# Petition for Writ of Certiorari — Alliance for Community Media v. Federal Communications Commission (No. 08-1027) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0173%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2008 ## Text Supreme Court, U.S. FILED Wi () 081027 FEB 10 2009 | OF Fecé OF THE CLERK No. Whitam K. Suter, Clerk In the SUPREME COURT OF THE UNITED STATES ALLIANCE FOR COMMUNITY MEDIA, ET AL. Petitioners, “uy Vv. UNITED STATES OF AMERICA: FEDERAL COMMUNICATIONS COMMISSION Respondent. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit PETITION FOR A WRIT OF CERTIORARI JOSEPH VAN EATON RONALD K. CHEN Counsel of Record Public Advocate FREDERICK E. ELLRCD III STEFANIE A. BRAND MATTHEW K. SCHETTENHELM Director Miller & Van Eaton, PLLC CHRISTOPHER J. WHITE Suite 1000 Deputy Public Advocate 1155 Connecticut Avenue, N.W Division of Rate Counsel Washington, DC 20036 31 Clinton Street, 11 Floor (202) 785-0600 P.O. Box 46005 Newark, NJ 07101 (973) 648-2690 Counsel for Petitioners QUESTIONS PRESENTED In 1984, Congress adopted the Cable Communications Policy Act of 1984, 47 U.S.C. §§ 521 et seq. (the “Cable Act’), which reserved solely to state and local governments the right to issue cable franchises authorizing cable operators to place cable systems on local and state property. 47 U.S.C. § 541(a)(1). In 1992, Congress amended the Cable Act to provide that “a franchising authority ... may not unreasonably refuse to award an additional competitive franchise,” and to provide for a court appeal of any such refusal. /d. ¥ In light of constitutional restraints and the Communications Act’s express limitations upon FCC authority, did the Sixth Circuit err in finding that Section 201(b) of the Communications Act authorizes the FCC to implement 47 U.S.C. § 541(a)(1) by deeming a local franchise granted or by otherwise controlling state or local franchising processes? 2. Did the Sixth Circuit err in finding that under Chevron USA v. NRDC, 467 U.S. 837 (1984), the phrase “unreasonably refuse,” coupled with a court remedy, permits the FCC to set franchise terms, control franchising procedures, and deem local franchises granted? 3. Did the Sixth Circuit err in finding that substantial evidence supports the FCC’s Order, where the court failed to consider “whatever in the record fairly detracts” from evidence relied upon by the FCC, as required by Universal Camera Corp. uv. NLRB, 340 U.S. 474, 488 (1951)? ll PARTIES TO THE PROCEEDING Petitioners are the Alliance for Community Media; the Alliance for Communications Democracy; the National Association of Telecommunications Officers and Advisors; City of Los Angeles, CA; City of Dubuque, LA; Carroll County, MD; Montgomery County, MD; City of White Plains, NY; City of Charlotte, NC; Greater Metro Telecommunications Consortium; and the New Jersey Department of the Public Advocate, Division of Rate Counsel. Respondents are the United States of America and the FCC. The Sixth Circuit consolidated various petitions for review under Docket # 07-3391. Other parties in the consolidated cases include: National League of Cities; United States Conference of Mayors; National Association of Counties; City and County of San Francisco, CA; City of Wilmington, DE; City of Tampa, FL; City of Chicago, IL; City of St. Louis, MO; Anne Arundel County, MD; City of Boston, MA; Charles County, MD; Villages of Larchmont and Mamaroneck, NY; Town of Mamaroneck, NY; City of New York, NY; City of Laredo, TX; Fairfax County, VA; City of Milwaukee, WI; State of Hawaii; National Cabie & Telecommunications Association; Ad Hoc Telecom Manufacturer Coalition; Qwest Communications International, Inc.; U.S. Telecom; Verizon; and AT&T. ill RULE 29.6 STATEMENT No parent or publicly held company owns 10% or more of the Alhance for Communications Democracy, the Alliance for Community Media, the Greater Metro Telecommunications Consortium, or the National Association of Telecommunications Officers and Advisors. No other Petitioner is a nongovernmental corporation. 1V TABLE OF CONTENTS QUESTIONS PRESENTED PARTIES TO THE PROCEEDING RULE 29.6 STATEMENT TABLE OF AUTHORITIES JURISDICTION CONSTITUTIONAL AND STATUTORY PROVISIONS STAT EDEN EG OF THE CASE ..cccsccccsscsosscscccserceserse 2 A. Statutory Framework. ................00008 3 B. BE FAS Citic cc css cniecenceeccaczcaccoesers C. The Sixth Circuit Appeal 12 REASONS FOR GRANTING THE WRIT 14 I. Certiorari Should Be Granted To Restore the Franchising Balance Struck by Congress in the Cable Act. .................... A, The Act Is Not Silent As to Where Franchising Authority Resides. ...... B. The Sixth Circuit’s Reading of the Cable Act As Empowering the FCC To Control the Franchising Process and ‘lo Deem Local Franchises Granted Conflicts with Decisions of this Court and Other Courts of Appeals.................. 2 Granting the Petition Is Appropriate To Restore the Division of Authority Required by the Cable Act, the Constitution, PE GPT SI GRIIGI os ccic vn cveccaciccsecscascns 22 Certiorari Is Appropriate To Clarify That Section 201(b) Does Not Authorize the FCC To Exercise Franchising Authority or To Control the Franchising NS, fois ta cine deusaecaaceabimadiapanneneeeien Z The Court Should Grant Certiorari To Review the Sixth Circuit’s Misapplication of Chevron. ........c.ccccceeceeeees A. The Sixth Circuit Mistakenly Concluded that Section 621(a)(1) Was “Ambiguous.” In Context, Section 621(a)(1) Is Not Ambiguous and Leaves No Gap for the FCC To Fill. ...c............. 32 Even Assuming the FCC Had Authority To Implement Section 621(a)(1), It Could Not Do So ina Manner Inconsistent with the Certiorari is Appropriate In Light of the Sixth Circuit’s Failure To Conduct the Analysis Required By Universal RN iis coe oe cacase cacsapsasebanaokabos cece COC EIEN viccsiccvcssicenss Sepeait aay taineiaiets Gale pianaeries 4] APPENDIX A. Opinion of the United States Court of Appeals for the Sixth Circuit (June 27, 2008) Judgment of the United States Court of Appeals for the Sixth Circuit (une 27, 2008)...............00.. SGA Federal Communications Commission Report and Order and Further Notice of Proposed Rulemaking (March 5, 2007) ...........55a Order of the United States Court of Appeals for the Sixth Circuit Denying Petitions for Rehearing (Clatower BO, ZOOB) .....ccrcccccsceccsceceses GOR Constitutional and Statutory ae sa ele caseuieneavenibh 332a Vl TABLE OF AUTHORITIES Cases Accuracy in Media, Inc. v. FCC, 521 F.2d 288 (D.C. Cir. 1975) ACLU v. FCC, 823 F.2d 1554 (D.C. Cir. 1987) Adams Fruit Co. v. Barrett, 494 U.S. 638 Alaska Dept. of Envtl. Conservation v. EPA, 540 U.S. 461 (2004) AT&T Corp. v. lowa Utils. Bd., 525 U.S. 366 ERNE ok cud katevoccesuaeentandanesousbunxecueeuere 13, 15 Brown v. Gardner, 513 U.S. 115 (1994) ..................30 Chevron U.S.A. Inc. v. Echazabal, 536 U.S. Pe MI rib coichs shee cacidintuesevasadened iva ccmmcescete Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) passim City of Chicago v. Envtl. Def. Fund, 511 U.S. City of Dallas v. FCC, 165 F.3d 341 (5th Cir. Piri sckiecitidncsd Rivivestadindinc arc: Ee ee ee City of New York v. FCC, 486 U.S. 57 (4968) ..............5............8, 4 14, 22 City of New York v. United States, 505 U.S. 144 (1992) Dunn v. CFTC, 519 U.S. 465 (1997).......... EVER v1 Esiate of Cowart v. Nicklos Drilling Co., 505 i cis cesasavonsisvivinddoe 30 FCC v. Midwest Video Corp., 440 U.S. 689 (1979) Global Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc., 550 ee kad sas peuniuneanest Gonzales v. Oregon, 546 U.S. 243 (2006) Indep. Ins. Agents of Am., Inc. v. Hawke, 211 F.3d 6388 (D.C. Cir. 2000) K Mart Corp. v. Cartier, Inc., 486 U.S. 281 ear a a euannaaes 3¢ Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982) ‘Acie NCTA v. Brand X Internet Servus., 545 U.S. I a od ce wena 24 NCTA v. FCC, 33 F.3d 66 (D.C. Cir. 1994) Ragsdale v. Wolverine World Wide, Inc., 535 Se RE RR eee a. Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) Union CATV v. City of Sturgis, 107 F.3d 434 OI PIII ovis cocincensinscosssscninsvecssiel Universe! Camera Corp. v. NLRB, 340 USS. 474 (1951) 1x Constitutional Provisions U.S. Clone, Se ccncnovcocess 20 U7... COret ee ag cousceccccces BO BS UC. SB Te ai iies vecescescorsceseccces l 28 U.S.C. § 2344.......... eisadianiatinbndas TG sdseissecsiessess 12 ys BARE OB” Be wee 47 U.S. § 181... TTT incase csenterscsvesssensese 4 47 U.8.0. © 362 cence EEE A 4,19, 26 47 U.S.C. § 201 ciscaameeeeens 8, 9, 10, 23, 24, 25 AT U SSAC. BB irc caa ee aaa ae ssessvenessecesces. 19 47 UB. 3 202 Accu Ee 24 47 GBS, FG rrcceak aetna adaccvisveveccsccccccs. 12 PURER ROR Bo 0) ye 8 ee +. 47 U.S.C. § 522(9)-(10) ....cccecceccsccecceseesssscseeeees 4,17, 18 AT UC. SoBe sesso re EEE abst ncscanesesssccecc1000O BT VI. & GBF ccc sc cae saat ies ssevesvessceses010 98 YOUR Ree Y.” ) Pe passim 47 U.S.C. & Ga icici scstace see eee otescanstesees 11, 36, $7 47 USC. © GRR i icnssscccisss..... 5 47 UBC. © GB cc ccc .e.. PAaSSIM S 47 U.S.C. § Other Authorities 1 C. Ferris & F. Lloyd, Telecommunications PUOAATERSIOTS CIGD ose secscncccecsvenencessversessevsvesesenseotl H.R. Rep. No. 98-934, 1984 U.S.C.C.A.N. 4655 (1984)... eld ee a pa ee ee FE. BRO. INO, EOZ-BZ8 CLGIZ) oicccccssscncccrcoscccessvcrsscsesecess ey In re Cal. Water & Tel. Co., 40 Rad. Reg. 2d 419 at 1G CII iii WR sccatcececsentassss pisearemeicocdoceccer: 19 In re Implementation of Section 621(a)(1) of Cable Television Consumer Protection and Competition Act of 1992, 20 FR pee Be CAPUUEED uicukdccbabccee~plates that localities may need to conduct expert studies as part of the franchising process, H.R. Rep. No. 98-934, 37 1984 U.S.C.C.A.N. at 4711-12 (surveys may be important in establishing community needs), and it is disingenuous to suggest that legal help is not needed to review and comply with an FCC Order that is more than 100 pages long. The FCC effectively requires localities to use franchise fees to defray regulatory costs, which it may not do under 47 U.S.C. § 542(h).§ These inconsistencies justify granting the Petition. There is, in addition, a broader inconsistency that pervades the Order and that requires this Court’s review. As shown in the Statement of the Case, the FCC’s decisions were bluntly driven by its dissatisfaction with the delays it believed were inherently caused by a franchising process rooted in “reasonable” local decisions.2? But that ts the process Congress adopted. By replacing Congress’s choice with a list of substantive federal rules, the FCC has not permissibly implemented the words “unreasonably refuse,” because Congress intended reasonableness of franchise requirements to be assessed on a case-by-case basis, through a local process. In a similar case, where the Secretary of Labor had the power to adopt regulations 8 The FCC’s analysis of “incidental to” also suffers from a Chevron Step One problem — it is inconsistent with the plain language of the Act. The FCC found that a list of examples of “incidental” costs was effectively exhaustive, and that the term “incidental” means “small” as opposed to “in connection with.” Only the latter makes linguistic sense. 9 See Part IV, infra. 38 “necessary to carry out” an Act, 29 U.S.C. § 2654, the Court rejected a remedy that the Secretary believed would be superior to a “fact-specific inquiry.” Ragsdale v. Wolverine World Wide, Inc., 535 U.S. 81, 91 (2002). The Court explained that the Secretary could not, indirectly by regulation, resolve issues that Congress had directly left for the courts to resolve on a case-by-case basis: By its nature, the remedy created by Congress requires the retrospective, case- by-case examination the Secretary now seeks to elisinate. .. . Though the Secretary could not enact’ rules purporting to make these kinds of determinations for the courts, fits rulc] has this precise effect. 1° Id. (internal citations omitted). The rules here are equally objectionable 10 Prios to 1992, Section 635, 47 U.S.C. § 555, specified the remedy available to operators where an LFA denied a request for modification or renewal: it provided for case-by-case court review. The 1992 amendments that are the subject of this Petition expanded this remedy; that a cable operator whose request for an initial franchise wa: denied could also obtain court review. Reading the 1992 amendments to grant the FCC powers to grant franchises and establish franchise terms is inconsistent with this pre-existing remedial scheme, and cannot be squared with Ragsdale. 39 Certiorari is Appropriate In Light of the Sixth Circuit’s Failure To Conduct the Analysis Required By Universal Camera. The Order makes clear that the decision to impose rules on local governments was dependent upon agency’s finding that local governments were abusing the franchising process and delaying competitive entry. Pet. App. 60a, § 4. However, the Sixth Circuit failed to conduct the analysis required by this Court’s precedents to determine whether that conclusion was supported by the record. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951), requires a court reviewing the substantiality of the evidence before the agency to “take into account whatever in the record fairly detracts from its weight.” This standard was embodied statutorily in the Administrative Procedure Act to prevent agencies from adopting rules by pointing to evidence that supported the desired conclusion, while ignoring that which undercut it. Jd. at 478 (irresponsible weighing of evidence was thougnt to create “serious menace’). There was reason to carefully review the record in this case. Dissenting Commissioner Ade!stein noted that “the majority simply accepts in every case th.t the phone companies are right and the local governments are wrong, all without bothering to examine the facts behind these competing claims, or conducting any independent fact-finding.” Pet. App. 298a. 40 The Sixth Circuit, nonetheless upheld the FCCs finding because it concluded that there was evidence supporting the agency’s finding. Pet. App. 5la. This is the test Universal Camera rejected. Had the court of appeals conducted the necessary analysis, it would have discovered that the FCC failed to weigh evidence contrary to its conclusions, just as Commissioner’ Adelstein = suggested. Particularly given the impact of the FCC rules on he local franchising process and _ franchising officials, it 1s appropriate for this Court to grant certiorari, and to require that the record be analyzed under the proper standard. 4] CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be granted. Respectfully submitted, JOSEPH VAN EATON Counsel of Record FREDERICK EK. ELLROD ill] MATTHEW K. SCHETTENHELM MILLER & VAN EATON, PLLC Suite 1000 1155 Connecticut Avenue, N.W. Washington, DC 20036 (202) 785-0600 RONALD K. CHEN Public Advocate STEFANIE A, BRAND Director CHRISTOPHER J. WHITE Deputy Public Advocate Division of Rate Counsel 31 Clinton Street, 11“ Floor P.O. Box 46005 Newark, NJ 07101 (973) 648-2690 February 10, 2009 APPENDIX la APPENDIX A Opinion of the United States Court of Appeals for the Sixth Circuit (June 27, 2008) Nos. 07-3391/3569/ 3570/ 3571/ 3572/3573/ 3574/3673/ 3674/3675/ 3676/3677/ 3824 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Alliance for Community Media, et al., Petitioners, State of Hawaii; City and County of San Francisco; National Cable & 'Telecommunications Association, Inc.; City of New York; City of Milwaukee, Wisconsin; City of White Plains, New York; City of Wilmington, Delaware, Intervenors, Federal Communications Commission: United States of America, Respondents, Ad Hoc Telecom Manufacturer Coalition; Qwest Communiations International, Inc.. US'Telecom: Verizon; AT&T, Intervenors. On Petition for Review of an Order of the Federal Communications Commission. No. 05-311. Argued: February 6, 2008 Decided and Filed: June 27, 2008 Before: SUHRHEINRICH, COLE, and CIBBONS, Circuit Judges. OPINION R. GUY COLE, JR., Circuit Judge. Following a notice-end-comment rulemaking procedure, the Federal Communications Commission (“FCC,” “Commission,” or “the agency’) released an order (“the Order’) adopting rules interpreting and implementing section 621 (a)(1) of the Communications Act of 1934 (“the Act’), 47 U.S.C. § 541(a)(1), which prohibits’ local franchising authorities from “unreasonably refus[ing] to award” competitive cable franchises. The FCC released the Order on March 5, 2007 on the basis of record evidence that the operation of the local franchising process was unreasonably impeding competitive entry into the cable television market. A summary of the Order was subsequently published in the Federal Register on March 21, 2007. Petitioners and _ intervenors, consisting primarily of various local franchising authorities (“LIFAs”), their representative organizations, and the “2s oa incumbent cable industry’s trade association, request us to reverse the FCC’s decision and declare the Order void in its entirety, asserting that the FCC lacks the requisite authority to promulgate the Order and, in the alternative, that the FCC’s interpretation is not entitled to deference and is arbitrary and capricious. For the following reasons, we find that the FCC acted well within its statutorily delineated authority in enacting the Order and that there exists sufficient record evidence to indicate that the FCC did not engage in arbitrary-and-capricious rulemaking activity. Accordingly, we DENY the petitions for review. I. BACKGROUND A. Factual Background Given the complexity of the regulatory regime at issue, we begin by tracing the historical evolution of cable regulation and the role of the FCC therein. The public at large first obtained access to cable television in the 1950s. See generally City of Dallas, Tex. v. FCC, 165 F.3d 341, 345-46 (5th Cir. 1999) During this first decade in which cable television was publicly available, the FCC abstained from regulating in this arena because it believed it lacked the authority to do so under existing statutory provisions. Jd. at 345. By the mid-1960s, however, cable television had proliferated to such a degree that the FCC determined that it must regulate cable franchises in order to carry out its statutory duty to oversee all forms of broadcasting on behalf of the 4a public interest. [d. The Supreme Court subsequently affirmed the FCC’s regulatory authority over cable television, holding that the agency was authorized to issue rules that were “reasonably ancillary to the effective performance of the Commission’s various responsibilities for the regulation of television broadcasting.” United States v. Southwestern Cable Co., 392 U.S. 157, 178 (1968). Regulation of cable services did not fall entirely on the shoulders of the FCC, however. Municipalities, or LFAs, also exerted an interest in regulating the cable medium. See generally American Civil Liberties Union v. FCC, 823 F.2d 1554, 1558 (D.C. Cir. 1987). Specifically, they retained discretion to decide whether to grant cable franchises to applicants in their communities. Id. at 1558. As part of this negotiation process, cable operators frequently agreed te perform various activities on behalf of the public interest in exchange for a franchise. Jd. Given the overlapping jurisdiction of the FCC and the municipalities, in 1972 the agency issued a report to delineate the contours of its jurisdiction vis-a-vis the LFAs. Cable Television Report and Order, 36 F.C.C. 2d 143, on reconsideration, 36 F.C.C. 2d 326 (1972), affd sub. nom. Americon Civil Liberties Union v. FCC, 523 F.2d 1344 (9th Cir. 1975). In this report, the agency carved out a_e system of “deliberately structured dualism.” Jd. Within this binary regulatory regime, “state or local government issued franchises while the FCC exercised exclusive authority over all operational aspects of cable 5a communication, including technical standards and signal carriage.” National Cable Television Ass’n v. FCC, 33 F.3d 66, 68-69 (D.C. Cir. 1994) (internal quotations omitted). This was the. state of the cable communications market until 1984. At this time, approximately twenty years following the FCC’s foray into the cable television market, Congress conveyed its input for the first time through passage of a legislative amendment to the Communications Act}, entitled the Cable Communications Policy Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779. The 1984 Act was a response to the “illdefined [sic] ... state of regulatory uncertainty” resulting from the overlapping authority of the FCC and municipalities. American Civil Liberties Union, 823 F.2d at 1559. Accordingly, the legislation enlarged the Communications Act by inserting Title VI provisions governing the operation of cable providers and franchises. The purpose of these provisions was to “establish[] a national policy that clarifie[d] the current system of local, state and federal regulation of cable television” and _ to “continue[] reliance on the local franchising process as the primary means of cable television regulation, while defining and limiting the authority that a franchising authority may exercise through the “The Communications Act of 1934, Pub. L. No.73-416, 48 Stat. 1064 .... grants the FCC broad authority to regulate all aspects of interstate communication by wire or radio.” American Civil Liberties Union v. FCC, 823 F.2d 1554, 1557-58 (D.C. Cir. 1987). 6a franchise process.” H.R. Rep. No. 98-934 at 24. Thus, the regulatory guidelites incorporated into Title VI aimed to “both . . . reliev[e] the cable industry from unnecessary, burdensome regulation and ensur[e] that cable systems remain responsive to the needs of the public.” American Civil Liberties Union, 823 F.2d at 1559. In so doing, the amendments “balance[d] two conflicting goals: preserv[ing] the critical role of municipal governments in the franchise process ... while affirming the FCC’s’ exclusive jurisdiction over cable service, and overall facilities which relate to such service.” City of New York v. FCC, 814 F.2d 720, 723 (D.C. Cir. 1987) (Gnternal quotations and citations omitted). As a result of the amendment, when an entity now chooses to enter the market and offer services as a “cable operator,”’? it must comply with the dictates of Title VI. Section 621 of Title VI—the provision at issue in the instant case—enumerates various requirements cable operators must follow to acquire cable franchises. Specifically, subsection (b)(1) of Section 621, 47 U.S.C. § 541(b)(1), situates the securing of cable franchises as a mandatory 247 U.S.C. § 542(5) (defining “cable operator” as “any person or group of persons (A) who provides cable services over a cable system and directly or through one or more affiliates owns a significant interest in a cable system, or (B) who otherwise controls or is_ responsible for, through any arrangement, the management and operation of such a cable system.”) Coad fa precondition for providing cable services,? and subsection (a)(1), 47 U.S.C. § 541(a)(1), authorizes LFAs to award these franchises.4 By delegating this task to LFAs, the 1984 Act effectively “preserve[d] the role of municipalities in cable regulation.” City of Dallas, Tex., 165 F.3d at 345. Subsequently, in 1992, Congress once again weighed in on the regulation of cable television and clarified the role of LFAs through enactment of the Cable Television Consumer Protection and Competition Act, Pub. L.. No. 102-385, 106 Stat. 1460. Specifically, Congress revised section 621(a)(1) to codify restraints on the hcensing activities of an LFA such that it may grant “1 or more franchises within its jurisdiction; except that a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to award an additional competitive franchise.” (emphasis « ded). Through this amendment, Congress tu: ier endowed potential entrants with a judicial remedy by entitling them to commence an action in a federal or state court within 120 days after receiving a final, adverse 347 U.S.C. § 541(b)(1) (Except to the extent provided in paragraph (2) and subsection (f), a cable operator may not provide cable service without a franchise.”) 447 U.S.C. § 541(a)(1) (stating that a “franchising authority may award, in accordance with the provisions of this title, 1 or more franchises within its jurisdiction.”) A “franchising authority” is defined to encompass “any governmental entity empowered by Federal, State, or local law to grant a franchise.” Section 602(10) of the Communications Act, 47 U.S.C. § 522(10). 8a decision from an LFA.® It is the legitimacy and precise import of these restraints that give rise to the instant controversy. According to the legislative history, Congress enacted this amendment in part because the local franchising requirements provided most cable subscribers with “no opportunity to select between competing cable systems.” H.R. Conf. Rep. No. 102- 862, at 55 (1992). Therefore, the purpose of these constraints was to foster heightened competition in the cable market: Based on the evidence in the record taken as a whole, it is clear that there are benefits from competition between two cable systems. Thus, the Committee believes that local franchising authorities should be encouraged to award second franchises. Accordingly, [the 1992 Cable Act,] as reported, prohibits local franchising authorities from unreasonably refusing to grant second franchises. S. Rep. No. 102-92, at 13 (1991). “Any applicant whose application for a_ second franchise has been denied by a final decision of the franchising authority may appeal such final decision pursuant to the provisions of section {635 of the Act] ‘or failure to comply with this subsection.” 47 U.S.C. § 541(a)(1). 9a Overall then, the legislators adopted a revised version of section 621(a)(1) because they “believe[d] that exclusive franchises are directly contrary to federal policy . . . which is intended to promote the development of competition.” H.R. Conf. Rep. No. 102-862, at 77 (1992). B. Procedural Background Over a decade following the passage of the 1992 amendments to the Communications Act, the FCC compiled data suggesting that competition had yet to materialize as a reality for the cable market. S. Rep. No. 102-92. To investigate the state of the cable market, on November 3, 2005, the FCC adopted a Notice of Proposed Rulemaking (“NPRM”) and subsequently released it on November 18, 2005. In the NPRM, the FCC invited comment on approaches to implementing Section 621(a)(1) of the Communications Act of 1934. Responding to charges from potential entrants into the cable marketplace that “the current operation of the local franchising process serves as a barrier to entry/,]” the FCC solicited comment on “whether the franchising process unreasonably impedes the achievement of the interrelated federal goals of enhanced _ cable competition and accelerated broadband deployment and, if so, how the Commission should act to address that problem.” Specifically, in issuing the NPRM, the FCC sought to d°**rmine whether LFAs “are carrying out legitimate policy objectives allowed by the {Communications} Act or are hindering the federal communications policy objectives of increased 10a competition in the delivery of video programming and accelerated broadband deployment.” The FCC further called for comment on formulating a definition of “what constitutes an unreasonable refusal to award an_ additional competitive franchise under Section 621(a)(1).” In making initial headway toward a definition, the FCC tentatively concluded in the NPRM that “Section 621(a)(1) prohibits not only the ultimate refusal to award a competitive franchise, but also the establishment of procedures and other requirements that have the effect of unreasonably interfering with the ability of a would-be competitor to obtain a competitive franchise.” (JA 475.) In addition to soliciting comments on the ease of entry into the cable market, the FCC also tentatively concluded that it possesses legitimate authority to implement Section 621(a)(1) “to ensure that the local franchising process does not unreasonably interfere with the ability of any potential new entrant to provide video programming to consumers.” (JA 474.) After reviewing the “voluminous record” generated by the rulemaking proceeding, consisting of “comments filed by new entrants, incumbent cable operators, LFAs, consumer groups, and others[,]” the FCC ascertained the need for new rules to ensure that the local franchising process operated in a fully competitive fashion, free of barriers to entry. (JA 500.) Accordingly, on December 20, 2006, by a vote of three to two, the FCC adopted the Order at issue. The Order was released on March 5, 2007 and became lla final on March 21, 2007, when it was published in the Federal Register. (JA 491-599; 72 Fed. Reg. 13230 (2007).) Attached to the Order was the dissenting opinion of Commissioner Jonathan 5S. Adelstein. The thrust of Commissioner Adelstein’s dissent was that the Order “substitutes [the FCC’s] judgment as to what is reasonable—or unreasonable— for that of local officials—all in violation of the franchising framework established in the Communications Act.” (JA 586.) Notwithstanding Commissioner Adelstein’s dissent, as a threshold matter, the Order first established the FCC’s “broad rulemaking authority to implement the provisions of the Communications Act, including Title VI generally and Section 621(a)(1) in particular.” (JA 493.) The FCC derived support for its rulemaking authority from various statutory provisions, including 47 U.S.C. § 3037), which empowers the agency to implement “such rules