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Minutes for SB144 - Committee on Energy, Utilities and Telecommunications

Short Title

Exempting satellite service and video programming services accessed over the internet from the video competition act.

Minutes Content for Thu, Mar 9, 2023

Chairperson Delperdang opened the hearing on SB144. Nick Myers provided an overview of the bill. (Attachment2). Mr. Myers responded to questions from the committee member.

Proponent:

Sean Ostrow, Dish/DirecTV provided testimony in support of the bill. Mr. Ostrow said the bill has no fiscal implications, no city in the state or country has ever collected franchise fees from streaming companies and is necessary because municipalities across the country are creatively interpreting the franchise fee statute and have brought class action lawsuits against satellite TV and video streaming providers in an attempt to force them to pay cable franchise fees. He said if the Kansas Legislature does not pass the bill, customer could pay 5% more on each of their video streaming bills, all for the same cable line that is already in the ground and already pay a fee monthly on their cable bill. (Attachment3) Mr. Ostrow responded to questions from the committee members.

Neutral - None

Opponents:

Michael Fleming, Attorney for the City of Fort Scott provided testimony as an opponent of the bill. Mr. Fleming acknowledged Representative Smith as his former football coach and teacher. Mr. Fleming continued and said the City of Fort Scott filed a lawsuit against Netflix and Hulu saying they profit from pushing their video content to customers through the Kansas public rights-of-way without paying Kansas municipalities the statutorily required 5% fee for the use even though their competitors pay the fee. He said streaming companies like Netflix and Hulu provide their subscribers with access to programming identical to the content provided by cable companies and fairness demands streaming companies pay the same 5% fee that cable companies pay. He said the 5% franchise fee is not a burden to big tech companies and the lawsuit represents the efforts of Fort Scott and other Kansas municipalities to protect their interest and collect franchise fees necessary to pay for services like law enforcement, fire protection, parks and recreation, public works and infrastructure. (Attachment4). Mr. Fleming responded to questions from the committee members.

Michael Koss, Deputy City Attorney, Overland Park provided testimony as an opponent of the bill because the broad exemption in proposed bill creates an unintended outcome that would allow current video service providers to exempt themselves from the Video Competition Act and associated right-of-way regulations simply by changing how they deliver services. He said the City of Overland Park requests the committee amend to achieve the goals of protecting the cities by ensuring the traditional video service providers utilizing facilities in the right-of-way continue to be subject to the Act. (Attachment5). Mr. Koss responded to questions from the committee members.

Chairperson Delperdang closed the hearing on SB144.