CHAPTER 66. STATE-ISSUED CABLE AND VIDEO FRANCHISE - Texas Statutes

UTILITIES CODE

TITLE 2. PUBLIC UTILITY REGULATORY ACT

SUBTITLE C. TELECOMMUNICATIONS UTILITIES

CHAPTER 66. STATE-ISSUED CABLE AND VIDEO FRANCHISE

Sec. 66.001. FRANCHISING AUTHORITY. The commission shall be

designated as the franchising authority for a state-issued

franchise for the provision of cable service or video service.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.002. DEFINITIONS. In this chapter:

(1) "Actual incremental cost" means only current out-of-pocket

expenses for labor, equipment repair, equipment replacement, and

tax expenses directly associated with the labor or the equipment

of a service provider that is necessarily and directly used to

provide what were, under a superseded franchise, in-kind

services, exclusive of any profit or overhead such as

depreciation, amortization, or administrative expense.

(2) "Cable service" is defined as set forth in 47 U.S.C. Section

522(6).

(3) "Cable service provider" means a person who provides cable

service.

(4) "Communications network" means a component or facility that

is, wholly or partly, physically located within a public

right-of-way and that is used to provide video programming,

cable, voice, or data services.

(5) "Franchise" means an initial authorization, or renewal of an

authorization, issued by a franchising authority, regardless of

whether the authorization is designated as a franchise, permit,

license, resolution, contract, certificate, agreement, or

otherwise, that authorizes the construction and operation of a

cable or video services network in the public rights-of-way.

(6)(A) "Gross revenues" means all consideration of any kind or

nature including without limitation cash, credits, property, and

in-kind contributions (services or goods) derived by the holder

of a state-issued certificate of franchise authority from the

operation of the cable service provider's or the video service

provider's network to provide cable service or video service

within the municipality. Gross revenue shall include all

consideration paid to the holder of a state-issued certificate of

franchise authority and its affiliates (to the extent either is

acting as a provider of a cable service or video service as

authorized by this chapter), which shall include but not be

limited to the following: (i) all fees charged to subscribers

for any and all cable service or video service provided by the

holder of a state-issued certificate of franchise authority; (ii)

any fee imposed on the holder of a state-issued certificate of

franchise authority by this chapter that is passed through and

paid by subscribers (including without limitation the franchise

fee set forth in this chapter); and (iii) compensation received

by the holder of a state-issued certificate of franchise

authority or its affiliates that is derived from the operation of

the holder of a state-issued certificate of franchise authority's

network to provide cable service or video service with respect to

commissions that are paid to the holder of a state-issued

certificate of franchise authority as compensation for promotion

or exhibition of any products or services on the holder of a

state-issued certificate of franchise authority's network, such

as a "home shopping" or a similar channel, subject to Paragraph

(B)(v). Gross revenue includes a pro rata portion of all revenue

derived by the holder of a state-issued certificate of franchise

authority or its affiliates pursuant to compensation arrangements

for advertising derived from the operation of the holder of a

state-issued certificate of franchise authority's network to

provide cable service or the video service within a municipality,

subject to Paragraph (B)(iii). The allocation shall be based on

the number of subscribers in the municipality divided by the

total number of subscribers in relation to the relevant regional

or national compensation arrangement. Advertising commissions

paid to third parties shall not be netted against advertising

revenue included in gross revenue. Revenue of an affiliate

derived from the affiliate's provision of cable service or the

video service shall be gross revenue to the extent the treatment

of such revenue as revenue of the affiliate and not of the holder

of a state-issued certificate of franchise authority has the

effect (whether intentional or unintentional) of evading the

payment of fees which would otherwise be paid to the

municipality. In no event shall revenue of an affiliate be gross

revenue to the holder of a state-issued certificate of franchise

authority if such revenue is otherwise subject to fees to be paid

to the municipality.