and regulations . . ., not inconsistent with law, as may be necessary to carry out the provisions of thie] [Communications] Act[,]” 47 U.S.C. § 201(b), which authorizes the FCC to “prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Actf[,]” and 47 U.S.C. § 4), which states that the FCC “may perform any and all acts, make such rules and regulations, and issue such orders ... as may be necessary in the execution of its functions.” (JA 518.) The agency also justified its actions on the basis that “Congress specifically charged [it] with the administration of the Cable Act, including Section 12a 621” and that “federal courts have consistently upheld ... [its] authority in this area.” (/d.) In response to comments from incumbent cable operators that the judicial review provisions of sections 621(a)(1) and 635 of the Communications Act invested the federal courts with exclusive jurisdiction to interpret and enforce section 621(a)(1), the FCC explained that the availability of judicial review did not in any way attenuate its rulemaking authority. (JA 518-19.) The agency insisted that the “mere existence of a judicial review provision in the Communications Act does not, by itself, strip the Commission of its otherwise undeniable rulemaking authority.” (JA 519.) “As a general matter,” the FCC continued, “the fact that Congress provides a mechanism for judicial review to remedy a violation of a statutory provision does not deprive an agency of the authority to issue rules interpreting the statutory provision.” (/d.) Upon establishing its broad rulemaking authority, the FCC then proceeded to address the merits of the most pressing problems it identified in the cable franchising process. Based on the factual record before it, the FCC found that “the current operation of the franchising process can constitute an unreasonable barrier to entry for potential cable competitors, and thus justifies Commission action.” (JA 500.) The agency opined that “absent Commission action, deployment of competitive video services by new cable entrants will continue to be unreasonably delayed or, at worst, derailed.” (Ud.) l3a To avoid such ends and to further the goals of reducing barriers to entry into the cable market and facilitating investment in broadband facilities, the Order codified five rules construing the meaning of “unreasonable” within section 621(a)(1). First, the FCC ruled that “an LFA’s failure to issue a decision on a competitive application within the time frames specified herein constitutes an unreasonable refusal to award a competitive franchise.” (JA 493.) The FCC accordingly delineated two applicable time frames: ninety days for applicants, such as telephone companies, with already existing authorizations for access to rights-of-way, and six months for all other competitive franchise applicants. As a means of enforcement, the FCC declared that if an LFA failed to issue a final decision within the requisite time frame, the applicant’s proposal would be deemed granted on an interim basis until the LFA delivered a final decision. Second, the FCC ruled that “an LFA’s refusal to grant a competitive franchise because of an applicant’s unwillingness to agree to unreasonable build-out mandates® constitutes an unreasonable 6‘Build-out requirements necessitate that a franchisee deploy cable services to all households in a given franchise area within a specified duration. The principal statutory limitation on the right of LFAs to impose build-out requirements is that they allow the applicant a reasonable time period to do so. 47 U.S.C. § 541(a)(4)(A). The build-out provisions are intended to meet community needs and facilitate one of the goals of the Communications Act, that “cable service is not denied to any group of potential residential cable subscribers because of the l4a refusal to award a competitive franchise.” (JA 493.) While the agency characterized build-out requirements as “eminently sensible” under the prior regime, in which incumbent cable providers were granted community-wide monopolies, under the current, competitive regime, these requirements “make entry so expensive that the prospective provider withdraws its application and simply declines to serve any portion of the community.” WA 532-33.) Given the entry-deterring effects of build-out requirements, the agency exercised its rulemaking authority to proscribe LFAs from conditioning franchises on these requirements. Third, the Order included a ruling regarding franchise fees. ‘The FCC declared that “unless certain specified costs, fees, and other compensation required by LFAs are counted toward the statutory [five] percent cap on franchise fees, demanding them could result in an unreasonable refusal to award a competitive franchise.” (JA 493.) ‘The Order went on to explain that “a cable operator is not required to pay franchise fees on revenues from non-cable services.’ (JA 536.) Similarly, the FCC mandated that “any requests made by LFAs that are unrelated to the provision of cable services by a new competitive entrant are subject to the statutory [five] percent franchise fee cap.” (JA 539.) income of the residents of the local area in which such group resides,” see id., a practice commonly known as “redlining.” L5a Fourth, the FCC ruled that while LFAs may seek assurances from prospective cable operators that they will provide public, educational, and governmental (“PEG”) access channel capacity, “LF As may not make unreasonable demands of competitive applicants for PEG.” (JA 541.) As an example of such an unreasonable demand, the FCC stated that it would be “unreasonable for an LFA to impose on a new entrant more burdensome PEG carriage obligations than it has imposed upon the incumbent cable operator,” (JA 543.) In contrast, the agency approved a “pro rata cost sharing approach” in which a “new entrant agrees to share pro rata costs with the incumbent operator” as “per se reasonable.” (JA 544.) Lastly, the FCC clanfied that “the LFA’s jurisdiction apphes only to the provision of cable services over cable systems.” (JA 545.) Based on this limited jurisdiction, the Order characterizes as “unreasonable” an LFA’s refusal to issue a franchise based on issues related to non-cable services or facilities. Ud.) For example, the FCC explained that an “LFA may not use its video franchising authority to attempt to regulate a [local exchange carrier’s] entire network beyond the provision of cable services.” (/d.) Beyond codifying these five rules, the FCC’s Order also “preemptied] local laws, regulations, practices, and requirements to the extent that: (1) provisions in those laws, regulations, practices, and agreements conflict with the rules or guidance adopted in this Order; and (2) such provisions are not 16a specifically authorized by state law.” (JA 546.) Despite its preemption of local laws and regulations, however, the Order declined to preempt state laws, state-level franchising decisions, or local franchising decisions “specifically authorized by state law.” (/d.) The FCC refrained from preemption of state regulations because it lacked “a sufficient record to evaluate whether and how such state laws may lead to unreasonable refusals to award additional competitive franchises.” (/d.) In conjunction with the Order, the FCC issued a Further Notice of Proposed Rulemaking. This Notice underscored that since the Order implemented section 621(a)(1), its immediate applicability was only to applicants’ seeking “additional competitive franchises,” not to existing franchisees. (JA 535, 554). Accordingly, the FCC initiated a second round of rulemaking, “seeking comment on how [its] findings in [its] Order should affect existing franchisees” and “on local consumer protection and customer service standards as applied to new entrants.” (JA 494, 554-58.) Following publication of the Order, on April 3, 2007, the Alliance for Community Media (“ACM”), the National Association of Counties (“NAC”), the National Association of Telecommunications Officers and Advisors (“NATOA”), the National League of Cities (“NLC”), the United States Conference of Mayors (“USCM”), and Alliance for Communications 17a Democracy (“ACD”)? (collectively, “petitioners”) timely filed petitions for review of the Order in courts of proper venue under 28 U.S.C. § 2343. ACM’s petition for review typifies the claims of petitioners in challenging the Order “on the grounds that it exceeds the FCC’s statutory authority, is arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence, in violation of the United States Constitution ... and is otherwise contrary to law.” (JA 600-01.) On April 10, 2007, the Judicial Panel on Miultidistrict Litigation exercised its authority under 28 U.S.C. § 2112(a) to consolidate the petitions for review of the Order and randomly designated this Court to hear the matter. Petitioners thereafter requested this Court to stay the Order's applicability pending judicial review, but this Court denied that request on July 24, 2007. II. DISCUSSION A. The FCC’s Authority to Issue the Order At the outset, petitioners contest the FCC’s underlying authority to promulgate rules implementing section 621(a)(1) of the Communications Act. Petitioners maintain that the FCC exceeded the bounds of its authority when it adopted the Order because Congress never explicitly 7ACM, NAC, and NATOA filed petitions for review on April 3, 2007 with the United States Courts of Appeals for the Sixth, Third, and Fourth Circuits, respectively. ACD, USCM, and NLC filed petitions for review on May 17, 2007 with the United States Court of Appeals for the D.C. Circuit. 18a or implicitly delegated power to the FCC to interpret section 621(a)(1). In contrast, the FCC insists that it undoubtedly possesses the requisite authority to implement the Order and that petitioners’ argument “rest[s] on a fundamental misunderstanding of the statutory scheme.” (Respondent’s Br. 21.) In support of its jurisdictional argument, petitioners emphasize that nowhere in the plain language of section 621(a)(1) does any reference to the Commission appear. Turning to the text, section 621(a)(1) reads as follows: (a) Authority to award franchises; public rights-of-way and easements; equal access to service; time for provision of service; assurances (1) A franchising authority may award, in accordance with the provisions of this subchapter, 1 or more franchises’ within its jurisdiction; except that a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to award an additional competitive franchise. Any applicant whose application tor a second franchise has been denied by a final decision of the franchising authority may appeal such final decision pursuant to the provisions of 19a section 555 of this title for failure to comply with this subsection. 47 U.S.C. § 541(a)(1) (emphasis added). Petitioners are thus correct in noting that, while the text expressly references franchising authorities, it is silent as to the agency’s role in the process of awarding cable franchises. Where petitioners’ argument falls short, however, is in equating the omission of the agency from section 621(a)(1) with an absence of rulemaking authority. In AT&T Corp. v. lowa Utilities Board, 525 U.S. 366 (1999), the Supreme Court considered a challenge by state utility commissions and _ local exchange carriers to local competition rules issued by the FCC pursuant to the Telecommunications Act of 1996. In considering whether the FCC possessed the regulatory authority to interpret the provisions of the Telecommunications Act of 1996 at issue, the Court hinged its analysis on section 201(b), a 1938 amendment to the Communications Act of 1934. AT&T Corp., 525 U.S. at 377. Section 201(b) provides, in relevant part, that “[t}he Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act.” 47 U.S.C. § 201(b). The Court reasoned that “{s]ince Congress expressly directed that the 1996 Act, along with its local-competition provisions, be inserted into the Communications Act of 1934... the Commission’s rulemaking authority would seem to extend to implementation of the local competition 20a provisions.” AT&T Corp., 525 U.S. at 377-78. In other words, AT&T Corp. espoused a plain reading of section 201(b): “We think that the grant in § 201(b) means what it says: The FCC has rulemaking authority to carry out the ‘provisions of this Act,’ which include §§ 251 and 252, added by the Telecommunications Act of 1996.” Jd. at 378. We find that the logic of AT&T Corp. controls the disposition of the jurisdictional argument petitioners raise here. Just as Congress ratified the Telecommunications Act of 1996 as an amendment to be incorporated into the original Communications Act of 1934, Congress likewise passed the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460, which revised section 621(a)(1) to include the bar on unreasonable refusals to award additional franchises, as an amendment to the original Communications Act of 1934. Through this process of amendment, Congress incorporated section 621(a)(1) into the Communications Act of 1934, and the statutory language at issue here thus qualifies as a “provision[] of this Act” within the meaning of section 201(b). Thus, because “the grant in § 201(b) means what it says|,|” we are bound by this plain meaning and thereby conclude that, pursuant to section 201(b), the FCC possesses clear jurisdictional authority to formulate rules and_ regulations interpreting the contours of section 621(a)(1). See AT&T Corp., 525 U.S. at 378. Z2la Locating jurisdictional support for the FCC’s rulemaking in section 201(b) further explains the absence of any reference to the Commission in the language of section 621(a)(1). Facing a similar argument regarding statutory silence with respect to an agency's rulemaking authority, the Supreme Court underscored that there is an “obvious difference between a statutory requirement ... and a statutory authorization.” Alaska Dept. of Environmental Conservation v. E.P.A., 540 U. S. 461, 491 (2004) (emphasis in original). In the specific context of the Communications Act, the Court has observed that it is “not peculiar that the [congressionally] mandated regulations should be specifically referenced, whereas regulations permitted pursuant to the Commission’s § 201(b) authority are not.” AvY&T Corp., 525 U.S. at 385. Standing alone then, the statutory silence in section 621(a)(1) regarding the agency’s rulemaking power does not divest the agency of its express authority to prescribe rules interpreting that provision. Cases from our sister circuits interpreting section 621 lend further support to our finding of the agency's jurisdiction here. In City of Chicago v. FCC, 199 F.3d 424, 428 (7th Cir. 1999), for example, the Seventh Circuit squarely addressed the issue