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Local Governments Fight FCC Decision

A recent declaration from the FCC defines cable-modem services as "interstate information services" that local governments can't regulate.

WASHINGTON, D.C. -- The National Association of Counties (NACo), the National League of Cities (NLC), the United States Conference of Mayors (USCM), the National Association of Telecommunications Officers and Advisors (NATOA) and other national groups have formed a new legal defense fund -- the Alliance of Local Organizations Against Preemption (ALOAP) -- to fight a decision of the Federal Communications Commission to remove cable modem service from local regulation and franchise fees.

The FCC decided in a March 14 declaratory ruling that cable-modem service is "an interstate information service" not subject to regulation by local governments under the Telecommunications Act of 1996.

Besides the obvious preemption of local authority, this action could affect current county budgets because the decision is expected to cost local communities more than $300 million in reduced franchise fees in calendar year 2002 alone -- with that figure rising in future years.

All the major cable companies have sent letters to local government franchising authorities notifying them that the companies will no longer collect fees attributable to cable-modem service.

At the March meeting, the FCC also announced the issuance of a Notice of Proposed Rulemaking (NPRM), which tentatively concludes:

- There could be no new franchise required for cable-modem service;

- Cable-modem service fees are not to be included in gross revenues for establishing franchise; and

- Current cable franchises provide all the rights-of-way approvals to access the rights-of-way.

That NPRM appeared in the Federal Register on April 19. Comments are due on the NPRM June 17.

The ALOAP was created as a legal defense fund to appeal the FCC's Declaratory Ruling before the 9th Circuit Court of Appeals, and to pursue the regulatory procedures of the FCC and its NPRM.

Two prominent law firms, specializing in telecommunications law, have been retained to assist ALOAP in its efforts.

Any county wishing to contribute to ALOAP may do so by sending contributions to NACo, c/o Jeff Arnold, deputy legislative director, 440 First Street, N.W., Washington, D.C., 20001

Jeff Arnold, deputy legislative director, NACo