The following is an extract from a 2014 law case of interest to CTAC. In particular, Section II reproduced below, details historical events that affect to date, the functioning of the Hamden, New Haven and West Haven CTAC. (ed webmaster)

DOCKET NO. HHD CV 12-6034434 S

SUPERIOR COURT

SOUND VIEW COMMUNITY MEDIA, INC.

JUDICIAL DISTRICT OF HARTFORD AT HARTFORD

V.

STATE OF CONNECTICUT PUBLIC UTILITIES REGULATORY AUTHORITY

MARCH 31, 2014

MEMORANDUM OF DECISION RE:

CROSS MOTIONS FOR SUMMARY JUDGMENT (#123 AND #124)

This declaratory judgment action concerns the constitutionality and the effectiveness of Number 08-159 of the 2008 Public Acts (P.A. 08-159 or act), enacted in the waning, minutes of the 2008 legislative session. The act was a legislative response to a long-running dispute between the plaintiff, Sound View Community Media, Inc. (Sound View), and certain of the six municipalities that Sound View serves as a third-party nonprofit provider of community access television. The dispute concerned whether educational and governmental community access programming should be regional or town-specific. Sound View favored regional programming, so that all subscribers throughout the region would, generally see the same programming, including educational and governmental programming from towns other than their own. Several of the towns, however, wanted town-specific educational and . . .

II

OVERVIEW OF CABLE TELEVISION REGULATION

An overview of cable television regulation is necessary to place the issues of this case in context. Cable television services have been regulated for decades by a “deliberately structured dualism” of federal and state law. Cable Television Report and Order, 36 F.C.C.2d 143,207 (1972). Before 1984, cable services were regulated by state and local governments through a franchising process. Local governments are “inescapably involved” in granting franchises because cable services require the use of public streets and rights of way for the laying of cables. Id. In 1984, Congress enacted the Cable Communications Policy Act of 1984 (Cable Act of 1984) to establish a national policy for local, state and federal regulation of cable television. H.R. Rep. No. 98-934, p. 19 (1984), reprinted in 1984 U.S.C.C.A.N. 4655, 4666.

Under federal law, cable operators must obtain a franchise from a franchising authority to offer cable services. See 47 U.S.C. § 522 (10). Under Connecticut law, the legislature granted franchising authority first to the Public Utilities Commission (PUC), then to its successor, DPUC, and now to PURA. See Cox Cable Advisory Council v. Dept. of Public Utility Control, 259 Conn. 56, 58 n.2, 788 A:2d 29 (2002) (noting that DPUC was then designated as the franchising authority for the state).

From the 1960s until changes in the law in 2007, cable providers in Connecticut were required to obtain a certificate of public convenience and necessity (CPCN) to build or operate a community antenna television system, more commonly known as CATV or simply as cable, in a particular service area. See Public Acts 1963, No. 425. By 2007, there were twenty-four cable franchise areas in Connecticut, encompassing every Connecticut municipality. Cable companies operating under CPCNs were subject to extensive regulation, including lengthy contested procedures for franchise applications and renewals, facility build-out requirements, rate regulation, and consumer protection and community access requirements. See General Statutes §§ 16-331 through 16-333p; Regs., Conn. State Agencies §§ 16-333-1 through16-333i-1.

As a historical matter,long before the Cable Act of 1984, state and local authorities had required cable companies to set aside certain channels for community access as a condition of the franchise grant. See Denver Area Educational Telecommunications Consortium, Inc. v. Federal Communications Commission, 518lJ.S. 727, 760-62,116 S. Ct. 2374, 135 L. Ed. 2d 888 (1996). The community access requirement was seen essentially as recompense for the use of public rights of way for the installation of cable facilities. Id., 734. Community access channels include those designated for public access (programming by anyone in the community on a first-come, first-served basis), educational access (programming by and about a community’s educational institutions), and governmental access (programming by and about local government operations). Collectively, public, educational, and governmental access channels are known as “PEG” channels. H.R. Rep. No. 98-934, p. 30 (1984), reprinted in 1984 U.S.C.C.A.N. 4655,4667.