of whether the “FCC was ... granted regulatory authority over 47 U.S.C. § 541, the statute setting out general franchise requirements.” In answering this question, the court explained that “the FCC is charged by Congress with administration of the Cable Act... We are not convinced that for some reason the FCC has well-accepted authority under the Act but 22a lacks authority to interpret § 541 and to determine what systems are exempt from franchising requirements.” City of Chicago, 199 F.3d at 428 (internal citations omitted). Likewise, in National Cable Television Ass'n v. FCC, 33 F.3d 66 (D.C. Cir. 1994), the D.C. Circuit confronted the question of whether the FCC’s interpretation of the franchise requirements set forth in section 621(b)(1) was a_ reasonable construction of the statute. Although not addressing the jurisdictional question directly, the court concluded that the regulations at issue represented reasonable constructions of section 621(b)(1) and therefore denied the petitions for review. Id. at 75. Implicit in the court’s deference to the FCC’s interpretations was an acknowledgment that the agency possessed the underlying regulatory authority to promulgate rules construing section 621. Thus, our jurisdictional holding today reinforces the conclusions of our sister circuits. As a final jurisdictional challenge, petitioners focus their argument on the availability of judicial review under section 621(a)(1). Immediately after assigning LFAs the task of awarding franchises, the next sentence of section 621(a)(1), by cross- referencing section 635 of Title VI, identifies the courts as the forum for aggrieved cable operators to obtain relief. See 47 U.S.C. § 555(a)(1),(2) “Any cable operator adversely affected by any final determination made by a franchising authority under section 54l(a)(1) . . . of this title may commence an action within 120 days after receiving notice of such determination, which may be brought in (1) the district court of the United States for any judicial district in which the cable system is located; or (2) in any state court of general jurisdiction having jurisdiction over the parties.”). In light of this judicial review provision, petitioners challenge the Order for ‘ignor[ing] this basic statutory structure .. . [by] in effect, add[ing] a third clause to Section 635(a) that would allow local franchising matters under Section 621(a)(1) to be ruled upon by the FCC.” (Petitioner ACM’s Br. 18; see also Petitioner NCTA’s Br. 24-26; Petitioner Tampa’s Br. 16-17; Petitioner New Jersey’s Br. 16-17.) Petitioners contend that the FCC’s intervention in _ franchising’ decisions’ violates Congressional intent that the courts serve as the only other body with concurrent jurisdiction over section 621(a)(1). By issuing the Order, their argument goes, the FCC has impermissibly encroached on the exclusive role of the courts in providing redress to aggrieved cable operators. In effect, petitioners’ argument calls upon us to determine whether the judicial review provisions in the second part of section 621(a)(1) are exclusive and thereby override the FCC's” exertion of rulemaking authority. Our inquiry leads us to a negative answer: the availability of a judicial remedy for unreasonable denials of competitive franchise applications does not foreclose the agency's rulemaking authority over section 621(a)(1). While the Order equips LFAs with guidance on reasonable versus unreasonable distribution of 24a franchises, the courts ultimately retain their Congressionally-granted jurisdiction to hear appeals involving denials of competitive franchises. Although the courts may have to grant deference to the Order, this does not in any way impede the courts’ fact- finding or legal analysis during actual judicial proceedings. Our conclusion today that the FCC possesses jurisdiction over section 621 (a)(1) coextensive with that of the courts is buttressed by the Supreme Court’s analogous decisions in AT&T’ Corp. and U.S. uv. Haggar Apparel Co., 526 U.S. 380 (1999). In the former case, although the Communications Act specifically provides for judicial review of state commission decisions arbitrating interconnection disputes among telephone companies, 47 U.S.C. § 252(e)(6), the Supreme Court upheld the FCC’s authority to issue rules’ governing the states’ resolution of such disputes. AT&T Corp., 525 U.S. at 377-85. ‘The Court reasoned that Congress’s “assignment[]” of the adjudicatory task to state commissions did not “logically preclude the [FCC]’s issuance of rules to guide the state-commission judgments.” Jd. at 385 Likewise, in Haggar Apparel, a manufacturer of imported clothing brought an action to challenge regulations issued by the United States Customs Service through the notice-and-comment rulemaking process. 526 U.S. at 380. Specifically, the company contested the applicable scope of the rules, arguing that they applied only to customs officers and not to 25a the Court of International Trade in importers’ refund suits. Jd. at 386-87. The Court, however, rejected Haggar Apparel’s attempt to release the Court of International Trade from adherence to the rules and ultimately held that “[djeference can be given to the regulations without impairing the authority of the [Court of International Trade] to make factual determinations, and to apply those determinations to the law, de novo.” TId. at 391. Similarly, in the instant case, we believe that courts can grant deference to the Order while maintaining their Congressionally-granted authority to make factual'determinations and provide relief to aggrieved cable operators. B. Chevron Analysis Because we find that the agency possesses the underlying authority to issue the Order, our subsequent task is to ascertain whether the contents of the Order merit our deference pursuant to Chevron USA v. Natural Resources Defense Council, 467 U.S. 837 (1984). In Chevron, the Supreme Court observed that, pursuant to the principle of deference to administrative interpretations, “considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer.’ 467 U.S. at 844. To determine whether such deference is warranted, the Chevron analysis, colloquially referred to as the “Chevron two-step,” requires the following inquiry: “the court [must] ask ‘whether the statute is silent or ambiguous with respect to the specific issue before it; uf so, the 26a question for the court [is] whether the agency’s answer is based on a permissible construction of the statute.” Singh v. Gonzales, 451 F.3d 400, 403-04 (6th Cir. 2006) (citation and quotation marks omitted). Within this analytical framework, judicial deference to an agency’s construction of a statute is justified because the “statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000). The Supreme Court has explained that “a very good indicator of delegation meriting Chevron treatment is express congressional authorizations to engage in the process of rulemaking .. . that produces regulations or rulings for which deference is claimed.” United States v. Mead Corporation, 533 U.S. 218, 229 (2001). Applying the dictates of Chevron, we find that the Order is entitled to our deference. At the outset, we note that, as reflected by the NPRM, the sixty-day comment period, and the ninety-day reply comment period, the FCC promulgated the Order through the formal channels of notice-and-comment rulemaking pursuant to section 553 of the APA. According to the Supreme Court's pronouncement in Mead, the FCC’s conformance with notice-and-comment procedures serves as a “very yood indicator of delegation meriting Chevron treatment.” 533 U.S. at 229: see also, Estate of Gerson v. C.1.R., 507 F.3d 435, 438 (6th Cir. 2007) (finding that a Treasury Regulation adopted by the IRS deserved deference because “the IRS regularly engages in notice and comment 27a procedures for its general-authority regulations; these procedures foster fairness and_ deliberation.”); Cleveland Nat. Air Show, Inc. v. U.S. Dept. of Transp., 430 F.3d 757, 763 (6th Cir. 2005) (noting that a “formal process is one signal that an agency deserves Chevron deference.’). Turning to the Chevron two-step analysis, we are of the view that the language at issue in section 621(a)(1) is indeed ambiguous, and that the FCC's construal of the language in the Order amounts to a permissible construction of this language. 1. Chevron Step 1; Statutory Ambiguity The initial question under step one of the Chevron framework is “whether Congress has directly spoken to the precise question at issue” by employing precise, unambiguous statutory language. Chevron, 467 U.S. at 842. This first step is informed by the recognition that “[t]he judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent.” Jd. at 843, n.9. When conducting the inquiry required by Chevron’s first step, “our primary goal is to effectuate legislative intent using traditional tools of statutory interpretation.” Estate of Gerson, 507 F.3d at 439. In harnessing these tools, we must construe statutory language “in pertinent context rather than = in isolation.” /d. 28a In the case at bar, the statutory phrase within section 621(a)(1) which emerges as a candidate for ambiguity is “unreasonably refuse to award an additional competitive franchise.” 47 U.S.C. § 541(a)(1) (emphasis added). Language is ambiguous when “to give thle] phrase meaning requires a specific factual scenario that can give rise to two or more different meanings of the phrase.” Beck v. City of Cleveland, Ohio, 390 F.3d 912, 920 (6th Cir. 2004). While we have not previously interpreted the phrase “unreasonably” under section 621(a)(1), in the context of other provisions of the Communications Act, courts called upon to ascertain the ambiguity of descriptors such as “reasonable” and “unreasonable” have found these words subject to multiple constructions. In Orloff v. FCC, 352 F.3d 415 (D.C. Cir. 2003), cert. denied, 542 U.S. 937 (2004), for example, the petitioner filed a petition for review of an FCC adjudication which found that Verizon's practice of granting sales concessions to certain prospective customers did not rise to “unjust or unreasonable” discrimination in violation of 47 U.S.C. § 202(a). In conducting the requisite Chevron analysis, that court stated that “the generality of these terms—unjust, unreasonable-opens a _ rather large area for the free play of agency discretion, limited of course by familiar arbitrary and capricious standard in the Administrative Procedure Act.” Orloff, 352 F.3d at 420 (internal quotations omitted). Similarly, confronting section 201(b) of the Communications Act, which mandates that any interstate communications charge be “just and reasonable” and characterizes as unlawful any communications charge that is “unjust. or unreasonable,” the panel majority explained that “[blecause ‘just,’ ‘unjust,’ ‘reasonable,’ and ‘unreasonable’ are ambiguous statutory terms, this court owes substantial deference to the interpretation the Commission accords them.” Capital Network System, Inc. v. FCC, 28 F.3d 201, 204 (D.C. Cir. 1994). Of course, the detection of inherent ambiguity in words such as “reasonable” and “unreasonable” by other courts in other sections of the Communications Act does not terminate the analysis here, because such observations are divorced from the specific context of Title VI. See Bower v. Federal Exp. Corp., 96 F.3d 290, 208-09 (6th Cir. 1996) (“[E]ven facially ambiguous provisions can have their meanings clarified and rendered unambiguous by reference to the statute’s structure or to other unambiguous terms in the statute.”). and (c) ongoing franchise negotiations.26 To determine whether the current operation of the franchising process discourages competition and broadband deployment, the Commission also sought information regarding, among other things: (Continued from previous page) and thus are defined under the Communications Act as “cable operator[s]” that must obtain a franchise. Although we recognize that there are numerous other ways to enter the MVPD market (e.g., direct broadcast satellite (‘DBS”), wireless cable, private cable), our actions in this proceeding relate to our authority under Section 62!(a)(1) of the Communications Act, and thus are limited to competitive entrants seeking to obtain cable franchises. 25 Local Franchising NPRM, 20 FCC Red at 18588 26 Td. 70a how much time, on average, elapses between the date a franchise application is filed and the date an LFA acts on the application, and during that period, how much time is spent in active negotiations;?? whether to establish a maximum time frame for an LFA to act on an application for a competitive franchise; whether “level-playing-field” mandates, which impose on new entrants terms and conditions identical to those in the incumbent cable operator’s franchise, constitute unreasonable’ barriers’ to entry; 2 whether build-out requirements (i.e., requirements that a franchisee deploy cable service to parts or all of the franchise area within a specified period of time) are creating unreasonable barriers to competitive entry; specific examples of any monetary or in kind LFA demands unrelated to cable services that could be adversely affecting dla new entrants’ ability to obtain franchises;*! and whether current procedures or requirements are appropriate for any cable operator, including incumbent cable operators.“ 12. In the Local Franchising NPRM, we tentatively concluded that Section 621(a)(1) empowers the Commission to adopt rules to ensure that the franchising process does not unduly interfere with the ability of potential competitors to provide video programming to consumers.* Accordingly, the Commission sought comment on how it could best remedy any problems with the current franchising process.*4 13. The Commission also asked whether Section 706 provides a basis for the Commission to address barriers faced by would-be entrants to the ‘| Id. See also Comments of Verizon, MB Docket No. 05-255 at 12 (filed Sept. 19, 2005) (arguing that “[mJany local franchising authorities unfortunately view tiie franchising process as an opportunity to garner from a potential new video entrant concessions that are in no way related to video services or to the rationales for requiring franchises’). See Appendix A for a list of all commenters and reply commenters Local Franchising NPRM, 20 FCC Red at 18592 Td. at 18590 ‘Jd. at 1858] ae video market.*5 Section 706 directs the Commission to encourage broadband deployment by utilizing “measures that promote competition ... or other regulating methods that remove barriers. to infrastructure investment.”