innovation, slow deployment of new services, and are financially burdensome. They are not able to provide statistics to support this opinion, and in fact, they request this data from cable operators and information service providers within the policy document.

In addition to this basic assumption being unfounded, it is obvious from revenue statistics that cable providers, mixed-use providers and information service providers are realizing large profits for the services provided within the current regulatory environment⁴.

Local municipalities have established reasonable and balanced regulatory environments that support business development as well as provide for the public benefit. The FCC policy would create an imbalance favoring these media businesses, and the cost of this would be born by every other business in the community through increased taxes and fees,

¹ Network Neutrality: A History of Common Carrier Laws 1884–2018

² A United States Supreme Court case in which the Court declared in a 6–3 decision that the administrative law principle of Chevron deference to statutory interpretations by administrative agencies tasked with executing the statute trumped the precedents of the United States Courts of Appeals unless the Court of Appeals had held that the statute was "unambiguous" under Chevron. The Supreme Court therefore upheld the Federal Communications Commission's determination that a cable Internet provider is an "information service", and not a "telecommunications service" and as such competing internet service providers (ISPs) like Brand X Internet were denied access to the cable and phone wires to provide home users with competing internet service. - National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005)

Chevron deference test:

Two part test: First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.

If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute. —  Chevron U.S.A. v. NRDC, 467 U.S. 837, 842-43 (1984).

³ On October 2nd, 2018 the City of Portland convened a special City Council meeting to authorize the City Attorney’s Office to sue or join in lawsuits to fight the implementation of this FCC policy. At that meeting the Mayor stated that this policy would eliminate approximately $9.5 million dollars from the City’s general fund each year.

⁴ Comcast year end 2017 - BusinessWire.com