AB606: Bill Text

2009 - 2010 LEGISLATURE

2009 Assembly BILL 606

December 8, 2009 - Introduced by Representatives Hebl, Sinicki, Smith, Molepske Jr., Black, Berceau, Turner, Hintz, Pope-Roberts, Roys, Steinbrink, Kessler, Pocan, Hilgenberg, Hixson, Van Akkeren, Schneider, Benedict, Vruwink, Bies, Hubler, Sherman, Garthwaite, Parisi, A. Williams and Hraychuck, cosponsored by Senators Vinehout, Miller, Robson, Risser and Carpenter. Referred to Committee on Energy and Utilities.

AB606,2,5 An Act to repeal 66.0420 (2) (g), 66.0420 (3) (c), 66.0420 (7) (a) 2m. and 66.0420 (7) (b); to renumber and amend 66.0420 (3) (i); to amend 20.115 (1) (jb), 20.155 (1) (title), 20.155 (1) (g), 66.0420 (3) (a), 66.0420 (3) (d) (intro.), 66.0420 (3) (d) 1., 66.0420 (3) (e) 1., 66.0420 (3) (e) 2. b., 66.0420 (3) (f) (title), 66.0420 (3) (f) 1., 66.0420 (3) (f) 2., 66.0420 (3) (f) 4., 66.0420 (3) (g), 66.0420 (3) (h), 66.0420 (3) (j), 66.0420 (5) (a) 3., 66.0420 (5) (b) 1. a., 66.0420 (5) (b) 2., 66.0420 (5) (d) 1., 66.0420 (7) (a) 1., 66.0420 (7) (e) 2., 66.0420 (7) (em) (title), 66.0420 (7) (em) 1., 66.0420 (7) (em) 2., 66.0420 (7) (em) 3., 66.0420 (7) (em) 4., 66.0420 (7) (f), 66.0420 (8) (e), 66.0420 (10), 66.0420 (11), 66.0420 (13) (a), 66.0420 (13) (b), 66.0420 (13) (c), 100.209 (title), 100.209 (1) (c), 100.209 (2) (a), 100.209 (3), 100.209 (4) (a), 100.209 (4) (b), 100.261 (3) (c), 196.44 (1) and 196.44 (2); to repeal and recreate 66.0420 (3) (i) (title), 66.0420 (3) (k), 66.0420 (5) (c) 3. a., 66.0420 (8) (b) and 66.0420 (9); and to create 20.155 (1) (k), 66.0420 (2) (fm), 66.0420 (2) (q), 66.0420 (3) (i) 1. to 3., 66.0420 (3) (L), 66.0420 (5) (d) 3. and 4., 66.0420 (5e), 66.0420 (7) (em) 5., 66.0420 (8g), 66.0420 (8r), 66.0420 (13) (d), 66.0420 (14), 100.209 (1) (b), 100.209 (1) (e), 100.209 (2m) and 196.85 (1m) (e) of the statutes; relating to: the regulation of video service providers and interim cable operators, granting rule-making authority, making an appropriation, and providing a penalty.

Analysis by the Legislative Reference Bureau

Under current law, with certain exceptions, a person may not provide video service unless the Department of Financial Institutions (DFI) has issued a video service franchise to the person. The prohibition was enacted as part of 2007 Wisconsin Act 42, which made substantial changes to the regulation of cable television service. Current law defines "video service," in general, as cable television service, and other service comparable to programming service provided by a television broadcast station, that is provided through facilities located, at least in part, in public rights-of-way. Current law refers to a person who is granted a video service franchise as a "video service provider." One of the exceptions to the prohibition applies to a person operating under a cable television franchise granted by a municipality before the enactment of 2007 Wisconsin Act 42. Current law allows such a person to elect to continue to provide cable television service until the franchise expires. Upon expiration of the municipally granted franchise, the person must apply to DFI for a video service franchise. Current law refers to a person who elects to operate under a municipally granted cable television franchise until the franchise's expiration as an "interim cable operator."

This bill transfers DFI's duties regarding video service franchises and video service providers to the Public Service Commission (PSC). In addition, the bill allows the PSC to bill a franchise applicant or video service provider for the expenses incurred by the PSC regarding an application and other matters under the PSC's jurisdiction regarding the applicant or provider. The PSC has similar authority under current law to bill a public utility for the costs incurred by the PSC in regulating the public utility.

