Cable franchises are the agreement or ordinance setting forth the terms on which a cable company is given permission to provide cable service in a municipality. By state and federal law a cable company has to have such a franchise to use the public rights of way for its lines and to provide service.

Franchises cover several types of issues, such as:

• What services are to be provided
• Which company is authorized to provide cable service (and what happens if the company changes)
• Where the cable company has to provide service
• The fees and other compensation the company provides the municipality and the public
• Protections for use of the rights of way
• Extensive customer service protections (such as answering the phone on time)
• Channels for use by the municipality, schools and the public, and financial support for such channels.

We represented national municipal groups, the Michigan Municipal League and municipal leagues from three other states before the 6th Circuit Federal Court of Appeals in obtaining the most important court decision to date on cable franchise renewals. It held that a municipality's decision about what should be in a cable franchise to meet the municipality's future cable related needs must stand if there is any evidence in the record to support it. This case has helped many municipalities achieve their goals in cable franchise renewals.

Extensive Experience

We have represented well over one hundred municipalities on cable franchise renewals and franchise transfers. All were resolved successfully through negotiations. Some results from recent franchise transfer and renewal negotiations include the following:

• Franchise fees effectively in the 5.25% to 5.5% range by having the "five percent" federal franchise fee applied to as broad a definition of revenues as is legally possible.
• Prepayment of franchise fees, which can significantly increase franchise fee revenues during the first year of the franchise.
• Improvements for municipal, school, and public access channels by having fiber optic feeds from them to the cable company (improves quality of signal). Also, adding the ability to broadcast live from remote locations.
• Increases in funding from the cable company for municipal, school, and public access channels of from ten cents to thirty cents per customer per month.
• The cable company providing at no charge an "I-NET" which is a fiber optic network connecting municipal buildings for video, voice, data and other applications.
• Strict customer service provisions with significant liquidated damages if (for example) the cable company does not answer the phone on time.
• State of the art emergency alert systems where the municipality can use the cable system to instantly notify its residents of emergencies.
• Comprehensive indemnity and insurance provisions minimizing the municipality's financial exposure should accidents occur.

Model Franchises

The typical municipality or municipal attorney deals with cable franchise renewals only once per decade while the cable company deals with this legally and technically complex area every day.

Based on our work representing many municipalities on cable franchise renewals, we have prepared two forms of model cable franchises (a short form model franchise and a long form model franchise) which help "level the playing field" for municipalities and municipal attorneys. Our Model Documents web page has links with a memo and order form for both of the model franchises, and the table of contents for each, so people can determine which is appropriate for their use.