** Competitive entrants in the video market are, in large part, deploying new fiber-based facilities that allow companies to offer the “triple play” of voice, data, and video services. New entrants’ video offerings thus directiy affect their roll-out of new broadband services. Revenues from cable services are, in fact, a driver for broadband deployment. In light of that relationship, the Commission sought comment on whether it could take remedial action pursuant to Section 706. %7 14. The Franchising Process. The record in this proceeding demonstrates that the franchising process differs significantly from locality to locality. In most states, franchising is conducted at the local level, affording counties and municipalities broad discretion in deciding whether to grant a franchise. *® % Td. at 18590. 6% Section 706 of the Telecommunications Act of 1996, 47 U.S.C § 157 nt. 37 See USTA v. FCC, 359 F.3d 554, 580, 583 (D.C. Cir. 2004) See also USTelecom Commer'ts at 15; TIA Comments at 16-17 1 See, e.g., Mb. ANN, CODE art. 23A § 2(b)(13); OR. CONST. ART lL, § 21 (2005); COLO. REV. STAT. ANN. § 30-35-201 (West 2005) We also note that several states have adopted statutes governing the franchising process. For example, some states require public hearings or special elections. See League of Minnesota Cities (“LMC”) Comments at 6-8, South Slope (continued) 3a Some counties and municipalities have cable ordinances that govern the structure of negotiations, while others may proceed on an _ applicant-by- applicant basis.29 Where franchising negotiations are focused at the local level, some LFAs create formal or informal consortia to pool their resources and expedite competitive entry.?° (Continued from previous page) Comments at 6. Other states have laws limiting the range of issues that can be negotiated in a franchise. See Cablevision Comments at 12, LMC Comments at 15. As we discuss below, certain states have adopted new franchising laws that allow providers to apply for franchises through state franchising authorities (“SFAs”), and we note that lawmakers in those states adopted these new franchising laws to address the needs of the current marketplace. Furthermore, certain states have traditionally considered franchise applications at the state level. See, e.g., HAW. REV. STAT. § 440G-4 (2006), CONN. GEN. STAT. ANN. § 16-331 (West 2006), VT. STAT. ANN. tit. 30, § 502 (2006). The record indicates that state level franchising may provide a practical solution to the problems that facilities-based entrants face when seeking to provide competitive services on a broader basis than county or municipal boundaries and seek to provide service in a significant number of franchise areas. See, e.g., AT&T Reply at 21, 37, NTCA Comments at 10. 89 See, e.g., Mobile, Ala. Comments at 2 (discussing its Master Cable Services Regulatory Ordinance that was created to ensure all potential entrants were treated in a_ uniform manner); Ontario, Cal. Comments at 5-6 (discussing draft master ordinance that will ensure a “fair and equitable application process” for all new entrants). 40 See, e.g., MO-NATOA Comments at 8 (“some localities work together to franchise and manage rights-of-way’); MHRC (continued) 74a 15. To provide video services over a geographic area that encompasses more than one LFA., a prospective entrant must become familiar with all applicable regulations. This is a time- consuming and expensive process that has a chilling effect on competitors.4' Verizon estimates, for example, that it will need 2,500-3,000 franchises in order to provide video services throughout its service area.42 AT&T states that its Project Lightspeed deployment is projected to cover a geographic area that would encompass as many as 2,000 local franchise areas.** BellSouth estimates that there are approximately 1,500 LFAs within its service area.*4 Qwest’s in-region territory covers a potential 5,889 LFAs.4° While other companies are also considering competitive entry,‘® these estimates (Continued from previous page) Comments at 1 (MHRC is a consolidated regulatory authority for six Oregon localities). 41 See, e.g., Verizon Comments at 27, Att. A, para. 10, 59-75; BellSouth Comments at 2, 11; Letter from Jeffrey S. Lanning, Associate General Counsel, USTelecom, to Marlene H. Dortch, Secretary, Federal Communications Commission at 17-18 (July 28, 2006) (“USTelecom Ex Parte”). 42 Verizon Comments at 27, Att. A, para. 10. 43 AT&T Comments at 17. 44 BellSouth Comments at 11. 45 Qwest Comments at 14. 46 See BSPA Comments at 1-2; Cavalier Telephone Comments at 2; South Slope Comments at 2; Cincinnati Bell Comments at 1; Hawaiian Telcom Comments at 1; Minnesota Telecom (continued) 15a amply demonstrate the regulatory burden faced by competitors that seek to enter the market on a wide scale, a burden that is amplified when individual LFAs unreasonably refuse to grant competitive franchises. 16. A few states and municipalities recently have recognized the need for reform and have established expedited franchising processes for new entrants. Although these processes also vary greatly and thus are of limited help to new cable providers seeking to quickly enter the marketplace on a. regional basis, they do provide more uniformity in the franchising process on an intrastate basis. These state level reforms appear to offer promise in assisting new entrants to more quickly begin offering consumers a competitive choice among cable providers. In 2005, the Texas legislature designated the Texas Public Utility Commission (““PUC”) as the franchising authority for state-issued franchises, and required the PUC to issue a franchise within 17 business days after receipt of a completed application from an eligible applicant.4? In 2006, (Continued from previous page) Alliance Comments at 2. In addition to video services, many of these new entrants also intend to provide broadband services. See, e.g., Verizon Comments at i; BSPA Comments at 1; Cavalier Telephone Comments at 2. 47 TEX. UTIL. CODE ANN. §§ 66.001, 66.003. Holders of these franchises are required to pay franchise fees, comply with customer service standards, and provide the capacity for PEG access channels that a municipality has activated under the (continued) 76a Indiana, Kansas, South Carolina, New Jersey, North Carolina, and California also passed legislation to streamline the franchising process by providing for expedited, state level grants of franchises.48 Virginia, by contrast, did not establish statewide franchises but mandated uniform time frames for negotiations, public hearings, and ultimate franchise approval at the local level. In particular, a “certificated provider of telecommunications service” with existing authority to use public rights-of-way is authorized to provide video service within 75 days of filing a request to negotiate with each individual LFA.49 Similarly, Michigan’ recently enacted legislation that streamlines the franchise application process, establishes a 30-day timeframe within which an LFA must make a decision, and eliminates build-out requirements. ®° (Continued from previous page) incumbent cable operator’s franchise agreement. Id. at §§ 66.005, 66.006, 66.008, 66.009, 66.014. Franchisees are not required to comply with any build-out requirements, but they are prohibited from denying service to any area based on the income level of that area. /d. at § 66.007. 48 IND. CODE § 8-1-34-16 (2006); 2006 Kan. Sess. Laws 93 (codified at KAN. STAT. ANN. § 17-1902); S.C. CODE ANN. § 58- 12-310 et seq. (2006); Assemb., No. 804, 212th Leg. (N.J. 2006); 2006 N.C. Sessions Laws 151 (to be codified 1/1/2007 at N.C. GEN STAT. ANN. § 66-351 (West 2006): CAL. PUB. UTIL. CODE § 40], et seq.;. 439'VA. CODE ANN. § 15.2-2108.1:1 et seq. 50 2006 Mich. Pub. Acts 480. 77a yA In some _ states, however, franchise reform efforts launched in recent months have failed. For example, in Florida, bills that would have allowed competitive providers to enter the market with a permit from the Office of the Secretary of State, and contained no build-out or service delivery schedules, died in committee.*! In Louisiana, the Governor vetoed a bill that would have created a state franchise structure, provided for automatic grant of an application 45 days after filing, and contained no build-out requirements.®2 In Maine, a bill that would have replaced municipal franchises with state franchises was withdrawn.** Finally, a Missouri bill that would have given the Public Service Commission the authority to grant franchises and would have prohibited local franchising died in committee. 4 Ill, DISCUSSION 18. Based on the voluminous record in this proceeding, which includes comments filed by new entrants, incumbent cable operators, LFAs, consumer groups, and others, we conclude that the current operation of the franchising process can 51 S 1984, 2006 Sess. (Fla. 2006), HB 1199, 2006 Sess. (Fla. 2006). 52 HB 699, 2006 Reg. Sess. (La. 2006). 53 LR 2800, 2006 Leg., 2d. Reg. Sess. (Me. 2005). 54 SB 816, 2006 Sess. (Mo. 2006). 78a constitute an unreasonable barrier to entry for potential cable competitors, and thus _ justifies Commission action. We find that we have authority under Section 621(a)(1) to address this problem by establishing limits on LF Comcast asserts that MSOs are well within their rights to insist that their legal and contractual rights are honored in the grant of a subsequent franchise.!76 The record demonstrates, however, that local level-playing-field requirements may require LFAs to impose obligations on new 173 See, e.g., NATOA Reply at 44; Burnsville/Eagan Comments at 44; City of Philadelphia Reply at 2. 174 See, e.g., South Slope Comments at 7-8 (build-out); Verizon Comments at 60-61, 71 (PEG requirements); AT&T Comments at 67 (redundant facilities). See also FTTH Council Comments at 29-30 (quoting Hazlett & Ford study concluding that the result of level-playing-field laws “is that incumbents and [LFAs] can force entrants to incur sunk costs considerably in excess of what free market conditions would imply’). We note that, as described below, we do not address — and therefore do not preempt — state laws governing the franchising process including state level-playing-field mandates. 175 See supra para. 34; see also DOJ Ex Parte at 15-16. 176 Comcast Reply at 17-18 (citing Comcast’s involvement in Verizon’s Howard County, Maryland, franchise approval process). 118a entrants that directly contravene Section 621(a)(1)’s prohibition on unreasonable refusals to award a competitive franchise.!77 In most cases, incumbent cable operators entered into their franchise agreements in exchange for a monopoly over the provision of cable service.!78 Build-out requirements and other terms and conditions that may have been sensible under those circumstances can _ be unreasonable when applied to competitive entrants. NATOA’s argument that level-playing-field requirements always serve to ensure a competitive environment and _ provide for an equitable distribution of services and obligations ignores that incumbent and competitive operators are not on the same footing. LFAs do not afford competitive providers the monopoly power and privileges that incumbents received when they agreed to their franchises, something that investors recognize. !79 49, Moreover, competitive operators should not bear the consequences of an incumbent cable operator's choice to agree to any unreasonable’ franchise terms that an LFA may demand. And while the record is mixed as to whether level- playing-field mandates “assure that cable systems are responsive to the needs and interests of the local 177 Mercatus Center at 39-40; Phoenix Center Competition Paper at 7. 178 Td. 179 See BSPA Comments 4: USTelecom Comments at 51-53: Mercatus Comments at 39-40. 119a community,’'®° the more compelling’ evidence indicates that they do not because they prevent competition. Local level-playing-field provisions impose costs and risks sufficient to undermine the business plan for profitable entry in a _ given community, thereby undercutting the possibility of competition. 14! 50. Benefits of Cable Competition. We further agree with new entrants that reform of the operation of the franchise process is necessary and appropriate to achieve increased video competition and broadband deployment. 182 The record demonstrates that new cable competition reduces rates far more than competition from DBS. Specifically, the presence of a second cable operator in a market results in rates approximately 15 percent lower than in areas without competition — about $5 per month.183 The magnitude of the rate 180 47 U.S.C. § 521(2); Id. 181 Mercatuc Comments at 46. 182 Verizon Reply at 5-8. See also DOJ Ex Parte at 1, 3. 1383 FI’TH Council Comments at 13. See also U.S. General Accountability Office, Subscriber Rates and Competition in the Cable Television Industry, GAQ-04-262T (Mar. 2004) (“[S]ubseribers in areas with a wire-based competitor had monthly cable rates about $5 iower, on average, than subscribers in similar areas without a wire-based competitor. Our interviews with cable operators also revealed that these companies generally lower rates and/or improve customer service where a wire-based competitor is present.”); U.S. (continued) 120a decreases caused by wireline cable competition is corroborated by the rates charged in Keller, Texas, where the price for Verizon’s “Everything” package is 13 percent below that of the incumbent cable operator, and in Pinellas County, Florida, where Knology is the overbuilder and the incumbent cable (C ‘ontinued from previous page) General Accounting Office, GAQO-04-8, Issues Related to Competition and Subscriber Rates in the Cable Television Industry, Report to the Chairman, Committee on Commerce, Science and Transportation, U.S. Senate (2003) (“2003 GAO Report’) at 3 (noting that cable rates are about 15 percent lower in markets where wireline competition is present), and at 10 (estimating that with an average monthly cable rate of approximately $34 that year, subscribers in areas with a wire- based competitor had monthly cable rates about $5 lower, on average, than subscribers in areas without such a competitor); U.S. General Accounting Office, GAO-03-130, Jssues in Providing Cable and Satellite Television Services, Report to the Subcommittee on Antitrust, Competition, and Business and Consumer Rights, Committee on the Judiciary, U.S. Senate (2002) (“2002 GAO Report’) at 9 (noting that in franchise areas with a second cable provider, cable prices are approximately 17 percent lower than in comparable arcas without a second cable provider). See also Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, MB Docket No. 05-255, Twelfth Annual Report, FCC 06-11, at para. 41 (rel. Mar. 3, 2006) and 2005 Cable Price Survey at paras. 2, 14 (noting that cable prices are 17 percent lower and decrease substantially when wireline cable competition is present). 