In addition, the bill requires a video service provider to apply to the PSC to renew a video service franchise every five years. Current law does not require renewal of a video service franchise. The PSC may not renew a video service franchise under the bill if the PSC determines that the video service provider has exhibited a pattern of noncompliance with requirements under current law relating to video service, including state consumer protection requirements, as well as regulations of the Federal Communications Commission (FCC) that are described below. Also, the bill allows the PSC to revoke a video service franchise if the PSC makes the same determination. Under current law, DFI may revoke a video service franchise if DFI determines that a video service provider fails to substantially meet a material requirement imposed by the DFI.

The bill also allows a municipality to require a video service provider that provides service in the municipality a quarterly video service fee of no more than 5 percent of the provider's gross receipts. Under current law, under certain circumstances, a municipality may be limited to a percentage that is less than 5 percent. In addition, the bill repeals a provision created by 2007 Wisconsin Act 42 that allows a video service provider to deduct right-of-way permit fees imposed by a municipality from any other compensation that is due to the municipality, including the video service fee.

Current law requires certain video service providers that use telecommunications facilities to provide video service to comply with two deadlines for providing access to their video service. The deadlines apply if the video service provider had more than 500,000 basic local exchange access lines in this state on January 1, 2007. The first deadline requires such a video service provider to provide access to 35 percent of households within the provider's basic local exchange service area no later than three years after beginning to provide video service. The second deadline requires such a video service provider to provide access to 50 percent of such households no later than five years after beginning to provide video service, or no later than two years after at least 30 percent of households with access to the provider's video service subscribe to the service for six consecutive months, whichever is later. Under certain circumstances, the Department of Agriculture, Trade and Consumer Protection (DATCP) can grant an extension or waiver of the deadlines. This bill eliminates the foregoing deadlines and creates a new deadline. Under the bill such a video service provider must provide access to 90 percent of such households no later than 18 months after the bill's effective date. A video service provider that fails to meet the deadline must pay $20,000,000 to the PSC, which must use the money to make grants to assist in the deployment of broadband service to underserved areas of the state. As under current law, under certain circumstances, DATCP can grant an extension or waiver of the deadline.

Current law prohibits municipalities from requiring video service providers and interim cable operators to provide monetary support for access facilities for public, educational, and governmental access channels (PEG channels) after January 1, 2011. The amount of monetary support that a municipality may require before that date is generally based on the amount of support that a municipality required prior to the enactment of 2007 Wisconsin Act 42. This bill changes current law so that it refers to support for PEG channels, rather than to monetary support for access facilities for PEG channels. The bill also allows a municipality to require, beginning on January 1, 2011, video service providers and interim cable operators to pay a fee for the purpose of supporting PEG channels. The fee, which must be set by ordinance, may be equal to no more than 1 percent of a video service provider's or interim cable operator's annual gross receipts. The bill also makes video service providers and interim cable operators responsible for making any changes to PEG channel content or programming that are necessary for compatibility with their service delivery technology or protocol. Under current law, municipalities that provide PEG channel programming are responsible for such changes. The bill also requires video service providers and interim cable operators to provide channel capacity for PEG channels with accessibility, functionality, and audio and visual quality that is at least equivalent to certain commercial channels. In addition, the bill requires video service providers and interim cable operators to do the following: 1) provide channel capacity for PEG channels so that it is viewable by subscribers without additional service or equipment charges; 2) provide such channel capacity on a service tier that is viewable by 100 percent of customers, rather than by more than 50 percent, which is required under current law; and 3) provide facilities adequate to carry signals for PEG channels without material degradation, alteration, or removal of PEG channel content. Also, the bill imposes requirements on the channel numbers used for PEG channels and clarifies duties under current law regarding the relocation of origination points for PEG channels. Additionally, the bill eliminates the authority of a video service provider or interim cable operator to provide certain restored PEG channel capacity on any service tier.

