47 U.S.C. § 541 — General franchise requirements

Page 284 TITLE 47—TELECOMMUNICATIONS § 537 Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 60 days after Oct. 5, 1992, see section 28 of Pub. L. 102–385, set out as an Effective Date of 1992 Amendment note under section 325 of this title. § 537. Sales of cable systems A franchising authority shall, if the franchise requires franchising authority approval of a sale or transfer, have 120 days to act upon any re- quest for approval of such sale or transfer that contains or is accompanied by such information as is required in accordance with Commission regulations and by the franchising authority. If the franchising authority fails to render a final decision on the request within 120 days, such re- quest shall be deemed granted unless the re- questing party and the franchising authority agree to an extension of time. (June 19, 1934, ch. 652, title VI, § 617, as added Pub. L. 102–385, § 13, Oct. 5, 1992, 106 Stat. 1489; amended Pub. L. 104–104, title III, § 301(i), Feb. 8, 1996, 110 Stat. 117.) Editorial Notes AMENDMENTS 1996—Pub. L. 104–104 redesignated subsec. (e) as entire section, substituted ‘‘A franchising authority’’ for ‘‘LIMITATION ON DURATION OF FRANCHISING AUTHORITY POWER TO DISAPPROVE TRANSFERS.—In the case of any sale or transfer of ownership of any cable system after the 36-month period following acquisition of such sys- tem, a franchising authority’’, and struck out subsecs. (a) to (d) which related to three-year holding period re- quirement, treatment of multiple transfers, exceptions to holding requirement, and waiver authority. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective 60 days after Oct. 5, 1992, see section 28 of Pub. L. 102–385, set out as an Effective Date of 1992 Amendment note under section 325 of this title. § 537a. Carriage of certain programming (a) Definitions In this section— (1) the term ‘‘local commercial television station’’ has the meaning given the term in section 534(h) of this title; (2) the term ‘‘multichannel video program- ming distributor’’ has the meaning given the term in section 522 of this title; (3) the term ‘‘qualified noncommercial edu- cational television station’’ has the meaning given the term in section 535(l) of this title; (4) the term ‘‘retransmission consent’’ means the authority granted to a multi- channel video programming distributor under section 325(b) of this title to retransmit the signal of a television broadcast station; and (5) the term ‘‘television broadcast station’’ has the meaning given the term in section 76.66(a) of title 47, Code of Federal Regula- tions. (b) Carriage of certain content Notwithstanding any other provision of law, a multichannel video programming distributor may not be directly or indirectly required, in- cluding as a condition of obtaining retrans- mission consent, to— (1) carry non-incidental video content from a local commercial television station, qualified noncommercial educational television station, or television broadcast station to the extent that such content is owned, controlled, or fi- nanced (in whole or in part) by the Govern- ment of the Russian Federation; or (2) lease, or otherwise make available, chan- nel capacity to any person for the provision of video programming that is owned, controlled, or financed (in whole or in part) by the Gov- ernment of the Russian Federation. (c) Rule of construction Nothing in this section may be construed as applying to the editorial use by a local commer- cial television station, qualified noncommercial educational television station, or television broadcast station of programming that is owned, controlled, or financed (in whole or in part) by the Government of the Russian Federa- tion. (Pub. L. 115–91, div. A, title X, § 1093, Dec. 12, 2017, 131 Stat. 1611.) Editorial Notes CODIFICATION Section was enacted as part of the National Defense Authorization Act for Fiscal Year 2018, and not as part of the Communications Act of 1934 which comprises this chapter. PART III—FRANCHISING AND REGULATION § 541. General franchise requirements (a) Authority to award franchises; public rights- of-way and easements; equal access to serv- ice; time for provision of service; assurances (1) A franchising authority may award, in ac- cordance with the provisions of this subchapter, 1 or more franchises within its jurisdiction; ex- cept that a franchising authority may not grant an exclusive franchise and may not unreason- ably refuse to award an additional competitive franchise. Any applicant whose application for a second franchise has been denied by a final deci- sion of the franchising authority may appeal such final decision pursuant to the provisions of section 555 of this title for failure to comply with this subsection. (2) Any franchise shall be construed to author- ize the construction of a cable system over pub- lic rights-of-way, and through easements, which is within the area to be served by the cable sys- tem and which have been dedicated for compat- ible uses, except that in using such easements the cable operator shall ensure— (A) that the safety, functioning, and appear- ance of the property and the convenience and safety of other persons not be adversely af- fected by the installation or construction of facilities necessary for a cable system; (B) that the cost of the installation, con- struction, operation, or removal of such facili- ties be borne by the cable operator or sub- scriber, or a combination of both; and (C) that the owner of the property be justly