(B) For purposes of this section, "gross revenues" does not

include:

(i) any revenue not actually received, even if billed, such as

bad debt;

(ii) non-cable services or non-video services revenues received

by any affiliate or any other person in exchange for supplying

goods or services used by the holder of a state-issued

certificate of franchise authority to provide cable service or

video service;

(iii) refunds, rebates, or discounts made to subscribers, leased

access providers, advertisers, or a municipality;

(iv) any revenues from services classified as non-cable service

or non-video service under federal law including without

limitation revenue received from telecommunications services;

revenue received from information services (but not excluding

cable services or video services); and any other revenues

attributed by the holder of a state-issued certificate of

franchise authority to non-cable service or non-video service in

accordance with Federal Communications Commission or commission

rules, regulations, standards, or orders;

(v) any revenue paid by subscribers to home shopping programmers

directly from the sale of merchandise through any home shopping

channel offered as part of the cable services or video services,

but not excluding any commissions that are paid to the holder of

a state-issued certificate of franchise authority as compensation

for promotion or exhibition of any products or services on the

holder of a state-issued certificate of franchise authority's

network, such as a "home shopping" or a similar channel;

(vi) the sale of cable services or video services for resale in

which the purchaser is required to collect this chapter's fees

from the purchaser's customer. Nothing under this chapter is

intended to limit state's rights pursuant to 47 U.S.C. Section

542(h);

(vii) the provision of cable services or video services to

customers at no charge, as required or allowed by this chapter,

including without limitation the provision of cable services or

video services to public institutions, as required or permitted

in this chapter, including without limitation public schools or

governmental entities, as required or permitted in this chapter;

(viii) any tax of general applicability imposed upon the holder

of a state-issued certificate of franchise authority or upon

subscribers by a city, state, federal, or any other governmental

entity and required to be collected by the holder of a

state-issued certificate of franchise authority and remitted to

the taxing entity (including, but not limited to, sales and use

tax, gross receipts tax, excise tax, utility users tax, public

service tax, communication taxes, and fees not imposed by this

chapter);

(ix) any forgone revenue from the holder of a state-issued

certificate of franchise authority's provision of free or reduced

cost cable services or video services to any person including

without limitation employees of the holder of a state-issued

certificate of franchise authority, to the municipality and other

public institutions or other institutions as allowed in this

chapter; provided, however, that any forgone revenue which the

holder of a state-issued certificate of franchise authority

chooses not to receive in exchange for trades, barters, services,

or other items of value shall be included in gross revenue;

(x) sales of capital assets or sales of surplus equipment that

is not used by the purchaser to receive cable services or video

services from the holder of a state-issued certificate of

franchise authority;

(xi) directory or Internet advertising revenue including, but

not limited to, yellow pages, white pages, banner advertisement,

and electronic publishing; and

(xii) reimbursement by programmers of marketing costs incurred

by the holder of a state-issued franchise for the introduction of

new programming that exceed the actual costs.

(C) For purposes of this definition, a provider's network

consists solely of the optical spectrum wavelengths, bandwidth,

or other current or future technological capacity used for the

transmission of video programming over wireline directly to

subscribers within the geographic area within the municipality as

designated by the provider in its franchise.

(7) "Incumbent cable service provider" means the cable service

provider serving the largest number of cable subscribers in a

particular municipal franchise area on September 1, 2005.

(8) "Public right-of-way" means the area on, below, or above a

public roadway, highway, street, public sidewalk, alley,

waterway, or utility easement in which a municipality has an

interest.

(9) "Video programming" means programming provided by, or

generally considered comparable to programming provided by, a

television broadcast station, as set forth in 47 U.S.C. Section

522(20).

(10) "Video service" means video programming services provided

through wireline facilities located at least in part in the

public right-of-way without regard to delivery technology,

including Internet protocol technology. This definition does not

include any video service provided by a commercial mobile service

provider as defined in 47 U.S.C. Section 332(d).

(11) "Video service provider" means a video programming

distributor that distributes video programming services through

wireline facilities located at least in part in the public

right-of-way without regard to delivery technology. This term

does not include a cable service provider.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.003. STATE AUTHORIZATION TO PROVIDE CABLE SERVICE OR

VIDEO SERVICE. (a) An entity or person seeking to provide cable

service or video service in this state after September 1, 2005,

shall file an application for a state-issued certificate of

franchise authority with the commission as required by this

section. An entity providing cable service or video service

under a franchise agreement with a municipality is not subject to

this subsection with respect to such municipality until the

franchise agreement expires, except as provided by Section

66.004.

(a-1) The commission shall notify an applicant for a

state-issued certificate of franchise authority whether the

applicant's affidavit described by Subsection (b) is complete

before the 15th business day after the applicant submits the

affidavit.

