International Municipal Lawyers Association - Local Government Blog

Gold in the Trailings

May 14, 2009
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Posted By: Nick Miller, Partner, Miller & Van Eaton

The economic news for local governments and their attorneys has not been good.  Big time cutbacks in local budgets have forced major changes in the law offices advising local governments.  In the midst of this economic detritus, some good news is emerging.

Much like the middle income families that can now afford to buy houses that are in foreclosure, City Attorney offices may now have the chance to attract and hold some of the very best new lawyers graduating this June.  We all know the big law firms have driven associate salaries far beyond government salare levels and the big firms have thereby discouraged many young attorneys from pursuing public service careers.  Now the economy is forcing the large firms to change their hiring patterns.  And the door may be opening for government law offices to compete on equal footing for this young talent.

Recent news headlines on law firms have focused on the tragedy of job losses and personal tragedies among recently fired attorneys.  This is grim, heart-rending news.  But underneath these headlines is a less reported trend.  The biggest firms are changing their offers to third year law students and first year attorneys.  They are deferring start dates for new attorneys, in many cases until January 2010 or even June 2010.  And they are rolling back associate starting salaries to levels comparable to the late 1990’s.

This change offers City Attorneys the chance to compete more equally for this talent pool.  Local government law has always had the attractive qualities of public service, challenging and wide ranging legal issues, and family-friendly working hours.  To this list can now be added competitive compensation, and a chance to try public service before stepping into 2400 hours/year work environs.

The salary picture is better for three reasons.  Associate salaries are being rolled back o levels comparable to the late 1990’s.  Also most of the large firms are offering to pay the deferred attorneys some portion (often 50%) of the normal first year salary in return for accepting the delayed start date.  And the over-enrollment of attorneys in the big firms means many firms will not object if a first year attorney decides to not pursue the big firm job, even after accepting the deferred compensation for several months.

So now is the time to reach out to your local law school placement offices.  And reach out to your colleagues in larger firms.  Tell them you are looking to help June graduates or 2008 deferred graduates find useful legal work.


Another Cable TV Bankruptcy?

January 22, 2009
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Posted By: Nick Miller, Partner, Miller & Van Eaton 

Change may be coming to your community. And it won’t be from Washington DC. Instead, it will be from your friendly local cable operator—if the operator is either Charter or Broadstripe.

In a reprise of the Adelphia bankruptcy filed in 2002, two major national cable operators may be headed toward Chapter 11 bankruptcy court protection from creditors. Broadstripe and its affiliates filed for bankruptcy protection on January 2, 2009 in the United States Bankruptcy Court for the District of Delaware, (Case No. 09-10006 (CSS)). Last week, Charter reported it missed an interest payment and had hired counsel to try to renegotiate its debt, signaling that a bankruptcy filing may follow before the end of this week January 23, 2009.

If your city has granted a franchise to either of these cable operators, pay attention. And share this warning with colleagues in neighboring communities that have either Charter or Broadstripe as their cable operator.

The treatment of cable franchises in bankruptcy is neither simple nor straightforward—particularly if your community benefits from a franchise that contains significant in-kind or financial benefits. Most attorneys think the only issue presented by a bankruptcy is whether amounts owed have been paid—classic creditors’ claims. This is an important issue. But there is another and more important issue created by the unique legal character of a cable franchise agreement.

A bankrupt debtor may assign executory contracts of a bankrupt estate even if the contract contains an anti-assignment clause and the counterparty objects to the assignment. See, 11 U.S.C. § 365(f). But this authority is not available when “applicable law” excuses the counterparty from accepting performance from the assignee. You should not assume a bankrupt debtor has a right to assign your cable franchise without your City’s prior, independent consent.

The Adelphia bankruptcy court recognized that a municipal ordinance could be “applicable law”. Further, it drew a distinction between an anti-assignment clause in a franchise agreement, and one found independently in an ordinance of general applicability and effectuated legitimate regulatory concerns for the benefit of the public. The court concluded that where the anti-assignment clause was contained in an ordinance of general applicability, it would not compel Adelphia communities to recognize the assignment of the Adelphia franchises to Comcast or Time Warner. In re Adelphia Communications Corp., 359 B.R. 65 (Bkrtcy.S.D.N.Y., 2007)

This important principle preserves your community’s right to take an independent look at the proposed restructuring or transfer of the franchise to a new operator.

