Can an Idaho city or county hand out a cable TV franchise, regulate the rates the cable company charges, and collect a franchise fee, without waiting for the legislature to pass a special cable statute?

Plain-English summary

Scott McDonald, executive director of the Association of Idaho Cities, asked the AG whether Idaho cities and counties needed new state legislation before they could regulate cable rates or charge cable franchise fees, in light of the 1992 federal Cable Act amendments that gave local franchising authorities new tools but left the threshold question of who counted as a "franchising authority" to state law. Deputy AG Michael Gilmore, writing for AG Larry EchoHawk, walked through Idaho's general municipal-powers statutes, the case law on franchising taxis, buses, garbage haulers, and water utilities, and concluded that cities have the authority already and counties probably do too.

For cities, the answer rests on a stack of statutes in Idaho Code Title 50, Chapter 3. Idaho Code §§ 50-301 and 50-302 are general home-rule and police-power grants. Idaho Code §§ 50-328 through 50-330 specifically authorize cities to franchise utility transmission systems, control franchise creation by ordinance, and regulate rates of franchisees other than those regulated by the Public Utilities Commission. The PUC's jurisdiction in Idaho Code § 61-129 does not include cable television. Idaho Supreme Court precedent confirms that municipalities have franchised taxis, buses, garbage collection, and cable TV under these general statutes. Yellow Cab Taxi Service v. City of Twin Falls, Tarr (Pocatello buses), Coeur d'Alene Garbage Service, and Bush v. Upper Valley Telecable Company are the touchstones. Out-of-state authority points the same direction. The AG's conclusion: cities "almost certainly" have authority to franchise cable TV under current state law.

For counties, the analysis is similar but a step softer. Idaho Code § 31-601 makes every county a body politic with whatever powers are expressed plus those "necessarily implied." Section 31-815 mentions licenses and franchises for toll roads, bridges, and ferries. Sections 31-805 and 31-828 are broader. Read in isolation, the county franchising authority might look limited to roads-and-ferries, but two sections of the 1913 Public Utilities Law (Idaho Code §§ 61-510 and 61-527) clearly assume that counties were already franchising utilities much more broadly. The AG concluded counties "probably" have authority, and they get the same rate-regulation and franchise-fee follow-on authority that cities get.

For both cities and counties, federal law (the Cable Act, codified in 47 U.S.C. §§ 541-543) does three things. First, it preserves whatever franchising authority state law grants. Second, it permits but caps franchise fees at 5 percent of the cable operator's gross revenues. Third, it lets the local franchising authority regulate rates for the basic service tier when the FCC determines the system is not subject to effective competition, with a federal certification process and FCC-prescribed standards.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why did the AG say "almost certainly" for cities but only "probably" for counties?

Because the city statutes (Idaho Code §§ 50-328 through 50-330) explicitly mention utility transmission systems, franchise ordinances, and rate regulation, and Idaho courts had already accepted that cities franchise taxis, buses, garbage haulers, water utilities, and cable. The county statutes are organized differently. Idaho Code § 31-815 expressly mentions only toll roads, bridges, and ferries; the broader authority comes from § 31-601 (powers "necessarily implied"), § 31-828 (general and incidental powers), and the assumption baked into the 1913 Public Utilities Law that counties were franchising utilities more broadly than that. The AG didn't have a single county-specific case on point for cable, just out-of-state authority and the implication from the PUC statutes, so it dialed the confidence level back from "almost certainly" to "probably."

What does federal law do once the locality has state authority?

Three things, layered. First, federal law (47 U.S.C. § 541) confirms that a "franchising authority" is whatever entity state or local law empowers, and a franchising authority can grant franchises within its jurisdiction. Second, 47 U.S.C. § 542 caps franchise fees: a cable operator's franchise fee paid to any one franchising authority cannot exceed 5 percent of the operator's gross cable-system revenue for the relevant 12-month period. Third, 47 U.S.C. § 543 governs rate regulation: the franchising authority can regulate the basic service tier (broadcast retransmissions and required channels) only after the FCC determines the system is not subject to effective competition, and only after the locality files a certification with the FCC promising to follow FCC-prescribed standards. Rates for non-basic tiers are regulated by the FCC, not the locality.

Does this mean a city could regulate every cable rate?

No. Even with full state authority and FCC certification, the locality regulates only the basic service tier. The FCC keeps regulation over higher tiers (the "cable programming services" tier) and equipment/installation rates. The 1992 Act also requires "uniform rate structures" within the geographic area served, so a cable operator cannot price-discriminate by neighborhood. And if the FCC ever finds the system "subject to effective competition" (a defined term, generally meaning genuine competing video providers), local rate regulation goes away entirely.

What is a franchise fee actually paying for, in legal theory?

In Idaho, the courts treat the franchise fee as consideration for surrendering the city's right to operate the same service itself. Alpert v. Boise Water Corporation, 118 Idaho 136, 795 P.2d 298 (1990), is the leading case. Idaho cities can own and operate utilities themselves; when a city instead franchises a private operator, the city is giving up that right of self-provision in exchange for the franchise fee. Federal law caps the fee at 5 percent and treats franchise fees that resemble general taxes (rather than rent for use of public rights-of-way) as a separate category for accounting and pass-through purposes. Cable operators almost always pass franchise fees through to subscribers as a separate line item.

