Print Page  Close Window

SEC Filings

RENAISSANCE MEDIA GROUP LLC filed this Form 10-K405 on 03/31/1999
Entire Document
for the system if the franchise was granted after the effective date of the
1984 Cable Act (December 1984) or the franchise was pre-existing but the
franchise agreement did not provide a buyout or (ii) the price set in
franchise agreements predating the 1984 Cable Act. In addition, the 1984 Cable
Act established comprehensive renewal procedures which require that an
incumbent franchisee's renewal application be assessed on its own merits and
not as part of a comparative process with competing applications. The 1984
Cable Act also establishes buyout prices in the event the franchise is
terminated "for cause" and the franchise authority desires to acquire the
system. For franchises which post-date the existence of the 1984 Cable Act or
pre-date the 1984 Cable Act but do not specify buyout terms, the franchise
authority must pay the operator an "equitable" price. As amended by the 1996
Telecom Act, the 1984 Cable Act permits the cable operator to seek
renegotiation and modification of franchise requirements if warranted by
changed circumstances.
   The 1992 Cable Act made several changes to the renewal process which could
make it easier for a franchising authority to deny renewal. Moreover, even if
the franchise is renewed, the franchising authority may seek to impose new and
more onerous requirements such as significant upgrades in facilities and
services or increased franchise fees as a condition of renewal. Similarly, if
a franchising authority's consent is required for the purchase or sale of a
cable system or franchise, such authority may attempt to impose more
burdensome or onerous franchise requirements in connection with a request for
such consent. Historically, franchises have been renewed for cable operators
that have provided satisfactory services and have complied with the terms of
their franchises. Most of the Company's franchises can be terminated prior to
their stated expirations for uncured breaches of material provisions.
   Various courts have considered whether franchising authorities have the
legal right to limit franchise awards to a single cable operator and to impose
certain substantive franchise requirements (i.e., access channels, universal
service and other technical requirements). These decisions have been somewhat
inconsistent and, until the U.S. Supreme Court rules definitively on the scope
of cable operators' First Amendment protections, the legality of the
franchising process generally and of various specific franchise requirements
is likely to be in a state of flux.
 Ownership Limitations
   Pursuant to the 1992 Cable Act, the FCC adopted rules prescribing national
customer limits and limits on the number of channels that can be occupied on a
cable system by a video programmer in which the cable operator has an
attributable interest. The FCC's horizontal ownership limits have been stayed
because a federal district court found the statutory limitation to be
unconstitutional. An appeal of that decision is pending and has been
consolidated with an appeal of the FCC's regulations which implemented the
national customer and channel limitation provisions of the 1992 Cable Act. In
connection with these ownership limitations, the FCC recently reaffirmed the
current 30% horizontal ownership limit, but maintained its voluntary stay on
enforcement of that limit pending further action by the federal appellate
court; reaffirmed its horizontal ownership information reporting requirements;
made effective the requirement that any person holding an attributable
interest (as defined by FCC rules) in cable systems reaching 20% or more of
homes passed by cable plant nationwide notify the FCC of any incremental
change in that person's cable ownership interests; and opened an
administrative proceeding to reevaluate its cable television attribution rules
due to recent developments in the cable industry, including strategic
alliances, partnerships, system swaps, mergers and acquisitions among cable
   The 1996 Telecom Act eliminates the statutory prohibition on the common
ownership, operation or control of a cable system and a television broadcast
station in the same service area and directs the FCC to eliminate its
regulatory restrictions on cross-ownership of cable systems and national
broadcasting networks and to review its broadcast-cable ownership restrictions
to determine if they are necessary in the public interest. Pursuant to the
mandate of the 1996 Telecom Act, the FCC eliminated its regulatory restriction
on cross-ownership of cable systems and national broadcasting networks. In
March 1998, the FCC initiated a rulemaking proceeding to determine whether the
cable television/broadcast cross-ownership ban is necessary and in the public
interest or should be eliminated.