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il| Mkm Ov irbuMif <br />Or a city can overbuild, and as Uie <br />franchise authority, it can cut itself <br />financial ami regulatory breaks it <br />would never allow a competitor. Tlial’s <br />what happened in Nkeville. Florida. <br />Threatened with a municipal over­ <br />build, Warner Cable filed suit in U S. <br />District Court in 1985. Warner con­ <br />tended that a city-owned system would <br />have an unfair advantage—paying no <br />frandiioe fee, being cross-subsidized <br />by tax dollars, and having regulatory <br />control as well as the right to see <br />Warner's confidential business infor­ <br />mation. <br />The end reauk. Warner argued, was <br />that its right to free speech was being <br />demed. The court rejected the claim. <br />aay’.ngWanier'a right to speak had not <br />yet been suppressed, and that it could <br />not sue for a threat to impinge free <br />speech. Warner appealed to U. S. <br />Appeals Court, the llth Circuit, which <br />upheld the lower court Now Warner <br />is trying to get Nkeviiie on the <br />Supreme Court slate. <br />Too bod for Time Warner, you <br />might think, but the ramiilcations are <br />ter reaching. In a friend-of-the<ourt <br />brief aubmiticd to the Supreme Court <br />attorney Lloyd writes. “... city fran­ <br />chising authorities srill use the 11th <br />Circuit's decision as leverage to <br />iindemiinc... (dud fran- <br />diise renewal process <br />that t»rotects cable oper­ <br />ators against municipal <br />overreaching." The brief <br />goes on to argue that the <br />Niceville decision opens <br />the door for the sort of <br />inappropriate quid pro <br />quo concessions the <br />IU84 Cable Act was <br />intended to preclude. <br />Shirt laask la Vifae <br />Not all of the ham­ <br />mers in the franchise <br />tool box are as dramatic <br />or as topical as those <br />used in Rolla or <br />Niceville. But other tools <br />are more prevalent. Like <br />the short renewal term. <br />Where it was once <br />the standard, die 15-year <br />renewal period is <br />becoming as arcane as <br />bell bottom trousers. <br />They are going for a shorter renewal <br />term, and if they can’t get it. they go <br />for a reopener clause," says Mansel. <br />The reopener clause allows a city to <br />reopen negotiations on the franchise <br />outside of the formal renewal process <br />The cities say they need a shorter <br />V ^VI <br />y <br />i\ <br />*diNl <br />renewal period to assure that a cable <br />system will keep its technology “state <br />of the art." Though it goes unmen- <br />tiuned, it also keeps cities from becom­ <br />ing locked into long-term contracts <br />they can’t amend in the event of new <br />regulation Ojierators retort that short <br />TIPS FOR A SMOOTH RENEWAL <br />your hialory mid poarntinl goodien for the fbfrire.” <br />Failing to tri0{er the procem during the three- <br />year window can lead to dire conaequencea. “If <br />you don't trigger the formal proceas during this <br />window, you are left back with the old riidard <br />{prior to the 1984 actl, which la mbitiary and <br />caprkioua,” anya Lloyd. Tfou want to have your <br />lawinn Mints, Lavin, Cohn,’The beat way to protect a franchise ia through <br />common sense measures thst often got i^iored. <br />says Wes Heppler. a partner specialising in <br />if^ton law firm. *You start the procaaa early, <br />you nsake sure you have good records at cus­ <br />tomer satisfaction to back up your claim, put <br />in a raasonabh* ptopoaal. and above aO. run a <br />good system.'* ■ ILF. <br />22 CAIllVfllfrR • HIT I. IffI