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Resolution No. 84-18B CITY OF TIGARD, OREGON RESOLUTION NO. 84 - _.Lgg A RESOLUTION OF THE TIGARD CITY COUNCIL STATING ITS OPPOSITION TO HR 4103 DEALING WITH CABLE POLICIES. WHEREAS, the Tigard City Council, having reviewed the provisions of HR 4103, has determined that this is an unsound 'bill strongly favoring the interests of cable operators and against the interests of cities and their traditional franchising powers; and, WHEREAS, the Tigard City Council has determined that it is necessary to communicate to the Oregon congressional delegation and other interested members of Congress that adoption of the National League of Cities Cable Policies is necessary to protect the interests of consumers in both existing and new franchise agreements; and, WHEREAS, the major objections to HR 4103 are as follows: Rate Regulation. HR 4103's restrictions on municipal authority to regulate subscriber rates will preclude meaningful rate regulation in most communities for the following reasons: (1) all rate regulation will eventually terminate in any community served by four or more over-the-air television stations; (2) HR 4103's definition of basic service is very limited and in conflict with the definition of basic service included in many existing franchises; (3) only limited grandfathering of rate regulation under existing franchises is provided and applies only for the longer of five years or one-half the remaining life of the franchise; and (4) even if basic service rates are subject to regulation, the cable operator is entitled to annual automatic rate increases based on the increase in the consumer price index. Leased Access. HR 4103 does not authorize cities to establish leased access requirements in the franchise for the provision of non-video services (e.g., security services) by competitive service providers, authority which is necessary to ensure that the cable operator does not abuse its monopoly position. Moreover, HR 4103 establishes minimal federal leased access requirements with inadequate enforcement provisions for the provision of video programming and preempts state and local jurisdiction in this area. Because these standards apply only to systems with 36 or more channels most communities would be denied the benefits of even these inadequate leased access provisions. Abrogation of Contracts. HR 4103 would authorize the abrogation of contractual provisions requiring the provision of particular services and facilities by allowing the cable operator to remove facilities and services required by the franchise whenever there has been a significant change in circumstances. Franchise Renewal. HR 4103 establishes franchise renewal standards and procedures which are heavily weighted in the cable operator's favor and strip cities of their authority to obtain reasonable upgrades of cable systems or deny renewal to an operator who has provided poor service. The inequitable RESOLUTION NO. 84-- S Page I ■ nature of the renewal provisions is due to the following factors: (1) a strong presumption of renewal is established; (2) decision-making authority is effectively removed from the city by requiring de novo court review unless the actual decision is made by an independent hearing examiner or administrative law judge; and (3) a minimum buy out price which is unaffordable is established, making transfer of the franchise to a new company very difficult. Additionally, the renewal provisions are likely to increase the vulnerability of cities to anti-trust challenge because they require anti-competitive conduct, but do not include a provision immunizing cities from anti-trust challenge. Grandfathering. HR 4103 does not provide any grandfathering protection for franchise processes which were begun after October 31, 1982, but not actually completed until after the bill's date of enactment. Moreover, HR 4103 provides only minimal grandfathering for existing franchises as their rate regulation provisions are not fully grandfathered, the removal of facilities and services required by the franchise is authorized whenever there has been a significant change in circumstances, and their leased access, buy out, and renewal provisions are invalidated. NOW, THEREFORE, BE IT RESOLVED by the Tigard City Council that: Section 1: The Mayor is instructed to transmit copies of this resolution to the Oregon Legislature delegation and other interested members of Congress. Section 2: That a copy of the National League of Cities Resolution 26 be attached and incorporated into this resolution as a positive statement of the City of Tigard on national legislation issues. Section 3: This resolution shall become effective immediately upon passage. PASSED: This _ �—f1� day of mak-Gh 1984. Mayor - City of Tigard ATTEST: W1. v Deputy City Recorder - City of Tigard (JM:pm/1286A) RESOLUTION NO. 84-- ice Page 1 PROPOSED RESOLUTION - R26 THE PROTECTION OF LOCAL, AUTHORITY AND CONSUMER.INTERESTS IN CABLE LEGISLATION '11HEREAS, provision of cable television service has proven to be a valuable service to hundreds of communities across the country and holds great promise to all cities in the United States; and f WHEREAS, local governments have had the responsibility for franchising cable television systems in their cities and for overseeing the implemen- tation of those franchises once awarded; and WHEREAS, the presence of a.strong local governmental role in the overseeing of franchise agreements has worked to ensure that contractual obligations are carried our- and the public interest served; and WH-REAS, since 1981, the National Municipal Policy of the League has called for the pursuit of federal cable television legislation which protects local regulatory authority; and WI—MREAS, the National League of Cities has provided valuable leadership in developing such legislation; and WHEREAS, the 'U.S. House of Representatives has been deliberating on federal cable television legislation; and hdEREAS, the National League of Cities recognizes that since the U.S. Senate adopted S_ 66, circumstances have changed due in part to the complexity of the legislative agenda involving telephone deregulation as well as to rapidly developing technology in the field of tele- communications; NOW, THEREFORE, BE IT RESOLVED that the National League of Cities continue its efforts to achieve cable legislation, consistent with the following goals: a that local and state governments not be limited in their option to negotiate the definition of basic services and to regulate the rates charged by cable television companies for basic service, should they believe it to be in the public interest; a that at the time of franchise renewal, 'cities be able to obtain reasonable upgrades of system hardware to "state-of-the-art" standards; be able to refuse renewal to an operator which has given poor serv_ce during the life of the franchis^; be able to negotiate the purchase price of a cable franchise when a municipality buys back a cable system or the system L' 2 is trans£erred _to a third party through a forced sale; and that any court review will not be de novo_ and court review of renewal or non-renewal decisions be the same as that accorded other legislative decisions; • that all existing franchises and their terms and conditions and all franchise processes in which Request for Proposals has been issued be grand- _ fathered; ' • that the legislation protect cities from antitrust liability for compliance with federal law; • that any limitation on franchise fees not apply to fees, charges and taxes charged to or through a cable operator as part of a larger class, for example, utility user taxes; • that federal cable legislation not restrict the ability of cities to require public, educational, governmental and leased access to cable television; • that cable companies not be provided with the power to abrogate contractual obligations based on a �• unilateral assertion of a "significant change in circumstances"; and • that local government not be restricted from municipal ownership and operation, i t - Approved by the Membership of the National League of Cities • annual Business Meeting • Tovember 30, 1983 m New Orleans