1.1                          A bill for an act 
  1.2             relating to telecommunications; regulating open video 
  1.3             systems; proposing coding for new law as Minnesota 
  1.4             Statutes, chapter 238A. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  [238A.01] [DEFINITIONS.] 
  1.7      Subdivision 1.  [SCOPE.] The words and phrases used in this 
  1.8   chapter have the meanings given them in this section unless a 
  1.9   different meaning clearly appears in the text. 
  1.10     Subd. 2.  [CABLE COMMUNICATIONS COMPANY.] "Cable 
  1.11  communications company" means a person owning, controlling, 
  1.12  operating, managing, or leasing a cable communications system 
  1.13  within the state.  An open video system operator is not a cable 
  1.14  communications company as defined in section 238.02, subdivision 
  1.15  2. 
  1.16     Subd. 3.  [CABLE COMMUNICATIONS SYSTEM.] "Cable 
  1.17  communications system" means a facility consisting of a set of 
  1.18  closed transmission paths and associated signal generation, 
  1.19  reception, and control equipment that is designated to provide 
  1.20  cable service that includes video programming and that is 
  1.21  provided to multiple subscribers within a community, but the 
  1.22  term does not include: 
  1.23     (1) a facility that services only to retransmit the 
  1.24  television signals of one or more television broadcast stations; 
  1.25     (2) a facility that serves subscribers without using public 
  2.1   rights-of-way; 
  2.2      (3) a facility of a common carrier, as defined in United 
  2.3   States Code, title 47, section 153, clause (10), that is 
  2.4   subject, in whole or in part, to the provisions of title II of 
  2.5   the Communications Act of 1934, United States Code, title 47, 
  2.6   section 151 et seq., as amended; or 
  2.7      (4) an open video system that complies with section 653 of 
  2.8   the federal Telecommunications Act of 1996, codified at United 
  2.9   States Code, title 47, section 573. 
  2.10     Subd. 4.  [CITY.] "City" includes both statutory and home 
  2.11  rule charter cities. 
  2.12     Subd. 5.  [FEDERAL COMMISSION.] "Federal commission" means 
  2.13  the Federal Communications Commission. 
  2.14     Subd. 6.  [GROSS REVENUES.] (a) "Gross revenues" means 
  2.15  revenues received from subscribers and all carriage revenues 
  2.16  received from unaffiliated video programming providers.  In 
  2.17  addition, gross revenues under this paragraph includes 
  2.18  advertising revenues received by an open video system operator 
  2.19  or its affiliates in connection with the provision of video 
  2.20  programming if the revenues are included in the calculation of 
  2.21  the incumbent cable operator's cable franchise fee. 
  2.22     (b) Gross revenues does not include: 
  2.23     (1) fees or other receipts derived by open video system 
  2.24  operators carriage of unaffiliated providers' cable service as 
  2.25  required by law pursuant to open video system obligations; 
  2.26     (2) revenues or other receipts derived from the provision 
  2.27  or transport of telecommunications or information services as 
  2.28  defined in state or federal law including the provision or 
  2.29  transport of data and Internet access; or 
  2.30     (3) taxes, fees, charges, or universal service 
  2.31  contributions on cable services imposed directly or indirectly 
  2.32  on a subscriber by any governmental unit or agency. 
  2.33     Subd. 7.  [LOCAL FRANCHISING AUTHORITY.] "Local franchising 
  2.34  authority" for cable communications means a city, town, 
  2.35  township, county, or joint cable communications authority that 
  2.36  has either organized or unorganized territory within its 
  3.1   boundaries. 
  3.2      Subd. 8.  [OPEN VIDEO SYSTEM OR OVS.] "Open video system" 
  3.3   or "OVS" means a facility consisting of a set of transmission 
  3.4   paths and associated signal generation, reception, and control 
  3.5   equipment that is designed to provide cable service that 
  3.6   includes video programming and that is provided to multiple 
  3.7   subscribers within a community; provided that, the federal 
  3.8   commission has certified that the system complies with Code of 
  3.9   Federal Regulations, title 47, part 76, under the Federal 
  3.10  Communications Commission.  Certification is pursuant to United 
  3.11  States Code, title 47, section 573, subsection (a), paragraph 
  3.12  (1), and the federal commission's regulations.  An open video 
  3.13  system is not a cable communications system as defined in 
  3.14  section 238.02, subdivision 3. 
  3.15     Subd. 9.  [OPEN VIDEO SYSTEM OPERATOR.] "Open video system 
  3.16  operator" means a person who is certified by the federal 
  3.17  commission, who provides video programming service or provides 
  3.18  video service over an open video system, and who, either 
  3.19  directly or through one or more affiliates, owns a significant 
  3.20  interest in the open video system or otherwise controls or is 
  3.21  responsible for the management and operation of the open video 
  3.22  system. 
