Dear Mayor:

Today Governor Corzine signed ACS-804 authorizing systemwide video cable franchises.

All sides agree that New Jersey should benefit from more competition in the area of cable television.  In the past, the League has vigorously supported legislation which would help bring about cable competition or at least foster more productive cable franchise negotiations.  The League appreciates the Governor signing this bill into law.

Although on the face of it, systemwide franchising seems to reduce home rule by reducing the individual municipality’s administration during franchising, on balance the League finds important local benefits unique to New Jersey, which must be taken into account.

The League believes this type of franchise will create competition to the ultimate benefit of the consumer, and it may benefit municipalities by enumerating specific franchise commitments which would otherwise be subject to negotiation.

Most important is the creation, now, of a competitive cable TV environment.  The benefits of creating wireline competition today include lower rates, (16% or more reduction according to FCC report released February 4, 2005 Docket No. 92-266) and incentive to respond to consumer demands regarding programming and service.  These are perennial cable issues with which we are all familiar.

Municipalities could benefit through statutory commitments the bill includes in the systemwide franchise such as Public, Educational, Government (PEG) access stations, access equipment and assistance, and cable service for municipal buildings.  These, and other, basic commitments are enforceable by the BPU.  In addition, this bill establishes a municipal franchise fee which, at three and a half percent (3.5%) of gross revenue, is closer to the national benchmark.  However, it is still well below the Federal ceiling of 5%.  This municipal revenue will go towards controlling property taxes at a time when budgets are under significant pressure.