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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 2 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 3 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- 4 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 5 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 6 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 7 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. 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 8 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 9 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 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. Contact: Name: Ron Williams, Attorney at Law Phone: 208-344-6633 STATEMENT OF PURPOSE/FISCAL NOTE H 195