NCCCMC In the News
Cable vs. Community - Mountain X-Press
An Open Letter to the NC General Assembly
Dear Senator or Representative:

As a former member of the N.C. Rural Internet Access Authority, I am writing to express my concern about the pending Video Services Competition Act.

This bill, in its current form, will be one of the biggest corporate giveaways in state history, and it will greatly impede our efforts to boost North Carolina's Digital Media Economy, especially for our smaller cities and rural communities.

North Carolina currently ranks near the bottom nationwide for obtaining PEG access (public, education and government video operations) and I-NETs (local government networks) via local video franchise renewals.

Both of these operations -- PEG Access and I-NET -- are cornerstones of building a local Digital Media Economy.

For example, PEG access operations are an excellent training ground for young people wanting to acquire digital media skills, and for entrepreneurs wanting to launch and develop new digital media programs.

It is no coincidence that the states which have led the nation in growing a Digital Media Economy -- California and Massachusetts -- also lead the nation in PEG access operations.

Currently, California and Massachusetts each have more than 70 communities with PEG access operations obtained via local video franchising (www.communitymedia.se/cat/linksus.htm).

North Carolina is even farther behind when it comes to I-NETs, the local government "intranets" that link local schools, libraries, public safety and government offices into a seamless telecommunications network.

Hundreds of U.S. communities, from Rock Hill, S.C. to Gilroy, CA, have leveraged the value of their public right of ways to obtain local government I-NETs to improve interagency communications and to save precious tax dollars -- via the local video franchise.

The I-NET for Gilroy, CA, for example, is saving the town more than $70,000 a year in telecommunications charges, while expanding and strengthening the community's public-safety and emergency-response capability (www.baller.com/library-art-faq.html).

The only community in North Carolina to obtain a partial I-NET is Buncombe County, which negotiated a high-speed Internet link for county schools valued at $1.1 million over the 12-year franchise term.

The Video Services Competition Act, as currently drafted, has NO provision protecting local governments' right to negotiate I-NET benefits in exchange for access to public right of ways.

For more than 30 years, local communities have obtained rents -- such as PEG access and I-NET funding -- via local franchise agreements with cable TV companies. With so many North Carolina communities struggling to jump-start their Digital Media Economies, now is not the time to eliminate this important economic development tool.

Indeed, in the long run, PEG access and I-NET investments in a growing Digital Media Economy will generate more business and profits for the state's telecommunications companies. But these benefits should be available to all North Carolina communities that want them -- not just five of our largest cities.

Please ensure that any statewide video franchise does not disenfranchise the majority of North Carolina communities -- and thereby prohibit them from sharing in the PEG access and I-NET benefits available via rents for the use of our public right of ways.

Again, if passed in its current form, the Video Services Competition Act would make permanent North Carolina's ranking near the bottom of states leveraging the value of their public rights of ways to boost the Digital Media Economy.

Finally, the current draft of the Video Services Competition Act is misleading when it defines franchise fees as "taxes."

For more than 30 years, cable TV franchise fees and related PEG and I-NET funding have been considered "rents," in keeping with the "landlord-tenant" relationship between local governments -- as stewards of our public right of ways -- and cable providers, who receive access to these right of ways in exchange for franchise fee rents.

This landlord-tenant relationship was affirmed in the City of Dallas, Texas v. FCC, 118 F.3d 393 (5th Cir. 1997), when the Fifth Circuit Court wrote:

"Franchise fees are not a tax, however, but essentially a form of rent: the price paid to rent use of public right-of-ways. See, e.g., City of St. Louis v. Western Union Telegraph Co., 148 U.S. 92 ... (1893) ..." Likewise, the Internet Tax Freedom Act reaffirms that franchise fees are "rents," not "taxes."
(frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_public_laws&docid=f:publ435.108)

Thank you for your consideration of this important issue.
Please let me know if I can provide any additional information.

Wally Bowen
Executive Director
Mountain Area Information Network
Asheville, N.C.
Former Member, N.C. Rural Internet Access Authority
828.255.0182 ext. 109
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