1 Consumer Protection and DIVCA Joseph Van Eaton, Partner May 24, 2007 Santa Monica, CA

Miller & Van Eaton P.L.L.C 2 Overview   For new entrants: Locally-established rules replaced with state-specified standards Localities may not specify additional performance standards BUT Localities are primarily responsible for enforcement There are opportunities to work with DRA   For incumbents: current rules apply while existing franchises remain in force.

Miller & Van Eaton P.L.L.C 3 What are the standards?   Specified in DIVCA, Sec   At least Sections 53055, , , and of Cal Govt Code (but not (q), (r) or (s) or )   Sec of Cal Penal Code plus Sec. 631 of the Cable Act (both relate to privacy)   Federal customer service standards “pertaining to the provision of video service”   Other “subsequent” state laws

Miller & Van Eaton P.L.L.C 4 General state standards   Requires provider to establish its own standards for: Installation, disconnection, service and repair obligations, employee identification and service call response time and scheduling Customer telephone and office hours; procedures for billing Charges, refunds, and credits Procedures for termination of service Notice of the deletion of a programming service, the changing of channel assignments, or an increase in rates. Complaint procedures and procedures for bill dispute resolution   Requires reporting on compliance plus notice

Miller & Van Eaton P.L.L.C 5 General state standards   sets minimum standards with which all video provides must comply   Include somewhat vague requirements – “Every video provider shall render reasonably efficient service, make repairs promptly, and interrupt service only as necessary”

Miller & Van Eaton P.L.L.C 6 General federal standards   Minimum FCC customer service standards are set out at 47 CFR (establishing requirements for office hours, conveniently located offices, telephone answering times, install times, appointment windows response to outages, billing practices, notices)   But what about: Other Cable Act notice provisions (e.g., 47 CFR ) Cable Act provisions governing use of easements (in section 541) Prohibition on negative option billing (in Section 543) Uniform rate requirements (where operator does not face effective competition) (Section 543) Fully scrambling channels to which a sub does not subscribe without charge and other indecency – related requirements (Sections 560, 561)

Miller & Van Eaton P.L.L.C 7 Privacy standards   Minimum state and federal standards apply.   FCC standards are not limited to video service. Applying customer service standards  Requirements “shall be interpreted” to “accommodate newer or different technologies” while “meeting or exceeding the goals of the standards.  Will this require local negotiations/ local rulemaking?

Miller & Van Eaton P.L.L.C 8 Enforcement   Law says localities “shall enforce” standards   Locality gives written notice of any “alleged material” breaches; op has 30 days to cure   Thereafter, locality may impose penalties in accordance with a schedule it is required to adopt.   Monetary penalties are quite limited, but violation of customer service standards can be grounds for CPUC refusal to issue state franchise or renew, or grounds for suspending state franchise.   Material breach = any substantial and repeated failure of a video service provider to comply with service quality and other standards

Miller & Van Eaton P.L.L.C 9 There are many intriguing questions…including:   Can locality establish a fee to recover costs of administering customer service requirements? See 53088(p)   May locality establish non-monetary penalties for violating standards?   How does a locality deal with “mixed use” systems, if company has single telephone number for voice, video & data)   What reporting/record-keeping requirements can a locality establish?   Can locality establish time limits for “promptness” in answering calls (see (e)?   What does Federal “convenient” local office requirement mean for new entrants?   When should locality require a new entrant to provide information regarding its customer service policies?

Miller & Van Eaton P.L.L.C 10 Missing?   Disconnect fee regulation?   Regulation of maximum fee for late services? ( )

Miller & Van Eaton P.L.L.C 11 Big question?   How aggressively should a locality enforce customer service requirements? Enforcement is the responsibility of localities; the state PUC will not enforce But…remedies are weak enough to discourage enforcement Should it depend on whether competition is actually developing?