BILL REQ. #:  S-0394.4 

Read first time 02/13/2007.   Referred to Committee on Water, Energy & Telecommunications.

     AN ACT Relating to statewide authorization for the provision of cable service or video service by competitive cable service providers and competitive video service providers in competition with incumbent cable operators; and adding a new chapter to Title 80 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   It is the intent of the legislature to establish a goal of promoting competition and consumer choice for cable television service.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Cable service" is defined as set forth in 47 U.S.C. Sec. 522(6).
     (2) "Cable operator" is defined as set forth in 47 U.S.C. Sec. 522(5).
     (3) "Cable system" is defined as set forth in 47 U.S.C. Sec. 522(7).
     (4) "Commission" means the Washington utilities and transportation commission.
     (5) "Competitive cable service provider" means an entity authorized by this chapter to provide cable service over a cable system other than the incumbent cable operator providing service in the area to be served by the competitive cable service provider.
     (6) "Competitive video service provider" means an entity authorized by this chapter to provide video service. This term does not include a cable operator, and a competitive video service provider may not be considered a cable operator and the facilities of a competitive video service provider may not be considered a cable system.
     (7) "Competitive cable service provider fee" means the amount paid by a competitive cable service provider under section 4 of this act.
     (8) "Competitive video service provider fee" means the amount paid by a competitive video service provider under section 4 of this act.
     (9) "Franchise" means an initial authorization, or renewal of an authorization, regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, that authorizes the construction and operation of a cable system or video service provider's network in the public rights-of-way.
     (10) "Incumbent cable operator" means the provider serving the largest number of cable television service subscribers in a particular local franchise service area on July 1, 2007.
     (11) "Local government" means any city, town, and county or other municipality of this state.
     (12) "Public rights-of-way" means the area on, below, or above a public roadway, highway, street, public sidewalk, alley, waterway, or utility easements dedicated for compatible uses.
     (13) "Video programming" means programming provided by, or generally considered comparable to programming provided by, a television broadcast station, as set forth in 47 U.S.C. Sec. 522(20).
     (14) "Video service" means video programming services provided through wireline facilities located at least in part in the public rights-of-way without regard to delivery technology, including internet protocol technology. This definition does not include any video programming provided by a commercial mobile service provider defined in 47 U.S.C. Sec. 332(d) or cable service provided by a competitive cable service provider.

