The Cable Franchising Authority of State and Local Governments and the Communications Act

Summary: Companies that provide cable television service (cable operators) are subject to regulation at the federal, state, and local levels. Under the Communications Act of 1934, the Federal Communications Commission (FCC or Commission) exercises regulatory authority over various operational aspects of cable service. At the same time, a cable operator must obtain a franchise from the state or local franchising authority for the area in which it wishes to provide cable service. The franchising authority often negotiates various obligations as a condition of granting the franchise.

Summary: Under the Cable Communications Policy Act of 1984 (Cable Act), cable operators must obtain franchises from state or local franchising authorities, and these authorities may continue to condition franchises on various requirements. Nevertheless, the Cable Act subjects franchising authorities to important limitations. For instance, the Cable Act prohibits franchising authorities from charging franchise fees greater than 5% of a cable operator's gross annual revenue and from "unreasonably" refusing to award a franchise.

Summary: In a series of orders since 2007, the FCC has interpreted the Cable Act to authorize an expanding series of restrictions on the powers of state and local franchising authorities to regulate cable operators. In particular, these orders clarify (1) when practices or policies by a franchising authority amount to an unreasonable refusal to award a franchise; (2) the types of expenditures that count toward the 5% franchise fee cap; and (3) the extent to which franchising authorities may regulate non-cable services provided by cable operators. Franchising authorities, in turn, have successfully challenged some of the FCC's administrative actions in federal court. The U.S. Court of Appeals for the Sixth Circuit upheld many rules in the FCC's orders, but it also vacated some of the FCC's rules in the 2017 decision in Montgomery County v. FCC . In response to the Montgomery County decision, the FCC adopted a new order on August 1, 2019, which clarifies its interpretations of the Cable Act. Among other things, the order reiterates the FCC's position that in-kind (i.e., non-monetary) expenses, even if related to cable service, may count toward the 5% franchise fee cap and preempts any attempt by state and local governments to regulate non-cable services provided by cable operators. Some localities have criticized the order for hampering their ability to control public rights-of-way and for reducing their ability to ensure availability of public, educational, and government (PEG) programming in their communities. Several cities have filed legal challenges to the order, which will likely involve many complex issues of statutory interpretation and administrative law, along with constitutional questions regarding the FCC's ability to impose its deregulatory policy on states.

Summary: This report first outlines the FCC's role in regulating cable operators and franchising authorities, beginning with the Commission's approach under the Communications Act through the passage of the Cable Act and its amendments. The report then turns to a discussion of recurring legal issues over the FCC's power over franchising authorities. The report concludes with a discussion of possible legal issues that may arise in current legal challenges to FCC regulations and offers considerations for Congress.

C ompanies that provide cable television service (cable operators) are subject to regulation at the federal, state, and local levels. Under the Communications Act of 1934 (Communications Act), as amended, the Federal Communications Commission (FCC or Commission) exercises regulatory authority over various operational aspects of cable serviceâsuch as technical standards governing signal quality, ownership restrictions, and requirements for carrying local broadcast stations. At the same time, a cable operator must obtain a "franchise" from the relevant state or local franchising authorities for the region in which it seeks to provide cable services. Franchising authorities often require cable operators to meet certain requirements, provide certain services, and pay fees as a condition of their franchise. As a result, the franchising process is an important component of cable regulation.

In the early history of cable regulation, the FCC did not interfere with franchising authority operations, opting instead for a system of "deliberately structured dualism." The Cable Communications Policy Act of 1984 (Cable Act) codified this dualist structure by adding Title VI to the Communications Act. Title VI requires cable operators to obtain franchises from state or local franchising authorities and permits these authorities to continue to condition the award of franchises on an operator's agreement to satisfy various requirements. However, Title VI also subjects franchising authorities to a number of important statutory limitations. For instance, franchising authorities may not charge franchise fees greater than 5% of a cable operator's gross annual revenue and may not "unreasonably refuse" to award a franchise.

As explained below, the FCC issued a series of orders restricting the requirements and costs that franchising authorities may impose on cable operators. The FCC issued its first such order in 2007 (First Order) after gathering evidence suggesting that some franchising authorities were imposing burdensome requirements on new entrants to the cable market. The First Order clarified when practices by franchising authorities, such as failing to make a final decision on franchise applications within time frames specified in the order, amount to an "unreasonabl[e] refus[al]" to award a franchise in violation of the Cable Act. The First Order also provided guidance on which costs count toward the 5% franchise fee cap, and it maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. The U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit) upheld the First Order in its 2008 decision in Alliance for Community Media v. FCC .

