Summary of COPE Act

March 30, 2006. The House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet held a hearing on HR __ [PDF], a committee print of a bill that may be titled the "Communications Opportunity, Promotion, and Enhancement Act of 2006".

It would create a national cable franchising regime. It would give the Federal Communications Commission (FCC) authority to enforce its August 2005 policy statement [3 pages in PDF] regarding network neutrality through case by case adjudicatory proceedings. It would impose E911 requirements on voice over internet protocol (VOIP) service providers. Finally, it would prevent states from preventing state and local governments from providing telecommunications, cable, or information services. The following is a summary.

National Video Franchising. Title I of the bill, which consists of 24 pages, provides for "national cable franchising". This applies only to eligible "cable operators" that provide "cable service". That is, it does not extend to all providers of video programming. For example, it excludes satellite and terrestrial wireless video service. The bill also contains further eligibility requirements.

The key provision of this part of the bill provides as follows: "A cable operator that is eligible under subsection (d) may elect to obtain a national franchise under this section for a franchise area in lieu of a franchise for a franchise area under section 621. A cable operator may not provide cable service in a franchise area without a franchise under either this section or section 621. A franchising authority may not require any cable operator that has a national franchise under this section in effect with respect to the franchise area of that franchising authority to obtain a franchise under section 621 or any other law."

Section 621 of the Communications Act of 1934 is codified at 47 U.S.C. § 541. It was added by the 1984 cable act, amended by the 1992 cable act, and again by the 1996 telecom act. It regulates the award of franchises by local franchising authorities.

The bill limits who is eligible for a national franchise, in a long and complex collection of eligibility clauses. It provides that those that commence the provision of cable service in a franchise area on or after the date of enactment of this bill can obtain a nation franchise for that franchise area. These providers are identified as "new cable operators". The bill further provides that those that already provide cable service in a franchise area at the time of enactment of this bill can obtain a national franchise, if a "new cable operator" obtains a national franchise. The bill further provides that an ILEC that already provides cable service pursuant to a Section 621 franchise can get a national franchise when its 621 franchise is no longer in effect if there is a competing cable operator.

The bill provides for rapid approval of national cable franchises. It states that "A national franchise under this section shall be effective with respect to any franchise area ... 30 days after the date of the filing of a completed certification" with the FCC. The bill then states that national cable franchises last for 10 years.

There is also a subsection that provides for loss of a national franchise if there is no other cable operator in the franchise area. It provides that "On petition to the Commission by the appropriate franchising authority, a franchise granted to an eligible person or group under subsection (d)(2) for a franchise area shall cease to be effective one year after the filing of the petition if no other cable operator provides cable service in such franchise area during that one year. A cable operator whose national franchise for such franchise area is terminated under this subparagraph may obtain a new franchise under section 621 or this section, if otherwise eligible."

This fall back provision could affect phone companies, if there is no competition from a cable competitor. Competition from a non-cable video services provider could not preserve the national franchise.

47 U.S.C. § 522 contains relevant definitions, which remain unchanged by the bill.

Section 522(5) provides that "cable operator" means "any person or group of persons
  (A) who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or
  (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system;"

Section 522(6) provides that "cable service" means
  "(A) the one-way transmission to subscribers of
    (i) video programming, or
    (ii) other programming service, and
  (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service;"

Title I of the bill imposes numerous requirements on the national cable franchises. First, it requires the payment of franchise fees by national cable franchisees to local franchising authorities.

Second, it requires the national franchisees to comply with the rights-of-way requirements of the local franchising authority. Third, it requires the national franchisees to comply with the consumer protection and customer service standards established by the FCC under section 632(b) of the Communications Act, but not local consumer protection requirements. It also requires the national franchisees to "ensure that all subscribers receive any public, educational, or governmental programming carried by the cable operator within the subscriber’s franchise area."

