2007 Legislation
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HOUSE BILL NO. 195 – Video franchising competitn/reform


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H0195......................................................by STATE AFFAIRS
provide the "Idaho Video Franchising Competition and Reform Act of 2007";
to revise regulation of cable television services; to provide authorization
required to provide video service in the form of a franchising authority;
to provide when a franchise is required; to provide for granting and
termination of a franchise; to provide for transfers; to provide for
franchise fees or other fees; to provide for public, educational or public
access channels; to provide for a video service sales tax of five percent;
and to provide for distribution of the moneys.
02/14    House intro - 1st rdg - to printing
02/12    Rpt prt - to St Aff

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   First Regular Session - 2007
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 195
                                 BY STATE AFFAIRS COMMITTEE
  1                                        AN ACT
 12    Be It Enacted by the Legislature of the State of Idaho:
 13        SECTION 1.  That Title 50, Idaho Code, be, and the same is hereby  amended
 14    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 15    ter 11, Title 50, Idaho Code, and to read as follows:
 16                                      CHAPTER 11
 18                                AND REFORM ACT OF 2007
 19        50-1101.  SHORT TITLE. This act may be known and cited as the "Idaho Video
 20    Franchising Competition and Reform Act of 2007."
 21        50-1102.  CONSTRUCTION OF CHAPTER. This chapter supersedes all  provisions
 22    in  existing laws to the extent that such provisions are inconsistent with the
 23    provisions of  this  chapter.  This  chapter  occupies  the  entire  field  of
 24    franchising,  licensing, permitting, contracting, and regulating the provision
 25    of cable and video services as  defined  herein.  This  chapter  controls  and
 26    supersedes  any  state, municipal, or county resolution or ordinance that pur-
 27    ports to address the subject matter of this chapter.
 28        50-1103.  DEFINITIONS. In this chapter:
 29        (1)  "Cable  service,"  "cable  operator,"  "cable  system,"  "franchise,"
 30    "franchising authority,"  "multichannel  video  programming  distributor"  and
 31    "video programming" each have the meaning set forth in 47 U.S.C. section 522.
 32        (2)  "Franchise  area" means the total geographic area within a municipal-
 33    ity or county as authorized to be served by a cable operator  in  a  political
 34    subdivision  as of the effective date of this chapter, except that in the case
 35    of a telephone corporation  providing  telecommunications  services,  as  such
 36    terms are defined in chapter 6, title 62, Idaho Code, the franchise area shall
 37    be the area within such political subdivision in which such telephone corpora-
 38    tion provides telecommunications service.
 39        (3)  "Gross  revenues" means all revenues actually received by and paid to
 40    the video service provider by subscribers residing within  a  franchised  area
  1    for  video service. Gross revenues shall be computed in accordance with gener-
  2    ally accepted accounting principles (GAAP).
  3        (a)  Gross revenues shall include the following:
  4             (i)   Recurring charges for video service;
  5             (ii)  Event-based charges for video service,  including  pay-per-view
  6             and video-on-demand charges;
  7             (iii) Rental of set top boxes and other video service equipment;
  8             (iv)  Service  charges  related  to  the  provision of video service,
  9             including activation, installation and repair charges; and
 10             (v)   Administrative charges related to the provision of  video  ser-
 11             vice, including service orders and service termination charges.