NEW SECTION.  Sec. 3   (1) A competitive cable service provider or competitive video service provider seeking to provide cable service or video service in the state of Washington after the effective date of this section shall file an application for authorization with the commission as required by this section.
     (2) The commission shall issue an authorization permitting a competitive cable service provider or a competitive video service provider to provide cable service or video service in the state of Washington within thirty calendar days after receipt of a completed affidavit submitted by the competitive cable service provider or competitive video service provider and signed by an officer or general partner of the applicant affirming the following:
     (a) That the applicant agrees to comply with all applicable federal and state laws and regulations;
     (b) A written description of the city, town, county, or other municipality of this state to be served, in whole or in part, by the applicant, which written description must be amended by the applicant before the provision of cable service within an area not described in a previous application or amendment filed by the applicant. For purposes of this subsection (2)(b), a map or other graphic representation may supplement, but not substitute for, the written description; and
     (c) The location of the principal place of business and the names of the principal executive officers of the applicant.
     (3) A holder of a state authorization to provide cable service or video service who seeks to amend the authorization to include additional areas to be served must file an amended application with the commission that reflects the new areas to be served.
     (4) The authorization issued by the commission is fully transferable to any successor in interest to the applicant to which it is initially granted. A notice of transfer must be filed with the commission within thirty days after the completion of such a transfer.
     (5) The authorization issued by the commission may be terminated by the competitive cable service provider or competitive video service provider by submitting notice to the commission.
     (6) To the extent required by applicable law, any cable or video service authorization granted by this chapter by the commission constitutes a "franchise" for purposes of 47 U.S.C. Sec. 541(b)(1). To the extent required for purposes of 47 U.S.C. Secs. 521 through 561, only the state of Washington shall constitute the exclusive "franchising authority" for competitive cable service providers and competitive video service providers in the state of Washington.
     (7) Neither the commission, nor any other state agency, nor any local government, nor any other political entity of the state of Washington may:
     (a) Require a competitive cable service provider or competitive video service provider to obtain a separate franchise; or
     (b) Otherwise impose any fee or franchise requirement on any competitive cable service provider or competitive video service provider except as provided in this chapter. For purposes of this subsection (7)(b), a franchise requirement includes, without limitation, any provision that:
     (i) Regulates the rates charged by competitive cable service providers or competitive video service providers;
     (ii) Requires competitive cable service providers or competitive video service providers to satisfy any build-out requirements or deploy any facilities or equipment; and
     (iii) Requires a franchise to be approved by a vote of the people.
     (8) Not later than one hundred eighty days after a request by a local government in which the competitive cable service provider or the competitive video service provider is providing cable service or video service, the holder of a state authorization to provide cable service or video service shall designate a sufficient amount of capacity on its communications network to allow the provision of a comparable number of channels or capacity of public, educational, and governmental noncommercial programming provided by the incumbent cable operator.
     (9) The content to be provided over this public, educational, and governmental access under this section is the responsibility of the local government receiving the benefit of the capacity and the holder of a state authorization to provide cable service or video service bears only the responsibility for the transmission of the content, subject to technological restraints.
     (10) The local government must ensure that all transmissions, content, or programming to be transmitted by a holder of a state authorization to provide cable service or video service are provided or submitted to the competitive cable service provider or competitive video service provider in a manner or form that is capable of being accepted and transmitted by a provider, without requirement for additional alteration or change in the content by the provider, over the particular network of the competitive cable service provider or competitive video service provider, which is compatible with the technology or protocol utilized by the competitive cable service provider or competitive video service provider to deliver services.
     (11) Where technically feasible, the holder of a state authorization to provide cable service or video service and an incumbent cable operator must use reasonable efforts to interconnect their cable or video systems for the purpose of providing public, educational, and governmental programming. Interconnection may be accomplished by direct cable, microwave link, satellite, or other reasonable method of connection. Holders of a state authorization to provide cable service or video service and incumbent cable operators must negotiate in good faith and incumbent cable operators may not withhold interconnection of public, educational, and governmental channels.
     (12) If an incumbent cable operator pays any fee to a local government for public, educational, and governmental channels, any subsequent holder of a state authorization to provide cable service or video service that includes the local government must pay this fee at the same rate. All fees collected under this subsection (12) must be used only for the support of the public, educational, and governmental channels.
     (13) A court of competent jurisdiction has exclusive jurisdiction to enforce any requirement under this section.
     (14) Except as provided in subsections (1) through (12) of this section, competitive cable service providers and competitive video service providers enjoy the same rights under the law of the state of Washington as incumbent cable operators and other providers of video programming.
     (15) The commission is solely responsible for enforcing the provisions of this chapter by filing a complaint in a court of competent jurisdiction.
     (16) Nothing in this chapter is intended to abrogate, nullify, or adversely affect any franchise or other contractual rights, duties, or obligations existing and incurred by a cable operator as of the effective date of this section. A cable operator with an existing franchise with a local government to provide cable service in the state as of the effective date of this section is not eligible to obtain a state authorization to provide cable service or video service for any area for which the cable operator has an existing franchise agreement with the local government, or any portion thereof, until the expiration date of the existing franchise agreement.

