BILL ANALYSIS Ó
AJR 39
Page 1
Date of Hearing: March 24, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AJR 39 (Hernandez) - As Amended: March 13, 2014
SUBJECT : Cable and Video Service
SUMMARY : Urges the United States Congress to amend a specified
federal law to allow states and their municipalities to
determine the best use of public, education, and government
channel support.
EXISTING LAW :
1)Establishes the Digital Infrastructure and Video Competition
Act (DIVCA) of 2006 (PU Code 5800-5970)
2)States the holder of a state franchise shall designate a
sufficient amount of capacity on its network to allow the
provision of the same number of public, educational, and
government access (PEG) channels, as are activated and
provided by the incumbent cable operator that has
simultaneously activated and provided the greatest number of
PEG channels within the local entity under the terms of any
franchise in effect in the local entity as of January 1, 2007.
(PU Code §5870 (a))
3)States a local entity may, by ordinance, establish a fee to
support PEG channel facilities consistent with federal law
that would become effective subsequent to the expiration of
any fee imposed. If no fee exists, the local entity may
establish a fee not to exceed 1 percent of the holder's gross
revenues. (PU Code §5870 (n))
4)Section 611 of the Federal Cable Communications (FCC) Act,
local franchising authorities may require cable operators to
set aside channels for PEG use.
5)Section 542 of the Title 47 of the United States Code limits
how PEG channels funds can be used.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "in this modern age,
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residents rely on information to be delivered via public,
educational and government channels. These PEG channels offer
residents an opportunity to become fully aware of what is taking
place in their local communities. Public-access channels allow
citizens to become better informed on local decisions by their
elected representatives, educational and cultural programming.
Currently, PEG funds are restricted to the use of capital
expenses, such as equipment, maintenance, upgrades, and sets,
but cannot be used for legitimate operational expenses such as
labor, administration or research. Assembly Joint Resolution
(AJR) 39 urges Congress to allow states and their municipalities
to determine the best use of public, educational and government
funds."
1)Background : PEG channels are public access channels that
afford citizens with the
opportunity to connect with their communities, engage in civic
activity, and obtain cultural information. Although PEG channels
are not mandated by federal law, the law stipulates how PEG
channels fees can be used by local franchising authorities.
Cable subscribers pay 5 percent of their bill as a franchise fee
to the local government, and local governments cannot impose
additional costs beyond that 5 percent. However, federal law
does require a cable television service provider to set aside
channel capacity and provide financial support for PEG access
channels and restricts PEG channel funds to capital expenses
such as equipment, maintenance, upgrades and studio staging. The
federal government wanted to ensure local governments were
contributing to the community as well, thus limiting the 1
percent PEG fee to capital expenditures. This provision has not
been updated in federal law since 1984.
In 2006, the Legislature passed DIVCA with goals to promote
rapid, widespread competition in broadband and video markets and
accelerate the deployment of additional infrastructure in
California. DIVCA is implemented by the California Public
Utilities Commission (PUC) and addresses video franchising and
other broadband related issues. DIVCA fundamentally changed
video franchising within California by transferring the
authority for issuing franchises for the provision of video
services from local entities to the State of California.
Historically, local entities, primarily cities, counties and
special districts issued cable television franchises. This
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required cable operators to negotiate separate franchise
agreements with each locality where they wished to provide video
service.
Some jurisdictions used PEG fees to open PEG access centers.
These centers provide community groups and individuals free
access to video production facilities and equipment. According
to the author, since 2007 approximately 51 PEG access centers
have closed. It is unknown how many of these centers remain
open.
Some may argue that at the time the FCC began requiring cable
operators to provide local origination programming to connect
communities, mass communication was limited to local newspapers,
public broadcasting, and cable television systems. Today,
individuals can communicate to their communities through
emerging broadband technologies like Twitter, YouTube, and
Facebook, enhancing the right to "freedom of speech" to new
levels. With the availability of these new and emerging
technologies, requiring cable companies to continue to provide a
channel for PEG programming may no longer be necessary.