Does cable TV being "not a public utility" under Idaho law matter?

It matters for which agency regulates, but not for whether cities can franchise. Idaho Code § 61-129 defines public utilities subject to PUC jurisdiction; cable TV is not on that list. The AG's analysis, drawing on McQuillan's municipal-corporations treatise and out-of-state cases like Roberts (Michigan), Sacramento Orange County Cable v. San Clemente (California), Aberdeen Cable v. City of Aberdeen (South Dakota), and City of Issaquah v. Teleprompter (Washington), held that municipal franchising authority does not depend on the franchisee being a "public utility" for state utility-commission purposes. It depends on whether the activity uses public rights-of-way (cable does) and whether the city has general franchising authority (it does, under §§ 50-328 to 50-330).

Background and statutory framework

Cable television franchising in Idaho started in earnest in the late 1960s and early 1970s. Bush v. Upper Valley Telecable Company, 96 Idaho 83, 524 P.2d 1055 (1974), confirmed that the City of Idaho Falls franchised a cable system and regulated its rates; KTVB, Inc. v. Boise City, 94 Idaho 279, 486 P.2d 992 (1971), involved a competing-applicant challenge to the City of Boise's award of a cable franchise. Neither case squarely held that cities had cable-franchising authority, but both presupposed it.

Federal law evolved in two big steps. The Cable Communications Policy Act of 1984 (Pub. L. 98-549) gave franchising authorities a federal-law floor for their state-law powers, set a 5-percent gross-revenue cap on franchise fees, and largely deregulated rates. By 1990, with cable rates climbing well above inflation in the absence of competition, Congress responded with the Cable Television Consumer Protection and Competition Act of 1992 (Pub. L. 102-385), which authorized rate regulation of the basic service tier in markets without effective competition. The 1992 Act left the state-law foundation intact: a franchising authority is whoever state law makes one. That made the threshold question for Idaho cities and counties whether existing state law made them franchising authorities.

The Idaho Constitution (Art. 12, § 2) authorizes any county or incorporated city to make local police, sanitary, and other regulations not in conflict with state general laws. Idaho courts have applied this provision in the franchising context, treating it as a presumption in favor of local franchising authority where the state has not occupied the field. The Idaho Code's general grants of municipal authority (§§ 50-301, 50-302) and specific franchising sections (§§ 50-328 to 50-330), plus the county-level §§ 31-601, 31-805, and 31-828, are read against that constitutional backdrop.

Citations

• Idaho Const. art. 12, § 2
• Idaho Code §§ 31-601, 31-805, 31-815, 31-828
• Idaho Code §§ 50-301, 50-302, 50-328, 50-329, 50-330
• Idaho Code §§ 61-129, 61-510, 61-527, 61-801(k)(2)
• 47 U.S.C. §§ 521-543 (Communications Act of 1934, Title VI as added by 1984 and 1992 Cable Acts)
• 47 C.F.R. §§ 76.900 et seq. (FCC cable rate regulations)
• Alpert v. Boise Water Corporation, 118 Idaho 136, 795 P.2d 298 (1990)
• Bush v. Upper Valley Telecable Company, 96 Idaho 83, 524 P.2d 1055 (1974)
• KTVB, Inc. v. Boise City, 94 Idaho 279, 486 P.2d 992 (1971)
• Coeur d'Alene Garbage Service v. City of Coeur d'Alene, 114 Idaho 588, 759 P.2d 879 (1988)
• Yellow Cab Taxi Service v. City of Twin Falls, 68 Idaho 145, 190 P.2d 681 (1948)
• Tarr v. Amalgamated Ass'n of Street Electric Railway, 73 Idaho 223, 250 P.2d 904 (1952)
• Boise City v. Idaho Power Co., 37 Idaho 798, 220 P. 483 (1923)
• City of Pocatello v. Murray, 21 Idaho 180, 120 P. 812 (1912)

Source

• Landing page: https://www.ag.idaho.gov/office-resources/opinions/
• Original PDF: https://ag.idaho.gov/content/uploads/2018/04/OP94-05.pdf

Original opinion text

ATTORNEY GENERAL OPINION NO. 94-5
TO:

Mr. Scott B. McDonald, Executive Director
Association of Idaho Cities
3314 Grace Street
Boise, ID 83703

Per Request for Attorney General's Opinion
Dear Mr. McDonald:
QUESTIONS PRESENTED
1.

Without further enabling legislation, do cities and counties have authority under
Idaho and federal law to regulate the basic cable television service rate for cable
television franchisees?

2.

Without further enabling legislation, do cities and counties in Idaho have a right to
charge a franchise fee to cable television operators?
CONCLUSION

1.

Cities in Idaho almost certainly have authority under current state law to franchise
cable television companies. With general franchising authority under state law,
federal law allows cities to regulate the basic cable television service rate and
charge a franchise fee, both subject to the conditions of federal law.

2.

