Urban Politics #132: Seattle Cable Customer Bill Of Rights

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By City Councilmember Nick Licata.

Urban Politics (UP) blends my insights and information on current public policy developments and personal experiences with the intent of helping citizens shape Seattle’s future.


Seattle Cable Customer Bill Of Rights

Last month at the Full Council’s Monday, April 22, 2002 meeting I voted to approve Ordinance number 120775 (Council Bill number 114137, sponsored by Councilmember Jim Compton), legislation that strengthens our city’s Cable Customer Bill of Rights by revising sections of Seattle Municipal Code 21.60. The ordinance passed 8-0, with Councilmember Pageler excused. This legislation is significant because it specifically defines, for the first time anywhere in the nation, how a municipality can implement existing Federal laws regulating cable services. I see four important aspects to this legislation.

First, it requires that cable companies notify cable customers at least 30 days before each separate instance the companies intend to share personal customer information with third parties. Federal Law simply states that cable providers must “give notice” to customers when sharing their information with third parties.

Second, this ordinance requires that a specific form, a post card, include specific and plain language that discloses how cable companies share personal information and to inform cable customers that they may “opt out” of such sharing. Federal Law simply states that cable providers must allow subscribers to “opt out” to prevent providers from sharing their personal information with third parties. Often, I have heard complaints that cable company notices lack clarity, are confusing, and do not provide clear direction on how to remove oneself from personal information sharing.

Third, if a cable company shares a customer’s personal information after the customer failed to opt out of such information sharing, the cable company must notify the customer within 45 days of having shared their personal information that the customer has another opportunity to opt out of future information sharing. When a customer opts out, it is permanent. No further opt out notices need to be sent by the cable company or acknowledged by the customer. The cable company may, however, ask the customer to consider opting back in at a latter date.

And last, this legislation looks to the future by defining interactive television as one of the “other services” covered within the ordinance. The City anticipates that cable set-top box software and other interactive technology will one day be able to collect personal information on customers. So, the City extended to that technology consumer safeguards on personal information sharing, as well.

As a result of the Council having successfully passed this legislation, several cities are now looking to Seattle as a model they can use when shaping their own legislation on cable customer rights. I commend Councilmember Jim Compton and his staff for their leadership on this groundbreaking legislation.

Federal Ruling On Cable Modems

In a Declaratory Ruling announced on March 14, 2002, the FCC concluded that cable modem service is properly classified as an “interstate information service” rather than a “cable service” as defined by the Communications Act and is therefore not subject to local regulation. The FCC also said that cable modem service does not contain a separate “telecommunications service” offering and therefore is not subject to common carrier regulation. In other words, cable companies cannot be forced by local government to share their lines with other internet access providers.

If you are a cable modem subscriber, you might have already felt the impact of this ruling: your monthly bill has shrunk by a couple bucks. That’s because, as of April 1st, cable providers have removed municipal franchise fee taxes from their customers’ cable modem bills. Presently, the city levies a 10% utility tax on cable services. Cable companies have not yet asked the City to remove cable modem revenue from that tax base. The city puts into reserve 4% of that tax in anticipation of cable companies eventually requesting to be taxed at the lower telecommunications services rate of 6%. But, although cable modems are considered a utility, there is not yet a taxing category for “interstate information services,” which the FCC has declared cable modems to be.

While taxpayers obviously benefit from these lower cable bills, the City is losing revenue. Although specific figures are not yet available, the budget office anticipates that the hit on Seattle’s coffers could amount to about three hundred thousand dollars for the rest of this year.

In response to the FCC’s March 14th cable modem ruling, two interest groups have acted. The Washington State Association of Telecommunications Officers is in the process of submitting comments to the FCC challenging their determination that cable modem service is not a cable service. And the National League of Cities, U. S. Conference of Mayors, National Association of Counties, and National Association of Telecommunications Officers announced jointly on April 24th that they have formed the Alliance of Local Organizations Against Preemption. ALOAP was formed in direct response to the FCC ruling and has appealed it to the 9th U.S. Circuit Court of Appeals. That’s the same court that unanimously decided in 2000 that the regulation of cable modems is properly the jurisdiction of federal, not local government.

Look for updates on this fast-changing issue in future Urban Politics.

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