  3.23     Subd. 10.  [PERSON.] "Person" means an individual, trustee, 
  3.24  partnership, local franchising authority, association, 
  3.25  corporation, or other legal entity, however organized. 
  3.26     Subd. 11.  [PROGRAM.] "Program" means a broadcast-type 
  3.27  program, signal, message, graphics, data, or communications 
  3.28  content service. 
  3.29     Subd. 12.  [PUBLIC, EDUCATIONAL, OR GOVERNMENT ACCESS 
  3.30  CHANNELS OR PEG.] "Public, educational, or government access 
  3.31  channels" or "PEG" means: 
  3.32     (1) channel capacity designed for public, educational, or 
  3.33  governmental use; and 
  3.34     (2) facilities and equipment for the use of that channel 
  3.35  capacity. 
  3.36     Subd. 13.  [SERVICE AREA.] "Service area," when used in 
  4.1   connection with a common carrier, as defined in United States 
  4.2   Code, title 47, section 153, clause (10), and subject in whole 
  4.3   or in part to title II of the Telecommunications Act of 1996, 
  4.4   Public Law 104-104, means that area as defined by the open video 
  4.5   system operator and authorized by the federal commission to 
  4.6   provide video programming within the area where the carrier is 
  4.7   authorized to offer telephone exchange service. 
  4.8      Subd. 14.  [STATE.] "State" means the state of Minnesota. 
  4.9      Sec. 2.  [238A.02] [LEGISLATIVE INTENT AND FINDINGS.] 
  4.10     (a) The Telecommunications Act of 1996 established the 
  4.11  means by which common carriers may enter video programming 
  4.12  through the use of an open video system.  As a means to carry 
  4.13  out its intent to encourage competition with existing cable 
  4.14  service providers and encourage new providers to enter video 
  4.15  programming, Congress granted common carriers the right to be 
  4.16  able to choose from video entry options and systems.  Open video 
  4.17  system operators authorized under terms of this chapter are 
  4.18  allowed to tailor their video services to meet the unique 
  4.19  competitive and consumer needs of individual markets. 
  4.20     (b) It is the policy of the state to remove barriers to 
  4.21  entry in the provisioning of video programming and to create an 
  4.22  environment that encourages competition for cable services by 
  4.23  enabling open video system operators to provide services in 
  4.24  Minnesota in accordance with the Telecommunications Act of 1996. 
  4.25     (c) Open video system operators authorized by the federal 
  4.26  commission are not subject to the provisions of section 237.79 
  4.27  or chapter 238. 
  4.28     Sec. 3.  [238A.03] [APPLICABILITY.] 
  4.29     Subdivision 1.  [OPEN VIDEO SYSTEMS AND OPERATORS.] This 
  4.30  chapter applies to every open video system and every open video 
  4.31  system operator, operating within the state, including an open 
  4.32  video system that constructs, operates, and maintains an open 
  4.33  video system in whole or in part through the facilities of an 
  4.34  authorized open video system. 
  4.35     Subd. 2.  [FEDERAL COMMISSION'S AUTHORITY.] Persons 
  4.36  possessing the federal commission's authorization for any of the 
  5.1   purposes of this chapter are subject to this chapter although no 
  5.2   property has been acquired and no business has been transacted. 
  5.3      Subd. 3.  [LOCAL FRANCHISE AUTHORITY AGREEMENTS.] The open 
  5.4   video system operator authorized to provide service by the 
  5.5   federal commission is not subject to local franchise authority 
  5.6   agreements except for the procedures set forth in section 
  5.7   238A.04. 
  5.8      Sec. 4.  [238A.04] [OPERATING OVS WITHIN LOCAL FRANCHISING 
  5.9   AUTHORITY.] 
  5.10     Subdivision 1.  [FEDERAL COMMISSION CERTIFICATION 
  5.11  REQUIRED.] Before offering services in any local franchising 
  5.12  authority, an open video system operator must obtain 
  5.13  certification to operate from the federal commission.  A copy of 
  5.14  the filing made with the federal commission must be delivered to 
  5.15  the appropriate local government entity included in a defined 
  5.16  service area as authorized by the federal commission.  This 
  5.17  filing does not generate a filing fee assessment by the local 
  5.18  franchising authority. 
  5.19     Subd. 2.  [NEGOTIATIONS FOR PEG.] (a) An operating 
  5.20  agreement may be negotiated with the local franchising authority 
  5.21  to specify local public, educational, or governmental access 
  5.22  channel requirements. 
  5.23     (b) The open video system operator is subject to no more 
  5.24  public, educational, and governmental requirements as those 
  5.25  required of any cable communications company in the service area 
  5.26  defined by the open video system operator and authorized by the 
  5.27  federal commission. 
  5.28     (c) The local franchising authority may negotiate with the 
  5.29  open video system operator for fewer requirements or 
  5.30  alternative, mutually agreeable requirements. 
