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February 16, 2011

Re:    A-3766 S-2664 “Market Competition and Consumer Choice Act”

Dear Mayor:

The League has reviewed A-3766/S-2664, which are scheduled for a floor vote in the respective houses tomorrow Thursday February 17.  These bills as amended do not address all the issues the League raised during the committee hearing and do not include the benefits a municipality currently receives in consideration for the cable companies use of the municipal rights of way through systemwide or local cable franchises.

While we hope to continue working with the sponsors, we must urge you to immediately contact your Senator and Assembly delegation and ask them to oppose these bills if they come to a floor vote tomorrow.  Again, these bills as amended remove benefits from municipalities.

For example, 

  • The bill unduly restricts the obligation of a cable company to provide cable and internet connections to municipal and school buildings at no charge to a municipality;
  • The bill does not require the cable companies to provide a return feed to allow cable-casting of live municipal events;
  • The bill does not require cable companies to meet or surpass any existing line extension policy or to meet any applicable consumer protection requirements, all of which are required by the current law. 
  • Further, the Assembly bill as amended does not correct the following problems with the bill:
  • The verification process set forth in Section 2 for determining whether a company is operating in a “competitive franchise area” is inadequate.  (The cable company need only certify to the Secretary of State that there are at least two multi-channel video programming distributors offering programming in the area; this removes oversight from the BPU and provides no authority for the Secretary of State to verify the information provided by the cable company.)
  • The process set forth in Section 4 for renewal of a system-wide franchise must be corrected to require that the renewal be under the same terms and conditions as the original franchise.  It also must preserve authority for the BPU to establish rules governing the renewal when the company seeking renewal is in a competitive franchise area.
  • The process set forth in Section 6 for conversion of a municipal consent-based franchise to a system-wide franchise must be corrected to automatically require the cable company to pay the 4% franchise fee. 
  • Under Section 6, the right of a municipality operating under a municipal-consent based franchise to petition the BPU for a higher franchise fee must be retained.

Commitments were added to the law in 2006 when the systemwide was being negotiated in the Legislature.  At that time, there was an understanding that if cable companies were to be relieved of their obligation to negotiate with municipalities for a franchise, in return they would commit to provide certain services.  Cable companies should be required to continue to provide all those services as listed in NJSA 48:5A-28 paragraphs h through n. 

These bills should therefore be amended to ensure that all the commitments of NJSA 48:5A-28 be provided (a) upon application for a system-wide franchise, (b) upon renewal of a system-wide franchise and (c) upon conversion of a municipal-consent based franchise to a system-wide franchise.

If you request any further clarification on this please contact us.

Very truly yours,

Hon. Brian Wahler                                             William G. Dressel, Jr.
Mayor, Piscataway Township                             Executive Director
Chair, League Telecommunications Committee




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