12la operators rates are $10-15 lower than in neighboring areas where it faces no competition. 184 51. We also conclude that broadband deployment and video entry are “inextricably linked”!85 and that, because the current operation of the franchising process often presents an unreasonable barrier to entry for the provision of video services, it necessarily hampers deployment of broadband services.'86 The record demonstrates that broadband deployment is not profitable without the ability to compete with the bundled services that cable companies provide.'8? As the Phoenix Center explains, “the more potential revenues that the network can generate in a household, the more likely it is the network will be built to that household.” '88 184 EIT H Council Comments at 15-16, including chart and declaration. 185 AT&T Comments at 12. See also BSPA Comments at 7: Freedomworks Comments at 15; Mercatus Center Comments at 34-35. 86 Technology and Democracy Project Comments at 4. ‘87 AT&T Comments at 12. The Government Accountability Office reached this same conclusion in its review of the video service market. See Issues in Providing Cable and Satellite Television Services, GAO 03-130 at 2 (2002). 188 Letter from Lawrence Spiwak, President, Phoenix Ctr. for Advanced Legal and Econ. Pub. Policy Studies, to Marlene Dortch, Secretary, Federal Communications Commission, at Att., Phoenix Center Policy Paper Number 23: The Impact of Video Service Regulation on the Construction of Broadband (continued) 122a DOJ’s comments underscore that additional video competition will likely speed deployment of advanced broadband services to consumers.'!*®? Thus, although LFAs only oversee the provision of wireline-based video services, their regulatory actions can directly affect the provision of voice and data services, not just cable.!9° We find reasonable AT&T’s assertion that carriers will not invest billions of dollars in network upgrades unless they are confident that LFAs will grant permission to offer video services quickly and without unreasonable difficulty. 1% §2. In sum, the current operation of the franchising process deters entry and thereby denies consumers choices.'% Delays in the franchising process also hamper’ accelerated broadband deployment and investment in broadband facilities in direct contravention of the goals of Section 706, }% the President's competitive broadband objectives, !™ (Continued from previous page) Networks to Low-Income Households, pg 23 (March 13, 2006) (“Phoenix Center Redlining Paper’). 189 DOJ Ex Parte at 3-4. 190 FIT H Council Comments at 4. 191} AT&T Comments at 15. 192 DOJ Ex Parte at 7-8. 193 Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt 199 See The White House, A New Generation of American Innovation, 11-12 (April 2094), available at (continued) and our established broadband goals.’ In addition, the economic effects of franchising delays can trickle down to manufacturing companies, which in some cases have lost business because potential new entrants would not purchase equipment without certainties that they could deploy their services.!% We discuss below our authority to address these problems. B. The Commission Has Authority to Adopt Rules to Implement Section 621(a)(1) 53. In the Local Franchising NPRM, the Commission tentatively concluded that it has the authority to adopt rules implementing Title VI of the Act,'%? including Section 621(a)(1).1%8 The Commission sought comment on whether it has the authority to adopt rules or whether it is limited to (Continued from previous page) http://www.whitchouse.gov/infocus/technology/economic_policy 200404/innovation. pdf. 195 See Federal Communications Commission, Strategic Plan 2006-2011 at 3 (2005). 19% AT&T Reply at 9; Alcatel Comments at 1; Letter from Danielle Jafari, Director and Legal Counsel of Government Affairs, Telecommunications Industry Association, to Marlene Dortch, Secretary, Federal Communications Commission (March 9, 2006). '97 Local Franchising NPRM, 20 FCC Red at 18589. 196 47 U.S.C. § 541(a)(1). 124a providing guidance.'*? Based on the record and governing legal principles, we affirm this tentative conclusion and find that the Commission has the authority to adopt rules to implement Title VI and, more specifically, Section 621(a)(1). 54. Congress delegated to the Commission the task of administering the Communications Act. As the Supreme Court has’ explained, the Commission serves “as the ‘single Government agency with ‘unified jurisdiction’ and ‘regulatory power over all forms of electrical communication, whether by telephone, telegraph, cable, or radio.” 2°° To that end, “(t]he Act grants the Commission broad responsibility to forge a rapid and _ efficient communications system, and broad authority to implement that responsibility.”2°! Section 201(b) authorizes the Commission to “prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act.”2°2 “(T]he grant in § 201(b) means what it says: The FCC has rulemaking authority to carry out the 199 Local Franchising NPRM, 20 FCC Red at 18589. 200 United States v. Southwestern Cable Co., 392 U.S. 157, 167 68 (1968) (quotation omitted), 201 United Telegraph Workers, AFL-CIO v. FCC, 436 F.2d 920, 923 (D.C. Cir. 1970) (citations and quotations omitted) 47 U.S.C. § 201(b) (“The Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act.”) 125a ‘provisions of this Act,’’*°% This grant of authority therefore necessarily includes Title VI of the Communications Act in_ general, and Section 621(a)(1) in particular. Other provisions in the Act reinforce the Commission’s general rulemaking authority. Section 303(r), for example, states that “the Commission from time to time, as_ public convenience, interest, or necessity requires shall ... make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this Act....204 Section 4(i) states that the Commission “may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions.” 2° 55. Section 2 of the Communications Act grants the Commission explicit jurisdiction over “cable services.”*°° Moreover, as we explained in the Local Franchising NPRM, Congress specifically 203 AT&T Corp. v. lowa Utilities Board, 525 U.S. 366, 378 (1999). 204 See also 47 U.S.C. § 151 (the Commission “shall execute and enforce the provisions of this Act”) 205 47 U.S.C. § 154()) 206 47 U.S.C. § 152 (“The provisions of this Act shall apply with respect to cable service, to all persons engaged within the United States in providing such service, and to the facilities of cable operators which relate to such service, as provided in title VI.”) 126a charged the Commission with the administration of the Cable Act, including Section 621.27 In addition, federal courts have consistently upheld the Commission's authority in this area.?° 56. Although several commenters disagreed with our tentative conclusion, none has persuaded us that the Commission lacks the authority to adopt rules to implement Section 621(a)(1). Incumbent cable operators and franchise authorities argue that the judicial review provisions in Sections 621(a)(1) and 6352 indicate that Congress gave the courts exclusive jurisdiction to interpret and_ enforce 20’ Local Franchising NPRM, 20 FCC Ked at 18589. 208 See City of Chicago v. FCC, 199 F.3d 424 (7th Cir. 1999) (finding that the FCC is charged by Congress with the administration of the Cable Act, including Section 621). See also City of New York v, FCC, 486 U.S. 57, 70 n.6 (1988) (explaining that Section 303 gives the FCC rulemaking power with respect to the Cable Act); Nat'l Cable Television Ass'n vu. FCC, 33 F.3d 66, 70 (D.C. Cir. 1994) (upholding Commission finding that certain services are not subject to the franchise requirement in Section 621(b)(1)); United Video v. FCC, 890 F.2d 1173, 1183 (D.C. Cir. 1989) (denying petitions to review the Commission's syndicated exclusivity rules); ACLU v. FCC, 823 F.2d 1554 (D.C. Cir. 1987) (upholding the Commission's interpretive rules regarding Section 621(a)(3)). 209 47 U.S.C. § 541(a)(1) C[a]ny applicant whose application for a second franchise has been denied by a final decision of the franchising authority may appeal such final decision pursuant to the provisions of section 635 for failure to comply with this subsection”), Section 635 sets forth the specific procedures for such judicial proceedings. 47 U.S.C. § 555 127a Section 621(a)(1), including authority to decide what constitutes an unreasonable refusal to award a competitive cable franchise.?!° We find, however, that this argument reads far too much into the judicial review provisions. The mere existence of a judicial review provision in the Communications Act does not, by itself, strip the Commission of its otherwise undeniable rulemaking authority.?"' As a general matter, the fact that Congress provides a mechanism for judicial review to remedy a violation of a statutory provision does not deprive an agency of the authority to issue rules interpreting that statutory provision. Here, nothing in the statutory language or the lezislative history suggests that by providing a judicial remedy, Congress intended to divest the Commission of the authority to adopt and enforce rules implementing Section 621.2!2 In light 210 See NCTA Reply, at 11-13 (given the courts have concurrent jurisdiction to review many provisions of Title VI, Section 635(a) only has meaning if it is read to grant exclusive jurisdiction to the courts); Comcast Comments at 27-28 (Congress provided no role for the Commission in the franchising process); Comcast Reply at 27-28 (621(a)(1)’s “unreasonably refuse” language and court review are inextricably linked and thus enforcement authority over the franchising approval process lies with the courts); NATOA Comments at 7-8 (same) See ACLU vu. Texas, 8°3 F.2d 1554, 1574 (D.C. Cir 1987) (recognizing that despite a reference to “court action” in Section 622(d), in the absence of more explicit guidance from Congress the Commission has concurrent jurisdiction to take enforcement action with respect to franchise fee disputes) See BellSouth Re ply at 435: USTelecom Reply at 14-16 128a of the Commission’s broad rulemaking authority under Section 201 and other provisions in the Act, the absence of a_ specific grant of rulemaking authority in Section 621 is “not peculiar.”245 Other provisions in the Act demonstrate that when Congress intended to grant exclusive jurisdiction, it said so in the legislation.?'* Here, however, neither Section 621(a)(1) nor Section 635 includes an MW ATRT v. lowa Utilities Board, 525 U.S. 366, 385 (1999). In Towa Utilities Board, the Supreme Court reviewed Commission rules implementing provisions of the Telecommunications Act of 1996. In particular, states challenged Commission rules implementing Section 252(c)(2), which provides, “a State commission shall establish any rates for interconnection, services, or network elements.” 47 U.S.C. § 252(c)(2). Although this and other provisions in the 1996 Act entrusted the states with certain tasks, the Supreme Court held that “these assignments ... do not logically preclude the Commiission’s issuance of rules to guide the state commission judgments.” lowa Utilities Board, 525 U.S. at 385. The same reasoning apphes to the judicial review provisions in Sections 621(a)(1) and 635 4 See, e.g., 47 U.S.C. § 255(f) (“The Commission shall have exclusive jurisdiction with respect to any complaint under this section.”). We do not find persuasive commenters’ argument that the only way to give Section 635(a) any meaning is to construe it as giving courts exclusive jurisdiction with regard to the three Title VI provisions enumerated in Section 635(a), te.., Sections 621(a)(1), 625, and 626. See NATOA Comments at 9 None of the cases cited by commenters support this proposition Rather, they suggest that in the absence of an exclusivity provision in the statute, the Commission and courts share jurisdiction. See, eg., NATOA Comments at 9 (citing ACLU FCC, 823 F 1564, 1573-75 (D.C. Cir. 1987)) 129a exclusivity provision, and we decline to read one into either provision. ST. In addition, we note that the judicial review provisions at issue here on their face apply only to a final decision by the franchising authority.245. They do not provide for review of unreasonable refusals to award an_ additional franchise by withholding a final decision or insisting on unreasonable terms that an applicant properly refuses to accept. Nor do the judicial review provisions say anything about the broader range of practices governed by Section 621.216 58. We also reject the argument by some incumbent cable operators and franchise authorities that Section 621(a)(1) is unambiguous and contains no gaps in the statutory language that would give the Commission authority to regulate’ the franchising process.?2!” We strongly disagree. Congress did not define the term “unreasonably 215 47 U.S.C. § 541(a)(1) (“Any applicant whose application for a second franchise has been denied by a final decision of the franchising authority may appeal such final decision pursuant to the provisions of section 635 for failure to comply with this subsection”) (emphasis added); 47 U.S.C. §555(a) (“Any cable operator adversely affected by any final determination made by a franchising authority under section 621(a)(1)” may commence an action in federal district court or State court) (emphasis added). 216 See USTelecom Reply at 14. 217 See Comcast Reply at 27. 130a refuse,” and it is far from self-explanatory. The United States Court of Appeals for the District of Columbia Circuit has held that the term “unreasonable” is among the “ambiguous statutory terms” in the Communications Act, and that the “court owes substantial deference to _ the interpretation the Commission accords them.”2!8 We therefore find that Section 621(a)(1)’s requirement that an LFA “may not unreasonably refuse to award an additional competitive franchise” creates ambiguity that the Commission has the authority to resolve.2!9 The possibility that a court, in reviewing a particular matter, may determine whether an LFA “unreasonably” denied a second franchise does not displace the Commission’s authority to adopt rules generally interpreting what constitutes an “unreasonable refusal” under Section 621(a)(1).?2° 59. Some incumbent cable operators and franchise authorities argue that Section 621(a)(1) 218 Capital Network System, Inc. v. FCC, 28 F.3d 201, 204 (D.C. Cir. 1994) (“Because ‘Just,’ ‘unjust,’ ‘reasonable, and ‘unreasonable’ are ambiguous statutory terms, this court owes substantial deference to the interpretation the Commission accords them.”). 219.47 U.S.C. § 541(a)(1) (emphasis added). 