HCS SS SCS SB 284 -- VIDEO SERVICE REGULATIONS

SPONSOR:  Griesheimer (Dempsey)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Utilities by a vote of 11 to 0.

This substitute changes the laws regarding new video franchise
agreements.  In its main provisions, the substitute:

(1)  Requires the Missouri Public Service Commission to regulate
video service by issuing video service certificates that grant
authority to construct networks and provide service within
political subdivisions.  Currently, political subdivisions enter
into separate franchise agreements with the video service
providers;

(2)  Allows existing video service providers to provide service
under existing agreements with political subdivisions until the
agreements expire, apply for a new video service authorization,
or convert their existing franchise into a video service
authorization.  The holder of a video service authorization may
terminate the authorization or transfer it to another party upon
notice to the commission;

(3)  Allows political subdivisions to collect a service fee of up
to 5% of the gross revenue of each video service provider, but
the fees for all video service providers in the franchise area
must be the same.  Political subdivisions may adjust fees yearly
by providing 90 days' notice to providers.  A schedule for the
payment of fees is specified and providers are allowed to charge
customers for the tax if it is itemized on the customer's bill;

(4)  Allows political subdivisions to conduct audits of video
service providers and engage in mediation with providers in order
to resolve customer disputes.  Procedures for audits, mediation,
and court challenges are specified;

(5)  Requires the commission to make a report on the
implementation of the provisions of the substitute which includes
customer input to the General Assembly by August 28, 2008, and
annually thereafter for three years;

(6)  Specifies detailed requirements that allow political
subdivisions to require a provider to offer noncommercial public,
educational, and government (PEG) channels.  New and existing
providers will be required to meet the same criteria for
providing PEG channels.  Existing providers must fulfill their
obligations to PEG channels until their existing contract expires
or January 1, 2012, whichever is earlier;

(7)  Requires new providers to serve low-income households in
their franchise areas by establishing a target of 25% service to
low-income homes within three years and 30% service within five
years.  AT&T will have to meet the 25% target in three years and
a 50% target within six years.  The commission may waive these
low-income service requirements in certain cases; and

(8)  Allows political subdivisions to retain reasonable
regulation of their public right-of-ways and the placement of
video service equipment.

The substitute contains an emergency clause.

FISCAL NOTE:  No impact on state funds in FY 2008, FY 2009, and
FY 2010.

PROPONENTS:  Supporters say that the bill is a carefully crafted
compromise that will benefit Missouri customers by lowering video
service costs throughout the state.  Competition will ensure that
the quality of service is high.  Cities will be allowed to charge
the maximum taxes allowed by federal law and will gain additional
advertising moneys and fees from new customers.  The bill should
also result in additional video service coverage and increase
investments in Missouri by $400 million.  The legislation should
include a nonseverability clause so that a level playing field is
guaranteed.

Testifying for the bill were Senator Griesheimer; Missouri Cable
Television Association and Charter Communications; AT&T; Missouri
Coalition for Fair Competition; St. Louis Regional Commerce and
Growth Association; Windstream Communications; CenturyTel;
Missouri Telecommunications Industry Association; Embarq;
Missouri Chamber of Commerce and Industry; Multistate Associates
on behalf of DirectTV Group; Associated Industries of Missouri;
and Joseph Haslag.

OPPONENTS:  Those who oppose the bill say that it could result in
the loss of PEG channels and funding for public and educational
television.  Municipalities should retain local control over
cable franchise agreements.  It would also be useful for
municipalities to spend a portion of their tax revenue on PEG
channels.

Testifying against the bill were Representative Flook; Jim Dunn;
Ken Robinson; Ann Bertoldie; Elizabeth Federici and Christine
Gardener, Columbia Access Television; Vince Spiro; Beverly
Hacker, Alliance for Community Media; Steven Smith, KDHY
Community Media; St. Louis County Municipal League; AARP; Beth
Pike; and Joan Sapp.

OTHERS:  Others testifying on the bill say that it may face
constitutional challenges under the contract and retroactivity
clauses of the Missouri Constitution and the Article III, Section
39(5) prohibition on relinquishment of debts owed to political
subdivisions without compensation.  It does protect the police
powers of political subdivisions to regulate their public
right-of-ways.  There needs more customer protection measures
such as bond and insurance requirements.  The bill will raise the
cost of educational television.

Testifying on the bill were Missouri Municipal League; Susan
Littlefield, Missouri Chapter of the National Association of
Telecommunications Officers and Advisors; and Dennis Riggs.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:21 am