V. Eligibility to Operate Under a State Video Franchise

The draft General Order placed several conditions on what corporate entities are eligible to seek and operate under a state video franchise. First, it declared that entities in violation of the Cable Television and Video Providers Service and Information Act or the Video Customer Service Act are ineligible to hold a state video franchise. Second, the draft General Order stated that a communications company with multiple affiliates in California could only hold a single state video franchise. Third, the draft General Order provided that a state video franchise holder must be the applicant's parent company, or if none, the successful applicant itself.

Parties only comment of the substance of the latter two conditions. In response to these comments, this section considers (i) whether a single corporate enterprise should be allowed to hold more than one franchise and (ii) whether the Commission should place any stipulations on what entities are eligible to apply for and operate under a state video franchise.

A. Position of the Parties

Our proposed limits on when a corporate entity may hold a state video franchise draw a variety of responses. Many parties whose interests typically are aligned disagree with each other here: Cities differ on whether we should impose all the limits proposed in the OIR, and the only item communications companies can agree on is that a corporate parent should not be required to hold a state video franchise.

DRA, the sole consumer organization to speak on this issue, states that it is "indeed `necessary and reasonable'" for the Commission to prohibit the holding of multiple franchises through separate affiliates of a single enterprise.62 According to DRA, this restriction "should serve to reduce the potential for state video franchise holders to evade compliance with statutory requirements."63 DRA adds that "the Commission should have the flexibility to determine the operating entity of a corporation that shall hold the single franchise on behalf of the corporation and its subsidiaries and affiliates in the state."64

League of Cities/SCAN NATOA "strongly supports" our proposal to require a parent entity to obtain a single franchise for all its affiliates.65 League of Cities/SCAN NATOA explains that "[a]llowing multiple franchises to be held under one parent corporation would be confusing, redundant, and an unnecessary waste of the Commission's resources. The public interest will be served and state franchisees will incur no hardship as a result of this requirement."66

Los Angeles and Carlsbad Responders state that the Commission should not "sit back and wait until problems arise" before promulgating rules that prohibit a single corporate enterprise from holding of multiple franchises.67 Their experiences convince them that our "concerns regarding the potential for evasion of statutory obligations, through the holding of multiple state franchises via multiple entities, are `well founded'":

In the experience of both the County of Los Angeles and the City of Los Angeles, cable operators often change the entity within the corporate family that actually holds the franchise, sometimes with no notice to the franchising authority, even though the codes and/or franchises in both the County of Los Angeles and the City of Los Angeles require such notice. . . .

In the City of Carlsbad, the undisclosed transfer of the franchise from the owners which the City of Carlsbad approved as the franchise holder to an affiliated entity was not discovered until after the parent owners filed for bankruptcy protection and were forced into a Department of Justice forfeiture proceeding. . . .68

Under the local franchising scheme, Los Angeles and Carlsbad Responders explain that "such actions, while problematic, did not necessarily impact [their] ability to enforce franchise provisions," because they "retained their franchise enforcement mechanisms regardless of which entity held the franchise."69 Under a state franchising scheme, however, the Los Angeles and Carlsbad Responders note that their only mechanism for enforcing many of the statutory provisions is litigation, so "it is vital that local entities have some certainty as to what entity holds the state franchise."70

Los Angeles and Carlsbad Responders, however, find that it would be impracticable to impose a rule that requires a parent company to hold a state video franchise:

Since almost none [of] these parent corporations are California corporations, any lawsuit brought in a state court by a local entity against a parent corporation to enforce the provisions of the statute - even a dispute regarding a franchise fee underpayment - would almost certainly be removed by the parent corporation to federal court, on diversity jurisdiction grounds.71

The Los Angeles and Carlsbad Responders conclude that a rule to this effect would cause "interpretation and enforcement of California state franchising provisions" to be the "exclusive province of federal courts.72

