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Competitive Broadband and Cable Providers: Legal and Regulatory Considerations Presented by: Kenneth S. Fellman, Vice-President Kissinger & Fellman, P.C. Denver, Colorado www.kandf.com NATOA Litigation & Regulation Seminar Washington, D.C. March 24, 2006
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I. Negotiating with Qwest – a different perspective Disclaimer: we’re in negotiations now Some different issues than Verizon and AT&T Financial Initially planning to obtain franchises in limited number of market areas
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II. Where We Started “We’ll agree to whatever the incumbent is obligated to in its franchise…....except build out” Incumbent Level Playing Field language in metro Denver franchises New franchises must be comparable – no more favorable or less burdensome when viewed as a whole
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II. Where We Started (cont.) Problem: if the competitive agreement is different, but we think it’s comparable, we still might get sued Solution: indemnification from Qwest Qwest has previously agreed to this in another metro Denver competitive agreement
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III. The Elephant in the Room Build Out Qwest’s position based in large part on its prior experiences renegotiating in the Phoenix markets “If we aren’t 100% convinced we can do it, we won’t agree to it in a franchise.” Promise (threat?) to go elsewhere if LFAs insist on build out
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III. The Elephant (Cont.) Who will welcome you without a build out requirement? Salt Lake City Faux build out Once Qwest gets 51% of the market, it has the obligation to upgrade its system in order to offer services to everyone in the City.
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III. The Elephant (Cont.) In a market that already has an incumbent cable operator and two satellite companies, Qwest will reach a 51% market share when: ____________________________________ (you fill in the blank)
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IV. Getting Over the Build Out Hurdle Are there any creative ways to address build out? Build Out “Lite” Tastes lousy Un-fullfilling
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IV. Getting Over the Build Out Hurdle (cont.) Options to Consider Defined franchise term; no build out requirement; if not satisfied with deployment at term end – build out schedule in renewal franchise will not be challenged Short term franchise with automatic extensions if % coverage met Others?
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V. Level Playing Field Concerns and Suggestions Without Build Out, how do you make the franchise comparable? What are your PEG opportunities? Equipment upgrades Interconnection issues Video on Demand Video Streaming
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V. Level Playing Field Concerns and Suggestions (Cont.) Unbundling language PEG fees on total number of units served in MDUs Violations/Remedies provisions Financial issues GAAP Audits
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V. Level Playing Field Concerns and Suggestions (Cont.) If no build out, or “build out lite” might be acceptable in your community: Examine incumbent franchise -- what would you do to improve it? Review your PEG and I-Net operations -- are there ways to expand and enhance programming and services?
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Questions
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