(b) The commission shall issue a certificate of franchise

authority to offer cable service or video service before the 17th

business day after receipt of a completed affidavit submitted by

the applicant and signed by an officer or general partner of the

applicant affirming:

(1) that the applicant has filed or will timely file with the

Federal Communications Commission all forms required by that

agency in advance of offering cable service or video service in

this state;

(2) that the applicant agrees to comply with all applicable

federal and state statutes and regulations;

(3) that the applicant agrees to comply with all applicable

municipal regulations regarding the use and occupation of public

rights-of-way in the delivery of the cable service or video

service, including the police powers of the municipalities in

which the service is delivered;

(4) a description of the service area footprint to be served

within the municipality, if applicable, otherwise the

municipality to be served by the applicant, which may include

certain designations of unincorporated areas, which description

shall be updated by the applicant prior to the expansion of cable

service or video service to a previously undesignated service

area and, upon such expansion, notice to the commission of the

service area to be served by the applicant; and

(5) the location of the applicant's principal place of business

and the names of the applicant's principal executive officers.

(c) The certificate of franchise authority issued by the

commission shall contain:

(1) a grant of authority to provide cable service or video

service as requested in the application;

(2) a grant of authority to use and occupy the public

rights-of-way in the delivery of that service, subject to the

laws of this state, including the police powers of the

municipalities in which the service is delivered; and

(3) a statement that the grant of authority is subject to lawful

operation of the cable service or video service by the applicant

or its successor in interest.

(d) The certificate of franchise authority issued by the

commission is fully transferable to any successor in interest to

the applicant to which it is initially granted. A notice of

transfer shall be filed with the commission and the relevant

municipality within 14 business days of the completion of such

transfer.

(e) The certificate of franchise authority issued by the

commission may be terminated by the cable service provider or

video service provider by submitting notice to the commission.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.004. ELIGIBILITY FOR COMMISSION-ISSUED FRANCHISE. (a)

A cable service provider or a video service provider that

currently has or had previously received a franchise to provide

cable service or video service with respect to such

municipalities is not eligible to seek a state-issued certificate

of franchise authority under this chapter as to those

municipalities until the expiration date of the existing

franchise agreement, except as provided by Subsections (b) and

(c).

(b) Beginning September 1, 2005, a cable service provider or

video service provider that is not the incumbent cable service

provider and serves fewer than 40 percent of the total cable

customers in a particular municipal franchise area may elect to

terminate that municipal franchise and seek a state-issued

certificate of franchise authority by providing written notice to

the commission and the affected municipality before January 1,

2006. The municipal franchise is terminated on the date the

commission issues the state-issued certificate of franchise

authority.

(c) A cable service provider that serves fewer than 40 percent

of the total cable customers in a municipal franchise area and

that elects under Subsection (b) to terminate an existing

municipal franchise is responsible for remitting to the affected

municipality before the 91st day after the date the municipal

franchise is terminated any accrued but unpaid franchise fees due

under the terminated franchise. If the cable service provider

has credit remaining from prepaid franchise fees, the provider

may deduct the amount of the remaining credit from any future

fees or taxes it must pay to the municipality, either directly or

through the comptroller.

(d) For purposes of this section, a cable service provider or

video service provider will be deemed to have or have had a

franchise to provide cable service or video service in a specific

municipality if any affiliates or successor entity of the cable

or video provider has or had a franchise agreement granted by

that specific municipality.

(e) The terms "affiliates or successor entity" in this section

shall include but not be limited to any entity receiving,

obtaining, or operating under a municipal cable or video

franchise through merger, sale, assignment, restructuring, or any

other type of transaction.

(f) Except as provided in this chapter, nothing in this chapter

is intended to abrogate, nullify, or adversely affect in any way

the contractual rights, duties, and obligations existing and

incurred by a cable service provider or a video service provider

before the enactment of this chapter, and owed or owing to any

private person, firm, partnership, corporation, or other entity

including without limitation those obligations measured by and

related to the gross revenue hereafter received by the holder of

a state-issued certificate of franchise authority for services

provided in the geographic area to which such prior franchise or

permit applies. All liens, security interests, royalties, and

other contracts, rights, and interests in effect on September 1,

2005, shall continue in full force and effect, without the

necessity for renewal, extension, or continuance, and shall be

paid and performed by the holder of a state-issued certificate of

franchise authority, and shall apply as though the revenue

generated by the holder of a state-issued certificate of

franchise authority continued to be generated pursuant to the

permit or franchise issued by the prior local franchising

authority or municipality within the geographic area to which the

prior permit or franchise applies. It shall be a condition to

the issuance and continuance of a state-issued certificate of

franchise authority that the private contractual rights and

obligations herein described continue to be honored, paid, or

performed to the same extent as though the cable service provider

continued to operate under its prior franchise or permit, for the

duration of such state-issued certificate of franchise authority

and any renewals or extensions thereof, and that the applicant so

agrees. Any person, firm, partnership, corporation, or other

entity holding or claiming rights herein reserved may enforce

same by an action brought in a court of competent jurisdiction.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.005. FRANCHISE FEE. (a) The holder of a state-issued