NEW SECTION.  Sec. 4   (1) A competitive cable service provider or competitive video service provider will provide notice to each local government with jurisdiction in which a competitive cable service provider or competitive video service provider begins to offer cable service or video service.
     (2) In any locality in which a competitive cable service provider offers cable service or a competitive video service provider offers video service, the competitive cable service provider or competitive video service provider must calculate and pay the competitive cable service provider or competitive video service provider fee to the local government with jurisdiction upon the local government's written request. If the local government makes such a request, the competitive cable service provider or competitive video service provider fee is due on a quarterly basis, forty-five days after the close of the quarter, and must be calculated as a percentage of gross revenues, as defined in this section. The local government may not demand any additional fees or charges from the competitive cable service provider or competitive video service provider except as provided by this chapter, and may not demand the use of any other calculation method.
     (3) The percentage to be applied against gross revenues under subsection (1) of this section must be set by the local government and identified in its written request equal to the percentage paid by the incumbent cable operator or five percent, whichever is less.
     (4) For purposes of this section, "gross revenues" means all consideration of any kind or nature, including, without limitation, cash, credits, property, and in-kind contributions (services or goods) received by the provider from subscribers for the provision of cable service over a cable system by a competitive cable provider or video service by a competitive video service provider within the local government's jurisdiction. Competitive cable service providers and competitive video service providers are subject to and are only required to pay either the competitive cable service provider fee or the competitive video service provider fee but in no event may a provider be subject to both the competitive cable service provider and competitive video service provider fees.
     (5) For purposes of this section, "gross revenues" does not include:
     (a) Revenues not actually received, even if billed, such as bad debt;
     (b) Revenues received by any affiliate or any other person in exchange for supplying goods or services used by the provider to provide cable service or video service;
     (c) Refunds, rebates, or discounts made to subscribers, leased access providers, advertisers, or any local government;
     (d) Any revenues from services not classified as cable service or video service, including, without limitation, revenue received from telecommunications services, revenue received from information services, revenue received in connection with advertising, revenue received in connection with home shopping services, or any other revenues attributed by the competitive cable service provider or competitive video service provider to noncable service or nonvideo service in accordance with any applicable laws, rules, regulations, standards, or orders;
     (e) Any revenue paid by subscribers to home shopping programmers directly from the sale of merchandise through any home shopping channel offered as part of the cable services or video services;
     (f) The sale of cable services or video services for resale in which the purchaser is required to collect the five-percent fee from the purchaser's customer;
     (g) Any tax of general applicability imposed upon the competitive cable service provider or competitive video service provider or upon subscribers by a city, state, federal, or any other governmental entity and required to be collected by the competitive cable service provider or competitive video service provider and remitted to the taxing entity including, but not limited to, sales or use tax, gross receipts tax, excise tax, utility users tax, public service tax, and communication taxes, and including the five-percent fee specified in this subsection;
     (h) The provision of cable services or video services to public institutions, public schools, or governmental entities at no charge;
     (i) Any foregone revenue from the competitive cable service provider's or competitive video service provider's provision of free or reduced-cost video service to any person, including, without limitation, any municipality and other public institutions or other institutions;
     (j) Sales of capital assets or sales of surplus equipment;
     (k) Reimbursement by programmers of marketing costs incurred by the competitive cable service provider or competitive video service provider for the introduction or promotion of new programming;
     (l) Directory or internet advertising revenue including, but not limited to, yellow page, white page, banner advertisement, and electronic publishing; and
     (m) Copyright fees paid to the United States copyright office.
     (6) At the request of a local government, but no more than once per year, the commission may retain an independent auditor to perform reasonable audits of the competitive cable service provider's or competitive video service provider's calculation of the competitive cable service provider or competitive video service provider fee. The requesting local government and the competitive cable service provider or competitive video service provider shall each bear their own costs associated with such an audit. The requesting local government shall also bear the commission's costs, including but not limited to, the commission's cost to retain an independent auditor to perform an audit.
     (7) Any competitive cable service provider or competitive video service provider may identify and collect the amount of the competitive cable service provider or competitive video service provider fee as a separate line item on the regular bill of each subscriber.

NEW SECTION.  Sec. 5   (1) A local government may grant a use permit under chapter 35.99 RCW to the holder of a state authorization to provide cable service or video service to install, maintain, repair, or remove a communications network within public rights-of-way and must provide the holder of a state authorization to provide cable service or video service with open, comparable, nondiscriminatory, and competitively neutral access to the public rights-of-way. Consistent with chapter 35.99 RCW, requirements otherwise applicable to holders of master permits are deemed satisfied by a holder of a statewide authorization to provide cable service or video service in good standing.
     (2) A local government may not discriminate against the holder of a state authorization to provide cable service or video service regarding, without limitation:
     (a) The authorization or placement of a communications network in public rights-of-way;
     (b) Access to a building; or
     (c) A municipal utility pole attachment term.
     (3) A local government may impose on a competitive cable service provider or competitive video service provider a permit fee only to the extent it imposes such a fee on incumbent cable operators, and any fee may not exceed the actual, direct costs incurred by the local government for issuing the relevant permit. In no event may a fee under this subsection be levied:
     (a) If the competitive cable service provider or competitive video service provider already has paid a permit fee of any kind in connection with the same activity that would otherwise be covered by the permit fee under this subsection or is otherwise authorized by law or contract to place the facilities used by the competitive cable service provider or competitive video service provider in the public rights-of-way; or
     (b) For general revenue purposes.

NEW SECTION.  Sec. 6   A competitive cable service provider or competitive video service provider that has been granted a state authorization to provide cable service or video service may not deny access to service to any group of potential residential subscribers because of the income, race, or national origin of the residents in the local area in which such a group resides.

NEW SECTION.  Sec. 7   (1) The provisions of this chapter are intended to be consistent with the federal cable act, (47 U.S.C. Sec. 521 et. seq.).
     (2) Except as otherwise stated in this chapter, nothing in this chapter may be interpreted to prevent a competitive cable service provider, competitive video service provider, a cable operator or a local government from seeking clarification of its rights and obligations under federal law or to exercise any right or authority under federal or state law.

NEW SECTION.  Sec. 8   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 9   Sections 1 through 8 of this act constitute a new chapter in Title 80 RCW.