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Louisiana Moving Ahead With Incumbent Franchise Opt-Out Provision

Louisiana is moving forward with implementation of its state franchising law, as a state court judge issued a one-paragraph ruling in December that the opt-out provision for incumbent operators in the new law is constitutionally permissible.

The Louisiana Police Jury Association, the trade group for parishes in the state, would like to appeal the ruling of Judge Janice Clark of the state court in Baton Rouge, but its attorney said the group needs more guidance from the judge. The LPJA's Dan Garrett has asked for a written ruling detailing the judge's thinking on the new law.

The trade group challenged the provision in the law in the 19th Judicial District Court on Oct. 27. The municipal group alleged the provision, which allows incumbent operators to opt out of their current, local franchise provisions on implementation of the law, in unconstitutional under state law. Louisiana's constitution prevents state laws that serve to "extinguish" obligations between local cities and companies with whom they contract, the association argued.

But in a minute entry issued Dec. 9, Clark refused the declaratory judgment and injunction sought by the parishes. She wrote, in the short entry, that the impairment of obligations clause in the state constitution referred to "private persons, not to the state and its several subdivisions." Therefore the provision is constitutional.

The state franchising law allows new providers to apply to the secretary of state for a 15-year franchise. The state law demands less of video service providers than some local agreements did. For instance, some local agreements mandate local customer service rules, or the maintenance of a local payment office.

The state's cable operators had agreed not to act on the opt-out provision, pending conclusion of the challenge. 

No systems have taken action to become state regulated, noted Cheryl McCormick, CEO of the Louisiana Cable & Telecommunications Association, noting that Clark's official ruling has yet to be signed. When that occurs, a system would file both to the local community and to the state, indicating the system is to be state regulated.

Meanwhile, communities have been passing ordinances to ensure that franchise fees will continue to be collected by the state and paid back to the local communities. McCormick said she anticipated no business disruptions to local communities from the application of the new law.