In the Cable Act of 1984, Congress codified existing practices, authorizing franchising authorities to require cable franchise holders to designate some channels for public, educational, or governmental use. See 47 U.S.C. § 531; see also H.R. Rep. No. 98-934, p. 30 (1984), reprinted in 1984 U.S.C.C.A.N.4655, 4667. Consistent with federal-law, Connecticut requires cable franchise holders to designate channels for community access programming, which includes public, educational, and governmental access. See General Statutes § 16-331 (d) (1) and (3). Connecticut also requires that every cable franchise holder include all its community access channels in its basic service package. General Statutes § 16-331a (b). Funding for community access programming is provided through fees imposed on cable subscribers. General Statutes § 16-331 a (k). Under federal and state law, cable operators are generally prohibited from exercising editorial control over PEG channels.(2)
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(2) 47U.S.C. §531 provides in relevant part:

(b) Authority to require designation for public, educational, or governmental use. A franchising authority may in its request for proposals require as part of a franchise, and may require as part of a cable operator’s proposal for a franchise renewal, subject to section 626, that channel capacity be designated for public, educational, or governmental use, and channel capacity on institutional networks be designated for educational or governmental use, and may require rules and procedures for the use of the channel capacity designated pursuant to this section ….

(e) Editorial control by cable operator. Subject to section 624( d), a cable operator shall not exercise any editorial control over any public, educational, or governmental use of channel capacity provided pursuant to this section, except a cable operator may refuse to transmit any public access program or portion of a public access program which contains obscenity, indecency, or nudity.

General Statutes § 16-331a (g) provides:

No organization or company providing community access operations shall exercise editorial control over such programming, except as to programming that is obscene and except as otherwise allowed by applicable state and federal law. This subsection shall not be construed to prohibit such organization or company from limiting the hours during which adult programs may be aired. Such organization or company may consult with the advisory council in determining what constitutes an adult program for purposes of this subsection.

In Connecticut, community access programming is provided either by the cable company itself or by a third party nonprofit community access provider. Any nonprofit organization may apply, with or without the consent of the cable franchisee, to become the community access provider for a given franchise area or part thereof. See General Statutes § 16-331 (c). Of the twenty-four cable franchise areas in Connecticut, fourteen have community access provided by the cable franchisee, seven have community access provided by a third-party nonprofit organization covering the entire cable franchise area, two have separate nonprofit organizations for each municipality in the area, and one is divided, with the cable franchisee providing community access for one of the area towns and a third-party nonprofit organization providing community access for the remaining towns. See PURA Ex. 2, “Connecticut Public Access Channels and Studios.”

In the 1970s, by regulation, PURA’s predecessor agency, PUC, created local cable advisory councils in each cable franchise area to “give advice to the management of the cable television company upon such matters affecting the public as it deems necessary.” Regs., Conn. State Agencies § 16-333-30. The membership of each local council includes representatives of each of the towns in a franchise area where a CPCN has been granted to a cable television comp;my. Regs., Conn. State Agencies § J6-333-24. Members are appointed for two year terms and serve without compensation. Regs., Conn. State Agencies §§ 16-333-25 through 16-333-28.

Although initially created by regulation, local advisory councils have been incorporated into the statutory scheme governing cable franchises. Cable companies operating under CPCNs are required by statute to meet at least twice annually with the advisory council for their franchise area; General Statutes § 16-331 (c) (1); advisory councils are designated as intervenors in any contested case involving the franchise holder in their areas; General Statutes § 16-331 (c) (2); and one of the factors to be considered in determining whether to renew a franchise is “the operator’s effectiveness in dealing with the advisory counciL'” General Statutes § 16-331 (d) (1) (F). A cable company operating under a CPCN is required to contribute two thousand dollars a year to support the local advisory council. General Statutes § 16-331 c. Local advisory councils also play a role in the selection and monitoring of community access providers. See, e.g., General Statutes §§ 16-331a (c); 16-331a (h); 16-331a (j). The local advisory councils serve as the voice of the community in dealing with the cable companies and community access providers with respect to cable services, rates, community access, and other consumer issues.

Although the cable franchise laws expressly provided that cable franchises were nonexclusive, as a practical matter, only one cable company was operating in each franchise area before the mid-2000s. Changes in technology, however, led to substantial changes in the statutes governing cable services at that time.

In or around 2005, two telephone companies – Southern New England Telephone Company, an AT&T subsidiary, and Verizon-NY – announced plans to provide statewide video services through an internet protocol (lP). The DPUC initiated an investigation to determine whether IP video service constituted cable service and thus required the provider to .. obtain a CPCN. On June 7, 2006, over the vigorous objection of existing cable franchise companies: the DPUC held that IP video services were not cable services and that IP video providers would not be required to obtain a CPCN. See Decision, Department of Public Utility Control,”DPUC Investigation of the Terms and Conditions Under Which Video Products May Be Offered By Connecticut’s Incumbent Local Exchange Companies,” Docket No. 05-06-12 (June 7, 2006).

