International Municipal Lawyers Association - Local Government Blog

Deceptive Competition: What the 2010 U.S. Census Figures Might Reveal About Cable Competition in Your Community

March 9, 2011
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Author: Matthew Schettenhelm

In the past three years, cable operators have flooded the FCC with petitions claiming that because satellite providers serve the same communities, the cable operators face “effective competition” and should be deregulated. What has caused this dramatic uptick in filings at the turn of the decade? As you might suspect, the answer appears to relate less to a sudden emergence of meaningful competition (which, for most, remains hard to come by) than to old-fashioned gamesmanship.

In many recent petitions, cable operators, seeking to beat the release of 2010 U.S. Census data, have distorted the competitive status of many local markets by comparing current satellite subscribership with 10 year old (2000 U.S. Census) occupied housing data. For communities that have grown over the past decade, this creates a highly misleading picture of competition: it overstates satellite subscribership, often dramatically. Yet, lacking better data, the FCC—which finds effective competition if a cable operator shows that 15% of community households subscribe to satellite—has accepted these mismatched showings and freed cable operators from local regulation.

This need not be the case. Local government attorneys can now quickly and easily clarify this distortion using a simple tool: 2010 U.S. Census data. We have found that using 2010—not 2000—U.S. Census housing data often materially changes the 15% analysis. If your community has experienced any growth over the past decade, you should review whether a cable operator has recently filed an effective competition petition. If so, a simple filing with the FCC could correct the operator’s “effective competition” status and preserve valuable community benefits.

Why an Effective Competition Finding Matters

An “effective competition” finding helps the cable company and hurts the local community. After the FCC finds “effective competition,” a local government may no longer regulate the cable company’s basic cable service rates. In addition, cable operators use “effective competition” status to justify other anti-consumer practices. For example, certain operators have claimed that they no longer must place PEG channels on the basic service tier, and can require additional equipment to view it. The “competitive market,” it is said, will protect these benefits. But in areas where this so-called “effective competition” is the product of a cable operator’s skewed market calculations, cable subscribers in the community are left with no protection at all.

Why Recent Petitions May Not Fairly Reflect the Competitive Market in Your Community

In recent years, cable operators have flooded the FCC with effective competition petitions. In 2009, the total number of local markets found subject to effective competition more than doubled, increasing from 3,205 to 7,034. The FCC explained that the increase was due largely to petitions relying on the 15% satellite market share test. The FCC also found that cable rates are higher in markets that supposedly face “effective competition.”  The FCC openly attributes this effect to these recently-filed petitions.[1]

The fact that monthly cable bills have risen in new “effective competition” communities should not be a surprise for a simple reason: many recently-filed petitions do not document real competition at all. Because the FCC compares a community’s satellite subscribership with its total occupied households (to find effective competition, the FCC requires over 15% of households to subscribe), and because the U.S. Census only updates household counts every 10 years, many cable operators have claimed “effective competition” by comparing current satellite subscribership with ten year old household data. In many communities, this has produced “effective competition” findings that recent household data reveal to be simply wrong.

What Your Community Can Do

Local government attorneys now have an easy way to counter this tactic. For many states, the U.S. Census Bureau has already released occupied household numbers by community. For many others, such data will be released shortly.[2]

If your community has been the subject of a recent effective competition petition (even one already granted), you should test the cable company’s reported subscribership count against the occupied household count reported in the 2010 U.S. Census. If the total number of competing subscribers the company reports is less than 15%, your community should correct the record and preserve local benefits. The cable operator should not achieve “unregulated” status based on an openly misleading depiction of your local cable market.

Should you have any questions, please do not hesitate to contact us (Miller & Van Eaton, PLLC).



The FCC’s Open Internet Rules Could Impact Local Governments

March 1, 2011
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Authors: Joseph Van Eaton, Matthew K. Schettenhelm

May an Internet service provider block certain websites or content? May it slow Internet traffic from its competitors while favoring its own applications or services? Must the provider disclose these and other network management practices to its end-users?

On December 23, 2010, the Federal Communications Commission addressed these and other topics when it released new “open Internet” rules.  [Link 1] Local government attorneys should review the rules closely. Depending on the nature of the Internet service that a local government uses or provides, the FCC’s rules could protect a local government (as an Internet user), and impose new obligations upon it (as a service provider).

An analysis of the new rules is available here. [Link 2] The rules apply to Internet service that is sold on a retail, “mass market” basis. The FCC indicated that its rules—which do not exempt Internet service provided by a governmental entity—would not apply to certain premise owners, such as coffee shops and airlines, who obtain Internet service for customers from a third party. Nevertheless, on many important questions, the rules are fairly ambiguous and may require FCC clarification.