Current law also requires video service providers to pay annual fees to DFI. If a video service provider has 10,000 or less subscribers, the first annual fee is $2,000 and each subsequent fee is $100. Current law also requires video service providers to pay a $100 fee for notifying DFI about certain changes in information previously provided to DFI. This bill eliminates the fee for information changes, and also requires video service providers to pay annual fees to DATCP, rather than to DFI. Under current law, DATCP enforces certain video service consumer protection requirements. Under the bill, a video service provider with 10,000 or less in-state subscribers must pay an annual fee of $4,500 to DATCP, and a video service provider with more than 10,000 in-state subscribers must pay an annual fee of $50,000 to DATCP. In addition, the bill allows DATCP to adjust the amount of the fees by rule as necessary to cover administrative and enforcement costs. The bill also authorizes the creation of 5.0 FTE positions in DATCP for enforcing the video service consumer protection requirements. In addition, the bill requires DATCP to enforce certain prohibitions under current law regarding discrimination based on race or income in providing video service. Current law does not specify the state agency that enforces such prohibitions.

In addition, current law authorizes municipalities to require video service providers to comply, upon 90 days' advance notice, with regulations of the FCC regarding office hours and telephone availability; service installations, outages, and calls; and deadlines for refunds and service credits. However, a municipality is prohibited from requiring such compliance if more than one person offers video service in a municipality, or if a video service provider is subject to effective competition, as determined under FCC regulations. This bill eliminates the foregoing requirements and requires instead that video service providers comply with the foregoing FCC regulations, and that DATCP enforce compliance. In addition, the bill requires video service providers to comply with, and DATCP to enforce, additional FCC regulations regarding all of the following: 1) providing information about products, services, channels, prices, installation and service maintenance policies, and billing and complaint procedures; 2) providing advance written notice about changes to rates, programming services, and channel positions; and 3) providing clear, concise, and understandable bills, itemizing bills, and responding to billing complaints. Also, the bill allows a municipality to adopt or enact an ordinance or resolution requiring a video service provide to comply with the foregoing FCC regulations, as well as video service consumer protection requirements under state law enforced by DATCP. As a result, a municipality may enforce the same requirements as DATCP.

Finally, the bill does all of the following:

1. Requires a video service provider to carry a channel designated by WisconsinEye, which operates a nonprofit, statewide public affairs channel, or a successor to WisconsinEye specified by the PSC. A video service provider must carry the channel at no cost to WisconsinEye or such a successor. Also, the channel must be carried on the lowest cost service tier.

2. Requires the PSC to promulgate rules allowing a customer to return video service equipment to a video service provider at no cost to the customer, but only if the customer returns the equipment by a deadline specified in the rules.

3. Requires a video service provider to maintain at least one customer service facility within this state. The facility staff must have the capacity to accept payments; adjust bills; respond to repair, installation, reconnection, disconnection, and other service calls; and distribute and receive video service equipment.

4. Allows for the recovery of costs and attorney fees in certain actions regarding disputes over video service provider fees, as well as in actions to enforce the bill's requirements.

5. Changes one of the video service consumer protection requirements under current law so that certain repairs must be made within 24 hours after service interruptions are reported. Current law imposes a 72-hour deadline.

6. Subjects a person who violates video service requirements to a forfeiture of not more than $1,000 for each offense and not more than $10,000 for each occurrence.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB606, s. 1 Section 1. 20.115 (1) (jb) of the statutes is amended to read:

AB606,5,5 20.115 (1) (jb) Consumer protection, information, and education. The amounts in the schedule for consumer protection and consumer information and education. All moneys received under s. ss. 66.0420 (3) (k) and 100.261 (3) (b) shall be credited to this appropriation account, subject to the limit under s. 100.261 (3) (c).

AB606, s. 2 Section 2. 20.155 (1) (title) of the statutes is amended to read:

AB606,6,1 20.155 (1) (title) Regulation of public utilities and video service providers.

AB606, s. 3 Section 3. 20.155 (1) (g) of the statutes is amended to read:

AB606,6,9 20.155 (1) (g) Utility Public utility and video service provider regulation. The amounts in the schedule for the regulation of utilities and video service providers. Ninety percent of all moneys received by the commission under s. 196.85, 196.855, or 201.10 (3) shall be credited to this appropriation. Ninety percent of all receipts from the sale of miscellaneous printed reports and other copied material, the cost of which was originally paid under this paragraph, shall be credited to this appropriation.