Los Angeles and Carlsbad Responders suggest that a preferable approach addressing enforcement concerns is to mandate that "only one company - which does not have to be the ultimate parent entity - within a family of companies may hold a state franchise . . . ."73 It adds that we should require that "the one company which may hold the state franchise be a California company."74

In their opening comments on the draft decision, Los Angeles and Carlsbad Responders recommend that "the Proposed Decision . . . be modified to include an application affidavit that helps ensure that local entities, as well the PUC, can effectively enforce the applicable provisions of DIVCA."75 Los Angeles and Carlsbad Responders assert that the "affidavit should include a provision which requires an applicant to attest that a single identifiable entity within a family of companies - one with verifiable assets . . . - organized in the State of California, assumes full responsibility for the applicant's performance of all of its obligations under DIVCA and all other applicable local, state, and federal laws. Further, the applicant must attest that the responsible entity shall accept service of process, and shall submit to the jurisdiction of California courts."76

Verizon contends that requiring a corporate parent to hold a video franchise is neither necessary nor reasonable. Verizon states that "corporate parents will likely be unable to provide service."77 In the case of its parent company, Verizon explains that Verizon Communications "is a Delaware-based holding company, owns no network facilities of any kind in California, has no state or local operating permits or business licenses, and is not authorized to conduct business in California."78 Verizon adds that "requiring the parent to be the franchise holder contravenes the Act."79 According to Verizon, "[r]equiring a corporate parent to hold a franchise is very different from prohibiting multiple franchises, and the OIR's effort to do so finds no support in the Act or in Commission practice."80

Verizon further argues that "`problems' sought to be remedied are largely if not completely hypothetical."81 With respect to build-out requirements, Verizon asserts that these statutory requirements "apply to `holders or their affiliates' with telephone customers, and would therefore bind both a video franchise holder providing only video service and its affiliate providing only telephone service."82 Regarding the cross-subsidization provisions, Verizon contends that any ambiguity in Public Utilities Code § 5940 is clarified by Public Utilities Code § 5950. Verizon alleges that the latter provision "gives specific effect and clear enforcement to the more general prohibition in section 5940 that a holder shall not increase the rate for basic telephone service to finance the cost of deploying a video network."83 Finally, Verizon turns to reporting requirements and claims that "it is highly unlikely that a holder would or even could choose" to assign its broadband customers to an affiliate separate from a video affiliate.84 Verizon reasons that "the same technology and network that makes video capable also makes broadband capable."85

In its opening comments on the draft decision, Verizon - despite its prior assurance that it is "highly unlikely" that any state video franchise holder would assign broadband customers to an affiliate separate from its video affiliate - protests any application of annual broadband reporting requirements to its broadband affiliates. First, Verizon argues "DIVCA is limited to wireline companies and facilities."86 Second, Verizon contends that the Commission does not have statutory authority to impose reporting requirements on state video franchise holders' broadband affiliates.87 Third, Verizon asserts that "collection of wireless broadband data is inconsistent with DIVCA."88

AT&T supports our proposed limitation of one state video franchise per company.89 AT&T recognizes that this proposal "is consistent with section 5840(f)" and would "protect the Commission's workload by prohibiting multiple franchise applications from a single enterprise."90

AT&T, however, protests our proposal to require the state video franchise to be held by the applicant's parent company. It maintains that requiring the state video franchise to go to the parent company "would force it to be granted to the wrong legal entity."91 AT&T explains that "it is AT&T California, not AT&T, Inc., that will own and operate the network, and provide video services in California," and by requiring the holder to be some entity other than the one directly providing video service and operating the network, "numerous provisions of DIVCA would be rendered nonsensical or meaningless."92

Given these considerations, AT&T puts forth an alternate recommendation. AT&T states that the Commission's enforcement concerns "could be addressed by including in the application certification required by section 5840(e)(1)(B) an assurance from any affiliates that provide telephone or broadband services that such affiliates' operations will be included for the purposes of 5890, 5960, and 5940."93

