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Franchising Basics

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Franchising Basics

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    1. Franchising Basics By Steven Dick, Ph.D. Based on Baldwin/McVoy Cable Communications

    2. Cable systems may be Owned and operated by a city Owned by city and operated by cable company Owned and operated by a nonprofit corporation Owned by a private for-profit company Owned by a private company sharing ownership with the franchising authority.

    3. Guess which is MOST common? Private for profit companies are far more common in the United States and maybe in the world.

    4. Franchises Local government (in most states) grant franchises. Usually ONE non-exclusive franchise is granted. Possible anti-trust problems Cable companies must have a franchise to cross public property. No redlining

    5. Vocabluary MSO Cable Nets Ratings, shares Demographics Vertical/horizontal networks Revenue streams Vertical integration Basic, pay, PPV

    6. Vocabulary Multiplexing Niche networks Shopping services DBS MMDS Local Channels on DBS Microsoft and Rating

    7. Normal Parts of the Franchise Definitions Procedure for application Procedure for selecting applicants Monitoring Franchisee Performance Franchise Fee Rate Regulation ...

    8. Normal Parts of the Franchise Access to MDUs Transfer Term Forfeiture Free drops PEG Complaints Commission

    9. Request for proposal Ownership qualifications Financial resources Service area and line extension System design Programming and service Rates

    10. Modification of Franchises (84) A formal renewal process Throughout the franchise Commission should establish a pattern of behavior. Document problems and attempts to solve. Confront cable company on problems not solved or undesired service.

    11. Modification of Franchises Step one 36-30 months before expiration of the franchise Ascertainment Review performance If unacceptable review how company has failed to perform Did city waive requirements

    12. Modification of Franchises Step two RFP Current company may submit City limited to the those items they can regulate Customer service, line extension, safety, billing. City may request an upgrade

    13. Modification of Franchises Step Three Administrative proceeding with public notice Operator complied with existing franchise Service reasonable for community Operator still has the ability to offer cable Proposal meets future needs at practical costs

    14. Issues Transfer Early renewal New services Non-cable services Telco regulations Questions NEXT

    15. Review questions How might cable be considered a monopoly? A. A single company provides service B. DBS provides competition C. Movie theatres provide entertainment D. Television stations provide competition. E. All of the above

    16. Which of the following is a “vertical network?” A. USA B. CNN C. Microsoft D. America Online E. All of the above

    17. A franchise is a A. City law B. Federal law C. Contract D. None of the above E. Two of the above

    18. The most desirable bracket for advertisers is: A. Women 18-49 B. Men 18-49 C. Adults 18-49 D. People 12-35 E. People 35-49

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