A different problem may confront your community if your state has recently adopted one of the state-wide franchise laws pushed by at&t over the last few years. There may be no transfer of a franchise involved if the purchaser of the assets in bankruptcy already holds a state-wide franchise in its own right. In that case, your strategy for protecting your community may devolve to assert liens have attached to the existing facilities in the right-of-way, or other legal arguments tied to your right-of-way property interest.

Obviously your community’s specific rights will vary depending on the language of your franchise and local ordinances. But stay alert, and plan both to file a creditor’s claim to preserve your financial claims and to file an objection to preserve your authority to reject a franchise transfer if you are not satisfied by the promises of the new operator.


Obama’s Hurricane Katrina?

January 7, 2009
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Posted by: Nicholas P. Miller, Partner, Miller & Van Eaton, PLLC
 
Watch for February 17, 2009.  It will be a big day in your community, and for the entire nation.

You may have heard.  On February 17, 2009, ALL of the nation’s analog television broadcast stations go black simultaneously.[1] [DOC-280586A1.doc ]

Euphemistically called the “DTV Conversion”, 2/17/09 is D-Day for an estimated 15 to 20 million households which receive their TV “over the air”.  These tend to be the most vulnerable and isolated citizens in your community: those who are elderly, poor and foreign language dependent. 

Characteristic of so much else in the last 8 years, the Bush Administration has done it again—left a big pile of trouble for the Obama Administration to clean up.  But there will not be enough time for the Obama folks to have much impact.

In the words of FCC Commissioner Jonathan Adelstein,  “In your community, a lot of people are going to need help, but it’s not yet clear where that help is going to come from….  The DTV transition isn’t ready for prime time.” [Click Here]

Like a hurricane, this event was predictable for the last 20 years, as soon as the Federal Communications Commission and Congress determined that all television broadcasters should convert from analog to digital format signals.  [FCC-08-56A1.doc]  And the 85% of households “on high ground” should be OK, if still disrupted.  Their major televisions are hooked to a cable television system or to a satellite television network and will not be directly affected.  However, even in these households, multiple TVs may not be connected to the cable television system and they too will “go dark” if they can’t receive digital TV signals.

The remaining 15% of ALL households which do not subscribe to any cable television or satellite TV are going to have problems.  Only a small percentage of these over-the-air households own a digital television.  These households are least likely to be aware of the coming change, to have the technical savvy to equip their old analog TVs to receive the new digital signals[2], or to have the financial capability to buy the digital converter or to improve their antenna.

A prior “early roll-out” of the DTV conversion in Wilmington NC indicates the scope of the problem your community will experience.  You should expect your share of 2.2 million households nationwide to seek help in the first days after the national transition deadline.  And that’s the optimistic scenario.  Again, in Adelstein’s words, “[In Wilmington] the problems led viewers to need either phone or direct technical assistance, which could take upwards of 40 minutes on the phone for each household.” 

You need to alert your City leadership and to get local DTV assistance volunteers ready to go.  A reasonable set of steps for your community:

1.            Encourage tech savvy individuals to assist family members, friends, and neighbors with converter box installation. 

2.            Create a local phone bank with sufficient capacity to handle your share of the predicted 2 million phone calls in the days immediately following February 17. 

3.            Send speakers to Churches, community groups, and others serving the foreign-language and elderly communities.

4.            Ask your local telephone company, cable and satellite employees to get involved on a local level with local phone banks and help people to install converter boxes and new antennas in homes. 

Good luck to us all, and especially to President Obama on February 17. 

[1] Some temporary emergency exceptions are possible in the so-called “Analog Nightlight” legislation.  See Short-term Analog Flash and Emergency Readiness Act (“Analog Nightlight Act”), Pub. L. No. 110-459, 122 Stat. 5121 (2008).  The bill, S. 3663, was signed into law on December 23, 2008

[2] Three things are needed to receive the new digital TV signals:

1.        A NEW converter box that allows an analog TV to receive a digital signal;

2.        A strong digital signal from the local broadcast tower;

3.        Technical ability to self-install the converter box and make any needed antenna improvements.

 



CITIES CATCH A BREAK–FINALLY

December 18, 2008
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Posted by: Nicholas P. Miller, Partner, Miller & Van Eaton, PLLC

There was another pair of shoes thrown last week.  It occurred in Washington DC, when leaders in Congress, not frustrated Iraqis, took aim at the Federal Communications Commission. 