In contrast to AT&T and Verizon, SureWest asks us to reconsider our requirement that would prohibit separate state-issued franchises among affiliated companies.94 SureWest states that it "does not believe the Commission has an adequate record on which to base a decision to invoke this prohibition."95 It reasons that "there may be legitimate business reasons that affiliates should have separate state-issued franchises":

For example video service providers may operate separate systems in the state. An obvious example would be a company that divides its operations between Northern and Southern California. For purposes of allowing those systems to operate as distinctly as possible and to even increase their value as an independent going concern, it would be useful for those systems to possess their own independent operating authorities.96

SureWest adds that "the prohibition is ambiguous without any Commission direction regarding how it will define `affiliate' for purposes of enforcing the proposed rule."97 Thus, SureWest calls upon the Commission to "build[] a record on whether the prohibition is beneficial . . . [and] conduct an inquiry into how it will define `affiliate' for purposes of applying the proposed rule."98

SureWest strongly opposes the proposal to require a parent company to hold a state video franchise. SureWest seems to assume that we would never issue a state video franchise to an applicant's parent company, so it claims that we ignore the statutory definition of "holder" when we proposed that the state video franchise holder would be "a successful Applicant's parent company, or if none, the successful Applicant itself."99

SureWest further claims that the OIR's definition of a state video franchise holder "upsets the intended and delicate balance of reporting requirements and other franchise-related obligations set forth in the Franchise Act."100 SureWest - unlike other parties to this proceeding - contests the scope of reporting obligations imposed by DIVCA. First, SureWest asserts that it "is positive that the Legislature did not intend for smaller providers to be subject to the reporting requirements included in Section 5920(a)."101 Second, SureWest protests our collection of broadband data. SureWest states that the Commission "has no legal authority to require such reporting from non-regulated affiliates."102

Small LECs contends that "franchises should not be imputed to all entities within a corporate family, nor should multiple franchise be prohibited."103 First, Small LECs argues that our proposed restrictions "legally expand the definition of `holder' beyond the language of the statute."104 Second, Small LECs claims that the "Commission's concerns about franchise holders' attempts to avoid responsibility for the build-out, reporting, and cross-subsidization requirements are unfounded."105 Small LECs reasons that the "Commission has ample experience in regulating telecommunications subsidiaries and their affiliates, so there is no reason to expect the Commission to experience significant difficulties in regulating similarly-configured companies in the video sector."106 Third, Small LECs points out that "there may be legitimate business reasons for providers to seek multiple franchises, including situations where a single parent company may have multiple subsidiaries in different geographic areas of the state."107 Fourth, Small LECs argues that a parent companies likely "will not be the entities that are providing service," so if they were awarded state video franchises, "the legal rights and obligations of the franchisee status would not be conferred on the appropriate entities."108

CCTA states that it "strongly oppose[s] any requirement that restricts entities which currently hold local franchises, or any other affiliate of their parent corporation, from obtaining state-issued franchises."109 According to CCTA, incumbent cable operators "hold franchises in hundreds of communities in California using a myriad of corporate structures," and "[a]ny requirement to `roll up' or combine these entities into a single parent or other entity will trigger significant unintended consequences, including tax liabilities and other costs."110

CCTA finds that other "measures can be implemented to ensure compliance that are far less onerous and costly than forcing incumbent cable operators into wholesale corporate restructurings . . . ."111 Recognizing that the "Commission's concerns are not misguided,"112 CCTA makes the following proposal: "the Commission allow that state-issued franchises be held either: A) in the parent corporation; or that B) multiple legal entities or affiliates of a parent corporation are capable of holding state-issued franchises, but . . . their reports to the Commission be submitted by the parent corporation on behalf of the multiple legal entities, on a `rolled up' basis, similar to the [Federal Communications Commission's] Form 477, used for reporting broadband connections in individual states. . . ."113 CCTA adds that the Commission may "craft regulations in the future that address any unforeseen instances that impact reporting requirements."114

B. Discussion

This discussion is divided into two parts. First, we outline the issues that we seek to address when placing restrictions on when a video service provider may hold a state video franchise. Second, we assess how best to address these issues in a narrowly tailored manner.