compensated by the cable operator for any Page 285 TITLE 47—TELECOMMUNICATIONS § 541 damages caused by the installation, construc- tion, operation, or removal of such facilities by the cable operator. (3) In awarding a franchise or franchises, a franchising authority shall assure that access to cable service is not denied to any group of po- tential residential cable subscribers because of the income of the residents of the local area in which such group resides. (4) In awarding a franchise, the franchising au- thority— (A) shall allow the applicant’s cable system a reasonable period of time to become capable of providing cable service to all households in the franchise area; (B) may require adequate assurance that the cable operator will provide adequate public, educational, and governmental access channel capacity, facilities, or financial support; and (C) may require adequate assurance that the cable operator has the financial, technical, or legal qualifications to provide cable service. (b) No cable service without franchise; exception under prior law (1) Except to the extent provided in paragraph (2) and subsection (f), a cable operator may not provide cable service without a franchise. (2) Paragraph (1) shall not require any person lawfully providing cable service without a fran- chise on July 1, 1984, to obtain a franchise unless the franchising authority so requires. (3)(A) If a cable operator or affiliate thereof is engaged in the provision of telecommunications services— (i) such cable operator or affiliate shall not be required to obtain a franchise under this subchapter for the provision of telecommuni- cations services; and (ii) the provisions of this subchapter shall not apply to such cable operator or affiliate for the provision of telecommunications serv- ices. (B) A franchising authority may not impose any requirement under this subchapter that has the purpose or effect of prohibiting, limiting, re- stricting, or conditioning the provision of a tele- communications service by a cable operator or an affiliate thereof. (C) A franchising authority may not order a cable operator or affiliate thereof— (i) to discontinue the provision of a tele- communications service, or (ii) to discontinue the operation of a cable system, to the extent such cable system is used for the provision of a telecommuni- cations service, by reason of the failure of such cable operator or affiliate thereof to ob- tain a franchise or franchise renewal under this subchapter with respect to the provision of such telecommunications service. (D) Except as otherwise permitted by sections 531 and 532 of this title, a franchising authority may not require a cable operator to provide any telecommunications service or facilities, other than institutional networks, as a condition of the initial grant of a franchise, a franchise re- newal, or a transfer of a franchise. (c) Status of cable system as common carrier or utility Any cable system shall not be subject to regu- lation as a common carrier or utility by reason of providing any cable service. (d) Informational tariffs; regulation by States; ‘‘State’’ defined (1) A State or the Commission may require the filing of informational tariffs for any intrastate communications service provided by a cable sys- tem, other than cable service, that would be subject to regulation by the Commission or any State if offered by a common carrier subject, in whole or in part, to subchapter II of this chap- ter. Such informational tariffs shall specify the rates, terms, and conditions for the provision of such service, including whether it is made avail- able to all subscribers generally, and shall take effect on the date specified therein. (2) Nothing in this subchapter shall be con- strued to affect the authority of any State to regulate any cable operator to the extent that such operator provides any communication serv- ice other than cable service, whether offered on a common carrier or private contract basis. (3) For purposes of this subsection, the term ‘‘State’’ has the meaning given it in section 153 of this title. (e) State regulation of facilities serving sub- scribers in multiple dwelling units Nothing in this subchapter shall be construed to affect the authority of any State to license or otherwise regulate any facility or combination of facilities which serves only subscribers in one or more multiple unit dwellings under common ownership, control, or management and which does not use any public right-of-way. (f) Local or municipal authority as multichannel video programming distributor No provision of this chapter shall be construed to— (1) prohibit a local or municipal authority that is also, or is affiliated with, a franchising authority from operating as a multichannel video programming distributor in the fran- chise area, notwithstanding the granting of one or more franchises by such franchising au- thority; or (2) require such local or municipal authority to secure a franchise to operate as a multi- channel video programming distributor. (June 19, 1934, ch. 652, title VI, § 621, as added Pub. L. 98–549, § 2, Oct. 30, 1984, 98 Stat. 2786; amended Pub. L. 102–385, §§ 7(a)(1), (b), (c), Oct. 5, 1992, 106 Stat. 1483; Pub. L. 104–104, § 3(d)(3), title III, § 303(a), Feb. 8, 1996, 110 Stat. 61, 124.