 12        (b)  Gross revenues shall not include the following:
 13             (i)    Discounts,  refunds,  and  other price adjustments that reduce
 14             the amount of compensation received by a video service provider;
 15             (ii)   Uncollectible fees written off as bad debt;
 16             (iii)  Late payment charges;
 17             (iv)   Maintenance charges;
 18             (v)    Amounts billed to video service subscribers to recover  taxes,
 19             fees,  surcharges  or assessments imposed on a video service provider
 20             or a video customer or otherwise collected by a  video  service  pro-
 21             vider from video service subscribers for pass-through to any federal,
 22             state  or  local  government agency, including the  franchise fee and
 23             the federal communications commission user fee;
 24             (vi)   Revenue from the sale of capital assets or  surplus  equipment
 25             not used by the purchaser to receive video service from the seller of
 26             those assets or surplus equipment;
 27             (vii)  Charges,  other  than those described in paragraph (a) of this
 28             subsection, that are aggregated or bundled with amounts described  in
 29             paragraph  (a)  of  this  subsection and billed to video service sub-
 30             scribers, including, but not limited to, any revenues received  by  a
 31             video  service provider or its affiliates for telecommunications ser-
 32             vices, information services, or the provision of directory or  inter-
 33             net  advertising,  including yellow pages, white pages, banner adver-
 34             tisements, and electronic publishing, if a video service provider can
 35             reasonably identify such charges on books and  records  kept  in  the
 36             regular course of business or by other reasonable means;
 37             (viii) Revenues received by the video service provider or its affili-
 38             ates  from the provision of services or capabilities other than video
 39             service, including home shopping or similar programming, advertising,
 40             telecommunications services or information services;
 41             (ix)   Reimbursement  by  programmers  of  marketing  costs  actually
 42             incurred by the provider for the introduction or  promotion  of  pro-
 43             gramming; and
 44             (x)    Revenue  from the sale of set top boxes or other video service
 45             equipment.
 46        (4)  "Person" means an individual, partnership, association, organization,
 47    corporation, trust, government entity or any other legal entity.
 48        (5)  "Video service" means the provision  of  video  programming,  whether
 49    provided  as  part of a tier, on-demand or a la carte, by a video service pro-
 50    vider over a video service network. Such term includes cable service, but does
 51    not include:
 52        (a)  Any video programming provided by a provider of a  commercial  mobile
 53        service  as defined in 47 U.S.C. section 332(d) to persons in their capac-
 54        ity as subscribers to commercial mobile service; or
 55        (b)  Video programming provided solely as part of and via a  service  that
  1        enables  users  to  access content, information, electronic mail, or other
  2        services offered over the public internet.
  3        (6)  "Video service franchise"  means  the  franchise  agreement  required
  4    under  this  chapter  to  be  the  operating agreement between the franchising
  5    authority and the video service provider in this state.
  6        (7)  "Video service network" means a wireline facility, or  any  component
  7    thereof,  located at least in part in the public right-of-way which is used to
  8    provide video service, without regard to the technology used to  deliver  such
  9    video  service,  including internet protocol technology or any successor tech-
 10    nology.  Such term includes a cable system.
 11        (8)  "Video service provider" means a person authorized under this chapter
 12    to distribute video service through a video service network.
 13        50-1104.  AUTHORIZATION TO PROVIDE VIDEO SERVICE. (1) Franchising  Author-
 14    ity. Each incorporated municipality and, with respect to unincorporated areas,
 15    each county governing body is hereby designated as a franchising authority for
 16    purposes of granting video service franchises.
 17        (2)  Standard  Franchise Form. No later than one hundred twenty (120) days
 18    from the effective date of this chapter the public utilities commission  shall
 19    issue an order establishing a standardized form to be used by each franchising
 20    authority  for  the video service franchise, which form shall include only the
 21    requirements of subsection (4) of this section, and which shall  be  the  sole
 22    form  on which applicants shall demonstrate that they are legally, financially
 23    and technically qualified to provide video service.
 24        (3)  Franchise Required. (a)  Except as provided in paragraph (c) of  this
 25        subsection,  a  person may not provide video service in this state without
 26        first obtaining a  video  service  franchise,  notwithstanding  any  other
 27        authorization  to use, occupy, or access public rights-of-way held by such
 28        person or affiliate thereof for any other purpose.  A  person  seeking  to
 29        provide  video  service  shall file an application for a franchise in each
 30        municipality or unincorporated county area where it seeks to provide  such
 31        service.
