Cable Franchise Transfers
Have you received a "Form 394" cable franchise transfer request in the mail? Perhaps you've read a news report that the cable operator serving your community is about to be sold – and you're wondering how that will affect your residents?
The five largest cable operators in the country already control about 85% of all wireline cable business. Consolidation, however, continues to occur – and large cable operators regularly "swap" or sell "non strategic" cable systems so that their geographic "clusters" make more sense.
A change in cable operators can often have a more dramatic effect on a community and its residents than what is first anticipated. Some cable operators provide better customer service than others; programming lineup changes can cause customer irritation; billing system transitions can create incorrect customer statements; e-mail addresses have to be changed; and many more issues can surface. One recent cable franchise transfer created so many operational and customer service problems that a class action lawsuit was filed.
It's important to anticipate and plan for these changes. A proposed franchise transfer or change in operating control also provides a fleeting opportunity to conduct an audit of the current operator's performance in order to ensure that all franchise obligations have been met. A review of franchise fees, system design, customer service and other obligations should be on the list of items to review. Of course, it's much easier to remedy any past deficiencies before a transfer of a franchise occurs rather than after. If some deficiencies can't be cured, your community may want to pursue special assurance from the proposed operator that ongoing obligations will be honored.
Our cable and communications practice group possesses extraordinary experience in the area of franchise transfers and changes in operating control. While working for cable operators, attorney Jon Kreucher and his teams secured franchise transfer consents from nearly 1,000 communities nationwide. This enormous experience allows the firm to quickly identify issues that should be examined and pursued during the transfer process. Additionally, we also recently represented a California community in a difficult and exceptionally complex transfer matter involving Adelphia, a bankrupt cable operator. Our firm was one of only a few firms nationwide which defended local governments' jurisdiction in franchise transfers before the United States Bankruptcy Court for the Southern District of New York.
We can help you conduct a thorough review of a proposed change in your community's cable operator, often at no cost to your community. Call us at (248) 723-0426 or fill in the "Contact Us" section on the firm's homepage and we will be in touch with you soon.