220 See NCTA v. Brand X Internet Services, 545 U.S. 967, --, 125 S. Ct. 2688, 2709-02 (2005) (where statute is ambiguous, and implementing agency's construction is reasonable, Chevron requires federal court to accept agency's construction of statute, even uf agency's reading differs from prior judicial construction). 13la imposes no general duty of reasonableness on the LFA in connection with procedures for awarding a competitive franchise.?2! According to these commenters, the “unreasonably refuse to award” language in the first sentence in Section 621(a)(1) must be read in conjunction with the second sentence, which relates to the denial of a competitive franchise application.”22. Based on this, commenters claim that “unreasonably refuse to award” means “unreasonably deny” and, thus, Section 621(a)(1) is not applicable before a final decision is rendered.?2* We disagree. By concluding that the language “unreasonably refuse to award” means the same thing as “unreasonably deny,” commenters violate the long-settled principle of statutory construction that each word in a statutory scheme must be given meaning.224 We find that the better reading of the phrase “unreasonably refuse to award” is that Congress intended to cover LFA conduct beyond ultimate denials by final decision, such as situations where an LFA has unreasonably refused to award an additional franchise by withholding a final decision or by insisting on unreasonable terms that an 221 See NCTA Comments at 28-29: Comcast Reply at 31. 222 See NCTA Comments at 29; Comcast Reply at 32. 223 See NATOA Comments at 30-31; NCTA Comments at 28-29; Burnsville/Eagan Comments at 31-32; Comcast Reply at 32-33. 224 See Bailey v. United States, 516 U.S. 137, 143-45 (1995) (“We assume that Congress usec two terms because it intended each term to have a particular, nonsuperfluous meaning.”). 132a applicant refuses to accept.22° While the judicial review provisions in Sections 621(a)(1) and 635 refer to a “final decision” or “final determination,”226 the Commission’s rulemaking authority under Section 621 is not constrained in the same manner. Instead, the Commission has the authority to address what constitutes an unreasonable refusal to award a franchise, and as stated above, a local franchising authority may unreasonably refuse to award a franchise through other routes than issuing a final decision or determination denying a franchise application. For all of these reasons, we conclude that the Commission may exercise its statutory authority to establish federal standards identifying those LFA-imposed terms and conditions that would 225 See, e.g., Tribune Co. v. FCC, 133 F.3d 61, 66 (D.C. Cir. 1998) (imposing an “intolerable” condition on the grant of a license application may be deemed a de facto denial of that license for purposes of the appeal provisions under § 402(b) of the Act, citing Mobile Communications Corp. of America v. FCC, 77 F.3d 1399 (D.C. Cir. 1996)). See also DOJ Ex Parte at 7 (stating that unnecessary delays, demands for goods and services unrelated to the provision of cable services, and imposition of build-out requirements are tantamount to a “refusal” to award an additional competitive franchise). 226 47 U.S.C. §§ 541(a), 555. See also Puget Sound Energy, Inc. v. U.S., 310 F.3d 613, 624-25 (9th Cir. 2002) (for purposes of determining when power administration's rate determination becomes a “final action” under statutory judicial review provision, court will turn for guidance to general doctrine of finality in administrative law, which “is concerned with whether the initial decision-maker has arrived at a definitive position on the issue that inflicts an actual, concrete injury’). 133a violate Section 621(a)(1) of the Communications Act.227 60. Incumbent cable operators and _ local franchise authorities also maintain that the legislative history of Section 621(a)(1) demonstrates that Congress reserved to LFAs the authority to determine what constitutes “reasonable” grounds for franchise denials, with oversight by the courts, and left no authority under Section 621(a)(1) for the Commission to issue rules or guidelines govern*ng the franchise approval process.?28 Commenters point to the Conference Committee Report on the 1992 Amendments,?23 which adopted the Senate version of Section 621,2%° rather than the House version, which “containea five examples of circumstances under which it is reasonable for a franchising authority to deny a franchise.”23! We find commenters’ reliance 227 See Qwest Reply at 10-11. 228 See NCTA Comments at 22-23; Florida Municipalities Comments at 9-10. 229 H.R. REP. NO. 102-862, at 77-78 (1992) (Conf. Rep.), as reprinted in 1992 U.S.C.C.A.N. 1231, 1259-1260. 230 S. REP NO. 102-92, at 185 (1991) (explaining that “[i]t shall not be considered unreasonable for purposes of this provision for local franchising authorities to deny the application of a potential competitor if it is technically infeasible. However, the Committee does not intend technical infeasibility to he the only justification ror denying an additional franchise”). 231 H.R. REP. NO. 102-862, at 77-78 (1992) (Conf. Rep.), as reprinted in 1992 U.S.C.C.A.N. 1231, 1259-1260 (listing five examples of reasonable denials identified in the House (continued) 134a on the legislative history to be misplaced. While the House may have initially considered adopting a categorical approach for determining what would constitute a “reasonable denial,” Congress ultimately decided to forgo that approach and_ prohibit franchising authorities from unreasonably refusing to award an additional competitive franchise.?32 To be sure, commenters are correct to point out that Congress chose not to define in the Act the meaning of the phrase “unreasonably refuse to award.” However, commenters’ assertion that Congress therefore intended for this gap in the statute to be filled in by only LFAs and courts lacks any basis in law or logic. Rather, we believe that it is far more reasonable to assume, consistent with settled principles of administrative law, that Congress intended that the Con mission, which is charged by (Continued trom previous page) amendment to include: (1) technical infeasibility; (2) failure of the applicant to assure that it will provide adequate public, educational, and governmental access channel capacity, facilities, or financial support; (3) failure of the applicant to assure that it will provide service throughout the entire franchise area within a reasonable period of time; (4) the award would interfere with the ability of the franchising authority to deny renewal of a franchise; and (5) failure to demonstrate financial, technical, or legal qualifications to provide cable service.”); H.R. REP. NO. 102-628, at 90 (1992). See NCTA Comments at 22; Florida Municipalities Comments at 9-10. 232 H.R. Rev. NO. 102-862, at 77-78 (1992) (Conf. Rep.), as reprinted in 1992 U.S.C.C.A.N. 1231, 1259-1260. 135a Congress with the administration of Title VI,?°% to have the authority to do so. There is nothing in the statute or the legislative history to suggest that Congress intended to displace the Commission’s explicit authority to interpret and enforce provisions in Title VI, including Section 621(a)(1). 61. The pro-competitive rules and guidance we adopt in this Order are consis‘ent with Congressional intent. Section 601 states that Title VI is designed to “promote competition in cable communications.” 234 In a report to Congress prepared pursuant to the 1984 Cable Act, the Commission concluded that in erder “[t]o encourage more robust competition in the local video marketplace, the Congress should ... forbid local franchising authorities from unreasonably denying a franchise to potential competitors who are ready and able to provide service.”235 In response, Congress revised Section 621(a)(1) to prohibit a franchising authority from unreasonably refusing to award an additional competitive franchise.2°* The regulations 233 See City of Chicago v. FCC, 199 F.3d at 428. See also AT&T Corp. v. lowa Utilities Board, 525 U.S. at 377-380. 234 47 U.S.C. § 52146). 235 See Competition, Rate Deregulation and the Commission's Policies Relating to the Provision of Cable Television Service, 5 FCc Red 4962, 4974 (1990). 236 47 U.S.C. § 541(a)(1). See also H.R. REP. NO. 102-628, at 47 (1992) (noting the Commission’s recommendation that, in order to encourage competition, Congress should prevent LFAs from (continued) 136a set forth herein give force to that restriction and vindicate the national policy goal of promoting competition in the video marketplace. 62. Our authority to adopt rules implementing Section 621(a)(1) is further supported by Section 706 of the Telecommunications Act of 1996, which directs the Commission to encourage broadband deployment by utilizing “measures that promote competition ... or other regulating methods that remove barriers to infrastructure investment.”2*7 The D.C. Circuit has found that the Commission has the authority to consider the goals of Section 706 when formulating regulations under (Continued from previous page) unreasonably denying a franchise to potential competitors); Implementation of Section 19 of the Cable Television Consumer Protection and Competition Act of 1992 Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, 9 FCC Red 7442, 7469 (1994) (recognizing that “Congress incorporated the Commission’s recommendation in the 1992 Cable Act by amending § 621(a)(1) of the Communications Act...”). The legislative history explained that the purpose of this abridgement of local government authority was to promote greater cable competition. S. REP. No. 102-92, at 47 (1991) (the prohibition on local franchising authorities from unreasonably refusing to grant second franchises is based on evidence in the record that there are benefits from competition between two cable systems and the Committee’s belief that LFAs should be encouraged to award second franchises). 097 Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 157 nt. 137a the Act.288 The record here indicates that a provider’s ability to offer video service and to deploy broadband networks are linked intrinsically, and the federal goals of enhanced cable competition and rapid broadband deployment are interrelated 2° Thus, if the franchising process were allowed to slow competition in the video service market, that would decrease broadband infrastructure’ investment, which would not only affect video but other broadband services as well.24° As the DOJ points out, potential gains from competition, such as expedited broadband deployment, are more lhkely to 238 See USTA v. FCC, 359 F.3d 554, 580, 583 (D.C. Cir. 2004); see also USTelecom Comments at 15; TLA Comments at 16. 239 See Alcatel] Comments at 5-6; USTclecom Comments at 6 (broadband growth is tied to bundled services; firm’s perceived need to compete for “triple play” customers is the driving force for broadband investment); AT&T Comments at 39-40 (the local franchising process discourages broadband infrastructure investment that supports video along with other broadband services). 240 See Ad Hoc Telcom Marufacturer Coalition Comments at 1- 3 (the franchising process threatens to slow down incumbent LECs’ capital expenditures, thereby slowing competition in the video service market and reducing output throughout the high- tech manufacturing industry); AT&T Reply at 31-32 (the lack of clear regulatory guidance is chilling investment because new entrants cannot gauge the cost of entry); BellSouth Comments at 20-22 (the current franchising process impedes the deployment of BellSouth’s broadband network). 138a be realized without imposed _ restrictions or conditions on entry in the franchising process.”*! 63. We reject the argument by incumbent cable operators and LFAs that any rules adopted under Section 621(a)(1) could adversely affect the franchising process.2*2 In particular, LFAs contend that cable service requirements must vary from jurisdiction to jurisdiction because cable franchises need to be “tailored to the needs and interests of the local community.”243 The Communications Act preserves a role for local jurisdictions in the franchise process. We do not believe that the rules we adopt today will hamper the franchising process. While local franchising authorities and potential new entrants have opposing viewpoints about the reasonableness of certain terms,”44 we received comments from both groups that agree that Commission guidance concerning factors that are “reasonable” will help to expedite the franchising 241 DOJ Ex Parte at 4. 242 See, e.g., Anne Arundel County et al. Comments at 15 (federal regulation would not allow each locality to tailor franchise terms to its specific needs); NCTA Comments at 23 (universal rules and standards cannot be tailored well enough to define what is reasonable; reasonableness must be reviewed on a case-by-case basis). : 243 NATOA Comments at 27 (quoting Section 601(2) of the Communications Act, 47 U.S.C. § 521(2)). 244 See, e.g., NATOA Reply at 43; Verizon Comments at 76-77 (disagreeing about the reasunableness of level playing fields). 139a process. *4° Therefore, we anticipate that our implementation of Section 621(a)(1) will aid new entrants, incumbent cable operators, and LFAs in understanding the bounds of local authority in considering competitive franchise applications. 64. In sum, we conclude that we have clear authority to interpret and implement the Cable Act, including the ambiguous phrase “unreasonably refuse to award” in Section 621(a)(1), to further the congressional jmperatives to promote competition and broadband deployment. As discussed above, this authority is reinforced by Section 4(i) of the Communications Act, which gives us broad power to perform acts necessary to execute our functions, and the mandate in Section 706 of the Telecommunications Act of 1996 that we encourage broadband deployment through measures that promote competition.*46 We adopt the rules and regulations in this Order pursuant to that authority, We find that Section 621(a)(1) prohibits not only an LFA’s ultimate unreasonable denial of a competitive franchise application, but also LFA procedures and conduct that have the effect of unreasonably interfering with the ability of a would-be competitor to obtain a competitive franchise, whether by (1) creating unreasonable delays in the process, or (2) imposing unreasonable regulatory roadblocks, 245 See Manatee County Comments at 15; Verizon Reply at 35. 