AB606, s. 4 Section 4. 20.155 (1) (k) of the statutes is created to read:

AB606,6,12 20.155 (1) (k) Broadband grants. All moneys received under s. 66.0420 (8) (b) for making grants under s. 66.0420 (8) (b).

AB606, s. 5 Section 5. 66.0420 (2) (fm) of the statutes is created to read:

AB606,6,14 66.0420 (2) (fm) "Commission" means the public service commission.

AB606, s. 6 Section 6. 66.0420 (2) (g) of the statutes is repealed.

AB606, s. 7 Section 7. 66.0420 (2) (q) of the statutes is created to read:

AB606,6,18 66.0420 (2) (q) "Local commercial television station" has the meaning given in 47 USC 534 (h) (1).

AB606, s. 8 Section 8. 66.0420 (3) (a) of the statutes is amended to read:

AB606,6,23 66.0420 (3) (a) In general. Except for an interim cable operator, and except as provided in par. (c) and sub. (11), no person may provide video service in this state unless the department commission has issued a video service franchise to the person and the person has provided the notice required under par. (h).

AB606, s. 9 Section 9. 66.0420 (3) (c) of the statutes is repealed.

AB606, s. 10 Section 10. 66.0420 (3) (d) (intro.) of the statutes is amended to read:

AB606,7,3 66.0420 (3) (d) Application. (intro.) An applicant for a video service franchise shall submit an application to the department commission that consists of all of the following:

AB606, s. 11 Section 11. 66.0420 (3) (d) 1. of the statutes is amended to read:

AB606,7,8 66.0420 (3) (d) 1. The location and telephone number of the applicant's principal place of business, the names of the principal executive officers of the applicant, and the names of any persons authorized to represent the applicant before the department commission.

AB606, s. 12 Section 12. 66.0420 (3) (e) 1. of the statutes is amended to read:

AB606,7,14 66.0420 (3) (e) 1. At the time that an applicant submits an application under par. (d), or a video service provider submits a notification regarding a modification to an application under par. (j), to the department commission, the applicant or video service provider shall serve a copy of the application or notification on each municipality in the video franchise area.

AB606, s. 13 Section 13. 66.0420 (3) (e) 2. b. of the statutes is amended to read:

AB606,7,23 66.0420 (3) (e) 2. b. If a municipality specified in subd. 2. a. has granted any cable franchise that is in effect immediately before January 9, 2008, the municipality shall, no later than 10 business days after receipt of the copy, notify the applicant in writing of the number of PEG channels for which incumbent cable operators are required to provide channel capacity in the municipality, the amount and type of monetary support for access facilities for PEG channels required of incumbent cable operators as described in sub. (7) (em) 1. to 4., and the percentage of revenues that incumbent cable operators are required to pay the municipality as franchise fees.

AB606, s. 14 Section 14. 66.0420 (3) (f) (title) of the statutes is amended to read:

AB606,7,25 66.0420 (3) (f) (title) Department Commission duties.

AB606, s. 15 Section 15. 66.0420 (3) (f) 1. of the statutes is amended to read:

AB606,8,5 66.0420 (3) (f) 1. After the filing of an application, the department commission shall notify the applicant in writing as to whether the application is complete and, if the department commission has determined that the application is not complete, the department commission shall state the reasons for the determination.

AB606, s. 16 Section 16. 66.0420 (3) (f) 2. of the statutes is amended to read:

AB606,8,15 66.0420 (3) (f) 2. After the filing of an application that the department commission has determined is complete, the department commission shall determine whether an applicant is legally, financially, and technically qualified to provide video service. If the department commission determines that an applicant is legally, financially, and technically qualified to provide video service, the department commission shall issue a video service franchise to the applicant. If the department commission determines that an applicant is not legally, financially, and technically qualified to provide video service, the department commission shall reject the application and shall state the reasons for the determination.

AB606, s. 17 Section 17. 66.0420 (3) (f) 4. of the statutes is amended to read:

AB606,8,19 66.0420 (3) (f) 4. The department commission shall promulgate rules for determining whether an applicant is legally, financially, and technically qualified to provide video service.

AB606, s. 18 Section 18. 66.0420 (3) (g) of the statutes is amended to read:

AB606,8,24 66.0420 (3) (g) Effect of video service franchise. A video service franchise issued by the department commission authorizes a video service provider to occupy the public rights-of-way and to construct, operate, maintain, and repair a video service network to provide video service in the video franchise area.

