FCC Video Franchising Defense Murky, Contradictory, Localities Tell 6th Circuit

municipalities said the FCC argues that in-kind services always have been subject to a 5 percent franchise fee cap. The municipal interests are appealing a 2007 FCC order that extended to incumbent cable operators many limits put on new entrants and a 2015 order clarifying that franchising regulations don't apply to state laws on cable TV or to state-level franchising authorities (see 1605020030). The agency's own counsel said in-kind services weren't always capped, contend petitioners and supporting interveners Boston; Houston; Larchmont and Mamaroneck town/village, New York; Mount Hood (Oregon) Cable Regulatory Commission; and Texas Coalition of Cities for Utility Issues in the new joint filing. They said the FCC justification for pre-empting most-favored-nation (MFN) clauses doesn't rebut their contention that one-way pre-emption goes against Cable Act goals. "The agency claims it did not wish to interfere with existing contracts, but as it had already done so by preempting the agreements upon which MFN clauses inherently depend in [the 2007 order], its justification fails and cannot be reconciled with its decision to treat the validity of other contractual clauses on a case-by-case basis," they said. They said the FCC concession that local franchising authorities can require institutional networks (I-Nets) not used to provide cable services shows LFA authority isn't limited to providing cable services over cable systems. And they said the FCC continues to be unclear on whether it believes state licensing franchises are pre-empted by the 2015 order: "This Court should rule that any U.S. District Court presented with an attempt to apply any of the Orders ... dismiss the case where there is a state-level franchising regime." The FCC didn't comment Friday.