The current Chair of the FCC, Republican Kevin Martin, has been broadly attacked to the point of being investigated for manipulating FCC processes in ways inconsistent with the agency’s own rules and in ways designed to frustrate public participation and effective consideration by other commissioners [Link].  Congress reacted strongly to statements by the Chairman that “business would continue as scheduled” in regular Commission meetings in mid-December and mid-January.  In a letter dated Dec. 12, 2008, and unlike any previous in my memory, presumed Senate & House Committee Chairs Senator Rockefeller (D-WV) and Henry Waxman (D-Ca) said:  Stop the boat.  Focus on the Digital TV transition.  And stop trying to push through major policy changes as a lame duck Commission.

Chairman Martin finally conceded it was time to stop further major Commission actions until the Presidential Transition is completed and cancelled the December and January Commission meetings, although items could still be approved with written consent of the other Commissioners.

This concession means the FCC will not likely act on any major policy issues until the Obama administration designates a new FCC Chair. Congress will also have to confirm a  fifth member to the FCC as Commissioner Deborah Tate must leave the Commission upon the swearing in of the 111th Congress.  Until then the FCC will be stalemated 2-2.. 

So why does this “inside baseball” story matter to City Attorneys?  Let me list the reasons: 

• The wireless industry’s effort to get FCC preemption of local cell tower zoning is stopped dead, for now.  (http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)
• The reconsideration petition filed by local governments challenging the Commission’s preemption of local cable franchising for incumbent cable operators is further deferred. (http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)
• The reallocation of telephone subsidies which support rural and high cost subscribers will be left to the next administration. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-262A1.pdf); and
• Most important, the 700 MHz or “D Block” public-private public safety interoperability auction rules remain undetermined.  ( http://fjallfoss.fcc.gov/cgi-bin/websql/prod/ecfs/comsrch_v2.hts)

Later blogs will devote more time and comment to the 700 MHz D Block issue.  For now, consider these orientation comments:

1. Would 1st Responders benefit from Broadband communications capabilities on every portable laptop in every emergency vehicle?
2. Would metropolitan areas and local governments benefit from broadband and interoperable mobile?
3. Would all citizens benefit from universally available and very fast wireless internet access?
4. Would inner city and under-served rural areas benefit from robust, high-speed internet access without the expense of building wires to every location?

Too good to be true?  Not if the FCC sets the right rules for the merged construction and operation the 700 MHz D Block with the existing allocation of 700MHz wideband public safety spectrum which comes available in February 2009 after television broadcasters move from analog to digital transmission.

If the D Block is successfully merged into a common network with the public safety allocation, 20MHz of spectrum would be available nationwide.  This is sufficient bandwidth to meet the entire wish-list above.

Unfortunately, economics and physics have a habit of intruding on wishlists.  In this case, a nationwide system of antennae and network links must be built (estimated to cost at least $10 Billion).  Reception devices (PC cards @ $50-$100 each) need to be provided to each user.  And someone must operate the network.

The Public Safety wideband 10 MHz has been licensed to a national consortium of public safety operators.  [www.psst.org]  But that group, its member agencies, and state and local government in general, do not have the financial resources to build a nationwide wireless network.  The FCC had a plan to do this.  [In the Matter of Auction of the D Block License in the 758-763 and 788-793 MHz Bands, Order, 23 FCC Rcd 5421 (2008)]  The FCC tried to auction the D Block to a private operator, with the requirement that the successful bidder would operate the D Block along with the 10 MHz of wideband spectrum already set aside for public safety.  The FCC hoped the D Block bidder would build a single nationwide network, serving both private and public wireless users.  No one accepted the offer.

So the FCC has been reconsidering how to structure a new auction of the D Block.  And until the Congressional letter, the lame-duckedness of the current FCC created risks.  Many private sector players are trying to get the FCC to adopt quick D Block auction rules, relieving the successful bidder of the most costly obligations associated with serving public safety and building a true nationwide system. 

The freeze on major FCC actions stopped this raid on public spectrum.  Now state and local governments must nail theses shenanigans permanently shut.  We all will benefit from a broadband, nationwide, wireless system that is soundly financed, built universally and able to support all levels of local government requirements.  Doing it right will resolve major public safety communications problems as well as major problems integrating rural areas and others into the national internet economy.

More later on how the D Block/Public Safety 20MHz system should be structured.


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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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