Existing cable franchise holders and consumer advocates were dismayed by DPUC’s decision. They feared that unregulated providers of video services would have a significant competitive advantage over heavily regulated cable providers and would have none of the public accountability or obligations to support community access programming. The Office of Consumer Counsel (Consumer Counsel), a statutory party in cable franchise proceedings, commenced an action in federal district court, seeking to have IP video services declared to be cable services under federal law. See Office of Consumer Counsel v. Southern New England Telephone Co., 515 F. Supp. 2d 269 (D. Conn. 2007), vacated, 368 Fed. Appx. 244 (2d Cir. March 5, 2010). The Consumer Counsel also filed an administrative appeal of the DPUC decision in state court.

While the various actions were pending, the cable companies and the telephone companies came up with compromise proposed legislation to address the uncertainties created by the DPUC ruling and the ensuing litigation. See 50 H.R. Proc., Pt. 22, 2007 Sess., pp. 7044-45, remarks of Representative Vickie Nardello. The legislation was introduced in the 2007 legislative session and adopted as Number 07-253 of the 2007 Public Acts (P.A. 07-253).

Under the 2007 legislation, two new types of franchises for video services were created: a “certificate of video franchise authority” (CVF A) and a “certificate of cable franchise authority” (CCFA) (emphasis added), P.1\. 07-253, § 2 (CYFA), § 13 (CCFAl Together, the two new franchises substantially deregulated the provision of video services and, in effect and over time, superseded the CPCN. Although CVF As and CCF As are similar in most respects, there are differences that are material to this case.

The CVF A is available to any “entity or person” except a cable company providing cable services under a CPCN. See General Statutes §§ 16-331e (a).3 While an incumbent cable franchise holder is precluded from applying for a CVF A in its own CPCN franchise area, however, it can apply for a CVF A in any other area in the state. Id.

For the providers, a CVF A offers competitive advantages over a traditional cable franchise governed by a CPCN. An applicant for a CVFA does not have,to have a contested hearing to obtain the certificate; it merely has to submit an application containing specific information and representations. General Statutes § 16-331e (c). If the application is deemed complete, PURA is required to grant it. General Statutes § 16-331e (e). A CVFA is indefinite in duration, freeing the holder from the necessity of periodic renewal proceedings, and it is fully transferable to any successor in interest of the original holder. General Statutes § 16-331e (h).

The holder of a CVF A, unlike the holder of a traditional CPCN, is not required to comply with facility build-out requirements and is not subject to rate regulation. General Statutes § 16-331 f. A CVF A holder is nevertheless subject to certain requirements. It must provide channel  capacity and funding for community access programming; General Statutes § 16-331 h; it must periodically meet with a statewide video advisory council, composed of one representative from each of the existing local advisory councils, and provide two thousand dollars in annual financial support for the statewide advisory council; General Statutes § 16-331 i; and it must comply with a modest number of consumer protection provisions. General Statutes § § 16-3 31j through 16-3310.

A cable company that was providing services under a CPCN when the law went into effect could not obtain a CVF A for its existing cable franchise service area. General Statutes § 16-331e (a). It could, however, apply for the second new type of franchise, a CCFA, thirty days after a competitor began offering services under a CVFA in its service area.

General Statutes § 16-331p (a).

The CCF A is similar to the CVF A in many respects: it is obtained through a similar application process; it is indefinite in duration; and it frees the holder from facility build-out requirements and rate regulation. Compare General Statutes §§ 16-331e through 16-3310 (CVFA provisions) with §§ 16-331p through 16-331aa (CCFA provisions). But the two types of franchises are not identical, and a CCF A subjects its holder to somewhat greater regulation than does a CVF A. One difference concerns community access requirements. While the holder of a CVF A must provide channel capacity and funds from its subscriber fees for community access services, the holder of a CCF A remains subject to the more extensive community access requirements of General Statutes § 16-331a. In addition, a CCFA holder must continue to meet with and provide financial support to the local cable advisory council with which it was associated under its former CPCN, rather than the statewide advisory council.

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3) General Statutes § 16-331e (a) provides as follows: “An entity or person, other than a community antenna television company certified to provide community antenna television service pursuant to section 16-331 on or before October 1, 2007, or an affiliate, successor or assign of such community antenna television company, seeking to provide video service in the state on and after October 1,2007, shall file with the Public Utilities Regulatory Authority an application for a certificate of video franchise authority, containing such information as required by this section. A community antenna television company may apply for a certificate of video franchise authority pursuant to this section for any service area in which it was not certified to provide community antenna television service pursuant to section 16-331 on or before October 1, 2007. The application shall be accompanied by a fee of one thousand dollars.”

 

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