R-971 - 03/13/2007 - MUNICIPAL - Resolutions Supporting DocumentsITEM (i.
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AGENDA ITEM
Regular Board of Trustees Meeting
of
March 13, 2007
SUBJECT: Resolution Opposing House Bill 1500
FROM: Richa rd B. Boehm Village Manager ,,k
BUDGET SOURCE/BUDGET IMPACT:
RECOMMENDED MOTION: I move to approve Resolution 2007 -971 A Resolution in
Opposition to Legislation Relative to Municipal Cable Franchising Authority
Background /History:
HB 1500 does not ensure parity for low income households; does not ensure compliance with
buildout provisions; gives video service providers eminent domain and condemnation powers;
gives video providers access to property of all kinds; provides no real customer service
protection; provides no real customer privacy protection; allows video providers to eliminate
PEG channels; will harm municipal and county budgets, most, if not all of the fees to be paid to
local governments by the newer video providers under HB 1500 will replace existing franchise
fees and not be new revenue. Employing a narrower definition of gross revenues will result M
a net decrease in the fees paid to cities, villages and counties.
The attached document by the Metropolitan Mayors Caucus more fully explains why municipal
units of government should be opposed to this bill.
Recommendation:
That the Board approve of the Resolution in Opposition to HB 1500
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RESOLUTION 2007- GL- MUN -CB -R -971
A RESOLUTION IN OPPOSITION TO LEGISLATION RELATIVE
TO MUNICIPAL CABLE FRANCHISING AUTHORITY
WHEREAS, the General Assembly of the State of Illinois has recently introduced legislation which
would shift municipal cable franchising authority to the Illinois Commerce Commission, and
WHEREAS, the passage of this legislation, entitled House Bill 1500, in addition to taking franchise
authority out of the control of the Village of Oak Brook, also makes cuts to transmission of community
programming and Public, Education and Government (PEG) funding and fails to require service to all
residents; and
WHEREAS, the Village President and Board of Trustees find that the interests of the Village of
Oak Brook would not be best served by passage of House Bill 1500.
NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees of the Village of
Oak Brook, DuPage and Cook Counties, Illinois, as follows -
Section 1: That the Village President and Board of Trustees for the Village of Oak Brook hereby
express their collective opposition to the passage of House Bill 1500, proposed by the General Assembly
of the State of Illinois, which takes control of cable franchising away from the local municipalities.
Section 2 All resolutions or parts of resolutions in conflict with this resolution are hereby repealed
to the extent of the conflict.
Section 3 This resolution shall be in full force and effect from and after its passage, approval
and publication as required by law
APPROVED THIS 13th day of March, 2007.
PASSED THIS 13th day of March, 2007
Ayes
Nays
Absent
Kevin Quinlan,
Village President
ATTEST*
Linda K. Gonnella, CMC
Village Clerk
Richard M. Daley
Mayor, City of Chicago
IN. N Metropolitan Founding Chair
®® Gayle A. Smolinski
Mayors Mayor, Village of Roselle
Executive Board Chair
Jeffery D. Schielke
Mayor, City of Batavia
Executive Board Vice Chair
OPPOSE HB 1500
Proponents Claim It Will Bring Competition, Jobs and Economic Development,
But At What Cost to Citizens, Municipalities and Counties?
• HB 1500 does not ensure parity for low income households (See Section 21- 1101(2))
The bill states that video service providers shall not deny access to their services to any potential
residential subscribers because of race or income. It further sets goals that at least 25 percent of
of their customers in a local area must be low income households 3 years after the date they begin
providing service and 30 percent after 5 years. HB 1500 does not, however, provide a mechanism
to enforce compliance with these goals or defenses as they are called in the legislation. Where
can people who believe they have been refused service go to complain? HB 1500 does not
address this question. FYI: Existing local cable franchise agreements do. Similar legislation
adopted in other states does as well.
• HB 1500 does not ensure compliance with buildout provisions (See Section 21- 1101(3))
The proposed bill states that a video provider with more than 1,000,000 access lines shall provide
access to its services to at least 25 percent of the households within its service area within 3 three
years after the date it begins providing service and 40 percent within 6 years. HB 1500 does not,
however, ensure compliance with these goals. As a matter of public policy, how will the State,
its citizens and its local governments know whether video service providers are meeting these
buildout goals? HB 1500 does not address this question. FYI: Similar legislation adopted recently
in other states require video providers to file annual compliance reports with their public utility
commissions (i.e. the Illinois Commerce Commission) and local governments.