1. Implementation Concerns

Our proposal to place restrictions on when a video service provider may operate under a state video franchise was based upon our desire to ensure effective implementation of DIVCA. Without such restrictions, we feared that it would be difficult, if not impossible, for the Commission to monitor and enforce statutory provisions when a single company has multiple communications affiliates.

Our concerns are validated by most parties' comments. Speaking from their own franchising experience, Los Angeles and Carlsbad Responders contends that our "concerns regarding the potential for evasion of statutory obligations, through the holding of multiple state franchises via multiple entities, are `well founded.'"115 League of Cities/SCAN NATOA similarly argues that allowing "multiple franchises to be held under one parent corporation would be confusing, redundant, and an unnecessary waste of the Commission's resources."116 Such considerations lead DRA to conclude that restrictions on when a corporate entity may hold a state video franchise would "reduce the potential for franchisees to evade compliance with statutory requirements."117

Also some communications companies - while protesting how we address our concerns - concede that our concerns nonetheless are legitimate. According to CCTA, the "Commission's concerns are not misguided."118 AT&T adds that prohibiting multiple franchise applications from a single enterprise would "protect the Commission's workload."119

Our review of parties' comments reaffirms that it is both necessary and reasonable to adopt restrictions on when a corporate entity may operate under a state video franchise. In particular, these restrictions are especially relevant to Commission implementation of three types of statutory provisions: the cross-subsidization prohibitions, build-out requirements, and reporting obligations. All three of these statutory provisions impose requirements that apply to not only video services, but also other communications services. We discuss issues raised by each of these provisions below.

First, we recognize that our ability to enforce build-out requirements may be impaired if a corporate family divides its video or telephone and video services among different operating entities in California. "[H]olders or their affiliates with more than 1,000,000 telephone customers in California" are required to meet stringent build-out requirements for provision of video service.120 Yet a company with video and telephone customers could avoid these statutory obligations if it (like incumbent cable operators) were able to attain a separate franchise for each region where it offered communications services, thereby ensuring no single entity ever had more than one million telephone customers. Alternatively, a company could avoid build-out requirements if it were able to use a video affiliate, separate from its telephone business, to acquire a state franchise. This structural separation would ensure that no one entity in the company would have both telephone and video customers, the combination required for the applicability of § 5890(b) build-out requirements.

Second, we determine that our authority and ability to prevent subsidization of video services with telecommunications funds could be challenged if a company divides its video and telecommunications services into two different operating entities. Public Utilities Code § 5940 prohibits cross-subsidization of video rates by a "holder of a state franchise . . . who also provides stand-alone, residential, primary line, basic telephone service. . . ." A company offering both telecommunications and video services, however, would not be covered by this statutory provision if it divided its telecommunications and video operations into two different affiliates.121

Third, we find that it would be difficult, if not impossible, for us to collect comprehensive broadband and video reports if a company separated its broadband operations from its video operations, or divided its video operations among multiple California entities. Regarding broadband data, a state video franchise holder is required to report information regarding broadband access and usage, to the extent that the "holder makes broadband available in the state."122 Yet a company could try to avoid the broadband reporting requirements if it assigns all its broadband customers to an affiliate separate and distinct from a video affiliate, which attained the state video franchise. Indeed, we note that AT&T, pursuant to stipulations made during the Ameritech merger, already divides its video services (in AT&T California) and its broadband services (in AT&T Internet Services) between two separate affiliates. Thus, without an affiliate reporting requirement, we would receive no information from the corporate family that currently serves more California broadband subscribers than any other communications company in the state.

