Despite Changes, Possible Calif. Video Franchise Law Update Irks Cable

A California Senate panel scaled back what the California Public Utilities Commission could require from cable companies under a proposed update of the state’s 2006 video franchise law, known as the Digital Infrastructure and Video Competition Act (DIVCA). At a hearing webcast Monday, the Senate Communications Committee voted 12-4 to approve the Assembly-passed AB-1826 with amendments. The Senate committee delayed receiving testimony on an Assembly-passed equity bill (AB-2239) that would ban digital discrimination as defined by the FCC (see 2405230012).

Majority Democrats supported advancing AB-1826 to the Appropriations Committee, while all Republicans voted no. Assemblymember Chris Holden's (D) bill would increase fines for service-quality problems and seeks increased participation from the public and its advocates in the franchise renewal process. However, the Senate committee suggested several amendments. A Friday bill analysis noted, "As currently drafted, this bill could establish an infeasible public hearing framework for cable franchise renewals, create conflicting rules for application reviews and penalty assessments, and expand the CPUC’s authority for regulating franchise[s] without specifying how such authority should be exercised."

Holden accepted the committee’s amendments during the Monday hearing. One change reduced the number of public hearings required for a renewal to two, one of which may be virtual, said Vice Chair Brian Dahle (R). The bill previously required four hearings for large cable companies. Another committee amendment moved a required CPUC evaluation of each franchise from the application process to the CPUC's existing DIVCA annual report, said Dahle. In addition, the amended bill no longer changes franchise fee-related rules. The CPUC’s ability to tariff cable franchises and information the CPUC can require as part of approving a franchise application also were left untouched, he said.

The cable industry believes the committee's amendments are moving the bill the right way, Amanda Gualderama, California Broadband & Video Association director-legislative and regulatory advocacy, said. But industry continues reviewing the latest changes and remains opposed, she said. Gualderama added that the CPUC has an open rulemaking to update how it handles DIVCA. "It would seem that the CPUC believes it already has the statutory authority to modernize DIVCA and that changes to the statute are unnecessary." USTelecom and California Chamber of Commerce also oppose the bill, lobbyist Yolanda Benson said.

Sen. Josh Becker (D) had hoped for no opposition after the committee amendments. Becker voted yes but said he could change his on the Senate floor. Holden said he aims to keep talks alive and get opponents to pull back their objections. Updating DIVCA is one tool the state can use to close the digital divide, the Assembly member said. Also, AB-1826 “would align DIVCA with federal law by establishing a renewal process that authorizes the CPUC to initiate a proceeding to receive public input and complete a performance evaluation for each franchise holder,” he said.

The bill would make the renewal process fair and more transparent, California Emerging Technology Fund Director-Policy Leticia Alejandrez testified. "CETF appreciates the wisdom of revisiting video franchising as a powerful vehicle for closing the digital divide, promoting digital inclusion and achieving digital equity.”

While the committee punted for now on the digital discrimination bill by Assemblymember Mia Bonta (D), a Friday committee analysis suggested some amendments. The bill’s definition of digital discrimination should conform more with the FCC's, the bill analysis said. Clarify that the prohibition applies to the same covered entities in the FCC order, it added. "The bill’s definition of disparate impact does not include policies and practices justified by a substantial, legitimate business interest," it added.

Also, the committee suggested deleting "vague and unnecessary" rules proposed for CPUC broadband programs in AB-2239. "In certain cases, these requirements may create unnecessary work for programs specifically aimed at addressing broadband inequities experienced by low-income and non-white populations," it said. For example, applicants for public housing and tribal technical assistance money would submit an affidavit that they won't discriminate, but "these grant programs are only available to entities that are aiming to address existing broadband gaps experienced by low-income and tribal populations," it said. The committee didn't take up AB-2239 on Monday due to "[u]nexpected absences from committee members," a Bonta spokesperson emailed Tuesday.