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (f), was in the original ‘‘this Act’’, meaning act June 19, 1934, ch. 652, 48 Stat. 1064, known as the Communications Act of 1934, which is classified principally to this chapter. For com- plete classification of this Act to the Code, see section 609 of this title and Tables. AMENDMENTS 1996—Subsec. (b)(3). Pub. L. 104–104, § 303(a), added par. (3). Page 286 TITLE 47—TELECOMMUNICATIONS § 542 Subsec. (d)(3). Pub. L. 104–104, § 3(d)(3), substituted ‘‘section 153’’ for ‘‘section 153(v)’’. 1992—Subsec. (a)(1). Pub. L. 102–385, § 7(a)(1), inserted before period at end ‘‘; except that a franchising au- thority may not grant an exclusive franchise and may not unreasonably refuse to award an additional com- petitive franchise. Any applicant whose application for a second franchise has been denied by a final decision of the franchising authority may appeal such final de- cision pursuant to the provisions of section 555 of this title for failure to comply with this subsection’’. Subsec. (a)(4). Pub. L. 102–385, § 7(b), added par. (4). Subsec. (b)(1). Pub. L. 102–385, § 7(c)(1), inserted ‘‘and subsection (f)’’ after ‘‘paragraph (2)’’. Subsec. (f). Pub. L. 102–385, § 7(c)(2), added subsec. (f). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1992 AMENDMENT Amendment by Pub. L. 102–385 effective 60 days after Oct. 5, 1992, see section 28 of Pub. L. 102–385, set out as a note under section 325 of this title. EFFECTIVE DATE Section effective 60 days after Oct. 30, 1984, except where otherwise expressly provided, see section 9(a) of Pub. L. 98–549, set out as a note under section 521 of this title. § 542. Franchise fees (a) Payment under terms of franchise Subject to the limitation of subsection (b), any cable operator may be required under the terms of any franchise to pay a franchise fee. (b) Amount of fees per annum For any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator’s gross revenues derived in such period from the operation of the cable system to provide cable services. For purposes of this sec- tion, the 12-month period shall be the 12-month period applicable under the franchise for ac- counting purposes. Nothing in this subsection shall prohibit a franchising authority and a cable operator from agreeing that franchise fees which lawfully could be collected for any such 12-month period shall be paid on a prepaid or de- ferred basis; except that the sum of the fees paid during the term of the franchise may not exceed the amount, including the time value of money, which would have lawfully been collected if such fees had been paid per annum. (c) Itemization of subscriber bills Each cable operator may identify, consistent with the regulations prescribed by the Commis- sion pursuant to section 543 of this title, as a separate line item on each regular bill of each subscriber, each of the following: (1) The amount of the total bill assessed as a franchise fee and the identity of the fran- chising authority to which the fee is paid. (2) The amount of the total bill assessed to satisfy any requirements imposed on the cable operator by the franchise agreement to sup- port public, educational, or governmental channels or the use of such channels. (3) The amount of any other fee, tax, assess- ment, or charge of any kind imposed by any governmental authority on the transaction be- tween the operator and the subscriber. (d) Court actions; reflection of costs in rate structures In any court action under subsection (c), the franchising authority shall demonstrate that the rate structure reflects all costs of the fran- chise fees. (e) Decreases passed through to subscribers Any cable operator shall pass through to sub- scribers the amount of any decrease in a fran- chise fee. (f) Itemization of franchise fee in bill A cable operator may designate that portion of a subscriber’s bill attributable to the fran- chise fee as a separate item on the bill. (g) ‘‘Franchise fee’’ defined For the purposes of this section— (1) the term ‘‘franchise fee’’ includes any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such; (2) the term ‘‘franchise fee’’ does not in- clude— (A) any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services but not in- cluding a tax, fee, or assessment which is un- duly discriminatory against cable operators or cable subscribers); (B) in the case of any franchise in effect on October 30, 1984, payments which are re- quired by the franchise to be made by the cable operator during the term of such fran- chise for, or in support of the use of, public, educational, or governmental access facili- ties; (C) in the case of any franchise granted after October 30, 1984, capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities; (D) requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indem- nification, penalties, or liquidated damages; or (E) any fee imposed under title 17. (h) Uncompensated services; taxes, fees and other assessments; limitation on fees (1) Nothing in this chapter shall be construed to limit any authority of a franchising author- ity to impose a tax, fee, or other assessment of any kind on any person (other than a cable oper- ator) with respect to cable service or other com- munications service provided by such person over a cable system for which charges are as- sessed to subscribers but not received by the cable operator. (2) For any 12-month period, the fees paid by such person with respect to any such cable serv- ice or other communications service shall not exceed 5 percent of such person’s gross revenues derived in such period from the provision of such service over the cable system. (i) Regulatory authority of Federal agencies Any Federal agency may not regulate the amount of the franchise fees paid by a cable op-