Video and Cable Franchising Policy Goals

Video and Cable Franchising Policy Goals

The Digital Infrastructure and Video Competition Act of 2006 (DIVCA) streamlined the video franchising process by assigning the franchising authority to just one government agency, the California Public Utilities Commission (CPUC). The CPUC is the only entity responsible for determining which companies can qualify to become state video franchise holders in California. 

Prior to DIVCA’s passage in 2006, video franchises were issued by local government agencies. Companies were required to negotiate with and apply for franchises with multiple local government agencies, a different agency for each county/city it served. 

 

Benefit to Businesses and Consumers

  • Increased competition: By creating a new state-issued video franchise process administered by the CPUC to replace the former fractured local system, DIVCA aimed to attract new competitors to the video franchising market. With more franchise holders in the market, consumers benefit from increased choice and prices that are typically lower than in monopoly markets. 
  • Reduced barriers to market entry: Statewide franchising allows companies to enter the market without needing to negotiate with local franchising agencies, thus allowing them to reach consumers sooner. Applicants only need to apply with the CPUC. 
  • Faster infrastructure deployment: By removing barriers to entry, DIVCA allows video franchise holders to deploy service in a faster and more expansive way. With increased infrastructure, the CPUC can meet the goals of narrowing the digital divide and benefiting the California economy.  
  • Increased transparency through data collection: With annual data collection, the public has access to subscription, deployment, and employment information related to video service. 
  • DIVCA requires compliance with consumer protection rules such as promptly responding to customer calls, service outages, and service termination requests.

 

Resources

 

History of Video Franchising

 

Legislative Origin

 

The Digital Infrastructure and Video Competition Act of 2006 (DIVCA) became law with the Governor’s approval of Assembly Bill 2987. Prior to DIVCA, local governments throughout California retained local franchising authority to issue video franchises. DIVCA streamlined the franchise application process by assigning the franchising authority to just one government agency, the California Public Utilities Commission (CPUC). As a result, the CPUC is the sole agency that determines which companies can become franchise holders for video services in California.

Historic Timeline

1965: The Federal Communications Commission (FCC) first established rules for microwave antenna cable systems.

1966: The FCC established rules for all cable systems.

1968: The Supreme Court affirmed the FCC’s jurisdiction over cable in United States v. Southwestern Cable Co.

1972: The FCC issues rules on certificate of compliance requirements. The rules required obtaining a certificate prior to operating a cable television system or adding a television broadcast signal. 

1977: The FCC deleted most of the franchise standards in 1977.

1978: The FCC substituted a registration process for the certificate of compliance application process.

1980: The FCC eliminated the distant signal carriage restrictions and syndicated program exclusivity rules.

1983: By 1983, the FCC modified or eliminated many of its rules regarding cable systems. 

The FCC deleted its requirement that cable operators file financial information.

1984: The U.S. Congress passes the Cable Communications Policy Act of 1984.

The Act establishes new policies in system franchising and rate regulation, among other things. The Act also defined jurisdictional boundaries among federal, state, and local authorities for regulating cable television systems. 

1987: California High-Cost A Funds (CHCF-A) is established.

The CHCF-A Funds were created to ensure that all Californians across the state have access to telephone service, by subsidizing telephone service to serve rural areas.

1992: The U.S. Congress passes the Cable Television Consumer Protection and Competition Act of 1992.

The Act mandates several changes in the way cable television is regulated to increase competition among distributors of cable services. 

1993: California passes the Cable Television and Video Provider Customer Service and Information Act requiring establishment of customer service standards that are shared with customers and local franchising authorities.

1993: California passes the Video Customer Service Act, which establishes specific customer service standards for video providers.

1996: The U.S. Congress passes the Telecommunications Act of 1996.

The Act aims to increase competition and promote a deregulatory, national framework to advance telecommunications and information technologies. 

2006: California’s Digital Infrastructure and Video Competition Act (DIVCA) is passed.

DIVCA designates the CPUC as the sole franchising authority for video services in California.

2007: California Public Utilities Code is updated to establish Reimbursement Fees

Article 4. Video Service Franchises [440 – 444] of the Public Utilities Code establishes Commission Reimbursement Fees.

2021: California’s Senate Bill (SB) 28 adds Cal. Pub. Util. Code Section 5895.

Allows the CPUC to collect granular data on the actual locations served by franchise holders and authorizes the CPUC to adopt customer service standards and adjudicate service complaints from customers.

2022: Assembly Bill 2752 requires a public interactive map showing accessibility of broadband service in California. AB 2752 also clarifies that actual locations include addresses.