AB606, s. 19 Section 19. 66.0420 (3) (h) of the statutes is amended to read:

AB606,9,4 66.0420 (3) (h) Notice before providing service. No later than 10 business days before providing video service in a municipality in a video franchise area, a video service provider shall provide notice to the department commission and the municipality.

AB606, s. 20 Section 20. 66.0420 (3) (i) (title) of the statutes is repealed and recreated to read:

AB606,9,7 66.0420 (3) (i) (title) Renewal; revocation.

AB606, s. 21 Section 21. 66.0420 (3) (i) of the statutes is renumbered 66.0420 (3) (i) 4. and amended to read:

AB606,9,25 66.0420 (3) (i) 4. The department commission may revoke a video service franchise issued to a video service provider if the department commission determines that the video service provider has failed to substantially meet a material requirement imposed upon it by the department. Before commencing a revocation proceeding, the department shall provide the video service provider written notice of the department's intention to revoke the franchise and the department's reasons for the revocation and afford the video service provider a reasonable opportunity to cure any alleged violation. The department must, before revoking any video service franchise, afford a video service provider full due process that, at a minimum, must include a proceeding before a hearing officer during which the video service provider must be afforded the opportunity for full participation, including the right to be represented by counsel, to introduce evidence, to require the production of evidence, and to question or cross-examine witnesses under oath. A transcript shall be made of any such hearing. A video service provider may bring an action to appeal the decision of the department exhibited a pattern of noncompliance with one or more requirements or prohibitions under this section, ch. 100, any rule promulgated under s. 100.20 (2), any order issued under s. 100.20 (3), or 47 CFR 76.309, 76.1602, 76.1603, or 76.1619. A revocation is a contested case under ch. 227.

AB606, s. 22 Section 22. 66.0420 (3) (i) 1. to 3. of the statutes are created to read:

AB606,10,9 66.0420 (3) (i) 1. A video service provider shall apply to the commission to renew its video service franchise every 5 years. The commission may not renew a video service franchise if the commission determines that the applicant exhibited a pattern of noncompliance with one or more requirements or prohibitions under this section, ch. 100, any rule promulgated under s. 100.20 (2), any order issued under s. 100.20 (3), or 47 CFR 76.309, 76.1602, 76.1603, or 76.1619.

AB606,10,13 2. If the commission does not renew the video service franchise of an applicant for renewal, the commission shall notify the applicant and state the reasons for not renewing the video service franchise. The video service franchise shall terminate on the date specified in the notification.

AB606,10,17 3. If a video service provider gives at least 30 days' advance notice to the commission that the video service provider intends to terminate the video service franchise, the video service franchise shall expire on the termination date specified in the notice.

AB606, s. 23 Section 23. 66.0420 (3) (j) of the statutes is amended to read:

AB606,11,4 66.0420 (3) (j) Modifications. If there is any change in the information included in an application filed by a video service provider under this subsection, the video service provider shall notify the department commission and update the information within 10 business days after the change, except that if the video service provider determines to expand the area or areas of the state in which the video service provider intends to provide video service, the video service provider shall apply to the department commission for a modified video service franchise under par. (d). A video service provider that makes a notification regarding a change in the information specified in par. (d) 3., 4., or 5., shall include with the notification a fee of $100. No fee is required for a notification regarding a change in the information specified in par. (d) 1.

AB606, s. 24 Section 24. 66.0420 (3) (k) of the statutes is repealed and recreated to read:

AB606,11,12 66.0420 (3) (k) Annual fees. Upon issuance of a video service franchise to a video service provider, and annually thereafter, a video service provider with more than 10,000 in-state subscribers shall pay a fee of $50,000, and a video service provider with 10,000 or less in-state subscribers shall pay a fee of $4,500, to the department of agriculture, trade and consumer protection, except that the department may, by rule, adjust the amount of a fee as necessary to cover the department's costs in administering and enforcing sub. (8) and s. 100.209.

AB606, s. 25 Section 25. 66.0420 (3) (L) of the statutes is created to read:

AB606,11,18 66.0420 (3) (L) Commission expenses. The commission shall bill under s. 196.85 (1) an applicant for a video service franchise or a video service provider any expense incurred by the commission with respect to an application or any other matter under the commission's jurisdiction regarding the applicant or video service provider.