  5.31     Subd. 3.  [SUBSCRIBER ACCESS TO PEG.] (a) An open video 
  5.32  system operator shall ensure that all subscribers receive 
  5.33  public, educational, and governmental access channels within the 
  5.34  subscriber's cable communications company franchise area. 
  5.35     (b) The cable communications company is required to permit 
  5.36  the open video system operator to connect with its public, 
  6.1   educational, and governmental access channel feeds.  The costs 
  6.2   of connection to the cable communications company's public, 
  6.3   educational, and governmental access channel feed must be borne 
  6.4   by the open video system operator.  These costs must be counted 
  6.5   toward the open video system operator's matching financial 
  6.6   contributions.  The local franchising authority may require that 
  6.7   the connections occur on government property or on public 
  6.8   rights-of-way. 
  6.9      (c) If an open video system operator and a local 
  6.10  franchising authority are unable to reach an agreement regarding 
  6.11  the public, educational, and governmental access channel 
  6.12  capacity, services, facilities, and equipment, the open video 
  6.13  system operator shall satisfy public, educational, and 
  6.14  governmental obligations of the cable communications company by 
  6.15  providing the same amount of channel capacity for public, 
  6.16  educational, and governmental access and making annual financial 
  6.17  contributions to public, educational, and governmental access 
  6.18  services, facilities, and equipment that are actually used for 
  6.19  public, educational, and governmental access services, 
  6.20  facilities, and equipment. 
  6.21     (d) For in-kind contributions, such as cameras and 
  6.22  production studios, the open video system operator may satisfy 
  6.23  its statutory obligation by negotiating mutually agreeable terms 
  6.24  with the cable communications company so that public, 
  6.25  educational, and governmental access services to the community 
  6.26  are improved or increased. 
  6.27     (e) The public, educational, and governmental in-kind 
  6.28  contributions must be no greater on a per customer basis than 
  6.29  those imposed on any cable communications company operating 
  6.30  within the service area.  The local franchising authority may 
  6.31  not impose public, educational, and governmental access 
  6.32  obligations on the open video system operator that would exceed 
  6.33  those imposed on the cable communications company. 
  6.34     Subd. 4.  [NEGOTIATED PEG AGREEMENT.] An interconnection 
  6.35  agreement shall be negotiated with the cable communications 
  6.36  company to specify the negotiated public, educational, and 
  7.1   governmental requirements.  If any cable communications company 
  7.2   and the open video system operator cannot agree on how to 
  7.3   accomplish the connection, the local franchising authority may 
  7.4   decide.  The local franchising authority shall not require an 
  7.5   open video system operator to duplicate public, educational, and 
  7.6   governmental requirements of the cable communications company.  
  7.7   The open video system operator may proceed with providing its 
  7.8   services before negotiations are completed. 
  7.9      Subd. 5.  [RIGHTS-OF-WAY.] The open video system operator 
  7.10  shall comply with the right-of-way requirements under sections 
  7.11  237.162 and 237.163.  The open video system operator is not 
  7.12  required to have a franchise to access the rights-of-way. 
  7.13     Subd. 6.  [FEES.] (a) The open video system operator may be 
  7.14  subject to a gross revenue fee as negotiated with the local 
  7.15  franchising authority.  The fee will be expressed as a 
  7.16  percentage of gross revenues.  The gross revenue fee must not 
  7.17  exceed the franchise fee of the cable communications company as 
  7.18  allowed under federal law, or five percent of gross revenues, 
  7.19  whichever is less.  Gross revenue fees received by the local 
  7.20  franchising authority from open video system operators must be 
  7.21  used for public, educational, and governmental operations, 
  7.22  improvements, and facilities. 
  7.23     (b) An open video system operator may designate that 
  7.24  portion of a subscriber's bill attributable to the gross revenue 
  7.25  fee as a separate item on the subscriber's bill.  An open video 
  7.26  system operator may recover the gross revenue fee from the 
  7.27  programming providers on a proportional basis as an element of 
  7.28  the carriage rate. 
  7.29     Sec. 5.  [238A.05] [APPLICATION TO EXISTING OPERATORS.] 
  7.30     Subdivision 1.  [OPEN VIDEO SYSTEM.] An open video system 
  7.31  operator operating an open video system on the effective date of 
  7.32  this chapter may renegotiate any agreement in effect under the 
  7.33  terms and conditions as provided in this chapter.  Existing 
  7.34  agreements may be terminated with proper notice as provided for 
  7.35  in the agreement. 
  7.36     Subd. 2.  [CABLE COMMUNICATIONS SYSTEM.] A telephone 
  8.1   company operating a cable communications system on the effective 
  8.2   date of this chapter is eligible to become an open video system 
  8.3   operator under the terms and conditions of this chapter. 
  8.4      Sec. 6.  [EFFECTIVE DATE.] 
  8.5      Sections 1 to 5 are effective the day following final 
  8.6   enactment.