HF4978

Purpose

Explain and update Minnesota’s rules for cable communications systems and how they obtain a franchise, including simplifying procedures and updating definitions.

Key definitions and scope

• Cable communications system: a system that receives and amplifies programs from TV or radio stations or other origins and distributes those programs by wire, cable, microwave, or other means to subscribers, regardless of ownership.
• Exclusions (from being treated as a cable system under the law): systems serving fewer than 50 subscribers; systems serving more than 50 but fewer than 1,000 subscribers if a local government vote removes them from franchise provisions, with conditions about subsequent removal if subscriber totals grow; systems with 50–999 subscribers that have been removed can return to the franchise provisions if a majority of the served political subdivisions vote to return; master antenna television systems; specialized closed-circuit systems not using public rights-of-way for building their plant; translator systems that rebroadcast over-the-air signals.
• These definitions determine whether a system is regulated under the cable franchise process or is treated as outside that process.

Main provisions

• Franchising process changes:
  • The bill repeals the existing notice-based franchise procedure (no more published notice and related requirements for applying for a franchise under the old framework).
  • The bill repeals Minnesota Statutes 2024 section 238.081 subdivisions 1, 2, 3, and 5, which contained prior franchising procedures and notice requirements.
  • It replaces the old process with a “franchising proposal” application that the municipality and applicant may negotiate after submission.
• Contents of the franchising proposal application:
  • Proposals must be notarized and include a detailed set of information, including:
  • Plans for channel capacity: total channels capable of energizing and channels to be energized immediately.
  • Statement of which television and radio signals will be carried with permission sought from the Federal Communications Commission (FCC).
  • System design and operation details: locations of antennas and head end (if known), schedule for activating two-way capacity, type of automated services, number of channels and services for access/cable broadcasting, and a schedule of charges for facilities and staff assistance for access cable broadcasting.
  • Terms and conditions for service to governmental and educational entities.
  • Schedule of proposed rates and policy on difficult connections.
  • Construction timeline for the entire system and sequencing for wiring the service area.
  • Applicant qualifications and experience in the cable field.
  • Municipalities where the applicant owns/operates a cable system or has outstanding franchises.
  • Plans for financing the proposed system, including sources and any limitations.
  • Ownership information: corporate structure, officers/directors, ownership shares, and related entities.
  • Any omissions or variations from the proposal requirements.
• Negotiation rights: after submission of the franchising proposal, the municipality and applicant may negotiate franchise terms.
• Overall effect: the bill shifts from a formal notice-based framework to a more information-rich, negotiated proposal process for granting cable franchises.

Significant changes to existing law

• Elimination of publication and mail notice requirements for franchise applications (removal of the Appendix FRANCHISE PROCEDURE notice system).
• Removal of several subdivisions of the old 238.081 franchise procedure (subdivisions 1, 2, 3, and 5) and their related provisions.
• Introduction of a notarized, content-rich franchising proposal that must be submitted to the municipality, with mandatory topics covering technical, financial, ownership, and service details.
• A more streamlined, negotiated approach to granting franchises rather than following the old notice-and-bid process.
• Clarification and retention of the ability to exclude very small systems from franchise regulation, while maintaining criteria for when such systems can return to the franchise framework.

Potential impacts to stakeholders

• Cable system operators: may experience a faster, more flexible process to obtain a franchise, provided they complete the notarized proposal with required details.
• Municipalities: gain a formal process to evaluate proposals through a written, negotiated framework rather than public notice procedures.
• Consumers in small systems: potential changes in regulation depending on whether their system remains under or is removed from franchise provisions.
• Transparency and public participation: the removal of published notice requirements could reduce public advance notice about franchise applications, depending on how municipalities handle the new process.

Relevant implications

• The bill uses terms such as cable communications system, franchise, franchising authority, and notice requirements, while also invoking FCC processes (permission to carry signals) and technical concepts (head end, two-way capacity, access cable broadcasting).

Relevant Terms - cable communications system - franchise - franchising authority - proposal/application (franchising proposal) - notarized - channel capacity - head end - two-way capacity - automated services - access cable broadcasting - FCC (Federal Communications Commission) - rates - construction schedule - governmental and educational entities - financing - ownership/disclosure - master antenna television system (MATS) - translator system - public rights-of-way - notice of intent to franchise (repealed) - publication notice requirement (repealed)