2)A message to Congress : In light of the concerns raised by
local jurisdictions, that have
excessively low PEG channel revenue streams and caused PEG
centers to close their operations, this AJR specifically calls
on the U.S. Congress to amend Section 542 of Title 47 of the US
Code to:
a) Allow states and their municipalities to determine the
best use of PEG channel support
b) Restore and protect funding for PEG operations
c) To allow states and local governments the flexibility to
use PEG funding for legitimate expenses other than capitol
expenses
d) Ensure PEG channels are transmitted without charge to
local governments
1)Support : The City of Whittier writes in support of AJR 39.
The City operates one PEG
channel to show City Council meetings, Planning Commission
meetings, public hearings, candidate forums, and other events
important to the community. According to the City, "our
residents are typically very engaged in local issues and rely on
this information to develop their opinions so they can provide
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educated public input to local governance. The Whittier City
Council unanimously supports the PEG channel as a very effective
means of making government activities transparent and open.
Furthermore, "AJR 39 is important to the City of Whittier as it
will remove use restrictions on PEG channel access fees and
prevent video providers from charging municipalities for
transmission of PEG channels. The measure will allow us the
flexibility to use PEG funding for operational expenses as well
as capital expenses."
The Marin Telecommunications Agency (MTA) supports AJR 39. MTA
administers video franchises and contracts with a nonprofit
organization to operate PEG access channels, and operate and
manage the Media Center for public, education and government use
to develop programming for the PEG. According to MTA, "AJR 39
will provide solutions for critical and immediate threats to PEG
channels and facilities in California and across the country by
removing use restrictions on PEG channel access fees, restoring
PEG channel revenue streams, and preventing video providers from
charging municipalities for the transmission of the PEG
channels."
2)Opposition : The California Cable & Telecommunications
Association (CCTA) opposes
this AJR noting that "pursuant both federal and state law, in
most cases cable operators provide 1 percent of their gross
revenues in a franchise area to support the capital costs
associated with providing PEG programming. CCTA argues that
state law requires cable and video companies to provide
dedicated channels for PEG programming. CCTA points out that
"while federal law limits the use of the PEG fee to exclusively
support the capital costs associated with PEG programming, cable
operators also pay local governments an additional 5 percent of
their gross revenues as a franchise fee that can be used without
restriction to cover general government expenses, including
non-capital costs of PEG.
Further, many local governments have the resources to contribute
their share to this partnership if they deem it valuable public
service to their citizens. According to CCTA, "given the funding
currently available to local governments that can be used to pay
for any costs associated with the provision of PEG, there simply
is no basis to assume that local governments cannot now provide
full funding support for PEG programming".
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REGISTERED SUPPORT / OPPOSITION :
Support
Access Humboldt
Access Sacramento
California Consumer Affairs Association
Center for Media Justice
City of Camarillo
City of Fremont
City of Glendale
City of Lakewood
City of Los Altos
City of Martinez
City of Palmdale
City of Palo Alto
City of Pleasant Hill
City of San Jose
City of Santa Maria
City of Whittier
Common Cause
Community Media Center of Marin
Contra Cost County Board of Supervisors
County of Los Angeles
CreaTV San Jose
Cupertino TV Productions
Individual Letters (10)
KMVT 15 Silicon Valley Community Media
KOCT-The Oceanside Channels
Larry Bragman, Vice Mayor, Town of Fairfax
League of California Cities
Marin Telecommunications Agency
Media Alliance
Media Center Marin
National Alliance for Media Art and Culture
National Association of Counties
New America Foundation
Pete Constant, San Jose Councilmember, District 1
ReSurge International
Saratoga Community Access Television Foundation
Seal Beach Cable Communications Foundation
Several Individuals
Silicon Valley Council of Nonprofits (SVCN)
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The Alliance for Community Media
The Buske Group
Town of Danville
Towns of Fairfax and Tiburon
Tri-Valley Community Television
TV Santa Barbara
Opposition
California Cable & Telecommunications Association (CCTA)
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083