The Competitive Cable and Video Services Act, found at T.C.A. §§ 7-59-301 et. seq., establishes a process for cable companies seeking franchises to serve cities. Following is a brief summary of the salient points of the legislation:

Current franchise holders — The current holder of a city franchise may apply for a state franchise, whether or not the local franchise agreement has expired.

Current franchise agreements — The terms of a current local franchise agreement may be adopted by any other cable company that wants to provide services in the city.

Notice — The applicant for a state franchise is required to provide notice of filing an application to the mayor of each city in the proposed service area.

City action required to preserve PEG channels — After receiving notice that an application has been filed, a city must notify the state of any public, educational, and government access channels provided by the incumbent cable company.

City action required to preserve free cable service — If an incumbent cable provider offers free cable service to schools or government offices, the city must provide a list of locations at which free service is provided to the incumbent cable company. If the cable company applies for a state franchise, any cable service provided free must continue until the termination date of the local agreement.

This law essentially grants a statewide franchise to cable companies. Current individual cable franchise holders may terminate their local agreements and seek a state franchise. A city that has previously negotiated a franchise agreement with one cable provider may be forced to permit other cable companies to serve its area under the same terms and conditions of the existing agreement.

Tennessee cities may receive public access channels through the state franchise, and may receive financial support for public access channels. The law requires that franchise fees be paid directly to cities rather than routing such funds through a state department and sets the franchise fee at 5%, which is payable every quarter. Cities should receive franchise fee payments within 45 days after each quarter. T.C.A. § 7-59-306.