Counties in Idaho probably have authority under current state law to franchise
cable television companies. With general franchising authority under state law,
federal law allows counties to regulate the basic cable television service rate and
charge a franchise fee, both subject to the conditions of federal law.
ANALYSIS
I.
AUTHORITY OF CITIES UNDER STATE LAW

The first step in determining a city's authority under state law is to examine the
statutes addressing the power and authority of cities. No statute of the State of Idaho or
reported appellate decision specifically addresses whether cities have authority to
regulate cable television service rates or to charge a franchise fee to cable television
operators. Accordingly, the analysis must fall back upon the general statutes addressing

the powers and duties of cities. This analysis must be made against the backdrop of art.
12, sec. 2 of the Idaho Constitution, which provides:
§ 2. Local police regulations authorized.--Any county or
incorporated city or town may make and enforce, within its limits, all such
local police, sanitary and other regulations as are not in conflict with its
charter or with the general laws.
A.

General Municipal Franchising Authority

Title 50 of the Idaho Code is entitled "Municipal Corporations." Chapter 3 of title
50 is entitled "Powers." The initial two sections of that chapter and title provide cities
with the following general authority:
50-301. Corporate and local self-government powers.--Cities
governed by this act shall be bodies corporate and politic; may sue and be
sued; contract and be contracted with; . . . and exercise all powers and
perform all functions of local self-government in city affairs as are not
specifically prohibited by or in conflict with the general laws or the
constitution of the state of Idaho.
50-302. Promotion of general welfare--Prescribing penalties.-(1) Cities shall make all such ordinances, by-laws, rules, regulations and
resolutions not inconsistent with the laws of the state of Idaho as may be
expedient, in addition to the special powers in this act granted, to maintain
the peace, good government and welfare of the corporation and its trade,
commerce and industry . . . .
Idaho Code §§ 50-328 through 50-330, three other sections in the same chapter, address
municipal franchising and rates of municipal franchisees with more particularity:
50-328. Utility transmission systems--Regulations.--All cities
shall have power to permit, authorize, provide for and regulate the erection,
maintenance and removal of utility transmission systems, and the laying
and use of underground conduits or subways for the same in, under, upon
or over the streets, alleys, public parks and public places of said city; and
in, under, over and upon any lands owned or under the control of such city,
whether they may be within or without the city limits.
50-329. Franchise ordinances--Regulations.-- . . . No franchise
shall be created or granted by the city council otherwise than by ordinance
....

50-330. Rates of franchise holders--Regulations.--Cities shall
have power to regulate the fares, rates, rentals or charges made for the
service rendered under any franchise granted in such city, except such as
are subject to regulation by the public utilities commission.
Title 50 of the Idaho Code does not define "utility" or list what businesses (be they
utilities or other businesses like common carriers) may be franchised under these
sections. The term "public utility" as defined in Idaho Code § 61-129, one of the
sections defining the jurisdiction and authority of the Idaho Public Utilities Commission
(PUC), does not include cable television within its definition of public utilities subject to
state regulation by the PUC. The question becomes whether cities may franchise utilities
or other businesses under the sections quoted if those businesses are not public utilities
subject to the jurisdiction of the PUC. The answer is yes.
Taxis, buses, garbage collection and cable television are among the services
historically franchised by cities even though none of these businesses are subject to
regulation by the PUC. E.g., Yellow Cab Taxi Service v. City of Twin Falls, 68 Idaho
145, 190 P.2d 681 (1948) (City of Twin Falls franchised taxi service); Tarr v.
Amalgamated Association of Street Electric Railway and Motor Coach Employees of
America, Division 1055, 73 Idaho 223, 250 P.2d 904 (1952) (City of Pocatello franchised
bus service); Coeur d'Alene Garbage Service v. City of Coeur d'Alene, 114 Idaho 588,
759 P.2d 879 (1988) (City of Coeur d'Alene franchised garbage collection service); Bush
v. Upper Valley Telecable Company, 96 Idaho 83, 524 P.2d 1055 (1974) (City of Idaho
Falls franchised cable television and regulated its rates). See also Idaho Code § 61801(k)(2), which exempts from PUC regulation under the Motor Carrier Act "taxicabs . .
. performing a licensed or franchised taxicab service."
The appellate courts of Idaho have never specifically addressed whether cities
have authority to franchise cable television. In KTVB, Inc. v. Boise City, 94 Idaho 279,
486 P.2d 992 (1971), the losing applicants in the award of a franchise for cable television
services within the City of Boise challenged the city council decision awarding the
franchise to other persons. One of their challenges, which the Idaho Supreme Court did
not reach, contended that the Boise City Council had not properly followed the
procedures of Idaho Code § 50-329 regarding the award of franchises. 94 Idaho at 28081, n.1, 486 P.2d at 992-94, n.1. But neither Bush nor KTVB reached the issue of city
authority to franchise cable television.
Justice Holmes once wisely observed: "[A] page of history is worth a volume of
logic." New York Trust Company v. Eisner, 256 U.S. 345, 349, 41 S. Ct. 506, 507, 65 L.
Ed. 963, 983 (1921). History and current practice suggest that cable television
franchising is within the general authority of municipalities in Idaho and other states:

In connection with the law relating to franchises, the term "public
utilities" is often used. One of the distinguishing characteristics of a public
utility is the devotion of private property by the owner to a service that is
useful to the public, and that the public has a right to have rendered with
reasonable efficiency and at proper charges, so long as it is continued. The
term implies public use and the duty to serve the public without
discrimination, as distinguished from private service . . . .
Specifically, the term "public utility" is understood to refer to such
things as steam and street railways, telegraphs and telephones, waterworks,
gasworks, electric light plants, public utility wharves, cable television
systems,11 and other public conveniences and activities of the city.