 32        (b)  Within  one  hundred  eighty  (180)  days after the enactment of this
 33        chapter, any person providing cable or  video  service  under  an  expired
 34        franchise  previously granted by a franchising authority shall apply for a
 35        video service franchise governed by the terms of this chapter  by  submit-
 36        ting  the  affidavit  required  by  subsection  (4) of this section to the
 37        franchising authority that issued the  expired  franchise.  Prior  to  the
 38        grant  of such video service franchise, such person shall continue to pro-
 39        vide cable or video service in accordance with the terms and conditions of
 40        its expired franchise.  Upon the grant of the video service franchise, the
 41        terms of such video service franchise shall be as provided in this chapter
 42        and shall preempt and supersede the terms and conditions  of  the  expired
 43        franchise.
 44        (c)  As  of  the  effective date of this chapter, no existing franchise or
 45        ordinance issued by a franchising authority shall be renewed  or  extended
 46        upon  its  expiration  date.  At any time after the effective date of this
 47        chapter, any person providing cable or video service  under  a  franchise,
 48        franchise  extension  or  ordinance  previously  granted  by a franchising
 49        authority may: (i) continue to provide service under the terms and  condi-
 50        tions  of such franchise, franchise extension or ordinance until its expi-
 51        ration; or (ii) convert any or all such franchises or  ordinances  into  a
 52        video  service  franchise governed by the terms of this chapter by submit-
 53        ting the affidavit required by subsection  (4)  of  this  section  to  the
 54        franchising authority. To the extent a person chooses to convert its fran-
  1        chises  or ordinances to a video service franchise, the ordinance or fran-
  2        chise granted by the franchising authority shall terminate  upon  issuance
  3        of the video service franchise.  Upon the grant of the video service fran-
  4        chise,  the  terms of such video service franchise shall be as provided in
  5        this chapter and shall preempt and supersede the terms and  conditions  of
  6        the  franchise, franchise extension or ordinance previously granted by the
  7        franchising authority.
  8        (4)  Contents of Application. The contents of a  video  service  franchise
  9    application  shall  be  limited to an affidavit submitted by the applicant and
 10    signed by an officer or general partner or other authorized representative  of
 11    the applicant affirming:
 12        (a)  That  the  applicant  has  filed or will timely file with the federal
 13        communications commission all forms required by that agency in advance  of
 14        offering video service;
 15        (b)  That the applicant agrees to comply with the provisions of this chap-
 16        ter  and  all federal statutes and regulations applicable to the provision
 17        of cable service;
 18        (c)  That the applicant agrees to comply  with  all  reasonable  and  non-
 19        discriminatory  municipal  regulations  consistent  with  section 50-1110,
 20        Idaho Code, regarding the use and occupation of  public  rights-of-way  in
 21        its construction, operation or repair of a video service network;
 22        (d)  The  location and telephone number of the applicant's principal place
 23        of business, the names of the principal executive officers of  the  appli-
 24        cant,  and  the names of any persons authorized to represent the applicant
 25        before the franchising authority;
 26        (e)  A demonstration, in a form prescribed by the public utilities commis-
 27        sion, that the applicant is legally, financially and technically qualified
 28        to provide video service;
 29        (f)  An exact description of the franchise area(s)  to be served; and
 30        (g)  The date on which the applicant will commence  providing  video  ser-
 31        vices  in  all or part of each franchise area, which date may not be later
 32        than sixty (60) days after the grant of the application for  persons  with
 33        preexisting  authority  to use the public rights-of-way and not later than
 34        one hundred eighty (180) days for all others, and the date  on  which  the
 35        applicant  will provide video in all of the franchise area, which date may
 36        not be later than five (5) years after the grant of the application;  pro-
 37        vided  however, that nothing herein shall require a video service provider
 38        to provide video service in any part of the franchise area where there  is
 39        a  population density of less than twenty-five (25) homes per mile of wire
 40        facilities which must be installed to provide service to such part.
