Tag Archives: divca

CPUC’s cable franchise renewals remain private and privileged

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Cable companies won’t be held publicly accountable for their business practices or service levels by the California Public Utilities Commission. That’s the result of a unanimous vote by commissioners on Thursday.

The CPUC’s semi-independent office of ratepayer advocates (ORA) asked the commission to revisit a 2014 decision that established a perfunctory, closed door review of statewide video franchise renewals. Cable lobbyists sweet talked California lawmakers into ending local franchise authority in 2006, and replacing it with a single, statewide process run by the CPUC. But they gamed the bill – the Digital Infrastructure and Video Competition Act, or DIVCA as it’s known – so that there’s very little they need to do to get a statewide franchise, and even less they need to show the CPUC when it comes up for renewal every ten years.

The way the CPUC interpreted its responsibility in 2014, the only avenue for local governments or citizens to object was to take a cable company to court and win. Only if a cable company doesn’t comply with a court order by the time their ten year franchise rolls around for renewal, will the CPUC listen to a public complaint. ORA can go a little further and review confidential material, but if they find something wrong, all a cable company has to do is resubmit the application.

Otherwise, the CPUC has a chummy conversation with the cable company and rubber stamps the renewal.

Even though he issued the decision that was approved on Thursday, commissioner Clifford Rechtschaffen offered a sliver of hope that maybe there’s a way that the CPUC can listen to someone other than cable company lawyers and lobbyists…

I do recognise that ORA has raised a legitimate question about how it can effectively advocate during this franchise renewal process. So I look forward to learning more about the way that ORA can do this and bring legitimate concerns about issues within our jurisdiction to the Commission’s attention.

It’s only a sliver, though. Rechtschaffen expressed his sympathy in a narrow, legalistic way, which is how the CPUC has viewed its duties under DIVCA. In order to do anything more, it will have to change its thinking and claim greater responsibility.

Cable franchise audit finds underpayment, misuse of fees

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California cities and counties don’t have much to say about the service cable companies provide and the prices they charge for it. When the state took control of cable franchises with the 2006 Digital Infrastructure and Video Competition Act (DIVCA), local governments were largely pushed out of the regulatory picture.

But not completely. Cities can still collect a franchise fee of up to 5% of gross video revenue and another 1% to pay capital equipment costs for public access channels. They also have the ability to take cable companies to court if there’s a dispute over whether all service and financial obligations are being met.

The City of Palo Alto recently did a thorough audit of the franchise and public access channel fees it was collecting from Comcast and AT&T and found problems on both sides of the table. Palo Alto manages video fee collection on behalf of several other Peninsula communities, and contracts with the Midpeninsula Community Media Center to run the region’s public access channels. The video fee money it passed along wasn’t spent legally, however, according to the auditor’s report

The Media Center inappropriately used an annual average of $340,000 of public, education, and government (PEG) fees, or $1.4 million during the audit period, paid by cable television subscribers in the Cable Joint Powers areas, for operating expenses. Neither the City nor the Media Center enforced the federal law that restricts the use of PEG fees to capital expenses associated with PEG access facilities.

On the other hand, AT&T and Comcast were shortchanging the cities…

Comcast and AT&T did not always calculate the fees due in accordance with DIVCA and the municipal code of each of the Cable Joint Powers. As a result, Comcast underpaid about $141,000 in franchise and PEG fees from July 1, 2010, through June 30, 2014, and AT&T underpaid about $76,000 from July 1, 2011, through September 30, 2014.

The auditor’s recommendations can be generally summed up as pay more attention to what the companies, the Media Center and you, the city, are doing.

Not many California cities take as much interest as Palo Alto in exercising what little remaining video franchise authority remains, but the auditor’s report, which includes a lengthy rebuttal from the Media Center, is a good template to use if any want to up their game.

If you don’t like the way your cable company does business in California, speak up now

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If local governments, advocacy groups and ordinary citizens want to challenge a cable or telephone company’s right to offer video services under statewide authority granted by the California Public Utilities Commission it can be done, but not while a company is trying to renew its franchise.

That was message from several commissioners – Carla Peterman, Mike Florio and Catherine Sandoval – as they reluctantly voted on 28 August 2014 to approval a video franchise renewal process that all but shuts out any opportunity for public scrutiny or challenge.