11 Michigan Charter Tp. of Meridian v. Roberts, 114 Mich. App. 803, 319
NW2d 678 [1982].

12 McQuillan Mun. Corp., Franchises § 34.08 (3d ed. 1986), pp. 29-31 (footnotes
unrelated to cable television omitted).
This franchising authority does not depend upon whether cable television is
considered a "public utility" for purposes of state utility commission regulatory authority.
Roberts, which was cited in McQuillan, held that cable television was not a "utility"
within the definition of a provision of the Michigan Constitution addressing specific
kinds of utilities (light, heat and power), but was nevertheless a utility within the meaning
of a different section of the Michigan Constitution generally defining local franchising
authority. 319 N.W.2d at 680-82. It was the latter, more general definition that
determined what businesses were subject to municipal franchising; cable television fell
under this broad category of services subject to municipal control under general
franchising provisions of the state constitution. Accord: Sacramento Orange County
Cable Communications Company v. City of San Clemente, 59 Cal. App. 3d 165, 170-72,
130 Cal. Rptr. 429, 432-34 (1976) (although cable television is not a public utility subject
to regulation by California Public Utilities Commission, it is subject to general municipal
franchising statute and rate regulation); Community Tele-Communications, Inc. v. the
Heather Corporation, 677 P.2d 330, 338-39 (Colo. 1986) (cable television is a proper
subject for city franchising under generally worded constitutional provision); City of
Owensboro v. Top Vision Cable Company of Kentucky, 487 S.W.2d 283, 287 (Ky.
1972) (under generally worded constitutional provision city may franchise kinds of
businesses in addition to utility services specifically listed in the constitution, e.g.,
garbage collection, taxis, buses, and cable television); Shaw v. City of Asheville, 152
S.E.2d 139, 145-46 (N.C. 1967) (municipal franchising authority under generally worded
statute is not limited to public utilities regulated by North Carolina Utilities Commission,
but includes cable television); Board of Supervisors of New Britain Township, 492 A.2d

461, 463-64 (Pa. Commw. 1985) (borough's right to regulate cable television implied
from its general powers to make ordinances "expedient or necessary for the proper
management, care and control of the borough . . . and the maintenance of peace, good
government, safety and welfare of the borough and its trade, commerce and
manufactures"); Aberdeen Cable TV Service, Inc. v. City of Aberdeen, 176 N.W.2d 738,
740-42 (S.D. 1970) (cable television is a public utility within the meaning of generally
worded municipal franchising statutes); City of Issaquah v. Teleprompter Corporation,
611 P.2d 741, 745-47 (Wash. 1980) (although cable television is not a public utility
under specific code provisions addressing municipal ownership of public utilities, it was
properly subject to terms of more general municipal franchising ordinance). But see
Devon-Aire Villas Homeowners Association No. 4, Inc. v. Americable Associates, Ltd.,
490 So.2d 60 (Fla. App. 1985).
After applying the constitutional rule of art. 12, sec. 2, that cities may enact local
regulations not in conflict with general laws, examining Idaho's general laws, and
reviewing these cases, I conclude that cities in Idaho almost certainly have authority
under state law to franchise cable television service within their city limits. From this,
the next questions are: Under state law, does the right to franchise include a right to set
rates? Under state law, does the right to franchise include a right to collect a franchise
fee?
B.

Rate Regulation Under Franchising Authority

Idaho Code § 50-330 specifically provides that "cities shall have the right to
regulate the fares, rates, rentals or charges made for the service rendered under any
franchise granted in such city, except such as are subject to regulation by the public
utilities commission." Thus, there is no question under state law that cities have the right
to regulate the rates of franchisees. See, e.g., City of Pocatello v. Murray, 21 Idaho 180,
120 P. 812 (1912) (before passage of Public Utilities Commission Act in 1913 preempted
city regulation of water franchisee's rates, city had authority to regulate rates of water
franchisee, although it had not properly exercised that authority). Moreover, the
authorities cited previously strongly suggest that, even without explicit rate authority in
the franchising statutes, rate authority is an incident of the franchising authority itself. As
another commentator says:
In granting franchises, local governments can ordinarily condition
the grant as the governing body deems proper. . . .
....
Local governments have been able to include conditions in
franchises, which:

(a)
set rates, fares, and charges to be levied by the party
accepting the franchise;4 . . . .

4 Struble v. Nelson, 217 Minn. 610, 15 N.W.2d 101 (1944); City of Allegheny v.
Millvale, E. & S. St. Ry. Co., 159 Pa. 411, 28 A. 202 (1893); Helicon Corp. v. Borough of
Brownsville, 68 Pa. Commw. 375, 449 A.2d 118 (1982).

3 Antien Municipal Corporation Law, Franchises: Public Utility Regulation § 29.03, pp.
29-14 and 29-15 (1993) (footnotes unrelated to rate regulation omitted).
C.