certificate of franchise authority shall pay each municipality in

which it provides cable service or video service a franchise fee

of five percent based upon the definition of gross revenues as

set forth in this chapter. That same franchise fee structure

shall apply to any unincorporated areas that are annexed by a

municipality after the effective date of the state-issued

certificate of franchise authority.

(b) The franchise fee payable under this section is to be paid

quarterly, within 45 days after the end of the quarter for the

preceding calendar quarter. Each payment shall be accompanied by

a summary explaining the basis for the calculation of the fee. A

municipality may review the business records of the cable service

provider or video service provider to the extent necessary to

ensure compensation in accordance with Subsection (a). Each

party shall bear the party's own costs of the examination. A

municipality may, in the event of a dispute concerning

compensation under this section, bring an action in a court of

competent jurisdiction.

(c) The holder of a state-issued certificate of franchise

authority may recover from the provider's customers any fee

imposed by this chapter.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.006. IN-KIND CONTRIBUTIONS TO MUNICIPALITY. (a) Until

the expiration of the incumbent cable service provider's

agreement, the holder of a state-issued certificate of franchise

authority shall pay a municipality in which it is offering cable

service or video service the same cash payments on a per

subscriber basis as required by the incumbent cable service

provider's franchise agreement. All cable service providers and

all video service providers shall report quarterly to the

municipality the total number of subscribers served within the

municipality. The amount paid by the holder of a state-issued

certificate of franchise authority shall be calculated quarterly

by the municipality by multiplying the amount of cash payment

under the incumbent cable service provider's franchise agreement

by a number derived by dividing the number of subscribers served

by a video service provider or cable service provider by the

total number of video or cable service subscribers in the

municipality. Such pro rata payments are to be paid quarterly to

the municipality within 45 days after the end of the quarter for

the preceding calendar quarter.

(b) On the expiration of the incumbent cable service provider's

agreement, the holder of a state-issued certificate of franchise

authority shall pay a municipality in which it is offering cable

service or video service one percent of the provider's gross

revenues, as defined by this chapter, or at the municipality's

election, the per subscriber fee that was paid to the

municipality under the expired incumbent cable service provider's

agreement, in lieu of in-kind compensation and grants. Payments

under this subsection shall be paid in the same manner as

outlined in Section 66.005(b).

(c) All fees paid to municipalities under this section are paid

in accordance with 47 U.S.C. Sections 531 and 541(a)(4)(B) and

may be used by the municipality as allowed by federal law;

further, these payments are not chargeable as a credit against

the franchise fee payments authorized under this chapter.

(d) The following services shall continue to be provided by the

cable provider that was furnishing services pursuant to its

municipal cable franchise until January 1, 2008, or until the

term of the franchise was to expire, whichever is later, and

thereafter as provided in Subdivisions (1) and (2) below:

(1) institutional network capacity, however defined or referred

to in the municipal cable franchise but generally referring to a

private line data network capacity for use by the municipality

for noncommercial purposes, shall continue to be provided at the

same capacity as was provided to the municipality prior to the

date of the termination, provided that the municipality will

compensate the provider for the actual incremental cost of the

capacity; and

(2) cable services to community public buildings, such as

municipal buildings and public schools, shall continue to be

provided to the same extent provided immediately prior to the

date of the termination. Beginning on January 1, 2008, or the

expiration of the franchise agreement, whichever is later, a

provider that provides the services may deduct from the franchise

fee to be paid to the municipality an amount equal to the actual

incremental cost of the services if the municipality requires the

services after that date. Such cable service generally refers to

the existing cable drop connections to such facilities and the

tier of cable service provided pursuant to the franchise at the

time of the termination.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.007. BUILD-OUT. The holder of a state-issued

certificate of franchise authority shall not be required to

comply with mandatory build-out provisions.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.008. CUSTOMER SERVICE STANDARDS. The holder of a

state-issued certificate of franchise authority shall comply with

customer service requirements consistent with 47 C.F.R. Section

76.309(c) until there are two or more providers offering service,

excluding direct-to-home satellite service, in the relevant

municipality.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.009. PUBLIC, EDUCATIONAL, AND GOVERNMENTAL ACCESS

CHANNELS. (a) Not later than 120 days after a request by a

municipality, the holder of a state-issued certificate of

franchise authority shall provide the municipality with capacity

in its communications network to allow public, educational, and

governmental (PEG) access channels for noncommercial programming.