 41        (5)  Grant of Franchise. A franchising authority may award one (1) or more
 42    nonexclusive franchises to provide video service within its  jurisdiction  but
 43    may not grant an exclusive franchise for the provision of video service.  Such
 44    franchise  shall  contain a grant of authority to construct, operate, maintain
 45    and repair a video service network to provide video service.
 46        (6)  Deadline for Action  on  Application.  (a)  A  franchising  authority
 47        shall  notify an applicant in writing within fifteen (15) days of the fil-
 48        ing of a franchise application as to whether the submitted application  is
 49        complete.  If it is not complete, the franchising authority shall state in
 50        its notice the reasons the franchise application is incomplete.
 51        (b)  A franchising authority shall have sixty  (60) days after  submission
 52        of a complete franchise application to act upon the application.
 53        (c)  If  the  franchising  authority fails to render a final decision on a
 54        franchise application within sixty  (60) days, then, unless the  applicant
 55        withdraws  its  application or agrees with the franchising authority to an
  1        extension of time, the video service franchise application shall  be  con-
  2        sidered complete and the video service franchise approved.
  3        (7)  Termination  of Franchise. A franchise may be terminated by the video
  4    service provider by  submitting  thirty  (30)  days'  advance  notice  to  the
  5    franchising authority.
  6        (8)  Notification  of  Changes. If any information in the franchise agree-
  7    ment changes, the video service provider shall notify the franchising  author-
  8    ity within thirty  (30) business days after such change.
  9        50-1105.  DISCRIMINATION  PROHIBITED.  (1)  Nondiscriminatory  Offering. A
 10    video service provider shall activate and offer video service in a nondiscrim-
 11    inatory manner.
 12        (2)  Antiredlining and Deployment. (a)  No video  service  provider  shall
 13        deny  access  to  video service to any group of potential residential sub-
 14        scribers in a franchise area because of the race or income  of  the  resi-
 15        dents in the local area in which the group resides.
 16        (b)  It is a defense to an alleged violation of paragraph (a) of this sub-
 17        section if the video service provider has met either of the following con-
 18        ditions:  (i)  within three (3) years of the date it began providing video
 19        service under this chapter, at least  twenty-five  percent  (25%)  of  the
 20        households  with  access  to  the  provider's video service are low-income
 21        households; or (ii) within five (5) years of the date it  began  providing
 22        video  service  under  this  chapter  and from that point forward at least
 23        thirty percent (30%) of the households with access to the provider's video
 24        service are low-income households. For purposes  of  this  requirement,  a
 25        "low-income  household" means a household with an average annual household
 26        income of less than thirty-five thousand dollars  ($35,000) as  determined
 27        by the most recent decennial census.
 28        (c)  An  applicant receiving a video franchise shall provide video service
 29        to a number of households equal to at least fifty percent   (50%)  of  the
 30        households  in  each franchise area in which the provider is authorized to
 31        provide video service pursuant to this chapter within three  (3) years  of
 32        the  date  it  begins providing such service and to a number not less than
 33        ninety percent  (90%) of such households within five  (5)  years  of  such
 34        date.
 35        (d)  Each  video  service  provider described in subsection (2)(c) of this
 36        section not providing video service throughout a franchise area shall file
 37        an annual report with the franchising  authority  regarding  the  progress
 38        that  has  been  made toward compliance with the build-out requirements of
 39        that subsection.
 40        (e)  A video service provider may apply to the franchising  authority,  or
 41        alternatively,  the  public  utilities  commission,  for a waiver of or an
 42        extension of time to meet the requirements of subsection  (2)(c)  of  this
 43        section  if  one (1) or more of the following apply: (i) the video service
 44        provider is unable to obtain access to  public  or  private  rights-of-way
 45        under  reasonable terms and conditions; (ii) developments or buildings are
 46        not accessible due to existing exclusive access arrangements; (iii) devel-
 47        opments or buildings being inaccessible using reasonable  technical  solu-
 48        tions  under commercially reasonable terms and conditions; or (iv) natural
 49        disasters.
