Print Friendly HOUSE BILL NO. 195 – Video franchising competitn/reform
HOUSE BILL NO. 195
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H0195......................................................by STATE AFFAIRS
VIDEO FRANCHISING COMPETITION AND REFORM ACT - Adds to existing law to
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
]]]] 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
2 RELATING TO CABLE OR VIDEO FRANCHISES; AMENDING TITLE 50, IDAHO CODE, BY THE
3 ADDITION OF A NEW CHAPTER 11, TITLE 50, IDAHO CODE, TO PROVIDE A SHORT
4 TITLE, TO PROVIDE CONSTRUCTION OF THE CHAPTER, TO DEFINE TERMS, TO PROVIDE
5 FOR AUTHORIZATION TO PROVIDE VIDEO SERVICE, TO PROHIBIT DISCRIMINATION, TO
6 PROVIDE CUSTOMER SERVICE STANDARDS, TO PROVIDE PROCEDURES FOR TRANSFERS,
7 TO PROVIDE FRANCHISE FEES OR OTHER FEES, TO PROVIDE PUBLIC, EDUCATIONAL
8 AND GOVERNMENTAL ACCESS CHANNELS AND TO PROVIDE FOR RIGHTS-OF-WAY MANAGE-
9 MENT; AND AMENDING CHAPTER 36, TITLE 63, IDAHO CODE, BY THE ADDITION OF A
10 NEW SECTION 63-3619A, IDAHO CODE, TO PROVIDE A VIDEO SERVICE SALES TAX, TO
11 PROVIDE FOR DISTRIBUTION OF MONEYS COLLECTED AND TO DEFINE TERMS.
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
17 IDAHO VIDEO FRANCHISING COMPETITION
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
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
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
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
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
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
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-
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.
45 50-1109. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS CHANNELS. (1) Limit
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
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.
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
STATEMENT OF PURPOSE/FISCAL NOTE H 195