(b) The holder of a state-issued certificate of franchise

authority shall provide no fewer than the number of PEG access

channels a municipality has activated under the incumbent cable

service provider's franchise agreement as of September 1, 2005.

(c) If a municipality did not have PEG access channels as of

September 1, 2005, the cable service provider or video service

provider shall furnish:

(1) up to three PEG channels for a municipality with a

population of at least 50,000; and

(2) up to two PEG channels for a municipality with a population

of less than 50,000.

(d) Any PEG channel provided pursuant to this section that is

not utilized by the municipality for at least eight hours a day

shall no longer be made available to the municipality, but may be

programmed at the cable service provider's or video service

provider's discretion. At such time as the municipality can

certify to the cable service provider or video service provider a

schedule for at least eight hours of daily programming, the cable

service provider or video service provider shall restore the

previously lost channel but shall be under no obligation to carry

that channel on a basic or analog tier.

(e) In the event a municipality has not utilized the minimum

number of access channels as permitted by Subsection (c), access

to the additional channel capacity allowed in Subsection (c)

shall be provided upon 90 days' written notice if the

municipality meets the following standard: if a municipality has

one active PEG channel and wishes to activate an additional PEG

channel, the initial channel shall be considered to be

substantially utilized when 12 hours are programmed on that

channel each calendar day. In addition, at least 40 percent of

the 12 hours of programming for each business day on average over

each calendar quarter must be nonrepeat programming. Nonrepeat

programming shall include the first three video-castings of a

program. If a municipality is entitled to three PEG channels

under Subsection (c) and has in service two active PEG channels,

each of the two active channels shall be considered to be

substantially utilized when 12 hours are programmed on each

channel each calendar day and at least 50 percent of the 12 hours

of programming for each business day on average over each

calendar quarter is nonrepeat programming for three consecutive

calendar quarters.

(f) The operation of any PEG access channel provided pursuant to

this section shall be the responsibility of the municipality

receiving the benefit of such channel, and the holder of a

state-issued certificate of franchise authority bears only the

responsibility for the transmission of such channel. The holder

of a state-issued certificate of franchise authority shall be

responsible for providing the connectivity to each PEG access

channel distribution point up to the first 200 feet.

(g) The municipality must ensure that all transmissions,

content, or programming to be transmitted over a channel or

facility by a holder of a state-issued certificate of franchise

authority are provided or submitted to the cable service provider

or video service provider in a manner or form that is capable of

being accepted and transmitted by a provider, without requirement

for additional alteration or change in the content by the

provider, over the particular network of the cable service

provider or video service provider, which is compatible with the

technology or protocol utilized by the cable service provider or

video service provider to deliver services.

(h) Where technically feasible, the holder of a state-issued

certificate of franchise authority and an incumbent cable service

provider shall use reasonable efforts to interconnect their cable

or video systems for the purpose of providing PEG programming.

Interconnection may be accomplished by direct cable, microwave

link, satellite, or other reasonable method of connection.

Holders of a state-issued certificate of franchise authority and

incumbent cable service providers shall negotiate in good faith

and incumbent cable service providers may not withhold

interconnection of PEG channels.

(i) A court of competent jurisdiction shall have exclusive

jurisdiction to enforce any requirement under this section.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.010. NONDISCRIMINATION BY MUNICIPALITY. (a) A

municipality shall allow the holder of a state-issued certificate

of franchise authority to install, construct, and maintain a

communications network within a public right-of-way and shall

provide the holder of a state-issued certificate of franchise

authority with open, comparable, nondiscriminatory, and

competitively neutral access to the public right-of-way. All use

of a public right-of-way by the holder of a state-issued

certificate of franchise authority is nonexclusive and subject to

Section 66.011.

