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March 21, 2011

Re:  S-2664 Market Competition Consumer Choice Act” Tabled in Senate

Dear Mayor,

Due in no small part to mayors raising their collective voices, today the Senate tabled S-2664.  This legislation already passed the Assembly and would deregulate the phone and cable TV industry and hurt municipalities.  We anticipate the Senate will not consider this legislation again until later this spring.  Municipal action will again be important at that time.

The League opposes S-2664 for the following reasons:

  1. S-2664 will result in the loss of important benefits and service to which communities are currently entitled.

  2. The bill reduces the current obligation of a systemwide cable franchise to provide cable and internet connections to all municipal buildings, libraries and emergency response facilities at no charge to a municipality. This is an attempt to avoid legitimate responsibilities associated with a community’s cable related needs, while creating increased costs for municipalities.

  3. When a company converts from a municipal consent-based franchise to a system-wide franchise they are not automatically required to pay the 4% franchise fee.  Under this bill, a company could unilaterally convert to a systemwide franchise fee and gain related advantages while not being subject to the higher franchise fee.

  4. The bill does not require the cable companies to provide a return feed to allow cable-casting of live municipal events. Municipalities seek to preserve live cablecasting of local emergencies and events, a legitimate community cable related need.

  5. The bill does not require systemwide franchises 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.  The line extension requirement in current law is important to sparsely populated communities and must be retained so all citizens will be served regardless of where their home is located now or in the future.

  6. The bill has an inadequate process for determining whether a company is operating in a “competitive franchise area”.  Establishing whether competition exists determines obligations under all types of cable franchises.  There must be authority to verify assertions of competition and appeal such assertions to a competent neutral body. 

  7. The process set forth in the bill for renewal of a systemwide franchise does not require that the renewal be under the same terms and conditions as the original franchise.  Renewals and initial applications must be reviewed based on the same terms and conditions to assure consistent services are provided to communities.

  8. Under the bill, the right of a municipality operating under a municipal-consent based franchise to petition the BPU for a higher franchise fee is eliminated.  With the speed of innovation, municipalities must have recourse to recoup franchise costs that exceed franchise fees.  Such costs, if they occur, can not be shifted to property taxes.

Very truly yours,


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


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