 50        (f)  The franchising authority or  the  public  utilities  commission  may
 51        grant  a waiver or extension pursuant to subsection (2)(c) of this section
 52        only if: (i) the video service provider has made substantial and  continu-
 53        ous efforts to meet the requirements of subsection (2)(c) of this section;
 54        and  (ii)  the video service provider demonstrates that one (1) or more of
  1        the factors set forth in subsection (2)(e) of this section  actually  pre-
  2        vented  it  from  complying  with the requirements of subsection (2)(c) of
  3        this section. If an extension is granted, the franchising authority or the
  4        public utilities commission shall establish a new compliance deadline.  If
  5        a  waiver  is  granted,  the franchising authority or the public utilities
  6        commission shall specify the requirement or requirements waived.
  7        (3)  Investigations of Compliance. A franchising authority may, on its own
  8    motion, or on the motion of another person or entity, commence  an  investiga-
  9    tion  to determine if a video service provider is activating or offering video
 10    service in a discriminatory manner or failing  to  make  progress  toward  the
 11    requirement of subsection (1) or (2) of this section.
 12        (4)  Remedies  for  Noncompliance.  If  the  franchising authority makes a
 13    determination under subsection (3) of this section that a video  service  pro-
 14    vider has violated subsection (1) or (2) of this section, then the franchising
 15    authority, a video service provider or a cable operator may bring an action in
 16    any  court of competent jurisdiction to enforce compliance with those require-
 17    ments.  The court shall conduct a de novo  review  and  shall  have  exclusive
 18    jurisdiction to enforce any such requirement.  Should a video service provider
 19    be  found by a court of competent jurisdiction to be in noncompliance with the
 20    requirements of this chapter, the court shall issue an order to the video ser-
 21    vice provider directing a cure for such noncompliance within a specified  rea-
 22    sonable period of time.
 23        (5)  Definition of Nondiscriminatory Manner. For the purposes of this sec-
 24    tion,  a "nondiscriminatory manner" means activating or offering video service
 25    in a sequence that balances the activation of video service in  the  areas  of
 26    the  municipality  or  the  county  that are below and above the median income
 27    using census tract or other reasonably available data.
 28        50-1106.  CUSTOMER  SERVICE  STANDARDS.  In  any  franchising  authority's
 29    jurisdiction with only  a  single  video  service  provider,  the  franchising
 30    authority  may  require the video service provider to comply with the customer
 31    service requirements set forth in 47 CFR 76.309(c) in its provision  of  video
 32    service.   Such  requirements  shall  cease  to apply in any such jurisdiction
 33    immediately upon the commencement of video service by a second  video  service
 34    provider.  Neither the franchising authority nor the state of Idaho may impose
 35    any additional or more stringent customer service requirements on a video ser-
 36    vice provider; provided however, that all such providers shall remain  subject
 37    to all consumer protection laws and requirements of general applicability.
 38        50-1107.  TRANSFERS.  (1)  Notice of Transfer. The video service franchise
 39    issued by the franchising authority is fully transferable to any successor  in
 40    interest  to the applicant to which it is initially granted, whether such suc-
 41    cessor in interest arises through merger, sale, assignment,  restructuring  or
 42    any  other  type  of transaction. A notice of transfer shall be filed with the
 43    franchising authority within twenty  (20)  days  of  the  completion  of  such
 44    transfer,  and  shall  be accompanied by an affidavit from the transferee con-
 45    taining the information and in the form required  by  section  50-1104,  Idaho
 46    Code.
 47        (2)  No  Review of System Transfers. A franchising authority shall have no
 48    authority to review or require approval of any sale or  transfer  of  a  cable
 49    system or other video service network.
 50        50-1108.  FRANCHISE  FEE  --  OTHER FEES. (1) Limit on Franchise Fees. All
 51    video service providers shall be assessed a franchise  fee  by  a  franchising
 52    authority  on  a  competitively  neutral  and nondiscriminatory basis. For any
  1    twelve (12) month period, the franchise fee paid by a video  service  provider
  2    to  a  franchising authority shall be set by ordinance, shall apply equally to
  3    all providers of video service in the municipality  or  unincorporated  county
  4    area,  and  shall  not exceed five percent (5%) of such provider's gross reve-
  5    nues.
