Court rules for FCC in video franchise case

The Washington-based National League of Cities (NLC) and other government associations are weighing their next move in light of the U.S. 6^th Circuit Court of Appeals’ ruling in favor of the Federal Communications Commission’s (FCC) policy preempting local government control over video franchising. The FCC rule sets a time limit for negotiations, prohibits local franchising authorities from placing unreasonable build-out limits on franchise applicants, and restricts the franchise fees that they can require from applicants.

In its opinion, issued on June 27, the court disagreed with the plaintiffs’ argument that the FCC did not have authority over the local franchise process, and also found that the commission had not been arbitrary and capricious in making the rule. The entire ruling is available at www.ca6.uscourts.gove/opinions.pdf/08a0230p-06.pdf.

While expressing disappointment in the court’s ruling, Deborah Vinsel, interim director for the lead plaintiff, the Washington-based Alliance for Community Media, said in a statement that there are “relatively small bright spots in the decision.” “While the decision affirms the FCC’s finding that capital costs required by a franchise to be paid for [public, educational and governmental] PEG access facilities are exempted from the definition of franchise fees, the court makes clear that such capital costs are not limited to the construction of facilities, but may also include equipment,” she said. “The court’s decision also makes clear that nothing in the FCC’s order prevents local franchise authorities from increasing PEG obligations upon renewal of incumbent franchises.”

Vinsel and NLC Executive Director Donald Borut said they are consulting with the other plaintiffs to decide their next action.