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CATV Page 4 because CATV systems provide a form of entertainment, and entertainment i not regarded in lav, as a public necessity. Only to the extent a CATs7 operation uses micro-v:ave, does the Federal Cor,-miunications Connnission have some control over the system. Only in a minority of cases, does a CATV system need to relay television signals over such a distance that it needs to supplement its cable operation with a micro-,cave relay. Furthermore, the F.C.C. has reported that it does not consider CATV systems as "common carriers" under the provisions of the Communications Act. In essence, the Commission desires authority to: 1. Require that a CATV system carry the signals of a local station if the latter desires thus. 2. Require that if a local signal is carried, it is carried on the cable syste ci without any degradation of quality. 3. Be able to afford some protection of local stations against duplication of other channels on the cable syste_a of programs being carried sinLul- taneously by the local stations. Therefore, the F.C.C. is largely concerned with the economic impact on local stations by CATV systems. Municipal Regulation. A large majority of cities pass an ordinance establisl- ing an exclusive or non- exclusive franchise to be in effect for a fixed peric>c of time. 141ost CATV companies apparently prefer a franchise. This provides both the municipality and CATV company a wide area of control over the operation, while at the same time creating a stable system which each can feel confident of operating for a fixed period of time. The validity of these, franchise ordinances are usually not open to question. A CATV franchise co:�?r'Lonly provides for regulation of the installations, rates, and services of the grantee; prescribes the duties which the grantee and the municipality ov.e to each other; and requires as a condition to its effectiveness written acceptance by the grantee of all its terms. ?Matters which are often or usually provided for in such franchises are the following: Duration of franchise; whether franchise is exclusive; whether franchise is transferable; obligation of the grantee to save the municipality harmless in the event it incurs liability or loss as a result of company operations, and types and amounts of bonds or liability insurance required for this purpose; amount of franchise fee; installation fee and monthly rates; specifications as to quality of signals to be maintained; provisions relating to carriage and duplication of local stations (this is not regulated by the F.C.C.); require- ments for extension of service; required channel capacity; and provisions concerning Pay TV or program origination.