  6        (2)  Payment of Franchise Fee. The fees due under subsection (1)  of  this
  7    section  shall  be paid on a quarterly basis within forty-five (45) days after
  8    the close of the quarter. Payments shall include a  statement  explaining  the
  9    basis for the calculation of the fee.
 10        (3)  Audits.  (a)  A  franchising  authority  may, upon reasonable advance
 11        written request, but no more than once with respect to any given three (3)
 12        year period, review the business records of a video  service  provider  to
 13        the  extent  necessary  to ensure proper and accurate payment of the fran-
 14        chise fee.  All records reasonably necessary for the audit shall  be  made
 15        available  by  the  provider at the location where the records are kept in
 16        the ordinary course of business.  The franchising authority and the  video
 17        service  provider  shall each be responsible for their respective costs of
 18        the audit.  Any undisputed amount or refund due to the franchising author-
 19        ity or video service provider shall be paid within sixty (60) days.
 20        (b)  Any claims by a franchising authority that fees have not been paid as
 21        required under this section, and any claims by a  video  service  provider
 22        for  refunds or other corrections to the remittance of the provider, shall
 23        be made within three (3) years from the end of  the  calendar  quarter  to
 24        which the disputed fee relates.
 25        (c)  A franchising authority shall not employ, appoint, or retain any per-
 26        son  or  entity  for compensation that is dependent in any manner upon the
 27        outcome of any such audit, including, without limitation, the audit  find-
 28        ings  or the recovery of fees or other payment by the municipality. A per-
 29        son may not solicit or accept compensation dependent in  any  manner  upon
 30        the  outcome  of  any  such audit including, without limitation, the audit
 31        findings or the recovery of fees or other payment by the  municipality  or
 32        video service provider.
 33        (4)  Limit  on  Other Fees and Requirements. A franchising authority shall
 34    not require a video service provider to obtain any other franchise, assess any
 35    other fee, charge or penalty, including any additional fee to occupy the  pub-
 36    lic  rights-of-way, or impose any other franchise requirement other than those
 37    specifically allowed under this act.  For purposes of this subsection, a fran-
 38    chise requirement includes, but is not  limited  to,  a  provision  regulating
 39    rates  charged  by  video  service  providers,  requiring  the  video  service
 40    providers  to  satisfy  any  build-out  requirements, or a requirement for the
 41    deployment of any facilities or equipment.
 42        (5)  Separate Line Item. Any video service provider may identify and  col-
 43    lect  as  a  separate  line  item  on each regular bill of each subscriber the
 44    amount of the total bill assessed as a franchise fee pursuant to this section.
 46    on  Required  Public,  Educational  or  Government  Use of Channel Capacity. A
 47    municipal franchising authority may require a video service provider providing
 48    video service to designate up to three (3) channels for noncommercial  public,
 49    educational  or  government (PEG) use if such municipality has a population of
 50    at least fifty thousand (50,000), and up to  two  (2)  PEG  channels  if  such
 51    municipality  has  a population of less than fifty thousand (50,000); provided
 52    however, that the foregoing limits shall constitute the total  number  of  PEG
 53    channels  that  may  be  designated on all video service networks that share a
 54    common headend, regardless of the number of municipalities or counties  served
  1    by  such  headend,  and  the  populations of all municipalities served by such
  2    video service networks shall be aggregated for purposes of applying these lim-
  3    its.  A video service provider may provide such PEG channels  on  any  service
  4    tier  viewed  by  more  than fifty percent  (50%) of its customers.  All video
  5    service providers serving a municipality shall be required to provide the same
  6    number of PEG access channels.
  7        (2)  Unused Channels. Any PEG channel designated pursuant to this  section
  8    that is not substantially utilized by the municipality shall no longer be made
  9    available  to  the  franchising  authority, but may be programmed at the video
 10    service provider's discretion.  At such time as the franchising authority  can
 11    certify  that  a  channel  that has been reclaimed by a video service provider
 12    under this subsection will be substantially utilized, the video  service  pro-
 13    vider  shall  restore  the  reclaimed channel within one hundred twenty  (120)
 14    days, but shall be under no obligation to carry that channel on any  specified
 15    tier of service.
 16        (3)  Substantially  Utilized.  For purposes of this section, a PEG channel
 17    shall be considered substantially utilized when twelve  (12)  hours  are  pro-
 18    grammed on that channel each calendar day and at least eighty percent (80%) of
 19    that programming is nonrepeat and locally produced.
 20        (4)  Operation  of  PEG  Channels.  Except as set forth in this section, a
 21    franchising authority may not require a video service provider to provide  any
 22    funds,  services, programming, facilities or equipment related to public, edu-
 23    cational or governmental use of channel capacity. The  operation  of  any  PEG
 24    access  channel  provided  pursuant  to this section and the production of any
 25    programming that appears on each such channel shall be the sole responsibility
 26    of the municipality receiving the benefit of such channel, and the video  ser-
 27    vice  provider  shall bear only the responsibility for the transmission of the
 28    programming on each such channel to subscribers.
 29        (5)  Format of Transmissions. The franchising authority must  ensure  that
 30    all  transmissions  of content and programming provided by or arranged by them
 31    to be transmitted over a PEG channel by a video service provider are  provided
 32    and  submitted to the video service provider in a manner or form that is capa-
 33    ble of being accepted and transmitted by such video service provider over  its
 34    network  without  further  alteration or change in the content or transmission
 35    signal, and which is compatible with the technology or  protocol  utilized  by
 36    the provider to deliver video service.
 37        (6)  Availability  of  PEG Programming -- Interconnection. The franchising
 38    authority shall make the programming of any PEG access  channel  available  to
 39    all  video  service providers in such municipality in a nondiscriminatory man-
 40    ner.  Each video service provider  shall  be  responsible  for  providing  the
 41    connectivity to the municipality's PEG access channel distribution point up to
 42    the first two hundred (200) feet.
 43        (7)  No  Institutional  Networks.  No  franchising authority may require a
 44    video service provider to provide  any  institutional  network  or  equivalent
 45    capacity on its video service or cable network.
 46        50-1110.  RIGHTS-OF-WAY  MANAGEMENT. (1) Indemnification for Property Dam-
 47    age. A franchising authority shall require a video service provider to, at its
 48    sole cost and expense, indemnify any other occupant of the  public  rights-of-
 49    way  for  damages or equitable relief arising out of the construction, mainte-
 50    nance or operation of its video service network.
 51        (2)  Nondiscrimination. Each government entity shall  manage  the  use  of
 52    public rights-of-way under its authority in a manner that:
 53        (a)  Is competitively neutral;
 54        (b)  Does  not  discriminate between video service providers and incumbent
  1        cable operators providing service under existing  franchises,  or  between
  2        such providers or operators and any other entity that makes comparable use
  3        of  such  rights-of-way,  with respect to the enactment and enforcement of
  4        ordinances and  regulations  concerning  excavation,  permitting,  bonding
  5        requirements,  indemnification  requirements and placement and maintenance
  6        of facilities in any public right-of-way; and
  7        (c)  Is consistent with applicable state law.
  8        (3)  Construction Permits. In managing the public rights-of-way, the state
  9    of Idaho and each franchising authority may require the  issuance  of  a  con-
 10    struction  permit,  without cost, to a video service provider that is locating
 11    facilities in the public rights-of-way under the authority of each  such  gov-
 12    ernment entity.
 13        (4)  Action  on  Permit  Requests. The state of Idaho and each franchising
 14    authority shall act upon a request for permits or licenses to use  the  public
 15    rights-of-way in a timely manner.