AB606, s. 26 Section 26. 66.0420 (5) (a) 3. of the statutes is amended to read:

AB606,11,23 66.0420 (5) (a) 3. An interim cable operator or video service provider shall provide any channel capacity for PEG channels required under this paragraph on any a service tier that is viewed by more than 50 100 percent of the interim cable operator's or video service provider's customers.

AB606, s. 27 Section 27. 66.0420 (5) (b) 1. a. of the statutes is amended to read:

AB606,12,10 66.0420 (5) (b) 1. a. Notwithstanding par. (a), an interim cable operator or video service provider may reprogram for any other purpose any channel capacity provided for a PEG channel required by a municipality under par. (a) if the PEG channel is not substantially utilized by the municipality. If the municipality certifies to the interim cable operator or video service provider that reprogrammed channel capacity for a PEG channel will be substantially utilized by the municipality, the interim cable operator or video service provider shall, no later than 120 days after receipt of the certification, restore the channel capacity for the PEG channel. Notwithstanding par. (a) 3., an interim cable operator or video service provider may provide restored channel capacity for a PEG channel on any service tier.

AB606, s. 28 Section 28. 66.0420 (5) (b) 2. of the statutes is amended to read:

AB606,12,17 66.0420 (5) (b) 2. Notwithstanding par. (a), if a municipality fails to provide the notice specified in sub. (3) (e) 2. before the deadline specified in sub. (3) (e) 2., no interim cable operator or video service provider is required to provide channel capacity for any PEG channel, or monetary support for access facilities for PEG channels pursuant to sub. (7) (em) 1. to 4., until the 90th day after the municipality provides such notice.

AB606, s. 29 Section 29. 66.0420 (5) (c) 3. a. of the statutes is repealed and recreated to read:

AB606,13,11 66.0420 (5) (c) 3. a. If a municipality produces or maintains PEG channel content or programming in a manner or form that is compatible with the interim cable operator's or video service provider's video service network and that permits the interim cable operator or video service provider to comply with the requirements of par. (d) 3., the municipality shall submit the content or programming to the interim cable operator or video service provider in that manner or form. If the municipality does not produce or maintain PEG channel content or programming in such manner or form, the interim cable operator or video service provider shall be responsible at its sole cost for any changes in the manner or form of the transmission that are necessary to make PEG channel content or programming compatible with the technology or protocol used by the interim cable operator or video service provider to deliver services. If an interim cable operator or video service provider is required to make such changes to the manner or form of the transmission, the municipality shall provide reasonable access to the interim cable operator or video service provider that allows the interim cable operator or video service provider to transmit the PEG channel programming in an economical manner subject to the requirements of par. (d) 3.

AB606, s. 30 Section 30. 66.0420 (5) (d) 1. of the statutes is amended to read:

AB606,14,9 66.0420 (5) (d) 1. If a municipality requires an interim cable operator or video service provider to provide capacity for PEG channels under par. (a), the interim cable operator or video service provider shall be required to provide equipment and transmission capacity sufficient to connect the interim cable operator's or video service provider's headend or, video hub office, or transmission facilities to the municipality's PEG access channel origination points existing as of January 9, 2008. A municipality shall permit the interim cable operator or video service provider to determine the most economically and technologically efficient means of providing such equipment and transmission capacity. If a municipality requests that such a PEG access channel origination point be relocated, the interim cable operator or video service provider shall be required to provide only the first 200 feet of transmission line beginning at the relocated origination point that is necessary to connect the relocated origination point to the interim cable operator or video service provider's headend or, video hub office to such origination point, or transmission facilities. A municipality shall be liable for the costs of construction of such a transmission line beyond the first 200 feet from the relocated origination point to the headend, video hub office, or transmission facilities and for any construction costs associated with additional origination points, but not for the costs associated with the transmission of PEG programming over such line. The interim cable operator or video service provider may recover its costs to provide equipment and transmission capacity under this subdivision by identifying and collecting a "PEG Transport Fee" as a separate line item on customer bills.

AB606, s. 31 Section 31. 66.0420 (5) (d) 3. and 4. of the statutes are created to read: