WPC 2a BK Z Courier#|x#>Fx6X@`7X@HP4Si (Additional); Rm. 900_1; LPT2HPLA4SAD.PRSx6X@8;\;+OX@CY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d<|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddvooChdF"dhd9dCCzCddoddCdYds]zUvdYYCCCCz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYC\   pxtll\tll@\@\`LЊm. 900_1; LPT2HPLA4SAD.PRSXw PE37\;+OXP2    #|x"CourierCourier BoldS]MCHPIII.PRSx6X@8;,\,f dtX@Њ2NN X JCourier 10cpiCourier 10cpi (Bold)CG Times (Scalable)Courier 10cpi (Italic)<?xxx,>Fx6X@`7X@?xxx,x `7X2WP}WP{.PF20.4a:\50750.4&^    !""m+O6^$(8<><q*"xxxxWWxxxWWkkxxx0X ? ԍ` ` Id. at 126.> The Court further endorsed tariffs as an essential component of nondiscriminatory ratesetting for telecommunications providers in MCI Telecommunications v. American Tel. & Tel.: XThe tarifffiling requirement is. . . the heart of the commoncarrier section of the Communications Act. In the context of the Interstate Commerce Act, which served as its model, ... this Court has repeatedly stressed that rate filing was Congress's chosen means of preventing unreasonableness and discrimination in  ?  charges. . . "I  ?! ԍ` ` 114 S.Ct. 2223, 2231 (1994).I  We recognize, of course, that Section 653 provides that OVS operators will not be subject to all of the requirements of TitleII. At the same time, however, OVS operators are subject to the same requirement of reasonable and nondiscriminatory`"x0*(( rates as common carriers, and the courts have repeatedly concluded that publiclyposted, uniform rates are the only reliable means of enforcing such a requirement. We suggest the following way to resolve this conundrum in the Act. OVS operators may be permitted to set their rates without requiring prior Commission approval in the fashion of a tariff, but the OVS operator must make all carriage contracts  ? publicly available.A  ?H ԍ` ` NPRM, 34.A Moreover, the OVS operator must justify any differences in the rates charged for carriage " including the  ? rates charged to its own affiliates or itselfUX ? ԍ` ` See Amendment of Part 21 of the Commission's Rules With Respect to the 150.8162 Mc/s Band, Docket No. 16778, Report and Order, 12 F.C.C. 2d 841, 84950, 852 (1968), recon. denied, 14 F.C.C. 2d 269 (1968), aff'd, Radio Relay v. FCC, 409 F.2d 322, 327 (2d Cir. 1969).U " by reference to verifiable and objective factors, such as genuine costjustified differences (such as volume discounts), and the nonprofit nature of the programmer (as with the special status of PEG programmers under the Act). The OVS operator should not, however, be permitted to draw distinctions based on programming content. For the same reason, the Commission's rules should ensure that all OVS programming contracts contain as a matter of course a "most favored nation" clause, providing that the programmer will automatically receive the benefit of any better deal the OVS operator gives to another similarlysituated programmer. It will still be necessary to publicize contracts, so that differences can be discovered, but such clauses should make it a routine 0*(( matter to adjust any such differences found. If any carriage contract does not include a most favored nation clause, an explanation should be required from the OVS operator and the  ? Commission should investigate.r ? ԍ` ` We endorse the comments of the City of Dallas, et al., on this point.r Making all contracts public will be one powerful way to ensure real, not merely sham, availability. As long as this requirement applies to everyone (including the OVS operator's own affiliates), no operator or programmer can claim to suffer a competitive disadvantage from such public availability. Any claims that secret "proprietary" contract terms are somehow necessary should be rejected. After all, the LEC can always choose the cable franchise option if it wishes. To the extent that cable operators may be permitted to make secret contracts with programmers, this is a privilege the OVS operator gives up in exchange for the advantages of OVS.   ?8 ` `  3. The Commission must use either a (# ` `  yardstick or a costbased approach  ? ` `  to determine the reasonableness of rates.  Even eliminating discrimination, however, does not resolve the equally critical problem of determining whether a carriage rate is "reasonable," and effectively auditing the rates an OVS operator would charge to its own affiliates. The Commission should require any programming affiliate of the OVS operator to file standalone financial statements from which the affiliate's rate of return and cash flow can be determined. Repeated losses$ 0*(( or inadequate rates of return by the OVS operator's programming affiliate would indicate that the OVS operator's carriage rates represent artificially high transfer prices designed to discourage independent, disfavored programmers. Such a reporting requirement might reduce somewhat the need to regulate the OVS operator's carriage rates directly in the traditional sense, by reviewing its ratebase and costs. But financial disclosures alone would still be insufficient to define the reasonableness of the rates, in the absence of any costbased rule. If the Commission does not apply a rateofreturn criterion, there must be some "yardstick" test to ensure that there are actually independent programmers on the OVS system, as a check on the reasonableness of rates. We propose that rates will be presumed unreasonable unless (1) at least 1/3 of system capacity is occupied by independent programmers not of the OVS operator's choosing; and (2) at least four such programmers are on the system. This "reality check" would serve as an independent means to ensure that undetected tricks with the financial reports could not be used to exclude independent programmers. These two criteria " multiple entities, together with a percentage of independent channel capacity " are necessary to guard against an OVS operator's using sub rosa "sweetheart" deals to evade the affiliation rules: it would be more difficult to make and conceal such deals with many programmers than with a few.%0*((ԌThe only alternative to the stringent yardstick presumption approach we have outlined would be a utilitylike, costbased pricing mechanism to determine whether carriage rates are reasonable and nondiscriminatory as Section 653 requires. And the Act does not preclude the Commission from using such a mechanism. While the Act says that OVS is not subject to Title  ?` II obligations,K`  ? ԍ` ` See NPRM, 30.K this does not imply that OVS operators are immune from whatever regulatory mechanisms the Commission finds necessary to determine the reasonableness of carriage rates. Otherwise, OVS operators would be free to violate the reasonable rate requirements of Section 653 that form the heart of the  ?0 entire OVS model.0X ? ԍ` ` The approach outlined above, in contrast, applies only those aspects of a tarifflike process that are specifically required or necessarily implied by the language of the Act: just and reasonable rates (47 U.S.C. 201(b)), nondiscrimination (47 U.S.C. 202(a)). It avoids the use of other Title II requirements, such as a duty to expand capacity to serve all comers (201(a)); establishment of rates in absolute terms (201(b)); approval of tariffs prior to service (203); hearings on proposed rates (204); prior approval of construction by the Commission (214); and accounting requirements (220).   ? ` `  4. The Commission's rules must prevent OVS (# ` `  operatorprogrammer relationships  ? ` `  outside the carrieruser relationship.  If an OVS is to be a truly open system, OVS rates and terms must encourage both large and small programmers (the wellheeled and those of more limited means) to use the OVS. The Commission's OVS rules must make it as straightforward and easyX 0*(( as possible for all programmers to obtain OVS capacity. There must be as bright a line as possible to discourage improper behindthescenes relationships between the OVS operator and favored nonaffiliated programmers. Absent such a bright line, it will be impossible to monitor and enforce whether ostensibly independent programmers have relationships with the OVS operator outside the carriage arrangement. In the past, the Commission has found only one mechanism able to deal with such artifices. The "carrieruser" restriction in the Commission's former telcocable crossownership rules was  ? designed to deal with many of the same concerns.^ ? ԍ` ` See former 47 C.F.R. 63.54, Note 1(a).^ We therefore recommend that the Commission's OVS rules should provide that, for a programmer to qualify toward an OVS operator's 2/3 setaside obligation, the OVS operator's relationship with that programmer should be restricted to a "carrieruser" relationship. The OVS operator should, however, be allowed to perform billing and collection services for such programmers on a nondiscriminatory basis.   ? ` `  5. Rules for allocation of OVS capacity must (#  ? ` `  protect independent programming competition.  The NPRM suggests that the OVS operator should be allowed to manage channel allocation, either in general, or when demand  ?`" exceeds capacity.H`"X ?H& ԍ` ` NPRM  11, 24.H Clearly, any such control by the OVS operator would be tantamount to the editorial control exercised#0*(( by cable operators, since choosing the program packager or managing channel allocations amounts to choosing the programming indirectly. If the initial demand exceeds system capacity, a proportional allocation, in which all comers will receive some capacity in proportion to the total capacity available, appears to be most equitable and to promise the widest diversity of  ?` program offerings.X`  ? ԍ` ` Cf. NPRM, 24 & n.36 (proportional allotment method based on amount of requested capacity during an enrollment period). The question of reallocating capacity to accommodate later applicants, however, is at least equally important. The Commission's discussion of an enrollment period and isolated later updates only every few years (NPRM 14, 2526) seems to presume a onetime allocation that is then frozen in stone for a period of years. That is unacceptable and inconsistent with the purpose of OVS. We believe that, until or unless any OVS operator's 2/3 setaside obligation is completely filled, any programmer willing to meet the "open" contract must be allowed on the system within 30 to 60 days, and the OVS operator is obliged to reduce the number of channels under its control accordingly. This sort of responsibility is the essence of being an open system operator rather than a cable operator. It is essential to remember that if the need to remain perpetually "open" to new comers is a burden to the OVS operator (see NPRM, 25), the LEC need not put up with that burden: it can always be a cable operator.# 0*((ԌOnce the OVS capacity is entirely filled, the best solution to allow new programmers to enter may be rules that ensure an open market in subleasing capacity and free trading of access rights (as against the operatorcentric approach of NPRM 15). Unless the Commission can develop other means to ensure that at least some capacity remains available at all times, it will be essential that OVS channels be assignable, so that programmers can resell their capacity freely, without interference from the OVS operator. In this way a new programmer willing to pay the market price may always in principle be able obtain capacity from existing users. While this rule, without more, may not ensure that affordable capacity is always available for programmers of modest means, it should help to prevent OVS capacity from being locked up once for all. Once again, it is essential to the OVS model that the OVS operator does not have the right to exercise editorial control and hence to monopolize speech on all channels. A LEC that wishes to exert such total editorial control may always choose the cable option. The NPRM also erroneously seems to assume that switched  ? digital systems will have unlimited capacity.X ? ԍ` ` If the NPRM's assumption were correct, the Commission could simply require that such an OVS carrier provide capacity to all comers, and there would be no problem. This is not the case. Any switched system has limits on its throughput capacity, switches, input ports, and the like. The public switched telephone network, for example, is a switched network, but it clearly has capacity limits (cf. NXX and other area code issues). #!0*(( Thus, there is no basis for relieving switched systems from the setaside obligations that Section 653 requires.   ? ` `  6. OVS program marketing and selection rules (#  ? ` `  must protect access by independent programmers.  The NPRM suggests that the OVS operator may be allowed to  ? market other programmers' channels.H  ?( ԍ` ` NPRM  10, 27.H This, however, would be indistinguishable from what a cable operator does. For example, when a cable operator carries HBO or TNT, the cable operator is selecting and offering to its subscribers a package of programming put together by other " often unaffiliated " parties. HBO or Turner have chosen the particular programs that run on the HBO and TNT channel feeds, and the cable operator is merely transmitting the programming chosen by its program providers. Thus, if the OVS operator were allowed to market other programmers' products along with its own, this would make it a cable operator. In addition, it is hard to imagine how an independent programmer could compete with the OVS operator if the OVS operator could bundle the independent's programming in with its own products, but not vice versa. In effect, the OVS operator would be able to offer all the channels on its system to subscribers " not just 1/3 " while the independent could only offer its own channels. Such an arrangement would doom intrasystem competition, not promote it.#"X 0*((ԌSimilarly, the NPRM suggests that the OVS operator may choose what programming is carried on shared channels, or select  ?  another entity to do so.A!  ?x ԍ` ` NPRM, 37.A Either notion would result in impermissible editorial control by the OVS operator and potential discrimination against independent programmers. If the OVS operator could determine which channels could be shared, it would gain considerable control over all programmers' packaging decisions. To allow the OVS operator to select another entity to do so would merely permit an OVS operator to do indirectly, through an agent, what it should not be allowed to do directly. A simpler solution would be to require the OVS operator to carry on only one physical channel any program feed requested by two or more OVS programmers, and to make that channel accessible to all of those programmers' subscribers. If the OVS operator itself wants to carry the shared channel, it must negotiate with the program providers in exactly the same way as do the OVS program  ? packagers."X ? ԍ` ` See NPRM, 41 (each video provider must deal with program vendors independently). It must be kept in mind that precluding OVS operators from exercising any influence over program selection on the twothirds of system capacity set aside for others on OVS is consistent with the First Amendment. After all, any wouldbe OVS operator that wishes to select all the programming itself always has the option under the Act of being a cable operator instead if it wishes.`"#"0*((Ԍ ? Й` `  7. OVS programmer application and usage rules (#  ? ` `  must protect independent programming competition.   ?X  Financial Conditions. The Commission should resist any suggestion that potential programmers demonstrate financial resources or meet other artificial hurdles, which would simply deter competition. Rather, the Commission should specify a maximum financial commitment for programmers that would not form a barrier to entry for competing independent programmers " for example, one month's carriage fees in advance as a deposit, to be returned on termination.  ?  Parity With Affiliates. It is difficult to know what to make of the NPRM's question whether an OVS operator should be allowed to charge independent programmers higher rates than it  ? charges its own affiliates.A# ? ԍ` ` NPRM, 31.A We think it should be obvious that the OVS operator and its affiliates can get no better deal than other programmers. If nondiscrimination means anything, it must mean this.  ?  Minimum Channel Requirements. If the OVS operator could set minimum requirements " for example, refuse to make available less than five channels to a programmer " it would be simple for the OVS operator to eliminate small or nichemarket programmers from competition for its capacity. Thus, the OVS operator should be $X#0*(( required to make single channels and partial (parttime) channels  ? available, to accommodate those of limited means.$x ? ԍ` ` The Commission recently recognized that cable operators must make parttime arrangements available to leased access programmers. See Public Notice, Commission Adopts Order And Further Notice of Proposed Rulemaking Regarding Rules for Cable Television Leased Commercial Access, at 2 (March 21, 1996). Obviously, OVS operators should be subject to no lesser standard than cable operators.   ?  C.` ` An OVS Operator That Violates the Commission's OVS  ? Rules Should Be Required to Obtain a Cable Franchise. (#` If an OVS operator is found to be in violation of the OVS rules, it should be decertified and required to obtain cable franchises for the relevant areas. This remedy would ensure that the operator could stay in business as a video competitor, but would deprive it of the special OVS privileges it had abused. In cases where the violation does not fall clearly within the Commission's rules, the Commission may wish to provide the OVS operator with notice and sixty days' opportunity to cure before decertification.   ?  III.XOPEN VIDEO SYSTEMS MUST MEET (#  ? LOCAL COMMUNITY NEEDS AND INTERESTS.MEET COMMUNITY NEEDS  The Act requires the Commission to make rules that will impose on an OVS obligations no greater or less than those contained in sections 611, 614, and 615 of the Cable Act and section 325 of the Communications Act (PEG access, mustcarry and retransmission consent). The following comments address thisx%$0*(( statutory requirement that the Commission's rules require PEG  ? commitments equal to those of a cable operator.%X ? ԍ` ` We agree with the comments of the Alliance for Community Media et al., and the City of Dallas et al., on this issue.   ?  A.` ` The Public Interest Necessarily Has (#`  ? ` ` Local As Well As Nationwide Components.  When the Commission attempts to identify the public interests relevant to OVS PEG requirements, the Commission cannot limit its investigation to national or federal interests. The Commission must also consider, and affirmatively take into account, the interests of the various state and local jurisdictions. This imperative is reflected in the legislative history of the Act. House Report No. 104204 states: X` ` In considering how to implement the capacity, services, facilities, and equipment requirements for PEG use . . . the Committee intends that the Commission give substantial weight to the input of local governments, which have longstanding and extensive experience in establishing and implementing such  ? requirements.& ?X ԍ` ` H.R. Rep. No. 104204, 104th Cong., 1st Sess. at 105 (1996) ("House Report").  Congress recognized that local governments have unique expertise in the ascertainment of public needs and interests in connection with PEG requirements, and determined that such expertise should be brought to bear on the determination of the PEG obligations of OVS within the local communities. @&@&0*((Ԍ ?  B.` ` PEG Obligations for Open Video Systems Must be  ? Established Consistent With Local Needs and Interests. (#` New Section 653(c)(1)(B) of the Communications Act provides that Section 611 of the Cable Act, "Cable Channels for Public, Educational, or Governmental Use," shall apply to OVS operators in accordance with regulations to be prescribed by the  ? Commission.h' ? ԍ` ` 1996 Act, Section 302 (adding 47 U.S.C. 653(c)(1)(B)).h Those regulations must ensure that OVS operators fulfill "obligations that are no greater or lesser" than the  ? obligations contained in Section 611.L(  ?h ԍ` ` Id. at 653(c)(2)(A).L The legislative history relating to Section 653(c)(1)(B) makes clear that the regulations to be promulgated by the Commission to implement that section must be crafted so as to impose PEG access requirements on OVS that are "equivalent" to the obligations agreed to by cable  ? operators.G) ? ԍ` ` House Report at 105.G Section 611 of the Cable Act, of course, authorizes each local franchising authority to establish requirements in a franchise for the designation of channel capacity for PEG use, including institutional networks. To establish PEG requirements, each local franchising authority typically conducts an ascertainment process to determine its individual PEG access needs and interests. Once determined, these needs and interests are translated into specific requirements for facilities, equipment, and channel capacity and are incorporated into a!'@)0*((  ? negotiated franchise._* ?X ԍ` ` See 47 U.S.C. 531(b), 546(c)(1)(D)._ Such requirements may include, for example, dedicated channel capacity; upstream feeds to allow PEG programming to reach the cable headend; PEG studio and production facilities and equipment; institutional networks and related equipment. The resulting PEG obligations are thus tailored to each individual community's needs and interests as a product of either negotiations or a formal renewal process, equitable to both the community and to the cable operator. Both the statute and sound policy require that the PEG obligations of OVS operators must likewise be tailored to each local community's needs and interests as determined by each affected local franchising authority.  ?  C.` ` An OVS Operator Should Be Subject To A (#` ` ` "Match or Negotiate" Requirement: It May ` ` Choose Either To Match Each Incumbent Cable ` ` Operator's PEG Obligations, Or To Negotiate  ? ` ` Agreements Acceptable to the Affected Communities. MATCH OR NEGOTIATE OVS operators should be obligated to fulfill their statutory PEG obligations through a "match or negotiate" system. Under our proposal, an OVS operator must, as a preĩcondition to certification, either: (a) agree to match the PEG obligations of each incumbent cable operator in each affected franchise area, and any future changes therein; or (b) reach agreement on an alternative arrangement with each affected franchising authority in whose jurisdiction the OVS will be. In either case, the OVS%(X*0*(( operator's certification to the Commission should include a statement of the PEG requirements to be imposed by each affected community with which the OVS operator will comply. See 47 U.S.C. 531, 544 and 546. Moreover, the statement of PEG requirements should bear the endorsement of each affected franchising authority.   ?( ` `  1. Under the "match" option, the OVS operator must  ? provide exactly what the cable operator provides. (#  Under the first (or "match") option, the OVS operator would simply agree to match the PEG requirements contained in the cable franchise of the incumbent cable operator in each cable franchise area covered by the OVS system. If an OVS operator chooses this option, it must also certify in its OVS application that it will match any future changes in a cable operator's PEG obligations, as may well occur when the cable operator's franchise is renewed or periodically renegotiated or modified. Each community's PEG needs and interests are likely to change over time. Indeed, the franchise renewal process specifically contemplates that each franchising authority will ascertain each individual community's cablerelated needs and interests. See 47 U.S.C.  546. Based on the results of that ascertainment, the PEG obligations delineated in a renewal franchise may " and typically do " differ from those in the prior franchise. This means that after an OVS system matches existing PEG obligations, if the cable operator's PEG obligations increase')*0*(( under a subsequently granted renewal franchise, the OVS operator's PEG obligations must likewise increase. To conclude otherwise " that is, to refrain from requiring an OVS operator to match a cable operator's new PEG obligations " would result in the OVS operator having "lesser" PEG obligations than those of the cable operator. That would be directly contrary to the clear language of the Act. It also would do violence to the renewal provisions of the Cable Act by interfering with the community's ability to upgrade its PEG requirements as contemplated by 47 U.S.C. 546, and would tend to produce a competitive imbalance between the cable and OVS operators. Hence, where new PEG obligations are imposed upon the incumbent cable operator, the OVS operator must be required to match those obligations as  ?P well.^+H P ? ԍ` ` We suspect that LECs will argue that it would be unfair to require an OVS operator to upgrade its PEG obligations based on a renewal franchise with a cable operator that the OVS had no role in negotiating. This argument is misguided for two reasons. First, the statute requires that an OVS operator's PEG obligations be no less than those of the cable operator. But if an OVS operator is not required to upgrade its PEG obligations along with the cable operator, then it would have impermissibly "lesser" PEG obligations. Second, the Commission must remember that the LEC always has the option of being a cable operator rather than an OVS operator, thereby enabling it, like the cable operator, to negotiate PEG obligations. The advantage of OVS is that the OVS operator can, if it chooses, avoid negotiations and merely match the existing cable operator's obligations. An OVS operator should not, however, be allowed to have it both ways: the certainty and simplicity of matching while, at the same time, complaining of its inability to negotiate terms.^ Logic dictates that this rationale must extend to the provision of PEG facilities as well as capacity. For example, if, based on local community needs, a franchise requires the*+0*(( cable operator to provide certain PEG facilities and equipment, any OVS operator coming into that community must provide equivalent PEG facilities and equipment. Similarly, if local community needs and interests dictate that the incumbent cable operator must provide an institutional network, then any OVS operator coming into that community must likewise provide an institutional network. See 47 U.S.C. 531. This result is entirely consistent with both the letter of new Section  ? 653(c)(2)(A) and with the legislative history.,  ? ԍ` ` In discussing the regulations to be promulgated by the Commission to implement Section 653(c)(1)(B) of the Act, the House Report states that the regulations "shall impose obligations on video platforms that are equivalent to the obligations imposed on cable operators." House Report at 105. The House Report goes on to discuss the deference that the Commission must give to local governments when the Commission endeavors to determine how to implement the "capacity, services, facilities and equipment requirements for PEG use. . ." set forth in the Act. House Report at 105 (emphasis added). This language makes clear that when drafting Section 653(c)(1)(B), Congress intended OVS operators to provide PEG facilities and equipment (including institutional networks referred to in Section 611), in addition to PEG capacity, that will be equivalent to what is required of the cable operator. Congress clearly understood that a requirement of PEG capacity without a concomitant requirement for facilities for PEG program production and transmission can render the former requirement meaningless. Channel capacity implies the means to program it. Moreover, it promotes nondiscriminatory treatment of similar providers of similar services.  ` ` 0+h,0*((Ԍ ? ` `  2. Under the "Negotiate" Option, OVS Operators (# ` `  May Negotiate Alternative Arrangements with ` `  Communities, Which Could Result in Greater PEG ` `  Benefits for the Community and, at the Same Time,  ?  ` `  Greater Cost Efficiency for the OVS Operator.  The matching obligation of an OVS operator with respect to PEG must be cumulative with the PEG obligations of the cable operator. The PEG obligations for OVS should not, as the NPRM seems at times to suggest, be used as an excuse for halving the  ? cable operator's PEG obligations.R-  ?H ԍ` ` See, e.g., NPRM, 57.R The Act contemplates that the PEG obligations of OVS operators will be "equivalent to the  ? obligations imposed on cable operators."G.X ? ԍ` ` House Report at 105.G If the OVS operator and the cable operator were simply to share the incumbent cable operator's existing PEG obligations, the OVS operator would, by definition, be providing less PEG support than the cable operator was providing, and the cable operator would be providing less PEG support than required by its franchise. The Act cannot be  ?p construed to sanction such a "dumbing down" of PEG access.:/ p ? ԍ` ` An additional occupant of the public rightsofway will necessarily mean more burdens and more private profits, and in any normal business arrangement will mean more rents, than the initial occupant alone. See Section RIGHT-OF-WAY SECTIONV infra.: At the same time, we recognize that in some cases, it may be more practical and costeffective to allow an incumbent cable operator and an OVS operator to have different (but equivalent), rather than identical, PEG obligations. We therefore propose,/0*(( that OVS operators be given a second (or "negotiate") option in addition to the "match" option.  Under the "negotiate" option, the franchising authority and the OVS operator may negotiate PEG obligations that are not identical to those of the incumbent cable operator, but that provide an equivalent benefit to the community, provided that the franchising authority agrees to such an arrangement prior to the OVS option's certification application. For example, if the cable operator were already providing an institutional network, the OVS operator, rather than providing a second such network, might agree to provide terminal equipment for use with the institutional network, at a comparable cost. Thus, the burdens on the two operators would be the same, but the community would benefit from intelligent planning of the combined compensation. A variation of the "negotiate" option would be to allow the franchising authority, the incumbent cable operator, and the OVS operator to negotiate a "winwinwin" solution. The two operators and the franchising authority could enter into a trilateral agreement that would result in greater PEG support than the incumbent cable operator is providing while, at the same time, costing the OVS operator and the cable operator less than simple duplicate "matching" of the cable operator's existing PEG obligations. Thus, for example, rather than matching the cable operator by building a PEG studio duplicative of the one built by the cable operator, the OVS provider might instead agree to provide'-/0*(( an equivalent amount of equipment or support to the existing PEG studio, thereby strengthening the PEG programming capabilities of the existing studio facilities. Under this approach, the total PEG obligations of the two operators would be greater than the cable operator's alone, but perhaps less than a simple doubling of these obligations. And the relative PEG obligations of each operator could be proportional to the number of subscribers served by each, or perhaps to their respective revenues. Conceivably, such an agreement could allow for the automatic adjustment of the companies' relative obligations thereunder based on changes in the number of each operator's subscribers or level of revenues. It is conceivable that under such a scheme, with the franchising authority's consent, the cost of the cable operator's PEG obligations could be decreased somewhat, particularly if the cable operator loses subscribers or revenue to the OVS competitor, while the OVS operator would not have to take on all of the burden of "matching" the cable operator's  ? original PEG obligations. 0  ? ԍ` ` One possible result could be the development and expansion of independent, regional nonprofit PEG access centers, such as those already in operation in Grand Rapids, St. Louis, and elsewhere, offering economies of scale.    ? ` `  3. In the exceedingly rare case where an (# ` `  OVS system is located in an area where ` `  no cable operator is franchised to serve, ` `  the OVS operator must negotiate its PEG  ? ` `  obligations with the local government.  An OVS operator's "match or negotiate" obligation should apply to any area that is within the franchise area of a cable(#.00*(( operator, regardless whether the cable operator has actually extended service to the area. The NPRM asks what an OVS operator's PEG obligations should be in areas where there is no  ? incumbent cable operator.A1 ? ԍ` ` NPRM, 57.A Properly construed, such cases should be exceedingly rare. The number of places in the nation where no cable operator is franchised to serve (as opposed to areas where the cable operator is franchised but has not extended its system) is exceedingly small. And it seems unlikely that OVS operators would be attracted to such areas, which by definition would have been unattractive to cable operators, including LECs that otherwise could have qualified under an exception to the former crossownership rule. In the exceptionally few cases where an OVS operator seeks certification in an area that no cable operator is authorized to serve, the OVS operator should be required to undertake negotiations with the local government. Of course, these negotiations may be much narrower in scope than negotiations for a cable franchise. But they will be no less important. Negotiations between the OVS operator and the local government in such cases will be imperative because, due to the absence of any prior cable franchising process, such negotiations would be the only practical mechanism by which the community can both impart to the OVS operator the community's PEG access needs and interests, and bind the OVS operator to an obligation to fulfill those needs and interests. As suggested above, the%/X10*(( Commission should require OVS operators to include in any OVS certification to the Commission the local government's endorsement of its local PEG obligations. Such a requirement will help ensure that OVS operators negotiate in good faith with the local governments.   ? ` `  4. The Commission should reject any proposals to average or "federalize" OVS PEG obligations across  ?( different franchising authority jurisdictions. (# When considering the several alternative suggestions on the OVS PEG issues that the Commission is sure to receive, the Commission should resist any impulse to establish universal, federalized OVS PEG requirements across franchising authority boundaries, whether by averaging or by other means. As demonstrated in the discussion above, local PEG requirements must be based on the particular needs and interests of each local community, as determined by each local government. Due to its lack of contact with local citizens and organizations, the Commission is peculiarly illsuited to determine the PEG needs and interests of individual communities. And any OVS PEG requirements that are based on something other than each individual community's needs and interests would fail to satisfy the Act's requirements that those PEG obligations be no greater or lesser than those of the cable operators in those areas. The Commission should likewise reject any "averaging" approach to PEG requirements across franchise areas. Such an approach would result in a "dumbing down" of PEG access,'010*(( effectively punishing those communities with the greatest demonstrated need for PEG with a system that fails to meet their PEG needs and interests. If OVS operators were permitted to provide "one size fits all" PEG programming on open video systems that overlapped several jurisdictions, by definition that programming would not address the individual communities' distinctive PEG access needs and interests. Such a result would defeat the whole purpose of PEG access programming. Moreover, to the extent that local cable operators are providing PEG access in one or more of the effected communities, such a result would be contrary to the Act, since it would permit OVS operators to provide services not equivalent to those provided by the local cable operators. Consequently, requiring an OVS operator to fulfill the PEG requirements of each individual community served by its system is the only way to ensure that the OVS operator meets each community's PEG access needs and interests. Thus, where an OVS will overlap several franchise areas, it should be designed with the capability to fulfill the separate PEG requirements of each affected community. This capability is commonly referred to as "narrowcasting." As demonstrated in the comments of the Alliance for Community Media, et al., it is neither technically difficult nor expensive for OVS operators to build systems that deliver PEG tailored to each community. Cable operators have done it with older technologies in system "clusters." OVS systems, by contrast, will be brand new. Any'110*(( suggestion that LECs would somehow be unable to accomplish with new technology what cable operators have already accomplished with older technology is nonsense. It is important to realize that by definition, our proposed communityspecific approach imposes PEG obligations on the OVS operator that are no greater or less than those imposed on the cable operators against whom they will compete. It thus encourages parity and fair competition. Moreover, any OVS operator that finds the "match or negotiate" formula unattractive always has another option: it can obtain a cable franchise and become a cable operator instead (or, for that matter, pursue other options available under the Act, such as wireless transmission). Thus, comparable PEG obligations help to ensure that both OVS and cable subscribers in the same area will be equally well served, while imposing no disadvantage on either competitor.   ? ` `  5. PEG channels should be (#  ? ` `  provided to all subscribers.  ` ` The principal purpose of PEG channels is to provide access to electronic media for individual citizens and groups that traditionally have had no means of contributing to television programming. Such access fosters a wide diversity of information sources for the public, including important but not commercially lucrative programming; the "electronic soapbox"; participation by diverse members of the public, including minorities; and community dialogue over important issues and'210*((  ? events.2 ?X ԍ` ` For example, the City of St. Louis produces and cablecasts four to six town hall meetings per year, so that citizens who cannot attend the meetings can still know what was discussed. Locally produced election night coverage can make immediate information available when commercial broadcast outlets do not wish to interrupt their standard evening lineups, giving viewers additional options. Similarly, educational channels can provide important distance learning opportunities during the day and broader community education programs by night. See also attached Comments at 3233 and Appendix A thereto. This diversity is a fundamental goal of the First  ? Amendment of the United States Constitution.3`  ? ԍ` ` See, e.g., H.R. Rep. No. 934, 98th Cong., 2d Sess. at 30 (1984), reprinted in 1984 U.S.C.C.A.N. 4667. This goal would be thwarted if PEG channels were not made available to all OVS  ? subscribers.4   ? ԍ` ` "There simply is no point in requiring diverse information sources and services if a large segment of the population . . . can be denied access to that information . . .". See id. at 36, 4673. The provision of OVS PEG channels to all subscribers would be consistent with the Act's requirement that OVS operators' PEG obligations be no less than the PEG obligations of cable operators. In this respect, the OVS PEG channels (along with mustcarry channels) could be part of a "basic package" similar  ? to the basic tier on a cable system.5 ?@ ԍ` ` See 47 U.S.C. 522(3). This scenario is consistent with the Commission's notion that the PEG channels do not count against the maximum onethird of capacity for which the OVS operator may select programming when carriage demand exceeds the capacity. See NPRM 19, 57 n.74. It should be noted, however, that in this case the OVS operator's programming allotment should not be onethird of the entire channel capacity: it should be onethird of the nonPEG channel capacity, since the PEG (or mustcarry) capacity is an obligation of the entire system in the public interest and should not be attributed solely to the independent programmers.350*((Ԍ ? Й` `  6. The Commission must ensure that any equipment necessary to deliver PEG programming to local  ? communities is made available. (# In the event that special equipment is necessary for local communities to have their PEG programming distributed over the OVS, the Commission must promulgate rules that ensure that the OVS operator will provide that equipment. The failure of the Commission to require the provision of such equipment could make the availability of PEG channel capacity meaningless and preclude actual participation by most PEG producers. For example, to the extent that available system capacity may be primarily or wholly digital or compressed, it will be necessary for the OVS operator to handle conversion from the more common analog format that is more accessible (and affordable) to PEG programmers. Otherwise, the expense of conversion facilities could form as prohibitive a barrier to PEG programmers as a discriminatory denial of capacity. Similarly, where an OVS is not capable of carrying live broadcasts, the Commission should ensure that program sources of whatever type (typically videotape) will be transposed by the OVS operator into a format that is compatible with the OVS, whether digital or analog, multicast or ondemand, tape or hard disk. Thus, PEG programming should be made available as soon as the necessary conversions can be made, as will presumably occur with any other live programming. Commission regulations must ensure that PEG programs are treated equally with other programs in scheduling such conversion.'450*((ԌIn the short term, this means that all OVS PEG channels should be carried on analog channels, unless the franchising authority agrees to an alternative arrangement.   ?x  D.` ` Other Title VI Provisions Must (#`  ?@ ` ` Reflect the Purposes of the OVS Provision.  In addition to the express provision for PEG access, new Section 653(c)(1)(A) provides that OVS operators will be subject to certain other Title VI provisions.   ?H ` `  1. Program access. (# The role of the program access rules (requirements of 47 U.S.C. 536 and 548) in OVS is the same as with cable systems: to ensure that potential competitors can obtain the programming necessary, on the prices, terms, and conditions that are necessary, so that they can provide true competition. To the extent that the Commission's current rules achieve that end, there seems no reason not to apply them to OVS as well. After all, OVS and cable systems will at best be duopolistic competitors in video distribution. For the same reasons, OVSoriginated programming should be equally available to other competing video delivery systems.   ? ` `  2. Negative option billing. (# The Commission should be able to apply negative option billing standards (47 U.S.C. 543(f)) without the complications introduced by the Commission's rate regulation rules in the cable context. Since all OVS services will by definition be new, there'550*(( will be no need to allow the various negative option exceptions that the Commission has allowed for the restructuring of preexisting cable services offerings. In accordance with the purposes of the statute, the Commission's rules should focus on providing clear choices to subscribers, rather than on preserving tier structures or packages designated by operators.  ?  E.` ` The 'Fee In Lieu Of Franchise Fees' Paid (#` ` ` By An OVS Operator Must Similarly Be  ? ` ` Matched To the Local Cable Operator's Obligations.  The Act authorizes a local franchising authority or other governmental entity to require an OVS operator to pay fees in lieu of cable franchise fees, based on its gross revenues for the  ? provision of cable service.I6 ? ԍ` ` See NPRM 6.I The intent of the statute is to ensure that cable systems and OVS have the same obligations in the franchise fee area as well as in PEG requirements. Thus, the statute provides that the rate at which OVS "in lieu of" fees are paid may not exceed that applied to a cable operator in the same  ? franchise area.e7X ?x ԍ` ` 1996 Act, section 302(a) (adding new 653(c)(2)(B)).e For the same reason, as with PEG requirements, an OVS operator should be required to pay at a rate no less than that of a cable operator in the same franchise area. To ensure that OVS and cable systems are subject to comparable obligations, the principles of 47 U.S.C. 542 should apply here as well. Thus, for example, an OVS operator's fees should be calculated based on all revenues derived from the#670*(( "operation of the [OVS] system to provide cable services." 47U.S.C. 542(b). That should include not only recurring subscriber revenues for programming but also, as is the case with cable operators, installation, disconnection, reconnection, changeinservice and equipment fees. It also means that, as is the case with cable operators, nonĩsubscriber revenues related to cable service must be included as well. Examples include late fees and administrative fees; fees, payments, or other consideration that the OVS operator receives from programmers for carriage of programming on the system; advertising revenues; and revenues from home shopping and bankathome channels. Any other construction of the "fee in lieu of" provision would result in an unlevel playing field between the OVS operator and the cable operator.   ?  IV.XCABLE OPERATORS SHOULD NOT BE PERMITTED TO BECOME OVS OPERATORS, BUT IF THEY ARE, SEPARATE AND PRIOR LOCAL APPROVAL WILL BE NECESSARY.(#  ?   A.` ` A Cable Operator Cannot Be An OVS Operator. (#` As the NPRM points out, the statute draws an explicit distinction between LECs and cable operators with respect to  ?x OVS.A8x ? ԍ` ` NPRM, 64.A New 653(a)(1) says: "A local exchange carrier may provide cable service ... through an open video system that complies with this section." When referring to cable operators, on the other hand, the Act uses distinctly different language: "To the extent permitted by such regulations as the Commission$7X80*(( may prescribe consistent with the public interest, convenience, and necessity, an operator of a cable system or any other person may provide video programming through an open video system that  ? complies with this section."s9 ? ԍ` ` 1996 Act, section 302(a) (adding new 653(a)(1)) (emphasis added).s If Congress had intended that a cable operator could do what a LEC can do under this section " operate an OVS " Congress would have used the same term ("cable service") rather than a different term ("video programming") to describe the cable operator's permissible role in OVS. Since Congress did not do so, the only logical conclusion is that Congress envisioned that only a LEC is eligible to be an OVS operator. Thus, properly read, the Act mandates that only a LEC may operate an OVS, but a cable operator " like any other "person" " is eligible to be an independent programmer on the system, subject to Commission determination of the public interest. The reason for this difference is evident in light of the goals of the OVS provisions. The Conference Report makes clear that the reason for OVS is to provide an additional route by which LECs may enter the video market to compete with established  ? cable operators._:  ?`" ԍ` ` See Conference Report at 177 ("telephone companies need to be able to choose from among multiple video entry options to encourage entry" [emphasis added]). Cf. NPRM, 64 (overall goals of the OVS provisions include "enhancing competition and maximizing consumer choice")._ An incumbent cable operator, however, certainly does not need special encouragement to enter: it is@8:0*(( already there. No purpose would have been served for Congress to allow cable operators to become OVS operators. Certainly there is no suggestion in the legislative history that OVS was cynically intended to allow a cable operator to abrogate its existing franchise obligations, which would appear to be the result of allowing a cable system to be converted to an OVS. Thus, the statutory reference to cable operators indicates that a cable operator, like any other person, may be a programmer on an OVS, but not an OVS operator. It seems clear that Congress inserted this reference to clarify the ongoing dispute over whether a cable operator could be a programmer on a video dialtone system under the Commission's former rules. There is no need to suppose that Congress intended, absurdly, to apply entry incentives to cable operators that are already in the video market.   ?8  B.` ` Even If the Commission Were To Conclude That A (#` ` ` Cable Operator May Be An OVS Operator, Separate  ? ` ` Local Community Consent Would Still Be Required.  Even if the Commission were to conclude (incorrectly) that cable operators may become OVS operators, any such FCC approval would be subject to the public interest, convenience, and  ? necessity.;  ?`" ԍ` ` See 1996 Act, section 302(a) (adding new 653(a)(1)); NPRM, 65. The Commission would certainly need to consider as part of the public interest any effect the cable operator's transition to OVS might have on the benefits the cable operator had previously agreed to provide to the community through its$9 ;0*(( cable franchise, including franchise fees, PEG channels,  ? facilities, and services, and the like.h< ? ԍ` ` See section &PEG INFRASTRUCTURE BENEFITSV.B.3& infra regarding the infrastructure benefits of PEG requirements in cable franchises. Similarly, cable franchises generally require service to be extended to all parts of the community to the extent commercially feasible, and thus promote the universal service goals of the Act. The Commission could hardly condone the conversion of such a cable system to an OVS bound by no universal service requirements, which could be allowed to abandon less lucrative neighborhoods, schools, and business districts.h The Commission would also have to face the issue of whether converting a cable system to an OVS would remove it from the scope of the buyout restriction in new section 652 and thus tend to reduce competition by allowing consolidation of cable and LEC systems.  One key element the Commission cannot ignore, however, is whether the affected local franchising authority has consented to a cable operator's conversion to OVS. A cable system cannot become an OVS without prior local community approval, for at least two reasons. First, unlike a LEC, a cable operator's only right to be in the public rightsofway comes from its cable franchise. Thus, if the cable operator were to try to abandon its cable franchise to become an OVS operator, the operator would thereby forfeit its right to be in the local public rightsofway at all, and would be subject to immediate eviction for abrogating its franchise agreement with the local community. Second, a cable franchise is a contract between the cable operator and the local government, under which the community allows the operator to use the public rightsofway in return for certain conditions and benefits. If the Commission were to make@:<0*(( rules that allowed a cable operator unilaterally to abandon the local government's contractual rights under that franchise agreement, that would be a taking of the local government's  ? property rights under contract.= ? ԍ` ` It must be kept in mind that the conditions of franchise agreements are voluntarily agreed to by cable operators, as are the conditions of any contract negotiated for mutual benefit by two businesses. The Cable Act ensures that no cable operator can be compelled to undertake commercially impracticable obligations. See, e.g., 47 U.S.C. 545. As such, it would be vulnerable under all of the Fifth Amendment arguments set forth in section RIGHT-OF-WAY SECTIONV below. As also noted below, the short review period for OVS certification approval means that a prospective OVS operator must be required to make all the necessary showings at the time of application. Thus, any OVS certification the Commission may allow a cable operator to present must include an express agreement by each affected local franchising authority assenting to the conversion. For the reasons discussed below, it must also include an agreement between the operator and the local government authorizing use of the public rightsofway for OVS purposes. An OVS certification without the necessary local government agreements should be considered facially incomplete and rejected.   ;@=0*((Ԍ ?  C.` ` A Cable Operator May Provide Programming (#` ` ` Through An OVS, But Only If Consistent With  ? ` ` Its Cable Franchise and the Public Interest.  The Act seems clearly to contemplate that a cable operator may be eligible to be among the independent, unaffiliated video programmers on an OVS, at least in some instances " but only to the extent the Commission deems such carriage "consistent with  ?` the public interest, convenience, and necessity."_>`  ? ԍ` ` 1996 Act, section 302 (adding new 653(a)(1))._ The NPRM, however, disturbingly suggests that it should be left to the "discretion" of the OVS operator to decide whether a cable  ? operator may become a programmer on the OVS system.@?X ? ԍ` ` NPRM 15.@ While such discretion might certainly be convenient to the OVS operator, there is no reason to think it would be so to the public. To the contrary, allowing the incumbent cable operator and the OVS operator to engage in such arrangements " perhaps trading carrier and programmer relationships in different geographic areas " raises the troubling possibility of effectively allowing LECs and cable operators to endrun the Act's prohibitions on mergers between cable operators and LECs in the same area. Conversely, in some cases, allowing cable operators to consume capacity on an OVS might be construed as anticompetitive foreclosure of capacity otherwise available to its competitors. These are not matters that should be left to the "discretion" of either the OVS operator or the cable operator. #<?0*(( Instead, the Commission should review and apply the requisite publicinterest analysis on a casebycase basis.   ?  V.XTHE OVS CERTIFICATION PROCESS MUST (# ENSURE THAT AN OVS COMPLIES WITH LOCAL  ?x RIGHTS REGARDING THE PUBLIC RIGHTS-OF-WAY. RIGHT-OF-WAY SECTION Any OVS rules adopted by the Commission must acknowledge local governments' rights " specifically, their property interests in the public rightsofway within their jurisdictions that OVS systems will use. Thus, an OVS certification must show that the prospective OVS operator has obtained all necessary local consents to use of the rightsofway for OVS, and any approval of an OVS certification by the Commission should be expressly conditioned on the applicant's having and maintaining those consents.   ?  A.` ` An OVS Remains Subject To the Right of Local Communities To Manage Their Public RightsofWay (#`  ?p ` ` and To Receive Fair Compensation For Their Use. While the 1996 Act makes the Commission responsible for approving a LEC's certification of compliance with Commission rules, the FCC, as a federal agency, lacks the power to grant an OVS operator permission to use local public rightsofway that do not belong to the federal government. Any suggestion in the OVS rules that the Commission's approval makes separate approval by local rightsofway owners unnecessary would violate the Takings Clause of the Fifth Amendment. %=?0*((Ԍ ? ` `  1. Local governments have an inherent right to manage  ? and receive compensation for their rights of way. (# Local governments are landlords responsible for managing the use and occupation of the public rightsofway. It is the responsibility of local governments (or in some cases state governments, as noted below), to schedule common trenching and street cuts for the most efficient use of local rightsofway; to repair and resurface streets damaged by such construction; to ensure public safety in the use of the rightsofway by gas, telephone, electric, cable, and similar companies; to keep track of the various systems using the rightsofway so that one system operator does not interfere with another's facilities; and, not least, to obtain fair compensation for the public from the  ? private, profitmaking use of this valuable public property.@`  ? ԍ` ` In the vast majority of states, the right to manage and receive compensation for the public rightsofway belongs to the local government within whose jurisdiction the rightsofway exist. Thus, these comments speak generally in terms of local government authority. In some states, however, that right is in part reserved by the state government, and that authority over the rightsofway is exercised at the state level. But in no case may the federal government dispose of that right at will (except, of course, with respect to property owned by the federal government). The Commission must therefore ensure in its rules that rightofway issues are left to be addressed according to the way each state has chosen to allocate this responsibility. Neither the Commission nor the federal government can grant a right to use public rightsofway that do not belong to the federal government. Over a century ago, the Supreme Court recognized the limits on federal authority to infringe on the rights of local governments to control their property, including local rightsofway.> @0*((ԌXIt is a misconception . . . to suppose that the franchise or privilege granted by the act of 1866 [the federal post roads act] carries with it the unrestricted right to appropriate the public property of a state. ... No one would suppose that a franchise from the federal government ... would authorize it to enter upon the private property of an individual, and appropriate it without compensation. ... And the principle is the same when, under the grant of a franchise from the national government, a corporation assumes to enter upon property of a public nature  ? belonging to a state.A ? ԍ` ` City of St. Louis v. Western Union Telegraph Co., 148 U.S. 92, 95, 13 S.Ct.485, 488 (1893). See also Western Union v. Penn. R.R., 195 U.S. 540, 557 (1904)(citing St. Louis v. Western Union) (franchise privilege could only be exercised subordinate to public rights and only upon payment of just compensation).  In the 1996 Act, Congress explicitly recognized local governments' right to manage and receive compensation for use of local rightsofway by telecommunications service providers and OVS providers. In discussing the OVS provisions of the Act, for instance, the Conference Report states that "The conferees intend that an operator of an open video system under this part shall be subject, to the extent permissible under State and local law, to the authority of a local government to manage its public rightsofway in a nondiscriminatory and competitively neutral  ?8 manner."FB8x ?@ ԍ` ` Conference Report at 178.F Similarly, new  253(c) provides: XNothing in this section affects the authority of a State or local government to manage the public rightsofway or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public  ? rightsofway on a nondiscriminatory basis ...CX ?H& ԍ` ` 1996 Act, section 101(a) (adding new 253(c)). New 653(c)(2)(B) provides that an OVS provider "may" be charged a fee "in lieu of" a cable franchise fee. As noted in section'B0*(( 'FEE IN LIEU NOT JUST COMPENSV.B.3', however, this provision, without more, does not satisfy the just compensation requirement of the Fifth Amendment. ? C0*((Ԍ ? ٙ` `  2. The right to control local rightsofway (# ` `  is a property right like that of any ` `  private property owner, which is ` `  protected under the Fifth Amendment.  ?  As the St. Louis and Western Union cases make clear, local governments' interests in their rightsofway are property  ? rights.D  ? ԍ` ` State courts have reached the same conclusion. See, e.g., Pacific Tel. & Tel. Co. v. City of Los Angeles, 44 Cal. 2d 272, 282 P.2d 36, 43 (1955) (franchise fee is "not a tax" but "compensation for the privilege of using the streets and other public property within the territory covered by the franchise"); City of Albuquerque v. New Mexico Public Service Commission, 115 N.M. 521, 854 P.2d 348 (1993); City of Montrose v. Public Utility Commission of Colorado, 629 P.2d 619 (Colo. 1981); Allegheny v. Millvale, Etna and Sharpsburg Street Ry. Co., 159 Pa. 411, 28 A. 202 (1893). Like the property rights of individuals and private corporations, those of local governments are protected by the Fifth Amendment of the Constitution. The Supreme Court has ruled that the takings clause of Fifth Amendment encompasses the property of state and local governments, and the same principles of just compensation apply to local government property interests as to the property  ? interests of private persons.E  ?@ ԍ` ` See, e.g., United States v. 50 Acres of Land, 469 U.S. 24, 105 S.Ct. 451 (1984); St. Louis, 148 U.S. at 95. Thus, a local government has the same rights against federal appropriation of its property as did Bell Atlantic against required physical collocation of a  ? competitor's wires in its central offices.qF ?H& ԍ` ` See Bell Atlantic v. FCC, 24 F.3d 1441 (D.C. Cir. 1994).q And just as an@hF0*(( apartment building owner has the right to grant or deny consent to a telecommunications company that wishes to run cables through  ?  or on its building,G  ?x ԍ` ` Loretto v. TelePrompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164 (1982). a local government may grant or deny consent to a telecommunications company that wishes to run cables through rightsofway belonging to that local government, and any attempt by the federal government to take away that right of  ?` consent is subject to the Takings Clause.H`  ? ԍ` ` The property interests protected against federal takings are not confined to fee simple interests. Thus, courts have held that property rights protected by the Fifth Amendment broadly include rightsofway held either in fee or otherwise for the public trust, including easements and leasehold interests. See, e.g., Donnell v. United States, 834 F. Supp. 19 (D. Me. 1993) (easements are property protected under the Fifth Amendment); National R.R. Passenger Corp. v. Faber Enterprises Inc., 931 F.2d 438 (7th Cir. 1991) (leasehold interests are property interests protected by Fifth Amendment).   ? ` `  3. Any Commission intrusion into local governments'  ? property rights would violate the Fifth Amendment. (#  ? ` `   a.` Commissionmandated access to local (# ` `  rightsofway would be an ` `  impermissible permanent physical occupation.  Any attempt by the FCC in its OVS rules to give OVS providers the right to place OVS systems in local rightsofway, without regard to local governments' proprietary interests in such rightsofway, would violate each affected local government's rights under the Fifth Amendment. Any federal grant of authority to build and operate an OVS system on a local governments' rightsofway would be a "taking" within the meaning A H0*(( of the Fifth Amendment, subject to the constitutional requirement  ? of just compensation.INVASION IS TAKINGIx ? ԍ` ` Nor would a mere offer or claim of compensation (such as the "fee in lieu of" provisions in new 653(c)(2)(B)) render such a federal grant constitutional. As the Court said in Ramirez de Arellano v. Weinberger, 745 F.2d 1500, 1524 n.95 (1984) (en banc), vacated on other grounds, 471 U.S. 1113 (1985), "the fundamental first question of constitutional right to take cannot be evaded by offering 'just compensation'." To require a local government to permit a private party to occupy space and construct an OVS system in its rightsofway without the local government's consent would be directly analogous to Loretto, where the Court ruled that such a physical intrusion plainly crossed the line between permissible regulation and impermissible taking. Where the "character of the governmental action" is "a permanent physical occupation of property, our cases uniformly have found a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimal economic impact  ? on the owner."JX ?X ԍ` ` Loretto, 458 U.S. at 43435 (emphasis added) (citing Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124 (1978)).   ? ` `   b.` Forced OVS provider access rises to (#  ? ` `  the level of an unconstitutional taking.  An OVS system will inherently make a physical intrusion into the local public rightsofway. Nor is this a merely minimal intrusion: every new line (or replacement of preexisting telephone wire with new fiber or video cable) places an increased burden on the rightsofway in the form of immediate damage fromB( J0*(( new trenching and street cuts, more frequent street resurfacing due to reduced life from cuts, new facilities on crowded poles, and the like. OVS construction also will cause increased traffic congestion, disruption and inconvenience for the local government and the residents it represents. Practically speaking, any invasion of the local public rightsofway by OVS operators will  ?` be far more extensive than the intrusion in Loretto.KX`  ? ԍSee, e.g., Mary Anne Ostrom, Residents Say Pac Bell Is Out Of Order, San Jose Mercury, Aug. 14, 1995, at 1A, 8A (impact of Pacific Bell construction in San Jose). In any case, no de minimis test can validate a physical taking. The size of the affected area is constitutionally  ? irrelevant.LX ? ԍ` ` In Loretto, the Court reaffirmed that the "the rights of private property cannot be made to depend on the size of the area permanently occupied." 458 U.S. at 43637. Any forced access to the local rightsofway contemplated by an OVS certification would be legally indistinguishable from the intrusion in Loretto, where the Court found a "permanent physical occupation" of the property.   ? ` `  4. Because Congress did not explicitly (# ` `  authorize a taking for OVS, the 1996 Act must  ?8 ` `  be construed so as not to require such a taking.  The authority to take property must be explicitly authorized  ?X by Congress.vMX ?# ԍ` ` See Hooe v. United States, 218 U.S. 322, 31 S. Ct. 85 (1910).v Courts will look to the plain language of the 1996 Act to determine if Congress has explicitly declared its intent to authorize a taking. If such language is ambiguous,xC` M0*((  ? courts will look to the legislative history.NX ?X ԍ` ` See Cable Holdings of Georgia vs. McNeil Real Estate Fund, 953 F.2d 600 (11th Cir. 1992), reh'g en banc denied, 988 F.2d 1071, cert. denied, 506 U.S. 862. And courts will not construe any law to be a taking if it can be construed to  ?  avoid such a result.O  ? ԍ` ` See Media General Cable of Fairfax v. Sequoyah Condominium, 991 F.2d 1169 (4th Cir. 1993).  The OVS provisions of the 1996 Act language contain no language authorizing the FCC to appropriate local governments' property rights. Nor does the legislative history reveal any intent by Congress to effect a taking of local government  ? property.P  @ ? ԍ` ` By contrast, Congress made specific provision when it intended to dedicate federal property " which Congress could rightfully control " for the use of new telecommunications services. See 1996 Act, section 704(c). Under such circumstances, the OVS provisions of the 1996 Act must be construed to avoid sanctioning a taking of local public property interests. In the analogous context of construing Section 621(a)(2) of the Cable Act, 47 U.S.C. 541(a)(2), which allows cable operators to use compatible public utility easements under certain circumstances, courts have consistently construed the provision to avoid a takings problem. Thus, in Media General Cable, the Fourth Circuit refused to extend 47 U.S.C. 541(a)(2) to cover the installation of cable wires in compatible private easements in common areas of a condominium. Joining the Eleventh Circuit's view earlier in Cable Holdings, the court reasoned that any other construction of the statute would renderD( P0*(( Section541(a)(2) indistinguishable from the New York statute  ? held unconstitutional in Loretto.SQ ? ԍ` ` Media General, 991 F.2d at 1175.S The Fourth Circuit recognized that it had a general duty to "avoid any interpretation of a federal statute which raises serious constitutional problems or results in an unconstitutional  ? construction."TRX ? ԍ` ` Id. at 117475. Accord, Bell Atlantic, 24 F.3d at 1447; Cable Investments v. Woolley, 867 F.2d 151 (3d Cir. 1989) (Congress had considered and rejected a provision that would have required access to privately owned multifamily buildings or trailer parks for purposes of installing cable wiring, thereby effecting a taking); Century SW Cable TV v. CIIF Associates, 33 F.3d 1068 (9th Cir. 1994) (no evidence of an express dedication); TCI of North Dakota, v. Shriock Holding Co., 11 F.3d 812 (8th Cir. 1993) (same).T Given the lack of any clear intent in the 1996 Act to provide for takings in an area where Congress, as shown in the legislative histories of the 1984, 1992, and 1996 Acts, has consistently been sensitive to such issues, courts are unlikely to be willing to construe the OVS provisions of the Act to grant the FCC authority to promulgate any rules that would effect a taking of local public property. Any contrary construction, of course, would subject the federal government to liability for just compensation.   ?8  B.` ` Congress Did Not Give the Commission Power to Take(#`  ? ` ` the Property Interests of Local Governments for OVS. (#(#K  ? ` `  1. The Commission has no power of eminent domain. As the D.C. Circuit made clear in the Bell Atlantic case, Congress did not confer the power of eminent domain on either theE( R0*((  ? Commission or the communications companies it regulates.RS ?X ԍ` ` Bell Atlantic, 24 F.3d at 1445.R Only Congress, not the Commission, has the power of eminent domain, and such power must be exercised pursuant to specific  ? legislation.jTX ? ԍ` ` Carmack v. United States, 135 F.2d 196 (8th Cir. 1943).j Unless Congress specifically delegates that  ?@ power, no administrative agency may exercise it.UX@ ? ԍ` ` Eden Memorial Park Ass'n v. Superior Court in and for Los Angeles County, 11 Cal. Rptr 189, 189 Cal. App. 2d 421 (Cal. App. 1961). A delegation of the right of eminent domain must be in express terms or by  ?` necessary implication.MV`  ? ԍ` ` Hooe, 31 S. Ct. at 85, 88.M The OVS provisions of the 1996 Act, however, make no such delegation by express terms. Moreover, since the Commission certainly could promulgate OVS rules without infringing on the property interests of local governments (simply by requiring OVS operators to obtain any required local consents), the 1996 Act does not create any such right by necessary implication. The Commission therefore has no authority to appropriate local rightsofway by eminent domain. Moreover, even if the 1996 Act were implausibly viewed as conferring on OVS providers some right to use local public rightsofway that belong neither to the federal government nor those providers (and it cannot), it would not follow that those providers could use the rightsofway free of charge. In City of St. Louis v. Western Union Telegraph Company, the Court made it@FV0*(( perfectly clear that even if Congress authorized carriers to use local public rightsofway, such authorization did not carry with  ?  it the power to take nonfederal property without compensation. W   ?x ԍ` ` St. Louis v. Western Union Tel. Co., 148 U.S. at 92. See also Western Union Tel. Co. v. Pennsylvania R.R., 195 U.S. 540 (1904) (citing Western Un. Tel. Co. v. Ann Arbor Ry., 178 U.S. 239 (1900)).  Where a taking of real property for public uses is involved, the usual procedure is for the Department of Justice to initiate judicial proceedings at the request of the agency pursuant to 40 U.S.C.  257 or  258a in U.S. district court under 28 U.S.C. 1358. Nothing in the 1996 Act authorizes the Commission to deviate from this prescribed procedure.   ? ` `  2.  Congress gave the Commission no (# ` `  implied authority to expose the  ?h ` `  federal government to fiscal liability.  The Commission's lack of explicit statutory authority to engage in a taking of property cannot be rectified by any reliance on implied authority. The courts have long interpreted statutes narrowly so as to prohibit federal officers and personnel from exposing the federal government under the Tucker Act, 28 U.S.C. 1491(a), to fiscal liability not contemplated or  ?X authorized by Congress.eXX ?! ԍ` ` See generally Hooe v. U.S., 31 S. Ct. at 87.e Since the Constitution assigns  ? Congress exclusive control over appropriations,]Y@ ?$ ԍ` ` See U.S. Const., Art. I,  8 and 9.] the courts have required a clear expression of intent by Congress to obligate the federal government for claims that require an appropriation of money. GY0*((ԌIn Bell Atlantic, the D.C. Circuit declared that where an administrative application of a statute constitutes a taking for an identifiable class of cases, the courts must construe the statute to avoid such a taking wherever possible. The court further made clear that this narrow construction of the laws is necessary to prevent encroachment on the exclusive authority of  ?` Congress over appropriations.RZ`  ? ԍ` ` Bell Atlantic, 24 F.3d at 1445.R This means that any FCC rules that would accomplish a taking will not receive the traditional deference accorded to  ? administrative agency interpretations.b[X ? ԍ` ` See Chevron v. NRDC, 467 U.S. 837 (1984).b The reason is that any deference on such a matter would provide the FCC with unbounded power to use statutory silence or ambiguity on a particular issue  ? to create unlimited liability for the U.S. Treasury.\ ?8 ԍ` ` Even if the 1996 Act could be construed to give the Commission authority to effect a taking in this instance (and it does not), any such taking would be unlawful under the AntiDeficiency Act, because Congress has not appropriated funds to compensate property owners. See 31U.S.C.  1341. The purpose of the AntiDeficiency Act is to keep all governmental disbursements and obligations for expenditures " including those caused by executive agencies " within the limits of amounts appropriated by Congress. Only weeks ago, the Supreme Court affirmed the Comptroller General's interpretation that the AntiDeficiency Act is violated where a federal government agency enters into indemnity contracts, either express or implied in fact, which expose the Government to unlimited liability. See Hercules v. U.S., 64 U.S.L.W. 4117, 4120 & n.9, 116 S. Ct. 981 (1996). The AntiDeficiency Act prohibits the Commission from interpreting the OVS provisions of the 1996 Act in such a way as to expose the federal government to the inevitable filing of claims by local governments founded on the Fifth Amendment. PH\0*((Ԍ ? ` `  3. The "Fee In Lieu Of" provision in Section 653 does  ? not satisfy the requirement of just compensation. !FEE IN LIEU NOT JUST COMPENS!(# As noted above, any federal statute that is construed to authorize a lawful taking must provide for just compensation in  ?x order to be valid.`]x ? ԍ` ` See United States v. 50 Acres of Land, 469 U.S. at 25; Western Union Tel. Co. v. Penn. R.R., 195 U.S. at 557 (no rightofway can be appropriated without payment of just compensation); United States v. Acquisition, 753 F.Supp. 50 (D. Puerto Rico 1990) (power to extinguish easement rights is subject to compensation requirements); United States v. Carmack, 329 U.S. 230, 24142, 67 S.Ct. 252, 257 (1946) (federal government can only take state land subject to limits of Fifth Amendment, including payment of just compensation).` But the FCC cannot avoid the takings objection to any mandated access to the local public rightsofway its rules might allow by requiring the OVS provider benefitted thereby to make a nominal payment to the local government for access. In Loretto, the New York statute at issue provided for a onedollar fee payable to the landlord for damage to the property. The Court concluded that the state legislature's assignment of damages equal to one dollar did not constitute the "just compensation" required by the Fifth Amendment. Thus, neither the Commission nor Congress can prescribe a nominal amount as compensation for rightofway access. Rather, the affected local government would be constitutionally entitled to compensation measured by fair market  ? value.^X ?# ԍ` ` See United States v. Commodities Trading Corp., 339 U.S. 121, 126 (1950) (current market value); Bell Atlantic, 24 F.3d at 1445 n.3.I ^0*((ԌIt is therefore no answer to the takings problem that the Act provides that any OVS operator "may" be required to pay a fee  ?  to the local government in lieu of the cable franchise fee.e_  ?x ԍ` ` 1996 Act, section 302(a) (adding new 653(c)(2)(B)).e To the extent that such a fee falls short of what the local government receives from cable operators, it does not represent the fair market value of the local government's property interests. It is important to note in this regard that a cable franchise may " and typically does " include compensation to the local government above and beyond the cable franchise fee. Such  ? compensation includes payments or inkind contributions that fund public, educational, and governmental ("PEG") access facilities and (for franchise agreements entered into prior to the 1984  ?P Cable Act) PEG operations.W`PX ?8 ԍ` ` See 47 U.S.C.  542(g)(2)(B)(C).W Local governments' compensation from cable operators for use of local rightsofway also often includes inkind compensation in the form of dedicated PEG channels and facilities and institutional networks, which are  ? explicitly authorized under 47 U.S.C. 531 and 544.ax ? ԍ` ` The NPRM recognizes that cable operators provide PEG channel capacity, but fails to recognize the substantial cash and inkind contributions cable operators have agreed to provide pursuant to franchise agreements to support PEG facilities. See NPRM at 19 n.33. And the NPRM completely overlooks institutional networks that many cable operators must provide under their franchises. Such facilities and local requirements contribute directly to the development of the nation's information infrastructure, fillingJ( a0*(( the gaps that would otherwise be left by commercial networks PEG INFRASTRUCTURE BENEFITS . For example, more schools have been wired pursuant to cable  ?  franchises than by telephone companies.Rb  ?x ԍ` ` See Appendix A at p. 31 & n.38.R Similarly, institutional networks make feasible the dissemination of computerized information by local governments to citizens. Thus, the inkind compensation agreed to in cable franchises helps  ?` serve the purposes of the Act.cX` X ?H ԍ` ` See, e.g., 1996 Act, sections 706708 (incentives to promote advanced telecommunications services to schools in particular). The total compensation cable operators pay for use of the local public rightsofway, then, consists of both franchise fees and the additional types of compensation described above. Thus, cable franchise fee payments alone do not represent the full market value of the compensations for use of local rightsofway that a cable operator pays to a local government. Thus, a "fee in lieu of" of a franchise fee that equals the cable franchise fee alone (much less "a fee in lieu of" that is less than a cable franchise fee), would fall short of the fair market value of the local public rightsofway in any particular jurisdiction. Unless the Commission interprets the "fees in lieu of" provision to include compensation over and above cable franchise fees, that provision in the Act fails to provide full compensation to a local government for an OVS operator's use of local rightsofway. It is therefore insufficient to validate Kxc0*(( any taking of the local government's property rights by OVS operators under color of Commission rules.   ?  C.` ` LECs' Existing Authorizations to Use Local RightsofWay to Provide Local Telephone Service do not Extend to  ?x OVS. (#` LECs will no doubt argue, as they did in the video dialtone proceedings, that even though a LEC needs local permission to use the local public rightsofway, a LEC that is currently using those rightsofway to provide telephone service needs no additional permission to build an OVS system and provide OVS service. This is incorrect. OVS falls far outside the scope of any preexisting authority granted to LECs. Grants made to LECs in the past gave them only the authority to use the rightsofway to build and operate a local telephone network to provide telephone service subject to state law definitions of telephone service and subject to Title II of the Communications Act. But the 1996 Act specifies that an OVS is  ? not a telephone network subject to TitleII.xd ?  ԍ` ` See 1996 Act, section 302(a) (adding new 651(b), 653(c)(3)).x And the new creature called OVS certainly does not fall within the scope of the "telephone service" for which LECs were granted authority to use local rightsofway by local governments or states decades ago. Thus, no past grant of authority to a LEC could be construed to include a right to use the rightsofway for OVS, which is not telephone service and which did not exist at the time of such grants.