Federal Challenges To State and Local Regulation of Communications Providers

1. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco www.millervaneaton.com Joseph Van Eaton Miller & Van Eaton, P.L.L.C. IMLA Mid-Year Seminar April, 2008 Federal Challenges To State and Local Regulation of Communications Providers

2. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 2 Overview Since 1984: cable system franchising has been controlled at state and local levels, subject to federal statutory limits FCC had eliminated regulations governing local franchising last year, the FCC reasserted authority over local franchising based on very limited statutory authority

3. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 3 Overview FCC Orders are limited, but read federal law way that suggests FCC has virtually unlimited authority to: regulate state and local franchising processes preempt charter and constitutional requirements for public participation control what requirements can and cannot be imposed on cable operators � and potentially other providers � that use rights of way.

4. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 4 The FCC Orders IN RE 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, First Report and Order, 22 F.C.C.R. 5101 (2007) (NEW ENTRANTS) Second Report and Order, 22 F.C.C.R. 19633 (2007) (INCUMBENTS)

5. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 5 Background Section 621 of Cable Act, 47 U.S.C. � 541 states franchising authority �may not unreasonably refuse to award an additional competitive franchise,� and provides that any applicant �may appeal such final decision� denying a franchise to the courts, under 47 U.S.C. � 555. FCC claimed right to define what was �unreasonable refusal� and decided regs were appropriate for local, but not state govts

6. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 6 Unreasonable Processes? UNDER FIRST ORDER, FOR NEW ENTRANTS 90 days to act on completed application submitted by a person with facilities in RoW seeking cable franchise 180 days for anyone else seeking a cable franchise Local requirements (charter or otherwise for public processes, hearings etc. preempted if they prevent these deadlines from being met. If no action on application by deadlines, franchise granted on terms proposed until final action is taken. UNDER SECOND ORDER Rules do not apply to incumbents

7. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 7 Flagstaff AZ ATT Infrastructure providers Questions as to impact on RoW rights Protection of consumers 2008 WL 762860 (F.C.C.)Federal Communications Commission (F.C.C.) Report and Order *1 IN THE MATTER OF PROMOTION OF COMPETITIVE NETWORKS IN LOCAL TELECOMMUNICATIONS MARKETS WT 99-217FCC 08-87 Adopted: March 19, 2008Released: March 21, 2008

8. Miller & Van Eaton P.L.L.C. ? Washington D.C. ? San Francisco 8 Protecting existing INETS 22 F.C.C.R. 20235, 22 F.C.C.R. 21828, 22 FCC Rcd. 20235, 22 FCC Rcd. 21828, 43 Communications Reg. (P&F) 76, 2007 WL 3353544 (F.C.C.)Federal Communications Commission (F.C.C.) **1 IN THE MATTER OF EXCLUSIVE SERVICE CONTRACTS FOR PROVISION OF VIDEO SERVICES IN MULTIPLE DWELLING UNITS AND OTHER REAL ESTATE DEVELOPMENTS MB 07-51FCC 07-189 Adopted: October 31, 2007Released: November 13, 2007Buy-outs problem: access to poles/conduits often bundled with existing fibers Contracts how do you protect against bankruptcy? contracting/bid issues; new division of existing responsibilities Limits on use?