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April 25, 2011

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

Dear Mayor:

This week the Senate is expected to vote on S-2664/A-3766.  Your action is still needed to stop this legislation which removes municipal benefits from systemwide cable franchises, now and going forward.  See more details in our earlier letters of February 23. and March 18.

Why the League opposes S-2664/A-3766:

  1. The bill reduces the current obligation of a systemwide cable franchise to provide cable and internet connections to all municipal buildings 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.
  2. 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.
  3. 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.
  4. 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. 
  5. 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.
  6. 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.  A company could unilaterally convert to a systemwide franchise fee and gain related advantages while not being subject to the higher franchise fee.
  7. 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.

Please do the following:

    • Share this letter with your Cable TV Advisory committee if you have established one.
    • Learn how many video and internet drops are provided to your schools, fire and police offices and all other municipal offices through your cable franchise.
    • Learn how many return feeds are provided by your cable franchise.
    • Consider the total cost of those to your community.
    • Contact your Senator and inform them of the possible impact on your community if you have to pay for each of those drops and ask them to have a fiscal impact note prepared for this bill

It is very important you contact your Senator and the Governor’s office again and ask them to oppose and veto this legislation which will increase costs for local government.  

Again, these bills as amended remove benefits from municipalities and will increase costs for local governments.

If you require any further clarification on this please contact Michael Darcy at the League

Very truly yours,

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




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