Local Governments, Cell Phones, and Health

October 13, 2009
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Posted By: Joseph Van Eaton, Matthew Schettenhelm and James Hobson

Do cell phones cause brain tumors or other health risks? At a September 14, 2009 hearing before a subcommittee of the U.S. Senate Committee on Appropriations, leading researchers testified that more research is needed before we definitively have an answer. This renewed attention to the health risks associated with cell phones and towers may mean that local governments, which regulate cell tower siting, may face an increasing number of questions from concerned citizens about the risks of radiofrequency emissions. Local government attorneys should be aware of both the limits upon their authority and the opportunities for local action in this area.

The Health Issues

The evidence of a link between cell phones and adverse health effects has been described as contradictory. Unlike x-rays or other forms of radiation that have been shown to cause harm, cell phones operate in frequencies that produce non-ionizing radiation, which does not independently mutate cells. As a result, many have argued that cell phones do not pose a health risk, and that the current evidence of a link between cellphones and cancer is weak or nonexistent. CTIA, the cell phone trade association, maintains that the “scientific evidence to date does not demonstrate any adverse health effects associated with the use of wireless phones.” This is consistent with the current views of the American Cancer Society, the FCC, and the FDA.

Others cite contrary findings, however, which do suggest reason for concern. For example, researchers have found that people who use cell phones for more than 10 years are more likely to get tumors on the side of the head on which they usually hold their phone; that exposure to such frequencies causes the blood brain barrier to be breached; and that DNA in rats is damaged by exposure to very low levels of cellular radiation. Some also contend that, just as early data failed to show a link between cancer and other harmful radiation, it may be too early to see a definitive link between cell phones and health risks. While these findings and views are now subject to vigorous debate, most do agree that additional research is needed with respect to long-term exposure and the effects on children, who appear to be more susceptible to potential harms. Thus, the placement of wireless antennas at or near schools, and the increasing use by young people of cell phones or other sources of non-ionizing radiation, has come under particular scrutiny by citizens and their elected officials. Several local government actions are noted below.

FCC Regulation

 Acting through the National Environmental Policy Act (“NEPA”), the FCC currently regulates non-ionizing radiation from broadcast, cellphone, and other wireless transmitters, including cell phone towers, pursuant to 47 C.F.R. § 1.1310 and 47 C.F.R. § 1.1310. The FCC also regulates the Specific Absorption Rate (“SAR”) for individual cell phones. The SAR is a measure of the rate at which energy is absorbed by the body when exposed to a radio frequency electromagnetic field pursuant to 47 C.F.R. § 2.1093.

The FCC’s current rules for cell phones date from 1996, and are founded on scientific knowledge of the 1980s and 1990s. The rules are based on avoiding “thermal” harm – that is, overheating of the human body by direct exposure to radiation from antennas or from a wireless receiver itself, such as a cell phone. Under the current standard, before any cell phone is released on the market, it is tested to confirm that its maximum SAR level does not exceed 1.6 W/kg.

In 2003, the EMR Network urged the FCC to reconsider its antenna radiation and SAR standards, arguing that it is dated and fails to consider the potential health risks of non-thermal effects or long-term exposure. The FCC refused to revisit the issue. The FCC maintained that in adopting its regulation, the agency has relied on both standards produced by IEEE and ANSI, and on agencies such as the EPA and the FDA that have primary expertise and responsibility for ensuring health and safety. The FCC said it would reconsider its regulation in the event such agencies or other expert sources found reason for concern.

Local Government Role

With respect to cell tower siting, local governments can only consider the potential health effects of radiofrequency emissions within the limits of the Communications Act. Section 332(c)(7)(B)(iv) of the Communications Act provides that no local government may regulate siting based on the effects of radiofrequency emissions if the facility complies with the FCC’s regulations on the issue. Accordingly, local governments that deny a siting request based on health concerns beyond the FCC ‘s regulations may find their decisions overturned by the courts.

However, while local government’s role in regulating radiofrequency emissions is limited, local entities can bring pressure to bear on Congress and on the FCC to address the health concerns. Some local entities – including Los Angeles County, California; the Los Angeles City School District; Glendale, California; Sebastopol, California; and Pima County, Arizona – have responded to local concerns by calling on Congress to revise Section 332(c)(7)(B)(iv) to allow local jurisdictions to more broadly consider the health effects of cell tower placement in their community. In May 2009, the City of Portland adopted a resolution calling for the FCC to work with the FDA and other relevant federal agencies to revisit and update studies on potential health concerns arising from RF wireless emissions.

Local governments can also educate citizens in this area. Those concerned about the potential adverse effects of cell phones often cite the precautionary principle. They maintain that even if we lack scientific proof of a link between cell phones and adverse health effects, we should take low-cost measures in order to avoid even the possibility of very costly future outcomes. Local governments officials can encourage such low-cost measures. They can urge cell phone users to take very basic steps, such as using a head-set or speaker, that will greatly reduce any potential risk. Local governments can also encourage users to check the SAR level of their cell phone at a site provided by the Environmental Working Group, or by inserting their cellphone’s FCC ID # at the FCC’s webpage.