Franchise Fees

The Idaho case law is clear that once the authority to franchise a business is
established under state law, prescription of reasonable franchise fees is a necessary
incident of that authority (unless franchise fees have been preempted by state law). In
Alpert v. Boise Water Corporation, 118 Idaho 136, 795 P.2d 298 (1990), the court
addressed the legality of cities charging franchise fees to its franchisees (both gas and
water companies):
The practice of charging franchise fees as consideration for the
granting of a franchise was first noted in Boise City v. Idaho Power Co., 37
Idaho 798, 220 P. 483 (1923), which involved the issue of cancellation of a
franchise contract where Idaho Power had purchased two competing power
plants and sought to consolidate the franchises. As consideration for the
granting of the franchise, Boise City had charged a percentage of the
utility's gross revenue collected from its Boise patrons. The court held that
the commission had no authority to invalidate the franchise cancellation
agreement entered into between Boise City and Idaho Power, and further
held that the payments from the utility to the city constituted valid
consideration for a valuable property right which the city surrendered.
It is well established that Idaho cities have the right to own and
operate utilities and provide these services to their residents. The cities
contend that their surrender of this right is valid consideration for the
franchise fee charged to the utilities. We agree. The franchise agreements
in the present case are contracts and the franchise fees are simply payments
for consideration for the rights granted by the cities to the utilities. Idaho
Const. art. 15, § 2; I.C. § 40-2308.
118 Idaho at 144, 795 P.2d at 306. The final sentence quoted above cited art. 15, sec. 2,
and Idaho Code § 40-2308, which are constitutional and statutory provisions dealing
exclusively with water. But, the case of Boise City v. Idaho Power Company cited and

relied upon dealt with an electric utility and did not depend upon the specific
constitutional or statutory provisions for water. Further, Alpert's holding also applied to
the gas utilities that were party to that case. Therefore, Alpert's rule concerning the right
to require municipal franchise fees applies generally to all franchisees, not just to water
utilities.
Given the long history of municipal franchising, rate regulation and collection of
franchise fees of cable television in Idaho, and the general approval by the appellate
courts of other states of municipal franchising of cable television under general statutes
not specifically addressing cable television, I conclude that cities in Idaho almost
certainly have authority under Idaho law to franchise cable television, to regulate cable
television service rates, and to charge a franchise fee to cable television operators.
II.
AUTHORITY OF COUNTIES UNDER STATE LAW
As with the cities, the first step in determining a county's authority under state law
is to examine the statutes addressing the power and authority of counties. No statute of
the State of Idaho or reported appellate decision specifically addresses whether counties
have authority to regulate the basic cable television service rates or to charge a franchise
fee to cable television operators. Accordingly, the analysis must fall back upon the
general statutes addressing the powers and duties of counties. As was the case with the
cities, this analysis must be made against the backdrop of art. 12, sec. 2.
Title 31 of the Idaho Code is entitled "Counties and County Law." Chapter 6 of
title 31 is entitled "Counties as Bodies Corporate." Its initial section provides:
31-601. Every county a body corporate.--Every county is a body
politic and corporate, and as such has the powers specified in this title or in
other statutes, and such powers as are necessarily implied from those
expressed.
A number of statutes address county authority in a manner pertinent to the exercise of
franchising authority:
31-805. Supervision of roads, bridges and ferries.--To lay out,
maintain, control and manage public roads, turnpikes, ferries and bridges
within the county, and levy such tax therefor as authorized by law.
31-815. Licensing of toll roads, bridges and ferries.--To grant
licenses and franchises, as provided by law, for construction of, keeping
and taking tolls on roads, bridges and ferries, and fix the tolls and licenses.

31-828. General and incidental powers and duties.--To do and
perform all other acts and things required by law not in this title
enumerated, or which may be necessary to the full discharge of the duties
of the chief executive authority of the county government.
An examination of these statutes in isolation could lead one to conclude the county
franchising authority is restricted to the franchising of toll roads, bridges and ferries.
However, the matter is not so simple.
Other statutes contemplate more extensive county franchising. For example, two
sections in the Public Utilities Law, chapters 1 through 7 of title 61 of the Idaho Code,
which were passed in 1913, were written against a backdrop of more extensive county
franchising:
61-510. Railroad service--Physical connections.--Whenever the
commission . . . shall find that the public convenience and necessity would
be subserved by having connections made between the tracks of any two
(2) or more railroad or street railroad corporations . . ., the commission may
order any two (2) or more such corporations . . . to make physical
connections . . . . After the necessary franchise or permit has been secured
from the city and county, or city or town, the commission may likewise
order such physical connection, within such city and county, or city and
town, between two (2) or more railroads which enter the limits of the same.
....
61-527. Certificate of convenience and necessity--Exercise of
right or franchise.--No public utility of a class specified in the foregoing
section [street railroad corporation, gas corporation, electrical corporation,
telephone corporation or water corporation] shall henceforth exercise any
right or privilege, or obtain a franchise, or a permit, to exercise such right
or privilege, from a municipality or county, without having first obtained
from the commission a certificate that the public convenience and necessity
require the exercise of such right and privilege: . . . .
The public utility statutes indicate that, at least as long ago as their 1913
enactments, counties had been franchising utilities other than toll roads, bridges and
ferries. Indeed, given the counties' explicit statutory authority over roadways under
Idaho Code § 31-805 and their authority under the "general and incidental powers"
language of Idaho Code § 31-828, it would appear that the franchising authority must
extend beyond toll roads, bridges and ferries because almost all utilities (and most
common carriers) must use county roads or rights of way and obtain the county's
permission to do so. History and established practice also support this view.