With respect to video data, a state video franchise holder is required to report information regarding video access within the holder's "video service area."123 Implementation of this requirement, however, would be unduly complicated if multiple video entities in a corporate family operate pursuant to individual state video franchises (as requested by incumbent cable operators).124 These individual operating entities would produce individual reports. Commission staff then would need to review and combine multiple data sets in order to develop a single picture of the corporate family's operations as a whole.

Any such evasion of an important statutory provision is untenable. Public Utilities Code § 5840(e)(1)(B) recognizes that both "the applicant" and "its affiliates" must "comply with all federal and state statutes, rules, and regulations," which include provisions found in DIVCA. Moreover, the Legislature states that DIVCA should "[c]reate a fair and level playing field for all market competitors that does not disadvantage or advantage one service provider . . . ."125 It would be contrary to this express Legislative intent we applied DIVCA in a manner that varied depending on the corporate structure of the company offering video service. We need not develop any further record to reach this conclusion.126

We also recognize that it is necessary and reasonable to adopt restrictions to facilitate the regulation by local entities of corporate entities operating under a state video franchise. To enforce DIVCA, local entities need to be able to identify and initiate legal actions against video service providers operating in their jurisdictions pursuant to a state video franchise.

2. Narrowly Tailored Restrictions

The prior section establishes that additional Commission action is necessary for effective enforcement of DIVCA provisions. We now seek to determine the most narrowly tailored means of ensuring this enforcement.

A clear way to ensure effective enforcement of statutory provisions is to limit awards of state video franchises to standalone communications companies. These companies either are (i) not affiliated with any other California communications provider or (ii) responsible for any and all of their corporate family's broadband, telecommunications, and video services in California. The corporate structure of these companies does not allow evasion of cross-sector obligations imposed by DIVCA. Compliance would be demonstrated and assessed for an entire corporate enterprise at one time, not on a piecemeal affiliate-by-affiliate basis.

Our authority to adopt this type of restriction is supported by DRA and Los Angeles and Carlsbad Responders. DRA states that "the Commission should have the flexibility to determine the operating entity of a corporation that shall hold the single franchise on behalf of the corporation and its subsidiaries and affiliates in the state."127 Implicitly recognizing this authority, Los Angeles and Carlsbad Responders make recommendations for what type of operating entity should be allowed to hold a single franchise for a corporate family. The localities recommend that we mandate that "only one company - which does not have to be the ultimate parent entity - within a family of companies may hold a state franchise . . . ."128 We recognize that there is merit to this proposal.129

Authority notwithstanding, we, however, conclude that we would impose an unreasonable burden if we required a parent company to hold a state video franchise on behalf of its larger corporate enterprise. Many parties point out problems with our prior proposal.130 In particular, we recognize that many corporate enterprises currently do not place all their California operations into one single California operating entity. CCTA asserts that many video service providers "hold franchises in hundreds of communities in California using a myriad of corporate structures," and "[a]ny requirement to `roll up' or combine these entities into a single parent or other entity will trigger significant unintended consequences, including tax liabilities and other costs."131

We do not seek to trigger the imposition of new tax burdens or other costs on entities organized in a manner different from that best suited to our enforcement of statutory provisions. Thus, we will design our restrictions with more flexibility as to when a company may apply for a state video franchise.

Instead, we will award a state video franchise only if an applicant states in its application affidavit that it and all its affiliates' operations will be included for the purposes of applying Public Utilities Code §§ 5840, 5890, 5940, and 5960. Specifically, the applicant must attest to compliance with three provisions. First, the applicant or its parent assumes responsibility for producing reports for and on behalf of any and all of its California affiliates. Second, the applicant includes its affiliates' telephone customers for the purposes of determining applicability of build-out requirements. Third, the applicant refrains from using any increase of its or its affiliates' rates for its stand-alone, residential, primary-line, basic telephone service to finance the cost of deploying a network to provide video service. These stipulations, detailed in Appendix C, ensure that no state video franchise holder may evade DIVCA requirements due to the specific nature of its corporate structure.