As Florio put it, that’s what the law they’re operating under requires…

Frankly, I don’t much like this legislation but that’s what we have to live with and it does constrain our ability to consider very much of anything in these renewal applications. I don’t really see much option other than to continue as we have. But there are some other opportunities for parties outside of the renewal process and I would encourage folks to pursue as necessary.

The commission’s in-house advocacy arm, the office of ratepayer advocates, will be able to review confidential documents submitted by cable companies at renewal time and offer comments. But unless a final, non-appealable court order is in place – something that would have started years before – there’s little that can be done.

Likewise, local governments and members of the public can object on the basis of a final court order, but that judicial process has to come first. In other words, you need to object well before renewal time. Which is something Peterman urged anyone concerned to do…

I do strongly encourage all local governments and stakeholders to utilise the existing proper channels to reach out and to raise concerns you have about some of the providers. I appreciate that it’s not perfect, but if you don’t bring that information forward to us, either through letters or through requests for investigation, we won’t be aware of any issues that you’re facing.

The vote to approve the new statewide video franchise renewal process was unanimous.

California cable TV franchise renewals still behind closed doors

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Double secret probation.

A bare sliver of light will shine on cable (and telephone) companies when they renew statewide video franchises every 10 years. The California Public Utilities Commission is considering a process that effectively shuts out meaningful public scrutiny of cable companies when they file for renewal. The CPUC’s reasoning is that in writing California’s Digital Information and Video Competition Act, usually referred to as DIVCA, the legislature set a very low bar for granting and, consequently, renewing the statewide video franchises that replaced the original city-by-city and county-by-county process in 2006.

The latest draft of the new renewal rules would allow the commission’s office of ratepayer advocates (ORA) to confidentially review applications and offer comments on whether or not the paperwork is complete. Up to a point, that means there will be a semi-independent review of the claims cable companies make regarding how well they’ve met their obligations to, among other things, build out to homes in their footprint and follow local laws regarding use of the public right of way.

But that review won’t necessarily lead to action. If an application is incomplete, a do-over process kicks in. ORA will be able to make substantive comments about how well cable companies have met their obligations, “which the Commission will not consider as part of the franchise renewal process but may lead to further action outside the renewal process”. In other words, if ORA says a cable company hasn’t met its legal obligations, the commission will grant the renewal anyway and think about it later.

Only ORA can get involved in video franchise review, and that’s because DIVCA specifically grants it “authority to advocate on behalf of video subscribers regarding renewal of a state-issued franchise”. Local governments, other advocacy groups and members of the public are shut out by the law, at least as it’s currently being interpreted.

The CPUC is scheduled to vote on the new rules on Thursday, but it’s been on the agenda several times before and bumped for further review, so changes are still possible.

Don’t expect a chance to challenge California-wide cable franchise renewals

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Stifle yourself.

The first statewide cable franchises issued by the California Public Utilities Commission will start expiring in the next three or four years. Those franchises superseded local video service franchises issued individually by cities and counties and run for ten years. To get ready for that, the commission is scheduled to vote on new renewal rules at its meeting on Thursday, 26 June 2014.

The proposal on the table now says, in essence, the same rules apply to renewals as to the original applications, with one exception: companies that are “in violation of any final nonappealable court order issued pursuant to California video franchise law” will lose their franchises. Once a renewal application is filed, there will be an extremely limited opportunity for the public to comment on just that specific point…

The public, including [the CPUC’s office of ratepayer advocates] may submit written comments within 15 days from the date the Application has been served. Comments must be limited to whether the Applicant is in violation of a non-appealable court order issued pursuant to the Digital Information and Video Competition Act (Cal. Pub. Code §§ 5800 et seq.) and must be accompanied by a court order supporting the existence of such a violation.

There are any number of requirements a cable or telephone has to meet in order to get a statewide franchise and to subsequently renew it, but you can’t comment on that, or if you do, you’ll be ignored. The only way to contest a renewal on those grounds is to file a complaint with the commission and/or go to court years ahead of time, and then hope that the decision is final and in your favor when the 15 day protest window opens.