While there are a number of reported opinions from other states analyzing the
question of city authority to grant franchises to cable television systems under generally
worded statutes, we have not found any addressing the question of county authority to
grant franchises to cable television systems under generally worded statutes.
Nevertheless, there are numerous reported cases in which counties have franchised cable
television systems, although the basis for the franchising authority is not discussed. See,
e.g., Cable Holdings of Georgia, Inc. v. McNeil Real Estate Fund VI, Ltd., 678 F. Supp.
871, 872 (N.D. Ga. 1986); Omega Satellite Products Co. v. City of Indianapolis, 694
F.2d 119, 121 (7th Cir. 1982); Town and Country Management Corp. v. Comcast
Cablevision of Maryland, 520 A.2d 1129, 1129 (Md. Ct. Spec. App. 1987); Southwestern
Bell Telephone Co. v. United Video Cablevision of St. Louis, Inc., 737 S.W.2d 474, 475
(Mo. App. 1987); Bylund v. Dept. of Revenue, 9 Or. Tax 76 (1981); Media General
Cable of Fairfax [Va.], Inc. v. Sequoyah Condominium Council of Co-Owners, 991 F.2d
1169, 1170 (4th Cir. 1993).
Applying the constitutional rule of art. 12, sec. 2, that counties may enact local
regulations not in conflict with the general laws, examining Idaho's general laws, and
acknowledging the general acceptance of county franchising of cable television, I
conclude that counties in Idaho probably have authority under state law to franchise cable
television service within their county limits. From this, the next questions are: Under
state law, does the right to franchise include a right to set rates? Under state law, does the
right to franchise include a right to collect a franchise fee?
Based upon the analysis earlier done with regard to the municipal franchising
authority, I conclude that counties in Idaho have authority under Idaho law to regulate the
cable television service rates and to charge a franchise fee for cable television operators if
they have authority to franchise cable television.
III.
FEDERAL PREEMPTION OF CITY AND COUNTY AUTHORITY
UNDER STATE LAW
Art. I, § 8, cl. 3 of the United States Constitution (the Commerce Clause) provides
that Congress has power "to regulate Commerce with foreign Nations, and among the
several States, and with the Indian Tribes." In the past ten years, Congress has twice
exercised its authority to regulate interstate commerce with regard to cable television,
first in the Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779, and
then more recently in the Cable Television Consumer Protection and Competition Act of
1992, Pub. L. 102-385, 106 Stat. 1460, 1477.1
Section 2 of the 1992 act, which was not codified in the United States Code,
contained a number of congressional findings:

• Rates for cable television services have been deregulated in
approximately 87% of all franchises since the passage of the 1984 act.
Since this rate deregulation, monthly rates for the lowest priced basic
cable service have increased by 40% or more for 20% of cable television
subscribers and the average monthly cable rate has increased almost
three times as much as the Consumer Price Index since rate deregulation.
Section 2(a)(1).
• Most cable television subscribers have no opportunity to select between
competing cable systems. When the cable system faces no local
competition, the result is undue market power for the cable operator
compared to consumers and video programmers. Section 2(a)(2).
• The 1984 act limited the regulatory authority of state or local franchising
authorities over cable operators. Franchising authorities are finding it
difficult under the 1984 act to deny renewals to cable systems that are
not adequately serving cable subscribers. Section 2(a)(20).
• It is the policy of Congress in the 1992 act where cable television
systems are not subject to effective competition to ensure that consumers'
interests are protected in receipt of cable service. Section 2(b)(4).
This congressional statement of purpose and concern about consumer interests is the
backdrop against which the 1992 amendments should be analyzed.
With these statements of purpose in mind, one next turns to the definitions of
terms found in section 602 of the Communications Act of 1934, 47 U.S.C. § 522, to
understand the statutory provisions in the remaining sections. The relevant definitions
are:
(3)
The term "basic cable service" means any service tier which
includes the retransmission of local television broadcast signals;
....
(5)
The term "cable operator" means any person or group of
persons (A) who provides cable service over a cable system and directly or
through one or more affiliates owns a significant interest in such cable
system, or (B) who otherwise controls or is responsible for, through any
arrangement, the management and operation of such cable system;
....

(7)
The term "cable system" means a facility . . . designed to
provide cable service . . . .
....
(9)
The term "franchise" means an initial authorization, or
renewal thereof . . . issued by a franchising authority . . . which authorizes
the construction or operation of a cable system;
(10) The term "franchising authority" means any governmental
entity empowered by Federal, State or Local law to grant a franchise;
Under these definitions, when a city or county has authority under state or local
law to franchise a cable television system, it meets the definition of a "franchising
authority" under federal law. Nevertheless, federal law does constrain the exercise of that
franchising authority. The heart of the statutory provisions prescribing how local units of
government may exercise their franchising authority is found at sections 621 et seq. of
the Communications Act of 1934, 47 U.S.C. §§ 541 et seq.
A.

Federal Law Preserves Local Franchising Authority

Section 621 of the Communications Act of 1934, 47 U.S.C. § 541, addresses the
local franchising authority. It provides:
§ 541. General franchise requirements
(a)
Authority to award franchises; public rights-of-way and
easements; equal access to service; . . .
(1)
A franchising authority may award . . . one 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 . . . .
....
(b)
prior law

No cable service without a franchise; exception under

(1)
Except to the extent provided in paragraph (2) and
subsection (f) of this section, a cable operator may not provide cable
service without a franchise.

