Local-government telecommunications policy checklist for 2023

In recent years, local governments have faced the twin challenges of addressing the broadband needs of families, businesses and schools—made urgent by the COVID-19 pandemic—while simultaneously defending their regulatory authority and property rights against federal actions that prioritize nationwide infrastructure deployment over local control of land use and local public property. At the same time, communications markets, technologies and business practices continue to evolve at a rapid pace. Successful advocacy before Congress, the Federal Communications Commission (FCC) and the courts has tempered or reversed some recent industry efforts damaging to local interests. But there are new threats and opportunities on the horizon. This overview will catch you up on where we are now and what’s ahead for 2023.

Capitalizing on broadband funding opportunities
Chief among opportunities in 2023 is for local governments to tap into federal dollars available for broadband. Federal laws enacted in 2021, the American Rescue Plan Act and the Infrastructure Investment and Jobs Act, created new broadband funding and grant programs. Local governments are eligible for some of these programs, and some will be administered through the states. Some of the most important funding programs include:

• Affordable Connectivity Program (ACP)
• American Rescue Plan Act (ARPA) Coronavirus State & Local Fiscal Recovery Funds
• Broadband Equity, Access, and Deployment (BEAD) Program
• Digital Equity Act Program

Resources can help communities pursue affordable broadband access to all their constituents, residential and business alike. Building strong relationships with state partners and agencies will be key, as will careful attention to compliance with grant funding requirements and grant conditions.

Protecting cable/video service franchise fee revenues from offsets
In 2023, it is expected that long simmering cable franchise fee issues between local governments and cable operators will return to the FCC in a remand proceeding. In 2019, the FCC issued a cable franchising order that, among other things, allowed offsets against franchise fees for franchise requirements such as providing an institutional network or I-Net for local government use, and complimentary cable services to government buildings. A successful court challenge by local governments resulted in 2021 in the appeals court substantially limiting the amount of in-kind offsets that cable operators could claim against franchise fees (rejecting the FCC’s market rates in favor of marginal costs). One of the FCC commissioner seats is vacant, once the current nominee is confirmed, the FCC will consider revisions to its rules to conform with the court’s decision.

In the meantime, localities should beware that the cable operators are already making demands of local jurisdictions based on their own interpretations of the FCC’s rules and the court’s decision—interpretations that are skewed in the cable operator’s favor. In this fluid environment, it is imperative that local governments seek their own advice rather than relying on cable operators. Moreover, the court did not alter FCC rulings requiring operators to notify franchising authorities if they intend to claim offsets (which are optional, not required), and directing that franchise terms must be renegotiated within a reasonable period of time (they do not automatically take effect). Where cable operators seek marginal cost offsets local governments should seek proof where appropriate, unless the amount proposed is minimal. The Cable Act requires cable operators to pass through to their subscribers costs recouped from offsets as reductions in franchise fees.

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