 16        (5)  Emergency  Repairs.  If  there is an emergency necessitating response
 17    work or repair in the public rights-of-way, a video service provider may begin
 18    such work or repair without prior approval  from  the  state  of  Idaho  or  a
 19    franchising  authority,  if  such provider notifies the appropriate government
 20    entity as promptly as possible after beginning such work or repair.
 21        SECTION 2.  That Chapter 36, Title 63, Idaho Code, be,  and  the  same  is
 22    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 23    ignated as Section 63-3619A, Idaho Code, and to read as follows:
 24        63-3619A.  VIDEO SERVICE SALES TAX. (1) Notwithstanding any  other  provi-
 25    sion of this title, all providers of video service and direct broadcast satel-
 26    lite  service  shall be subject to an annual sales tax equivalent to five per-
 27    cent (5%) of the basic rate paid or charged for the sale of video service. The
 28    revenues from this tax shall be distributed to  political  subdivisions  other
 29    than  counties  in  the  proportion  that  the population of each bears to the
 30    aggregate population of the state, and  to  political  subdivisions  that  are
 31    counties  in the proportion that the population of unincorporated areas of the
 32    county bears to the aggregate population of the state, according to  the  most
 33    recent federal census and any other census authorized by law.
 34        (2)  The  amount  of  tax  due under this section from a provider of video
 35    service shall be reduced by the amount of any cable or video service franchise
 36    fee lawfully imposed on and paid each year by such provider, whether  paid  to
 37    this state, or any political subdivision or county thereof.
 38        (3)  For purposes of this subsection:
 39        (a)  "Direct broadcast satellite service" means the distribution or broad-
 40        casting   of   programming  or  services  by  satellite  directly  to  the
 41        subscriber's receiving equipment without the use of  ground  receiving  or
 42        distribution  equipment,  except  the  subscriber's receiving equipment or
 43        equipment used in the uplink process to the satellite, and  including  all
 44        service  and  rental  charges, premium channels or other special services,
 45        installation and repair service charges, and any other charges having  any
 46        connection with the provision of the satellite broadcasting service.
 47        (b)  "Video  service" has the meaning given such term in chapter 11, title
 48        50, Idaho Code.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                            RS 16916C1

The Idaho Video Franchising and Competition Act of 2007 establishes
a statutory framework for cities and counties to franchise multiple
competing video service providers within a franchised area.
Under this Act all wireline video service providers are treated the
same and cities and counties are prohibited from discriminating in
favor of or against any single provider.  Similarly, all wireline
video service providers are prohibited from discriminating (based
primarily on income) against customers or demographic areas within
a franchise area.  Class or income non-discrimination is
accomplished by providing that all video service providers shall
offer video service to 90% of the customer within a franchised area
within 5 years of receiving a franchise.
The Act requires that cities or counties must act on a franchise
application within 60 days or the franchise is deemed granted.
Cities and counties are also prohibited from: (i) requiring more
than three public video channels (ii) restricting or prohibiting
the transfer of a franchise, or (iii) charging additional or
separate fees to occupy public rights of way. The Public Utilities
Commission is required to develop a model franchise agreement that
is to be used by all cities and counties in granting a franchise.
This Act also brings video fee parity between wireline video
providers and satellite video providers. This bill institutes a 5%
video sales tax to recover lost franchise fee revenues and rebates
those revenues to cities and counties, based on population. 
Franchise fees paid by a wireline video provider to a city or
county act as a credit against this video sales tax. 

                         FISCAL IMPACT
This legislation would return between $ 2.0 and $ 3.5 million
dollars of video sales tax revenues to cities and counties that
have been otherwise lost as customers have switched from cable TV
to satellite TV. There would be minimal fiscal impact to the state
for administering the video sales tax program and distributing the
funds to cities and counties.

Name: Ron Williams, Attorney at Law
Phone: 208-344-6633

STATEMENT OF PURPOSE/FISCAL NOTE                       H 195