TN: Final Language of the Tennessee Franchise Reform Bill and Amendments

Posted on April 24, 2008 - 6:49am.

from: Elliott Mitchell
Music City Arts TV9 / iQ TV10

Attached, please find the final language of the Franchise "Reform" Legislation in the General Assembly in Tennessee.

There has been some criticism of the draft version of this legislation, and insofar as I can tell the final version is identical to the draft.

I will be the first to tell you that the bill is imperfect, but I also know some of its genesis and was privileged to be among the PEG folks asked to help the Tennessee Municipal League understand and object to many of the demands of both Telco and Cable during closed-door "negotiation." I believe I can report that due to TML's help, PEG in Tennessee dodged several major bullets, where other states have been not so fortunate.

Below is an updated version of my unqualified take on the legislation:

Yes, the new legislation is a mixed bag but in retrospect:

From the statewide perspective of PEG Providers, these were the issues with the original bill:

A 12 month delay before activating PEG channels on AT&T

A requirement for 8 hours of non-repeated contiguous programming every calendar day, 365 days a year.

A complete loss of funding under AT&T (which would apply to cable as well)

Loss of picture quality under AT&T

Burden of paying for encoders and backhaul circuits under AT&T (which would apply to Cable as well). We know those are very expensive and the backhaul charges repeat forever.

The use of our programming outside of our normal distribution areas

Here's what happened:

Delay before activation:
Reduced from 12 months to 90 days following request for activation.

Non-repeated contiguous programming every calendar day:
For the First Activated PEG Channel (however that is determined) the measure is eight hours per day, on average, for each quarter, including Character Generator. For each subsequent PEG channel the minimum rises to 10 hours per business day. NB: The "business day" label. That was included to protect school-operated PEG channels that do not operate over Summer Vacation. Repeats are allowed but no more than two transmissions per day or 6 during a business week shall count as qualified programming.

This is interesting, as the new legislation allows moving PEG channels to the digital tier only under rather strict circumstances. If a county or municipailty has more than 3 channels, the first channel in excess of 3 may be migrated to another tier after 120 days' notice, but it can only be moved to a tier where there is at east 50% subscribership. The next channel in excess of 3 may not be moved any sooner than 2 years following the effective date of the legislation (that's PEG channel 5, remember). If a city or a county has 3 PEG channels, the first maybe be moved after 120 days' notice, but again only to a tier of service to which at least 50% of te subswcribers served in the area actually subscribe.

loss of funding:
Existing funding will continue until the end of the incumbent franchise.
Then funding is 1% of gross revenues over and above 5% franchise fees. For most of us, that is a significant boon, for those of us for whom that is a loss, the law allows them to continuing recieving funding that was over and above the 1%.

Loss of picture quality:
This was non-negotiable with AT&T, but we don't expect cable to retrofit to match the AT&T Final Solution to the PEG Problem, we only expect to be slammed and our channels moved out of the basic tier. NB: we expect to be slammed although the process will probably take years: If we're not important enough to our viewers to find us on new channels, we're not that important. Also NB: Cable cannot just sweep us all to new tiers willy-nilly, they must be tiers with at least 50% subscribership.

Burden of paying for encoders and backhaul:
The entire responsibility for taking our signals from the studio/PEG center to the cable/AT&T networks remains the responsibility of the provider. Any compressing/encoding required for AT&T's network will be at AT&T's expense. PEG does not pay a cent, the cities do not pay a cent. The National Television System Committee (NTSC) is how we currently produce and transmit programming. "Advanced Television Committee Standards" are the High Definition standards to which most of aspire. This was included specifically to place the burden of converting our signals to U-Verse compression camp #99 standard squarely in AT&T's lap.

Using our programming outside of our traditional areas:
PEG lost on this one, but there is hope: If the cable operators remain as cranky as they have been over the years, they still won't allow AT&T to cross connect to their signals to get our programming. That can only mean that AT&T will have to bring their encoders to us, install them and connect them to their network. I can't speak for other PEG stations in Tennessee, but in Nashville we're completely equipped to split off our feed to AT&T from our feed to Comcast so if we find ourselves in a bind over the exporting of our programming, we'll simply not send it to AT&T. In fact, we'll probably send replacement programming with regular interruptions to the effect that our normal programming is not available to AT&T subscribers, but is available from cable.

That ought to go over real well with AT&T but as long as we don't show the cable operator's logo, we're legal.

Don't take my word as Gospel, I'm too much of a backslider for that, but the above is how I read Section 10 of the attached legislation.


HA1245.pdf242.59 KB
( categories: AT&T | State Franchises | TENNESSEE )