(2)
Paragraph (1) shall not require any person lawfully
providing cable service without a franchise on July 1, 1984, to
obtain a franchise unless the franchising authority so requires.
Under this section, when cities and counties have authority under state law to award
franchises for cable television, they continue to have that authority under state law,
although the exercise of their franchising authority is constrained by federal law.
B.

Federal Law Authorizes and Caps Franchise Fees

Section 622 of the Communications Act of 1934, 47 U.S.C. § 542, addresses
franchise fees that the local franchising authorities may assess. It provides:
§ 542. Franchise fees
(a)

Payment under terms of franchise

Subject to the limitation of subsection (b) of this section, any cable
operator may be required under the terms of any franchise to pay a
franchise fee.
(b)

Amount of fees per annum

For any twelve-month period, the franchise fees paid by a cable
operator with respect to any cable system shall not exceed five percent of
such cable operator's revenues derived in such period from the operation of
a cable system. For purposes of this section, the twelve-month period shall
be the twelve-month period applicable under the franchise for accounting
purposes.
Under sections 622(a) and (b) of the Communications Act of 1934, 47 U.S.C. §§ 542(a)
and (b), when cities and counties have authority under state law to franchise cable
television systems, they are not federally preempted from charging franchise fees, but
they are federally preempted from charging franchise fees exceeding five percent of the
cable television system's gross revenues. (The remaining subsections of this section
flesh out the standards for franchise fees in considerable detail.)
C.

Federal Law Authorizes Rate Regulation of Basic Cable Television Services

Section 623 of the Communications Act of 1934, 47 U.S.C. § 543, addresses the
local franchising authorities' rate regulation. It provides:

§ 543. Regulation of rates
(a)
regulation

Competition
(1)

preference;

local

and

federal

In general

. . . Any franchising authority may regulate the rates
for the provision of cable service, or any other
communication service provided over a cable system to cable
subscribers, but only to the extent provided under this section.
....
(2)

Preference for competition

If the [Federal Communications] Commission finds
that a cable system is subject to effective competition, the
rates for the provision of cable service by such system shall
not be subject to regulation by the Commission or by a State
or franchising authority under this section.
If the
Commission finds that a cable system is not subject to
effective competition-(A) the rates for the provision of basic cable
service shall be subject to regulation by a franchising
authority, or by the Commission if the Commission
exercises jurisdiction pursuant to paragraph (6), in
accordance with the regulations prescribed by the
Commission under subsection (b) of this section; and
(B) the rates for cable programming services
shall be subject to regulation by the Commission under
subsection (c) of this section.
(3)

Qualification of franchising authority

A franchising authority that seeks to exercise the
regulatory jurisdiction permitted under paragraph (2)(A) shall
file with the Commission a written certification that-(A) the franchising authority will adopt and
administer regulations with respect to the rates subject

to regulation under this section that are consistent with
the regulations prescribed by the Commission under
subsection (b) of this section;
(B) the franchising authority has the legal
authority to adopt, and the personnel to administer,
such regulations; and
(C) procedural
laws
and
regulations
applicable to rate regulation proceedings by such
authority provide a reasonable opportunity for
consideration of the views of interested parties.
(4)

Approval by Commission

A certification filed by a franchising authority under
paragraph (3) should be effective 30 days after the date on
which it is filed unless the Commission finds, after notice to
the authority and a reasonable opportunity for the authority to
comment, that-(A) the franchising authority has adopted or
is administering regulations with respect to the rates
subject to regulation under this section that are not
consistent with the regulations prescribed by the
Commission under subjection (b) of this section;
(B) the franchising authority does not have
the legal authority to adopt, or the personnel to
administer, such regulations; or
(C) procedural
laws
and
regulations
applicable to rate regulation proceedings by such
authority do not provide a reasonable opportunity for
consideration of the views of interested parties.
(4)
If the Commission disapproves the franchising
authority's certification, the Commission shall notify the
franchising authority of any revisions or modifications
necessary to obtain approval.
....

(b)

Establishment of basic service tier rate regulations
(1)

Commission obligation to subscribers

The Commission shall, by regulation, ensure that the
rates for the basic service tier are reasonable. Such regulation
shall be designed to achieve the goal of protecting subscribers
of any cable system that is not subject to effective
competition from rates for the basic service tier that exceed
the rates that would be charged for the basic service tier if
such cable system were subject to effective competition.
....
(d)

Uniform rate structure required

A cable operator shall have a rate structure, for the provision
of cable service, that is uniform throughout the geographic area in
which cable service is provided over its cable system.
Under section 623 of the Communications Act of 1934, 47 U.S.C. § 543, when
cities and counties have authority under state law to regulate franchisees' rates upon
approval by the Federal Communications Commission, they continue to have authority
under federal law to regulate rates for basic cable service, but they are federally
preempted from regulating rates for basic cable service in a manner inconsistent with
regulations promulgated by the Federal Communications Commission. See remaining
subsections of section 623, 47 U.S.C. § 543; 47 C.F.R. part 76--Cable Television Service;
in particular, subpart N--Cable Rate Regulations, 47 C.F.R. §§76.900 et seq.2
AUTHORITIES CONSIDERED
1.

United States Constitution:
Art. I, § 8, cl. 3.

2.

Idaho Constitution:
Art. 12, sec. 2.

3.