$L d0*((ԌBecause an OVS is not subject to Title II, it cannot be considered part of the original regulatory arrangement " an implicit or explicit contract with the public " that a LEC made with state and local governments and that was subject to corresponding state regulation. Any prior grants to LECs were made to public utilities subject to comprehensive state and local price and service quality regulation, which required universal service under established regulatory structures. It appears, however, that an OVS will use the public rightsofway on a nonutility basis, free from the comprehensive state and local price and service quality regulation and universal service requirements that were part of the LEC's original compact to use local rightsofway. Thus, any ancient telephone rightofway grant will not apply to OVS usage. There are additional policy reasons not to construe any preexisting LEC rightofway grant to include authority to provide OVS. Unlike the case with traditional telephone service, the consumers of OVS services will not be synonymous with the taxpayer public in general, because some taxpayers will subscribe to OVS while others will not. Thus, taxpayers as a whole should not be required to subsidize OVS, though the grant of belowmarket access to taxpayerfunded local rightsofway. An OVS operator should therefore have to make new arrangements with the local government to provide fair compensation for the crucial resource " the local rights of way " that the community is contributing to the OVS operator's new business. This'Md0*(( compensation represents a user fee charged directly against the entities that make a profit from using the rightsofway, rather than the taxpayer subsidy that would result if an OVS operator  ? did not pay just compensation.e ? ԍ` ` The commenters endorse the comments of the City of Dallas, Texas, et al., on this issue.   ?  D.` ` An OVS certification must demonstrate (#` ` ` that the operator has obtained local  ? ` ` authority to use the public rightsofway.  To avoid a takings problem, a prospective OVS operator must be required to demonstrate that it has obtained the authorizations necessary under state and local law to use local public rightsofway for OVS. The conditions laid down by the Act, however, require that this be done in the LEC's initial certification filed with the Commission. This is because the statutory tenday certification requirement precludes any more than a facial review by the Commission. Moreover, although the statute does require public notice when the Commission receives a certification, the tenday time period effectively precludes any meaningful opportunity for interested parties to comment on or oppose the certification filing " for example, by informing the Commission that the OVS applicant has not obtained the necessary local rightofway authorizations. Consequently, the Commission cannot assume that affected parties will bring any problems to the Commission's attention: they will not have time. Indeed, unless the Commission's rules(#N e0*(( provide clear and immediate notice to all affected parties, they may not even know that such a filing has been made. For this reason, FCC rules must require the OVS operator's application to prove that it has done all of its homework beforehand. Since, as noted above, the Act does not give the FCC authority to infringe on local government control over local rightsofway, the Act must be construed to require an OVS operator to obtain authority from the local rightofway owner as a preĩcondition to certification (or at least as a precondition to constructing and operating an OVS). The Commission's requirements for the OVS certification must therefore ensure that OVS operator clearly and unmistakably demonstrates, on the face of its filing, that it has obtained all the necessary approvals and authority to use local rightsofway. The certification must include incontestable evidence of specific authorization from each affected local government to use its public rightsofway for OVS purposes " either in the form of attached licenses or franchises from each local community, or through written certifications by each affected community that  ? such authority has been granted.@f ? ԍ` ` NPRM 69.@ If a prospective OVS operator were to obtain Commission approval without obtaining the necessary local authorizations, and the operator were to proceed to invade the public rightsofway under color of a claim to Commission authorization, then the Commission and the federal government would be subject to an%OXf0*((  ? immediate takings claim.og ?X ԍ` ` See section INVASION IS TAKINGV.A.3.a supra.o To avoid subjecting the federal government to such major fiscal liabilities, not to mention extensive litigation, the Commission's OVS rules should not allow OVS operators to certify without clear local authorization.  Any other approach would not only impose unnecessary costs on federal and local taxpayers and the Commission, but would also unduly delay the entire OVS experiment. For this reason, the NPRM's proposal (at 68) for facial approval subject to later review is unacceptable. Such a rule would encourage LECs to file OVS certifications and then, on the strength of an incompletely informed Commission approval, seek to circumvent local authorities altogether: either by beginning to build OVS systems without authorization, forcing local governments to sue the LECs (and the Commission) to preserve their rights, or by claiming that local governments cannot reject the OVS operator's intrusion where the Commission has given its blessing. The only way to avoid such a labyrinth of litigation is to require that the OVS applicant have its ducks in a row before filing for certification " that is, by requiring unmistakable evidence of local consent to accompany the certification itself. As noted in Section MATCH OR NEGOTIATEIII.C above, the OVS operator also should be required to show in its certification application that it has met PEG and other local requirements. The local authorization attached to the operator's certification can thus do double duty by satisfying the PEG criterion as well. The%PXg0*(( operator should be able to show that it will meet each applicable PEG requirement through a similar showing of local approval, since the affected local governments are the only ones who will be in a position to verify that the OVS operator will match the PEG obligations of the incumbent local cable operator. Requiring OVS applicants to make the necessary arrangements prior to filing for certification should not cause undue delay. Local governments are not only willing, but eager to invite competition to the incumbent cable operator. Thus, LECs should not have difficulty in securing the necessary permissions, as long as they are willing to negotiate fairly and in good  ?0 faith.hX0 ? ԍ` ` It may be noted in this regard that Ameritech has already obtained twelve local cable franchises. Communications Daily, March 27, 1996, at 6. By the same token, any FCC approval of an OVS certification should be made expressly subject to the applicant's obtaining and maintaining all necessary local approvals. Such a condition is directly analogous to the approach the Commission has taken by imposing conditions on its consent to CARS license transfers by  ? cable operators.}i ? ԍ` ` See, e.g., Letter to Jill Abeshouse Stern, 4 F.C.C. Rcd 5061 (1989).}  Q@i0*((Ԍ ?  E.` ` The Commission's rules should recognize (#` ` ` that disputes regarding an OVS's right to ` ` be in the local public rightsofway cannot  ?X ` ` be resolved by the Commission, but only by the courts.  New section 653(a)(2) gives the Commission authority to resolve disputes "under this section." A dispute over an OVS operator's local rightofway authority, however, would not arise under 653. Rather, such a dispute would be arise from more fundamental constitutional issues regarding local communities' property interests. Thus, the Act gives the FCC no jurisdiction to resolve such disputes. Moreover, the FCC has no expertise " or factfinding capacity " to resolve disputes concerning the conditions under which an OVS operator should be permitted to use the local rightsofway, which will vary depending on local circumstances and local law. It will simplify matters if any such claims are excluded from Commission responsibility at the outset. Thus, in bringing any OVS dispute to the Commission, the petitioner should be required to certify that the dispute does not involve a local  ?X rightofway controversy.yjX ? ԍ` ` See NPRM, 72 (seeking ways to simplify dispute resolution).y Parties may pursue rightofway issues simultaneously, if necessary, in court.   ?@  VI.XCONCLUSION (# OVS is intended to be distinctively different from cable. It is not intended to allow an OVS operator to be a cable operator in disguise, subject to different regulatory#R j0*(( requirements than its cable operator competitor. The market will determine whether the OVS or the cable operator model is more feasible. If the Commission were to give OVS special regulatory advantages over cable, this would substitute federal planning for the free market. Accordingly, the flexibility of an OVS operator must be bounded by the requirements of the statute and the policy objectives of the OVS provision. Based on the foregoing, the attachments that should be required for every OVS certification filing must, at a minimum, include the following. ` ` Authorization from all affected state or local authorities to use the public rightsofway in each affected area.(#` ` ` Certification from all affected local governments that the proposed OVS will fulfill PEG obligations no less than those of any incumbent cable operator in each jurisdiction, either through directly matching such obligations or through a negotiated agreement with each affected local government.(#` ` ` All necessary amendments to the LEC's Cost Allocation Manual and the date such amendments were filed with the  ? Commission.Jk ?  ԍ` ` See NPRM 70.J(#` If the Commission cannot clearly determine on the face of each certification that it is accompanied by all the necessary attachments, the certification must be rejected. Only such a clear "checklist" approach will permit the Commission to verify SXk0*(( that the certification meets minimal statutory requirements Xwithin the required tenday period. ` `  Respectfully submitted, XX` ` X XTHE NATIONAL LEAGUE OF CITIES; THE UNITED STATES CONFERENCE OF MAYORS; THE NATIONAL ASSOCIATION OF COUNTIES; THE NATIONAL ASSOCIATION OF TELECOMMUNICATIONS OFFICERS AND ADVISORS; MONTGOMERY COUNTY, MARYLAND; THE CITY OF LOS ANGELES, CALIFORNIA; THE CITY OF CHILLICOTHE, OHIO; THE CITY OF DEARBORN, MICHIGAN; THE CITY OF DUBUQUE, IOWA; THE CITY OF ST. LOUIS, MISSOURI; THE CITY OF SANTA CLARA, CALIFORNIA; AND THE CITY OF TALLAHASSEE, FLORIDA(# ` `  By ` `  Nicholas P. Miller XX` ` X XTillman L. Lay(# XX` ` X XFrederick E. Ellrod III(# ` `  Miller, Canfield, Paddock and Stone, P.L.C ` `  1225 19th Street, N.W. ` `  Suite 400 ` `  Washington, D.C. 20036 ` `  (202) 7850600 ` `  Their Attorneys April 1, 1996  VC  WAFS1\44189.5\10425700010X Tk0*((   ?X  & APPENDIX ă A.XIn the Matter of Telephone CompanyCable Television CrossOwnership Rules, Sections 63.5463.58, CC Docket No. 87266, Comments of the United States Conference of Mayors; the National Association of Counties; the City of Alexandria, Virginia; the Alliance for Communications Democracy; Anne Arundel County, Maryland; the City of Baltimore, Maryland; Baltimore County, Maryland; the City of Dallas, Texas; Howard County, Maryland; the City of Indianapolis, Indiana; the City of Los Angeles, California; Manatee County, Florida; Montgomery County, Maryland; Prince George's County, Maryland; and the City of Santa Clara, California, on the Fourth Further Notice of Proposed Rulemaking (March21, 1995)(# B.XIn the Matter of Telephone CompanyCable Television CrossOwnership Rules, Sections 63.5463.58, CC Docket No. 87266, Reply Comments of the United States Conference of Mayors; the National Association of Counties; the City of Alexandria, Virginia; the Alliance for Communications Democracy; Anne Arundel County, Maryland; the City of Baltimore, Maryland; Baltimore County, Maryland; the City of Dallas, Texas; Howard County, Maryland; the City of Indianapolis, Indiana; the City of Los Angeles, California; Manatee County, Florida; Montgomery County, Maryland; Prince George's County, Maryland; and the City of Santa Clara, California, on the Fourth Further Notice of Proposed Rulemaking (April 11, 1995)(# WAFS1\44189.5\10425700010