(b) A municipality may not discriminate against the holder of a

state-issued certificate of franchise authority regarding:

(1) the authorization or placement of a communications network

in a public right-of-way;

(2) access to a building; or

(3) a municipal utility pole attachment term.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.011. MUNICIPAL POLICE POWER; OTHER AUTHORITY. (a) A

municipality may enforce police power-based regulations in the

management of a public right-of-way that apply to the holder of a

state-issued certificate of franchise authority within the

municipality. A municipality may enforce police power-based

regulations in the management of the activities of the holder of

a state-issued certificate of franchise authority to the extent

that they are reasonably necessary to protect the health, safety,

and welfare of the public. Police power-based regulation of the

holder of a state-issued certificate of franchise authority's use

of the public right-of-way must be competitively neutral and may

not be unreasonable or discriminatory. A municipality may not

impose on activities of the holder of a state-issued certificate

of franchise authority a requirement:

(1) that particular business offices be located in the

municipality;

(2) regarding the filing of reports and documents with the

municipality that are not required by state or federal law and

that are not related to the use of the public right-of-way except

that a municipality may request maps and records maintained in

the ordinary course of business for purposes of locating the

portions of a communications network that occupy public

rights-of-way. Any maps or records of the location of a

communications network received by a municipality shall be

confidential and exempt from disclosure under Chapter 552,

Government Code, and may be used by a municipality only for the

purpose of planning and managing construction activity in the

public right-of-way. A municipality may not request information

concerning the capacity or technical configuration of the holder

of a state-issued certificate of franchise authority's

facilities;

(3) for the inspection of the holder of a state-issued

certificate of franchise authority's business records except to

extent permitted under Section 66.005(b);

(4) for the approval of transfers of ownership or control of the

holder of a state-issued certificate of franchise authority's

business, except that a municipality may require that the holder

of a state-issued certificate of franchise authority maintain a

current point of contact and provide notice of a transfer within

a reasonable time; or

(5) that the holder of a state-issued certificate of franchise

authority that is self-insured under the provisions of state law

obtain insurance or bonding for any activities within the

municipality, except that a self-insured provider shall provide

substantially the same defense and claims processing as an

insured provider. A bond may not be required from a provider for

any work consisting of aerial construction except that a

reasonable bond may be required of a provider that cannot

demonstrate a record of at least four years' performance of work

in any municipal public right-of-way free of currently

unsatisfied claims by a municipality for damage to the

right-of-way.

(b) Notwithstanding any other law, a municipality may require

the issuance of a construction permit, without cost, to the

holder of a state-issued certificate of franchise authority that

is locating facilities in or on a public right-of-way in the

municipality. The terms of the permit shall be consistent with

construction permits issued to other persons excavating in a

public right-of-way.

(c) In the exercise of its lawful regulatory authority, a

municipality shall promptly process all valid and

administratively complete applications of the holder of a

state-issued certificate of franchise authority for a permit,

license, or consent to excavate, set poles, locate lines,

construct facilities, make repairs, affect traffic flow, or

obtain zoning or subdivision regulation approvals or other

similar approvals. A municipality shall make every reasonable

effort not to delay or unduly burden the provider in the timely

conduct of the provider's business.

(d) If there is an emergency necessitating response work or

repair, the holder of a state-issued certificate of franchise

authority may begin the repair or emergency response work or take

any action required under the circumstances without prior

approval from the affected municipality, if the holder of a

state-issued certificate of franchise authority notifies the

municipality as promptly as possible after beginning the work and

later obtains any approval required by a municipal ordinance

applicable to emergency response work.

(e) The commission shall have no jurisdiction to review such

police power-based regulations and ordinances adopted by a

municipality to manage the public rights-of-way.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.012. INDEMNITY IN CONNECTION WITH RIGHT-OF-WAY; NOTICE