246 47 U.S.C. § 154(i), Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 1457 nt 140a such that they’ effectively constitute an “unreasonable refusal to award an _ additional competitive franchise” within the meaning of Section 62 1(a)(1).247 C. Steps to Ensure that the Local Franchising Process Does Not Unreasonably Interfere with Competitive Cable Entry and Rapid Broadband Deployment 65. Commenters in_ this proceeding identified several specific issues regarding problems with the current operation of the franchising process. These include: (1) failure by LF‘As to grant or deny franchises within reasonable time frames; (2) LFA requirements that a facilities-based new entrant build out its cable facilities beyond a reasonable service area; (3) certain LFA-mandated costs, fees, and other compensation and whether they must be counted toward the statutory 5 percent cap on franchise fees; (4) new entrants’ obligations to provide support mandated by LFAs for PEG and | Nets; and (5) facilities-based new entrants’ obligations to comply with local consumer protection and customer service standards when the same facilities are used to provide other regulated services, such as telephony. We discuss each measure below. l4la i. Maximum Time Frame for Franchise Negotiations 66. As explained above,248 the record demonstrates that, although the average time that elapses between application and grant of a franchise varies from locality to locality, unreasonable delays in the franchising process are commonplace and have hindered, and in some cases thwarted entirely, attempts to deploy competitive video services., The record is replete with examples of unreasonable delays in the franchising process,**° which can indefinitely delay competitive entry and leave an applicant without recourse in violation of Section 621(a)(1)’s prohibition on unreasonable refusals to award a competitive franchise. * 67 We find that unreasonable delays in the franchising process deprive consumers of competitive video services, hamper accelerated broadband deployment, and can result in unreasonable refusals to award competitive franchises. Thus, it is necessary to establish reasonable time limits for LFAs to render a decision on a competitive applicant's franchise application.**' We define below 248 See supra paras. 14-17, 22 249 See Local Franchising NPRM, 20 FCC Red at 18590 (quoting 47 U.S.C. § 541(a)(1)), FTTH Council Comments at 27 ae @ South Slope Comments at 13, Verizon Reply at 34-35 See supra paras, 22-30 291 47 U.S.C. $§ 541(a)(1), SdA the boundaries of a reasonable time period in which an LFA must render a decision, and we establish a remedy for applicants that do not receive a decision within the applicable time frame. We establish a maximum time frame of 90 days for entities with existing authority to access public rights-of-way, and six months for entities that do not have authority to access public rights-of-way. The deadline will be calculated from the date that the applicant files an application or other writing that includes the information described below. Failure of an LFA to act within the allotted time constitutes an unreasonable refusal to award the franchise under Section 621(a)(1), and the LIA at that time is deemed to have granted the entity’s application on an interim basis, pursuant to which the applicant may begin providing service. Thereafter, the LFA and applicant may continue to negotiate the terms of the franchise, consistent with the guidance and rulings in this Order. a. Time Limit 68 The record shows that the franchising process in some localities can drag on for years. We are concerned that without a defined time limit, the extended delays wil! continue, depriving consumers of cable competition and applicants of franchises. We thus consider the appropriate length of time that should be afforded LFAs in reaching a final decision on a competitive franchise application. Commenters suggest a wide range of time frames that may be reasonable for an LFA’s’ consideration of a 143a competitive franchise application. JIA proposes that we adopt the time limit used in the Texas franchising legislation, which would allow a new entrant to obtain a franchise within 17 days of submitting an application.22 Other commenters propose time limits ranging from 30 days to six months.253 While NATOA in its comments opposes any time limit,2°4 in February 2006 a NATOA representative told the Commission that the six- month time limit that California law imposes is reasonable.2*> Some commenters have suggested that a franchise applicant that holds an existing authorization to access rights-of-way (e.g., a LEC) should be subject to a shorter time frame than other applicants. These commenters reason that deployment of video services requires an upgrade to existing facilities in the rights-of-way rather than construction of new facilities, and such applicants 252 See TIA Comments at 8, 18. 233 See AT&T Comments at 77, Cavalier Telephone Comments at 4 (suggesting a 30-day time limit); BellSouth Comments at 26, NTCA Comments at 9, OPASTCO Reply at 4 (suggesting a 90-day time limit); Consumers for Cable Choice Comments at 9, Verizon Comments at 38, FTTH Council Comments at 60, State of Hawaii Reply at 3 (suggesting a 120-day time limit); Alliance for Public Technology Comments at 3 (suggesting a 180-day time limit); Qwest Comments at 26-27. 254 NATOA Comments at 36-37, NATOA Reply at 21-23. “55 Transcript of FCC Agenda Meeting and Panel Discussion at 38 (Feb. 10, 2006). 144a generally have demonstrated their fitness as a provider of communications services.*5® 69. In certain states, an SFA is responsible for all franchising decisions (e.g., Hawau, Connecticut, Vermont, Texas, Indiana, Kansas, South Carolina, and beginning January 1, 2007, California and North Carolina), and the majority of these states have established time frames within which those SFAs must’ make franchising decisions.257 We are mindful, however, that states in which an LFA is the franchising authority, the LFA may be a small municipal entity with extremely limited resources. 258 Thus, it may|not always be feasible for an LFA to carry out legitimate local 256 See Local Franchising NPRM, 20 FCC Rcd at 18591. 257 See HAW. REV. STAT. § 440G-4 (2006); CONN. GEN. STAT. ANN. § 16-331 (West 2006); VT. STAT. ANN. tit. 30, § 502 (2006); TEX. UTIL. CODE ANN. § 66.003 (West 2006); IND. CODE § 8-1- 34-16 (2006); 2006 KAN. SESS. LAWS Ch. 93 (West 2006); S.C. CODE ANN. § 58-12-05 (2006); N.C. GEN STAT. ANN. § 66-351; CAL. PUB. UTIL. CODE § 401, et seq. We note that our Order does not affect these franchising decisions. 258 We note that a number of other states in addition to Texas have adopted or are considering statewide franchising in order to speed competitive entry. See, e.g., IND. CODE § 8-1-34-16 (2006); VA. CODE ANN. § 15.2-2108.1:1 et seq. (2006); SB-816, 2006 Sess. (Mo. 2006). Nothing in our discussion here is intended to preempt the actions of any states. The time limit we adopt herein is a ceiling beyond which LFA delay in processing a franchise application becomes unreasonable. To the extent that states and/or municipalities wish to adopt shorter time limits, they remain free to do so. 145a policy objectives permitted by the Act and appropriate state or local law within an extremely short time frame. We therefore seek to establish a time limit that balances the reasonable needs of the LFA with the needs of the public for greater video service competition and broadband deployment. As set out in detail below, we believe that it is appropriate to provide rules to guide LFAs that retain ultimate decision-making power’ over franchise decisions. 70. As a preliminary matter, we find that a franchise applicant that holds an_ existing authorization to access rights-of-way should be subject to a shorter time frame for review than other applicants. First, one of the primary justifications for cable franchising is the locality’s need to regulate and receive compensation for the use of public rights-of-way.259 In considering an application for a cable franchise by an entity that already has rights- of-way access, however, an LFA need not devote substantial attention to issues of rights-of-way management.26° Second, in obtaining a certificate 259 NATOA Comments at 38-39; Ada Township Comments at 11-14; TCCFUI Reply Comments at 18. 260 Recognizing this distinction, some states have created streamlined franchising procedures specifically tailored to entities with existing access to public rights-of-way. See, e.g., VIRGINIA CODE ANN. § 15.2-2108.1:1 et seq.); HkF-2647, 2006 Sess. (lowa 2006) (this proposed legislation would grant franchises to all telephone providers authorized to use the right-of-way without any application or _ negotiation (continued) 146a for public convenience and necessity from a state, a facilities-based provider generally has demonstrated its legal, technical, and financial fitness to be a provider of telecommunications services. Thus, an LFA need not spend a significant amount of time considering the fitness of such applicants to access public rights-of-way. NATOA and its members concede that the authority to occupy the right-of-way has an effect on the review of the financial, technical, and legal merits of the application, and eases right-of-way management burdens.”*! We thus find that a time limit is particularly appropriate for an applicant that already possesses authority to deploy telecommunications infrastructure in the public rights-of-way.?62 We further agree with AT&T that entities with existing authority to access rights- of-way should be entitled to an expedited process, and that lengthy consideration of franchise applications made by such entities would be (Continued from previous page) requirement). See also South Slope Comments at 11 (duplicative local franchising requirements imposed on a competitor with existing authority to occupy the rights-of-way are unjustified and constitute an unreasonable barrier to competitive video entry). 261 See NATOA Comments at 38-39. Although NATOA contends that an applicant's authority to occupy the rights-of- way would not affect the length of the negotiations regarding PEG requirements, franchise fees, or build-out, we clarify the law concerning those issues below to minimize further disputes and delays. 262 Ad Hoc Telecom Manufacturers Comments at 6. 147a unreasonable.?63 Specifically, we find that 90 days provides LFAs ample time to review and negotiate a franchise agreement with applicants that have access to rights-of-way. ?*4 71. Based on our examination of the record, we believe that a time limit of 90 days for those applicants that have access to rights-of-way strikes the appropriate balance between the goals of facilitating competitive entry into the _ video marketplace and ensuring that _ franchising authorities have sufficient time to fulfill their 263 AT&T argues that an entity authorized to occupy a right-of- way should simply complete a short-form application and agree to general cable franchise requirements such as franchise fees and PEG capacity, and that the right-of-way holder should receive a franchise within one month of filing the short-form application. See AT&T Comments at 74. 264 See BellSouth Comments at 36; Ada Township, et al. Comments at 23; LMC Comments at 18; Hawaiuan Telecom Comments at 7-8 (recommending a time frame of 90 days from the filing of the application). Several state legislators agree that an applicant’s existing authority to occupy the right-of- way lightens the administrative load, and enacted or proposed similar measures to streamline the franchising process for entities that hold the authority. See VIRGINIA CODE ANN. § 15.2-2108.21; HF-2647, 2006 Sess. (Iowa 2006) (this proposed legislation would grant franchises to all telephone providers authorized to use the right-of-way without any application or negotiation requirement). We assume generally that state and local regulators are sufficiently empowered to deal with any public safety or aesthetic issues that may arise by virtue of deployment of new video-related equipment by applicants already authorized to use the rights-of way. 148a responsibilities. In this vein, we note that 90 days is a considerably longer time frame than _ that suggested by some commenters, such as TIA.26 Additionally, we recognize that the Communications Act gives an LFA 120 days to make a final decision on a cable operator’s request to modify a franchise. 2 We believe that the record supports an even shorter time here because the costs associated with delay are much greater with respect to entry. When an incumbent cable franchisee requests a modification, consumers are not deprived of service while an LFA deliberates. Here, delay by an individua) LFA deprives consumers of the benefits of cable competition.?®7 An LIA should be able to negotiate a franchise with a familiar applicant that is already authorized to occupy the right-of-way in less than 120 days. The list of legitimate issues to be negotiated is short,268 and we narrow those issues considerably in this Order. We therefore impose a deadline of 90 days for an LFA to reach a final decision on a competitive franchise application 265 See T1A Comments at 8-9 (a time frame of 17 business days, as set forth in the Texas statute, “provides ample time to negotiate an agreement reflecting the requirements of Section 621”); AT&T Comments at 75, 78-79. See also supra paras. 17, St. 266 See 47 U.S.C. § 545. 6&7 Verizon Comments at 36-37. 268 Verizon Reply Comments at 43 n.69. 149a submitted by those applicants authorized to occupy rights-of-way within the franchise area. 72. For other applicants, we believe that six months affords a reasonable amount of time to negotiate with an entity that is not already authorized to occupy the right-of-way, as an LFA will need to evaluate the entity’s legal, financial, and technical capabilities in addition to generally considering the applicant’s fitness to be a communications provider over the rights-of-way. Commenters have presented substantial evidence that six months provides LFAs sufficient time to review an applicant’s proposal, negotiate acceptable terms, and award or deny a competitive franchise. ?® We are persuaded by the record that a six-month period will allow sufficient time for review. Given that LFAs must act on modification applications within the 120-day limit set by the Communications Act, we believe affording an additional two months i.e., a six-month review period — will provide LFAs ample time to conduct negotiations with an entity new to the franchise area. 73. Failure of an LFA to act within these time frames is unreasonable amd constitutes a 269 See Cablevision Comments at 10-12; GMTC Comments at 3, 6-8; State of Hawaii Reply at 3; Mt. Hood Cable Regulatory Commission Comments at 20; NJBPU Comments at 5: Southwest Suburban Cable Commission Comments at 7. See also Fairfax County, Va. Comments at 4-7 (formal negotiations began April 1, 2005, franchise gran [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_0173%3A1. Public record. Not legal advice.