Similar to our definition of affiliate set forth in R.92-08-008, we use the following definition of affiliate in this context:

"Affiliate" means any company 5 per cent or more of whose outstanding securities are owned, controlled, or held with power to vote, directly or indirectly either by a state video franchise holder or any of its subsidiaries, or by that state video franchise holder's controlling corporation and/or any of its subsidiaries as well as any company in which the state video franchise holder, its controlling corporation, or any of the state video franchise holder's affiliates exert substantial control over the operation of the company and/or indirectly have substantial financial interests in the company exercised through means other than ownership.132

This definition addresses SureWest's concern that a rule regarding affiliates is "is ambiguous without any Commission direction regarding how it will define `affiliate' for purposes of enforcing the proposed rule."133 In response to SureWest, we determine that it is not necessary to "conduct an inquiry into how [we] will define `affiliate' for purposes of applying the proposed rule."134 This definition of "affiliate," as applied to public utilities, has been adequate for our reporting purposes for quite some time.

We further find that it is appropriate that this definition of affiliate encompasses wireless broadband providers affiliated with state video franchise holders. Contrary to Verizon's assertions, collection of wireless broadband data is required and expected by DIVCA. "Broadband," as used in Public Utilities Code § 5960, is not limited to wireline technologies. Public Utilities Code § 5830(a) defines "broadband" as "any service defined as broadband in the most recent Federal Communications Commission inquiry pursuant to Section 706 of the Telecommunications Act of 1996 (P.L. 104-104)." The Federal Communications Commission (FCC) currently uses the term "broadband" and "advanced telecommunications capability" to describe services and facilities with an upstream (customer-to-provider) and downstream (provider-to-customer) transmission speed of more than 200 kilobits per second.135 Thus, any wireline or wireless service meeting the FCC's speed threshold is subject to DIVCA's broadband reporting requirements.

Public Utilities Code § 5960 even explicitly anticipates collection of data on broadband provided by non-wireline technologies. Among other items required to be included in annual broadband reports, Public Utilities Code § 5960(b)(1)(C) instructs state video franchise holders to give the Commission information on "whether the broadband provided by the holder utilizes wireline-based facilities or another technology." This provision indicates that the Legislature contemplated that broadband reporting requirements would encompass more than just wireline service.

Finally, we take Los Angeles and Carlsbad Responders' recommendation and require applicants to make attestations to ensure effective local enforcement of DIVCA provisions. We revise the application affidavit to ensure that a single, qualified corporate entity will be responsible for DIVCA compliance. This entity shall accept service of process and submit to the jurisdiction of California courts.

62 DRA Opening Comments at 6.

63 Id.

64 DRA Reply Comments at 12.

65 League of Cities/SCAN NATOA Opening Comments at 15.

66 Id.

67 Los Angeles and Carlsbad Responders Reply Comments at 7.

68 Id. at 6.

69 Id. at 6-7.

70 Id. at 7.

71 Id.

72 Id.

73 Id.

74 Id.

75 Los Angeles and Carlsbad Responders Opening Comments on the PD at 9.

76 Id. at 8.

77 Verizon Opening Comments at 14.

78 Id. at 15.

79 Id.

80 Id. at 16.

81 Id.

82 Id. at 17.

83 Id.

84 Id. at 18.

85 Id.

86 Verizon Opening Comments on the PD at 4.

87 Id. at 5-6.

88 Id. at 7.

89 AT&T Opening Comments at 5.

90 Id.

91 Id. at 6.

92 Id. at 6-7.

93 Id. at 7.

94 SureWest Opening Comments at 10.

95 Id. at 11.

96 Id.

97 Id.

98 Id.

99 Id. at 4-5. See also Cal. Pub. Util. Code § 5830(i) ("`Holder' means a person or group of persons that has been issued a state franchise from the commission pursuant to this division.").