• HB 1500 gives video' service providers eminent domain and condemnation powers (See Section 94)
The State of Illinois adopted sweeping changes to its eminent domain laws in 2006. Here is the first
attempt to weaken those changes. Why should video service providers be given eminent domain
and condemnation powers? They are private companies, not vital public utilities! FYI: This
provision is not included in similar legislation adopted in other states.
• HB 1500 gives video providers access to property of all kinds (See Section 21 -1201)
A provision of the proposed bill states that property owners or others in possession or control of
property shall not forbid video providers access to their property for the purposes of constructing,
installing and maintaining their facilities. Properties included in this provision are residential
buildings, improved or unimproved real estate, and property owned or in the possession of public
utilities, railroads, or owners or operators of pipelines. Why should the State of Illinois grant
video service providers access to private 'property? They are private companies, not public
utilities! FYI: This provision is not included in similar legislation adopted in other states. (OVER... )
City of Chicago • DuPage Mayors and Managers Conference • Lake County Municipal League • McHenry County Council of Governments
Metro West Council of Governments • Northwest Municipal Conference - South Suburban Mayors and Managers Association
Southwest Conference of Mayors - West Central Municipal Conference - Will County Governmental League
177 North State Street, Suite 500, Chicago, Illinois 60601
Tel: 312.201.4505 Fax: 312.553.4355
• HB 1500 provides no real customer service protection (See Section 21- 501(1))
The bill requires video service providers to comply with federal customer service regulations,
but does not offer a mechanism to enforce compliance. Where can customers go with complaints
about their service? Who will ensure that video providers are indeed complying with the
federal regulations? HB 1500 is silent on these points. FYI: Other states that have passed
statewide franchising laws vest this authority in either their public utility commission or their local
governments as they already enforce compliance of federal standards for cable television services.
HB 1500 provides no real customer privacy protection (See Section 21- 501(2))
The proposed legislation also requires video service providers to comply with federal privacy
protection regulations, but as with customer service rules, it does not ensure their compliance.
Where can citizens go to complain if they believe their rights to privacy are being compromised?
HB 1500 doe not address this. FYI: Similar legislation adopted in other states does.
• HB 1500 allows video providers to eliminate PEG channels (See Section 21 -601)
Video providers are allowed to re -claim any local public, education and government access
programming that are not used for at least 8 hours per day of "non- repeat" programming for 3
consecutive months. Most PEG channels show repeats of city council/ village board meetings, school
events and community events. These repeats would not count toward the requirement of this section.
Municipalities, counties and schools would no doubt see their PEG channels re- claimed by video
providers to be programmed at their discretion. FYI: Other states that have adopted similar
legislation do not have a non - repeat provision or such high levels of programming requirements.
• HB 1500 will harm municipal and county budgets (See Section 21- 801(3))
The definition of gross revenues that is used to calculate service provider and PEG fees in the
proposed bill is narrower than what is used to calculate current cable television franchise fees. It
does not include home shopping commissions, advertising compensations or late fees - all of which
'are included in existing cable franchise fees. It is important to note that most of the customers
obtained by the newer video providers authorized under this bill will be former customers of
incumbent cable television providers. Therefore, most, if not all of the fees to be paid to local
governments by the newer video providers under HB 1500 will replace existing franchise fees
and not be new revenue. Employing a narrower definition of gross revenues will result in a net
decrease in the fees paid to cities, villages and counties.
The 272 Mayors of the Chicago region believe that the system of local franchising that has existed
in the State of Illinois for many, many years works. Not only has it worked for our municipalities, but
it has also worked for every natural gas utility, every electric utility, every cable company, every
telecommunications company and, yes, every telephone company with which our towns have
individual franchise agreements. In our view, there is no better method to manage the facilities these
entities place either in under ground conduits or on above g "round structur` es or utility poles and
protect the health, safety and welfare of our citizens.
The Chicago area's Mayors support competition in the video services market. We believe it can be
achieved under the current franchising system if all parties are willing. However, if the General
Assembly deems it necessary to authorize state franchising for video services, it should not be at the
expense of low income households, property owners, customer service rights and consumer protection
rights as is the case under HB 1500 in its current form.
WE URGE YOU TO VOTE "NO" ON HB 1500!
Resolution 2005- GL- MUN -TX -R -905
Resolution Supporting Increase in Non -
Home Rule Municipal Tax Page 2
Linda K Gonnella, CMC
Village Clerk