Conclusions

Local counsel for communities should recognize:

  • This is a hot issue, and it may become hotter.
  • Citizens may want to raise the issue in hearings on particular applications to site cell phone towers. But beyond ensuring compliance with FCC rules, local governments should not allow radio frequency and health issues to become, or even to appear to become, the driving force behind zoning decisions. There are often legitimate reasons for denying a request for permission to construct a cell tower, and decision-makers must focus on those grounds, or risk having a decision overturned.
  • A local government can respond to community concerns without putting its zoning decisions at risk. Local governments can both urge Congress to grant it further authority in this area, and call upon the FCC and other agencies to revisit regulations with respect to cell phones radiation.

DIGITAL TELEVISION CONVERSION REDUX

May 15, 2009
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Posted By: Nick Miller, Partner, Miller & Van Eaton

The Congress approved a delay in the Digital Television Conversion from February until June 12, 2009.  This additional time has allowed the Federal Communications Commission and the Department of Commerce’s National Telecommunications and Information Administration to enhance and restructure the federal government’s consumer outreach programs.

Among the good news items:

  1. The backlog for federal discount coupons for DTV converters is gone.
  2. The agencies have recruited fire departments and community organizations throughout the nation to assist homebound and vulnerable citizens.
  3. The agencies have improved call centers and help lines.
  4. The broadcasters are doing more to inform and to demonstrate to individual consumers whether the new over-the-air digital signals will be available without improved antenna arrays.
  5. Many broadcasters are converting ahead of June 12, providing real experience for the call centers and outreach agencies.

The story is not over—but the trends are finally positive. 

And please do your part by sharing this Consumers’ Union public education package with your electeds, agencies and local media: CLICK HERE for the PDF


LOCAL CONTROL AND RIGHTS-OF-WAY — THE LONG VIEW

April 28, 2009
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Posted By: John Pestle, Partner, Varnum LLP

Attendees at IMLA’s spring seminar heard an update on recent appellate decisions favoring municipalities on their control of the rights-of-way as to (and fees from) telecommunications companies.  This reflects 13 years of litigation on basic principles under the Telecommunications Act of 1996 which now appears to be coming to a favorable close, although the Supreme Court may yet step in.  And attendees heard about state and Federal efforts to site electric transmission lines, overriding local control.

Viewed from a longer perspective, these are both part of a long-term and continuing debate between local units of government and state/national authorities regarding franchising and control over the rights-of-way.  Briefly, at their inception most classic utilities (telephone, gas, electric, cable) were solely local operations – -  operated just within one city – -and thus were franchised and regulated locally.  And hence control over the rights-of-way as to them was local as well. 

Technological developments helped change this.  For example, the electric industry shifted to large, much more efficient plants which served large areas, such as many cities and counties, and built transmission lines which connected plants within a state and then between states.  As a result, electric regulation over rates and terms of service shifted to the state and national level.  The telephone industry had previously followed a similar trajectory and with the shift from locally manufactured gas to natural gas from the Southwest after World War II, gas utilities followed a similar route.  Most recently, the cable industry has moved in the same direction, with more operations moving from the purely local to the regional level.

            From the perspective of local government although economic regulation (rates, terms of service) tended to shift to the state or national level, control of the rights-of-way tended to remain local for obvious reasons.  Even so, tensions remained, and remain to this day. 

In the most widely used type of example, if a line (telephone, electric, gas or whatever) has to run through Community A (but not provide service in A) in order to provide local service in Community B, then can/should Community A be able to take actions to protect its interests, with consequent adverse affects on persons in Community B who are receiving service?  Community’s A’s actions may range from prohibiting the construction of the line, to changing its route, to taking other actions to mitigate visual or other harms (e.g. – – undergrounding), to the most prosaic of engineering-oriented street and right of way matters. 

But if, as has occurred or been proposed in some instances, the state or Federal government controls the permitting process for such a line, to what extent can or should it in the interest of the residents of Community B be able to ignore or overturn the interests of Community A, such as running a line through natural or scenic areas of Community A with consequent significant adverse impacts on it and its residents?

            The point is that the tension created by these issues is long-standing, and is sometimes portrayed as being between state and local interests, and sometimes portrayed as being between the interests of the communities receiving service versus those traversed by (but not receiving service from) utility lines.  That tension can be seen in court decisions and constitutional debates from over a hundred years ago.  And these issues are still being wrestled with today, as exemplified by the IMLA sessions this past week.

 


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This blog is made possible by the International Municipal Lawyers Association (IMLA), but may include guest bloggers (who are attorneys with experience in local government matters) who might or might not work for IMLA. Their views (and those expressed on this site) do not necessarily express the views of IMLA.

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