III. Scope of Commission Regulatory Authority for Video

DIVCA strictly defines the role of the Commission as the state video franchise authority. While many provisions relating to the Commission are detailed in subject-specific sections below, this section provides an outline of the scope of Commission authority pursuant to DIVCA.

A. Position of the Parties

Los Angeles and Carlsbad Responders contend that "DIVCA does not establish the PUC as the sole franchising authority for cable franchising in California."17 First, Los Angeles and Carlsbad Responders argue that "there is nothing in DIVCA which restricts a local entity and an incumbent cable operator from renewing the cable operator's franchise after January 2, 2008."18 Second, Los Angeles and Carlsbad Responders assert that "DIVCA grants the PUC exclusive franchising authority after January 2 only for operators who have never held a franchise in the area to be served prior to that date."19

Similarly, Oakland argues that Public Utilities Code § 5840(c) establishes that the "Legislature did not choose to make a state franchise mandatory unless on January 1, 2008, the person(s) had never obtained a franchise as that term is defined in the bill."20 Oakland asserts that "the legislation does not intend to repeal local franchising authority under the Government Code," and it argues that "nothing in DIVCA . . . eliminates a local government's authority to renew a local franchise after January 2, 2008."21

B. Discussion

We conclude that DIVCA makes the Commission the "sole franchising authority" for issuing video franchises in the state.22 In arguing to the contrary, the local entities disregard the significance of Public Utilities Code § 5840(c). That statute declares that "[a]ny person or corporation who seeks to provide video service in this state for which a franchise has not already been issued, after January 1, 2008, shall file an application for a state franchise with the commission." In other words, Public Utilities Code § 5840(c) establishes that video service provided in California after January 1, 2008 must be offered pursuant to a state video franchise, unless that service is being offered pursuant to a local franchise that took effect on or before January 1, 2008.

Public Utilities Code § 5840(c) does not give local entities unlimited authority to renew local franchises or issue local franchises to incumbent cable operators that previously received a franchise in their area. Localities arguing to this effect overstate the impact of the exception granted to video service providers offering "video service in this state for which a franchise has . . . already been issued." Any video service for which a local franchise is issued is limited in duration. Like authority to operate a car under a driver's license, the authority to operate under a local franchise agreement has an expiration date. After that date passes, a video service provider will need to come to the Commission if it wants to continue to offer video service within the state.

Local entities similarly misinterpret the significance of DIVCA provisions that allow for temporary continuation of local franchising. DIVCA establishes a transition period, whereby local franchises continue to operate until they expire or are abrogated pursuant to Public Utilities Code § 5840(o). Any flash cut of local franchising provisions is inappropriate under this statutory regime. The Government Code and other provisions that recognize local video franchise operations need to stay in effect so long as some local franchising entities temporarily continue to oversee local franchise agreements.

Our assessment is reaffirmed by the Assembly Analysis.23 According to the Assembly Analysis, DIVCA provides that "[a]s of January 1, 2008, all video service providers must seek a state franchise instead of a local franchise."24 "If the incumbent provider's local franchise expires after January 1, 2008, and the incumbent does not opt-in to the state franchise before the franchise expires," the Assembly Analysis further declares that "the incumbent provider must seek a state franchise at the expiration of the existing local franchise."25 The Assembly Analysis anticipates that "[e]ventually all video providers will operate under a state-issued franchise instead of a locally issued franchise."26

Pursuant to its statutory authority, the Commission may promulgate rules only as necessary to enforce statutory provisions on franchising (§ 5840); antidiscrimination and build-out(§ 5890); reporting (§§ 5920 and 5960); the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services (§§ 5940 and 5950); and application and user fees (§ 401, §§ 440-444, § 5840).27 We shall not adopt proposals that fall outside of the scope of this authority.28

DIVCA imposes clear restrictions on the Commission's ability to promulgate new video rules. The statute expressly provides that "video service providers are not public utilities,"29 and a "holder of a state franchise shall not be deemed a public utility as a result of providing video service. . . ."30 Thus, the statute declares that the Commission may not "impose any requirement on any holder of a state franchise except as expressly provided by . . ." the Act.31

Under DIVCA, local entities, not the Commission, have sole authority to regulate pursuant to many other statutory provisions, including those addressing franchise fees (§ 5860), PEG channels (§ 5870), the Emergency Alert System (§ 5880), and, notably, federal and state customer service and protection standards (§ 5900).32 A local entity shall be the lead agency for any environmental review with respect to network construction, installation, and maintenance in public rights-of-way (§§ 5820 and 5885). We shall not exercise our authority in a manner that diminishes these responsibilities afforded to localities.

17 Los Angeles and Carlsbad Responders Opening Comments on the PD at 1.

18 Id.

19 Id.

20 Oakland Opening Comments at 7.

21 Oakland Reply Comments on the PD at 2.

22 Cal. Pub. Util. Code § 5840(a).

23 Assembly Floor Analysis (Aug. 28, 2006).

24 Id. at 2.

25 Id. at 11.

26 Id. at 10.

27 With respect to the application process in particular, DIVCA states that the authority granted to the Commission in Public Utilities Code § 5840 "shall not exceed the provisions set forth" in that section. Cal. Pub. Util. Code § 5840(b).

28 These proposals include, but are not limited to, the following: developing a consumer education program for video service, extending the Commission's supplier diversity program to video franchising, reviewing availability of in-language customer service, and assessing the diversity of cable programming. CCTPG/LIF Opening Comments at 9, 12; Greenlining Opening Comments at 1-6. Many such proposals are discussed further in subject-specific sections below.

29 Cal. Pub. Util. Code § 5810(a)(3).

30 Id. at § 5840(a).

31 Id.

32 The Commission is granted no authority to regulate the rates, terms, and conditions of video services, except as explicitly set forth in DIVCA. Id. at § 5820(c). See also 47 U.S.C. § 541(c) ("Any cable system shall not be subject to regulation as a common carrier or utility by reason of providing any cable service.").

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