OF LIABILITY. (a) The holder of a state-issued certificate of

franchise authority shall indemnify and hold a municipality and

its officers and employees harmless against any and all claims,

lawsuits, judgments, costs, liens, losses, expenses, fees

(including reasonable attorney's fees and costs of defense),

proceedings, actions, demands, causes of action, liability, and

suits of any kind and nature, including personal or bodily injury

(including death), property damage, or other harm for which

recovery of damages is sought, that is found by a court of

competent jurisdiction to be caused solely by the negligent act,

error, or omission of the holder of a state-issued certificate of

franchise authority or any agent, officer, director,

representative, employee, affiliate, or subcontractor of the

holder of a state-issued certificate of franchise authority or

their respective officers, agents, employees, directors, or

representatives, while installing, repairing, or maintaining

facilities in a public right-of-way. The indemnity provided by

this subsection does not apply to any liability resulting from

the negligence of the municipality or its officers, employees,

contractors, or subcontractors. If the holder of a state-issued

certificate of franchise authority and the municipality are found

jointly liable by a court of competent jurisdiction, liability

shall be apportioned comparatively in accordance with the laws of

this state without, however, waiving any governmental immunity

available to the municipality under state law and without waiving

any defenses of the parties under state law. This subsection is

solely for the benefit of the municipality and the holder of a

state-issued certificate of franchise authority and does not

create or grant any rights, contractual or otherwise, for or to

any other person or entity.

(b) The holder of a state-issued certificate of franchise

authority and a municipality shall promptly advise the other in

writing of any known claim or demand against the holder of a

state-issued certificate of franchise authority or the

municipality related to or arising out of the holder of a

state-issued certificate of franchise authority's activities in a

public right-of-way.

(c) The commission shall have no jurisdiction to review such

police power-based regulations and ordinances adopted by a

municipality to manage the public rights-of-way.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.013. MUNICIPAL AUTHORITY. In addition to a

municipality's authority to exercise its nondiscriminatory police

power with respect to public rights-of-way under current law, a

municipality's authority to regulate the holder of state-issued

certificate of franchise authority is limited to:

(1) a requirement that the holder of a state-issued certificate

of franchise authority who is providing cable service or video

service within the municipality register with the municipality

and maintain a point of contact;

(2) the establishment of reasonable guidelines regarding the use

of public, educational, and governmental access channels; and

(3) submitting reports within 30 days on the customer service

standards referenced in Section 66.008 if the provider is subject

to those standards and has continued and unresolved customer

service complaints indicating a clear failure on the part of the

holder of a state-issued certificate of franchise authority to

comply with the standards.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.014. DISCRIMINATION PROHIBITED. (a) The purpose of

this section is to prevent discrimination among potential

residential subscribers.

(b) A cable service provider or video service provider that has

been granted a state-issued certificate of franchise authority

may not deny access to service to any group of potential

residential subscribers because of the income of the residents in

the local area in which such group resides.

(c) An affected person may seek enforcement of the requirements

described by Subsection (b) by initiating a proceeding with the

commission. A municipality within which the potential

residential cable service or video service subscribers referenced

in Subsection (b) may be considered an affected person for

purposes of this section.

(d) The holder of a state-issued certificate of franchise

authority shall have a reasonable period of time to become

capable of providing cable service or video service to all

households within the designated franchise area as defined in

Section 66.003(b)(4) and may satisfy the requirements of this

section through the use of an alternative technology that

provides comparable content, service, and functionality.

(e) Notwithstanding any provision of this chapter, the

commission has the authority to make the determination regarding

the comparability of the technology and the service provided.

Notwithstanding any provision of this chapter, the commission has

the authority to monitor the deployment of cable services, video

services, or alternate technology.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.015. COMPLIANCE. (a) Should the holder of a

state-issued certificate of franchise authority be found by a

court of competent jurisdiction to be in noncompliance with the

requirements of this chapter, the court shall order the holder a

state-issued certificate of franchise authority, within a

specified reasonable period of time, to cure such noncompliance.

Failure to comply shall subject the holder of the state-issued

franchise of franchise authority to penalties as the court shall

reasonably impose, up to and including revocation of the

state-issued certificate of franchise authority granted under

this chapter.

(b) A municipality within which the provider offers cable

service or video service shall be an appropriate party in any

such litigation.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.

Sec. 66.016. APPLICABILITY OF OTHER LAWS. (a) Nothing in this

chapter shall be interpreted to prevent a voice provider, cable

service provider or video service provider, or municipality from

seeking clarification of its rights and obligations under federal

law or to exercise any right or authority under federal or state

law.

(b) Nothing in this chapter shall limit the ability of a

municipality under existing law to receive compensation for use

of the public rights-of-way from entities determined not to be

subject to all or part of this chapter, including but not limited

to provider of Internet protocol cable or video services, unless

such payments are expressly prohibited by federal law.

Added by Acts 2005, 79th Leg., 2nd C.S., Ch.

2, Sec. 27, eff. September 7, 2005.