Franchise Fee or “Video Service Provider Fee” – SB 117 provides for quarterly payments to local governments of up to 5% of gross revenues, but limits the definition of gross revenues to include only subscriber revenues and advertising revenues (but only if the community specifies in an ordinance or resolution). Local governments must give new providers notice of the percentage, or forfeit the right to fees. Many communities will see significantly lower payments from video providers.
 

Provider Fee (Franchise Fee) Audits – SB 117 significantly impairs local governments'  ability to audit a provider’s payment of fees. Fees may be audited for the preceding two-year period but solely at the local government’s expense – no matter how great the underpayment. If the audit reveals an underpayment of fees that the operator disputes in whole or in part, the local government must file suit to recover the fees. Local governments cannot enter into “contingency” payment arrangements for the audit of franchise fees.
 

Free Services for Public Benefit – Local governments can no longer require operators to provide free cable service to government, school and library buildings as cable franchises have traditionally required. Any Institutional Network  (I-Net) obligations in a franchise effective on January 1, 2007  are  “grandfathered” until the expiration of the franchise or January 1, 2012 – whichever comes first.   A video service provider must give 120 days notice of its intention to terminate the provision of an I-Net.  
 

Public, Educational and Governmental (PEG) Access Channels and Support.  
 

Customer Service – The Director of Commerce has the authority to enforce a few, specifically enumerated customer service standards. Although local governments have no enforcement authority whatsoever, the bill provides that video service providers shall assist local governments in addressing subscriber complaints.
 

Emergency Alert – No later than 6 months from the effective date of its video service authorization a video service provider must carry emergency interrupt service announcements transmitted by local television broadcasters (EAS). Local governments may no longer require operators to provide local emergency override of emergency announcements by local officials.
 

Build-out/Redlining – SB 117 prohibits local governments from requiring operators to build-out and provide service to the entire community, so operators are free to “cherry-pick” the areas they wish to serve. The bill contains only very limited build-out and anti-redlining provisions, with many affirmative defenses. Only the Director of Commerce has authority to enforce these requirements.

the limited competition trigger for incumbent opt-out;

 the ability to include advertising revenues in gross revenue  for purposes of calculating franchise fees if specified by ordinance or resolution (the original version of the bill banned franchise fees on any non-subscriber revenues);

limited grandfathering provisions for

obligation of Video Service Provider to accept programming in any format that complies with NTSC standards in effect on effective date of SB 117;

removal of proposed changes to RC Chapter 4939 further infringing local government’s control of the public right-of-way.