100 SureWest Opening Comments at 4.

101 Id. at 5.

102 Id. at 6.

103 Small LECs Opening Comments at 4.

104 Id. at 4.

105 Id. at 5.

106 Id.

107 Id. at 6.

108 Small LECs Reply Comments at 5.

109 CCTA Opening Comments at 6.

110 Id.

111 Id. at 8.

112 Id.

113 CCTA Reply Comments at 6.

114 CCTA Opening Comments at 8.

115 Los Angeles and Carlsbad Responders Reply Comments at 6.

116 League of Cities/SCAN NATOA Opening Comments at 15.

117 DRA Opening Comments at 6. See League of Cities/SCAN NATOA Opening Comments at 15 (arguing that our allowing "multiple franchises to be held under one parent corporation would be confusing, redundant, and an unnecessary waste of the Commission's resources"); Los Angeles and Carlsbad Responders Reply Comments at 6 (finding that "concerns regarding the potential for evasion of statutory obligations, through the holding of multiple state franchises via multiple entities, are `well founded'").

118 CCTA Opening Comments at 8.

119 AT&T Opening Comments at 5.

120 Cal. Pub. Util. Code § 5890(b) (emphasis added).

121 Nevertheless, we find that the existence of other relevant Public Utilities Code provisions largely alleviates these enforcement concerns for the time being. Section XV explains that federal requirements and other Commission regulations already prevent cross-subsidization between telecommunications services and non-telecommunications services. See 47 C.F.R. 64.901 (requiring the accounting separation of telecommunications costs from the non-telecommunications costs for telecommunications utilities); Cal. Pub. Util. Code § 709.2 (directing the Commission determine "that there is no improper cross-subsidization of intrastate interexchange telecommunications service by requiring separate accounting records to allocate costs for the provision of intrastate interexchange telecommunications service and examining the methodology of allocating those costs"); Cal. Pub. Util. Code § 495.7 (requiring tariffing of basic residential rates). Moreover, the two-year telecommunications basic rate price caps in Public Utilities Code § 5950 give special effect to the cross-subsidization prohibition found in Public Utilities Code § 5940.

122 Cal. Pub. Util. Code § 5960(b)(1).

123 Id. at § 5960(b)(2)-(3).

124 CCTA Reply Comments at 7.

125 Cal. Pub. Util. Code § 5810(2)(A).

126 But see SureWest Opening Comments at 11 (contending that we need to develop a further record with respect to when a company may receive a state video franchise).

127 DRA Reply Comments at 12.

128 Los Angeles and Carlsbad Responders Reply Comments at 7.

129 We agree, upon further review, that we need not require a parent company to hold a state video franchise on behalf of its corporate family. Many parties point out problems with this proposal. AT&T Opening Comments at 6; CCTA Opening Comments at 6; Los Angeles and Carlsbad Responders Reply Comments at 7; Small LECs Reply Comments at 5; SureWest Opening Comments at 4-5; Verizon Opening Comments at 14.

130 AT&T Opening Comments at 6; CCTA Opening Comments at 6; Los Angeles and Carlsbad Responders Reply Comments at 7; Small LECs Reply Comments at 5; SureWest Opening Comments at 4-5; Verizon Opening Comments at 14.

131 CCTA Opening Comments at 6.

132 R.92-08-008 at 43.

133 SureWest Opening Comments at 11.

134 Id.

135 Federal Communications Commission, Availability of Advanced Telecommunications Capability in the United States, Fourth Report to Congress, FCC 04-208, 10 (Sept. 9, 2004). This definition, however, is under review by the FCC, and it may evolve in response to rapid technological changes in the marketplace. Id.

136 These factors include consumer equipment, weather, topography, and environmental considerations.

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