United States Code:

47 U.S.C. §§ 521 et seq.
47 U.S.C. § 522.
47 U.S.C. §§ 541 et seq.
47 U.S.C. § 542.
47 U.S.C. § 543.
4.

Idaho Code:
§ 31-805.
§ 31-828.
§ 40-2308.
§ 50-328.
§ 50-329.
§ 50-330.
§ 61-129.
§ 61-801(k)(2).

5.

Idaho Cases:
Alpert v. Boise Water Corporation, 118 Idaho 136, 795 P.2d 298 (1990).
Boise City v. Idaho Power Co., 37 Idaho 798, 220 P. 483 (1923).
Bush v. Upper Valley Telecable Company, 96 Idaho 83, 524 P.2d 1055 (1974).
City of Pocatello v. Murray, 21 Idaho 180, 120 P. 812 (1912).
Coeur d'Alene Garbage Service v. City of Coeur d'Alene, 114 Idaho 588, 759 P.2d
879 (1988).
KTVB, Inc. v. Boise City, 94 Idaho 279, 486 P.2d 992 (1971).
Tarr v. Amalgamated Association of Street Electric Railway and Motor Coach
Employees of America, Division 1055, 73 Idaho 223, 250 P.2d 904 (1952).
Yellow Cab Taxi Service v. City of Twin Falls, 68 Idaho 145, 190 P.2d 681
(1948).

6.

Other Cases:
Aberdeen Cable TV Service, Inc. v. City of Aberdeen, 176 N.W.2d 738 (S.D.
1970).

Board of Supervisors of New Britain Township, 492 A.2d 461 (Pa. Commw.
1985).
Bylund v. Dept. of Revenue, 9 Or. Tax 76 (1981).
Cable Holdings of Georgia, Inc. v. McNeil Real Estate Fund VI, Ltd., 678 F.
Supp. 871 (N.D. Ga. 1986).
City of Issaquah v. Teleprompter Corporation, 611 P.2d 741 (Wash. 1980).
City of Owensboro v. Top Vision Cable Company of Kentucky, 487 S.W.2d 283
(Ky. 1972).
Community Tele-Communications, Inc. v. the Heather Corporation, 677 P.2d 330
(Colo. 1986).
Devon-Aire Villas Homeowners Association No. 4, Inc. v. Americable Associates,
Ltd., 490 So.2d 60 (Fla. App. 1985).
Las Cruces TV Cable v. New Mexico State Corporation Commission, 707 P.2d
1155 (N. Mex. 1985).
Media General Cable of Fairfax [Va.], Inc. v. Sequoyah Condominium Council of
Co-Owners, 991 F.2d 1169 (4th Cir. 1993).
New York Trust Company v. Eisner, 256 U.S. 345, 41 S. Ct. 506, 65 L. Ed. 963
(1921).
Omega Satellite Products Co. v. City of Indianapolis, 694 F.2d 119 (7th Cir.
1982).
Sacramento Orange County Cable Communications Company v. City of San
Clemente, 59 Cal. App. 3d 165, 130 Cal. Rptr. 429 (1976).
Shaw v. City of Asheville, 152 S.E.2d 139 (N.C. 1967).
Southwestern Bell Telephone Co. v. United Video Cablevision of St. Louis, Inc.,
737 S.W.2d 474 (Mo. App. 1987).
Town and Country Management Corp. v. Comcast Cablevision of Maryland, 520
A.2d 1129 (Md. Ct. Spec. App. 1987).

7.

Other Authorities:
3 Antien Municipal Corporation Law, Franchises:
§ 29.03 (1993).

Public Utility Regulation

12 McQuillan Mun. Corp., Franchises § 34.08 (3d ed. 1986).
47 C.F.R. §§76.900 et seq.
58 Fed. Reg. 63091-92 (No. 228, November 30, 1993).
59 Fed. Reg. 6903 (No. 30, February 14, 1994).
59 Fed. Reg. 17957-61, 17972-75, and 17989-92 (No. 73, April 15, 1994).
DATED this 10th day of November, 1994.
LARRY ECHOHAWK
Attorney General
Analysis by:
MICHAEL S. GILMORE
Deputy Attorney General
1

These acts added or amended Title VI--Cable Communications, §§ 601 et seq.,
to the Communications Act of 1934. They are codified at 47 U.S.C. §§ 521 et
seq. This opinion gives parallel references to the sections of the
Communications Act of 1934 and to the United States Code in discussing these
acts because both are often used in the literature. Further, this opinion
assumes that the cable television systems subject to local franchising are
engaged in interstate commerce subject to regulation under those acts, i.e.,
it does not address the unusual situation of a purely intrastate operation of
transmission of a signal without any interstate origin. Cf. Las Cruces TV
Cable v. New Mexico State Corporation Commission, 707 P.2d 1155 (N. Mex.
1985), suggesting there may not be federal preemption in such circumstances.

Note the extensive revisions to these regulations in the last year: The rate regulations contained
in the published codification of 47 C.F.R. parts 70 to 79, revised as of October 1, 1993, have been
amended at 59 Fed. Reg. 17957-61, 17972-75, and 17989-92 (No. 73, April 15, 1994). See also 58 Fed.
Reg. 63091-92 (No. 228, November 30, 1993), and 59 Fed. Reg. 6903 (No. 30, February 14, 1994).
2