Epstein & August, LLP

Verizon is currently seeking cable licenses in approximately 23 northeast Massachusetts municipalities and reports it will be seeking additional cable licenses throughout much of Massachusetts and other states.

Initial discussions between Verizon and municipal officials have addressed matters such as licensing rules, Verizon’s fiber build, known as fiber to the premises (FTTP), and “level playing field” language in existing cable licenses. Municipal officials have emphasized their desire to have Verizon match or exceed the incumbent licensee’s provision of license terms and conditions, at a minimum to the extent required under existing level playing field terms (if any).

Verizon’s entry into cable licensing will require municipalities to implement initial licensing procedures, which are substantially different from renewal licensing. Accordingly, municipal officials in Massachusetts need to familiarize themselves with initial licensing procedures described below.

Depending upon the form of municipal charter in a community, the Issuing Authority can commence initial licensing by an initial selectmen’s, Mayor’s or City Manager’s decision. The Issuing Authority then advertises for license applications to be submitted to the community from any and all bidders. Once received, the Issuing Authority reviews license application(s) received and prepares an “Issuing Authority Report” (“IAR”) which will include specifications for a new cable television license. The license applicant(s) then submits a revised application in response to the IAR. If Verizon is the only applicant, the municipality and Verizon may engage in direct negotiations. If there are multiple applicants, which is unlikely, the municipality must treat the applications as competitive bids. Because the initial licensing process is open to multiple applicants, the Cable Division’s rules are designed for a competitive bidding process (in contrast to license renewal in which the municipality must address the incumbent licensee on a stand-alone basis). Essential details regarding the foregoing procedures may be found in 207 Code of Massachusetts Regulations 3.00 et seq.

Municipal officials should consider the licensing process only after carefully considering level playing field language, if any, in the incumbent’s license. Because some level playing field clauses may allow a current cable provider to ask for amendment of existing license provisions if it can demonstrate that the new cable provider has received more favorable terms, it is essential to negotiate a Verizon license that contains provisions that are not more favorable or less burdensome than those in the incumbent’s license. Although not binding law in Massachusetts, a recent Connecticut case illustrates potentially applicable level playing field clause principles. The Connecticut Department of Public Utility Control was upheld in its ruling that level playing field equivalency between new and incumbent cable licenses could be gauged by comparing the aggregate burdens and benefits of the two licenses when taken as a whole, and equivalency need not be established on an item-by-item basis. United Cable Television Services Corp. v. Dept. of Public Utility Control, 235 Conn. 334 (1995).

Another municipal concern is Verizon’s reported efforts to seek further federal deregulation of municipal licensing requirements, which could undermine municipal licensing efforts. Some municipal officials are concerned that Verizon is representing that it will be subject to local licensing at the same time Verizon is reported to be seeking federal relief from that same licensing.

ACM Northeast To Hold Conference

The Alliance for Community Media is holding its Spring conference for the Northeast on May 12-13, 2005. Entitled “Changing Tides”, the conference will feature workshops, speakers, and roundtable discussions, including:

· Public policy workshops on Verizon licensing and license renewals;

· “Ask the Lawyers” Panel;

· Community television studio management and fundraising;

· Trade show Thursday, May 12^th.

The conference is co-sponsored by the Massachusetts chapter of the National Association of Telecommunications Officers and Advisors (NATOA). It will be held at the Seacrest Resort and Conference Center in Falmouth, MA.

Additional information and registration forms are available online at www.acm-ne.org