There is also an anti-discrimination requirement for national franchisees. However, there is no build out requirement. The bill states that "cable operator with a national franchise under this section shall not deny access to its cable service to any group of potential residential cable service subscribers because of the income of that group. If the Commission determines that such a cable operator has denied access to its cable service to a group of potential residential cable service subscribers because of the income of that group, the Commission shall ensure that the cable operator extends access to that group."

Network Neutrality. Title II of the bill gives the FCC authority to enforce the network neutrality policy statement that it adopted last August.

The bill would give the FCC adjudicatory authority to enforce its policy statement [3 pages in PDF] of August 5, 2005. See, story titled "FCC Releases Policy Statement Regarding Internet Regulation" in TLJ Daily E-Mail Alert No. 1,221, September 26, 2005, and story titled "FCC Adopts a Policy Statement Regarding Network Neutrality" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005.

This policy statement relates to guaranteeing for consumers the freedom to use their internet connections to access some of the content, use some of the applications, and attach some of the devices, that they choose.

It enumerates four (or five) provisions. The first four provisions are:

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to access the lawful Internet content of their choice."

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement."

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to connect their choice of legal devices that do not harm the network."

"To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to competition among network providers, application and service providers, and content providers."

Then, the statement adds another principle in a footnote: "The principles we adopt are subject to reasonable network management."

The bill provides that the FCC "shall have the authority to enforce" this statement, and that this is limited to adjudicatory authority. The bill elaborates that the FCC "shall have exclusive authority to adjudicate any complaint alleging a violation of the broadband policy statement or the principles incorporated therein."

Notably, this title of the bill does not give the FCC authority to write rules implementing, expanding, or limiting any of the provisions in this policy statement.

VOIP/E911. Title III of the bill pertains to voice over internet protocol (VOIP) service and E-911.

It provides that "Each VOIP provider has a duty to ensure that -- (A) unless the provider is a receive-only provider, 911 services are provided to subscribers of VOIP services; and (B) if the provider is a send-and-receive provider, 911 and E–911 services are provided to subscribers of VOIP services."

It further provides that "Each entity with ownership or control of the necessary E–911 infrastructure shall provide any requesting VOIP service provider with nondiscriminatory access to such infrastructure. Such entity shall provide access to the infrastructure at just and reasonable, nondiscriminatory rates, terms, and conditions as determined by the Commission."

This section also provides that "Nothing in this Act or any Commission regulation or order shall prevent the imposition on or collection from a VOIP service provider, of any fee or charge specifically designated or presented as dedicated by a State, political subdivision thereof, or Indian tribe on an equitable, and non-discriminatory basis for the support of 911 and E–911 services if no portion of the revenue derived from such fee or charge is obligated or expended for any purpose other than support of 911 and E–911 services or enhancements of such services."

The bill also addresses interconnection. It provides that "A VOIP service provider shall have the same rights, duties, and obligations as a requesting telecommunications carrier under sections 251 and 252 of the Communications Act of 1934 (47 U.S.C. 251, 252) with respect to interconnection, including associated rights, duties, and obligations necessary to effectuate such interconnection, if the provider elects to assert such rights."

The bill does not extend liability protections to VOIP service providers.

Municipal Services. Title IV of the bill provides, in one sweeping clause, that state and local entities may provide any telecommunications, information or cable service.

It provides that "Neither the Communications Act of 1934 nor any State statute, regulation, or other State legal requirement may prohibit or have the effect of prohibiting any public provider of telecommunications service, information service, or cable service (as such terms are defined in sections 3 and 602 of such Act) from providing such services to any person or entity."

This would have the effect of preempting existing bans on state and municipal services in many states.

However, the bill also provides that state and local entities cannot favor their own services. The bill provides that "Any State or political subdivision thereof, or any agency, authority, or instrumentality of a State or political subdivision thereof, that is, owns, controls, or is otherwise affiliated with a public provider of telecommunications service, information service, or cable service shall not grant any preference or advantage to any such provider. Such entity shall apply its ordinances, rules, and policies, including those relating to the use of public rights-of-way, permitting, performance bonding, and reporting without discrimination in favor of any such provider as compared to other providers of such services."