Shortly after issuing the First Order, the FCC adopted another order (Second Order), extending the First Order's rulings to incumbent cable operators as well as new entrants. In a later order responding to petitions for reconsideration (Reconsideration Order), the FCC affirmed the Second Order's findings and further clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if related to the provision of cable service, generally count toward the maximum 5% franchise fee. In 2017, the Sixth Circuit reviewed aspects of the Second Order and Reconsideration Order in its decision in Montgomery County v. FCC , upholding some rules and vacating others. In response, the FCC adopted a new order on August 1, 2019 (Third Order). The Third Order seeks to address the defects identified by the Sixth Circuit by clarifying the Commission's reasoning for counting cable-related, in-kind payments toward the 5% franchise fee cap and for applying the First Order's rulings to incumbent cable operators. The Third Order also explicitly asserts the Cable Act's preemption of state and local laws to the extent they impose fees or other requirements on cable operators who provide non-cable service, such as broadband internet, over public rights-of-way. Some municipalities have criticized this order for, among other things, hampering their ability to control public rights-of-way and reducing their ability to ensure the availability of public, educational, and government (PEG) programming in their communities. Several cities have filed legal challenges to the order that are currently before the Sixth Circuit.

As an aid to understanding the complex and evolving nature of the law in this area, this report provides a basic overview of the federal legal framework governing the cable franchising process. The report begins with a historical overview of the law's evolution, from the Communications Act through the Cable Act and its later amendments, to the FCC's various orders interpreting the act. Next, the report details several key issues that have arisen from the FCC's orders, specifically (1) the circumstances under which a franchising authority might be found to have unreasonably refused to award a franchise; (2) the types of expenditures that count toward the 5% cap on franchise fees; and (3) the extent to which Title VI allows franchising authorities to regulate "mixed-use" networks, that is, networks through which a cable operator provides cable service and another service such as telephone or broadband internet. The report concludes with a discussion of other legal issues that may arise from pending challenges to the FCC's Third Order and offers some considerations for Congress. A summary of federal restrictions on local authority to regulate cable operators and a glossary of some terms used frequently in this report are found in the Appendix .

Historical Evolution of the Federal Legal Framework for Cable Regulation

Regulation of Cable Services Prior to 1984

The FCC's earliest attempts to regulate cable television relied on authority granted by the Communications Act, a legal framework that predated cable television's existence. The Communications Act brought all wire and radio communications under a unified federal regulatory scheme. The act also created the FCC to oversee the regulatory programs prescribed by the Communications Act. Title II of the act gave the FCC authority over "common carriers," which principally were telephone service providers. Title III governed the activities of radio transmission providers.

The FCC's Title III jurisdiction encompasses broadcast television transmitted via radio signals. For the first half of the 20 th Century, when virtually all commercial television broadcast in this manner, Title III thus gave the FCC regulatory authority over this industry. In the late 1940s and early 1950s, however, municipalities with poor broadcast reception began experimenting with precursors to modern cable systems. These areas erected large "community antennas" to pick up broadcast television signals, and the antenna operators routed the signals to residential customers by wire, or "cable." Through the 1950s, the FCC declined to regulate these systems, initially known as "Community Antenna Television" systems and later simply as "cable television." The FCC reasoned that cable television was neither a common carrier service subject to Title II regulation nor a broadcasting service subject to Title III regulation.

The FCC changed course in a 1966 order in which it first asserted jurisdiction over cable television. The Commission acknowledged that it lacked express statutory authority to regulate cable systems. Even so, the agency concluded that it had jurisdiction because of cable television's "uniquely close relationship" to the FCC's then-existing regulatory scheme. The Supreme Court affirmed the FCC's authority to regulate cable television in a 1968 decision, relying on the FCC's argument that regulatory authority over cable television was necessary for the FCC's performance of its statutory responsibility to "provid[e] a widely dispersed radio and television service, with a fair, efficient and equitable distribution of service among the several States and communities." Following this reasoning, the Court construed the Communications Act as enabling the FCC to regulate what was "reasonably ancillary" to its responsibilities for regulating broadcast television under Title III.

The FCC thereafter maintained regulatory authority over operational aspects of cable television, such as technical standards and signal carriage requirements. However, state and local "franchising authorities" continued to regulate cable operators through the negotiation and grant of franchises. The Commission recognized that cable television regulation ha d an inherent ly local character, insofar as local regulators were better situated to manage rights-of- way and to determine how to divide large urban areas into smaller service areas . As part of the ir franchising process, f ranchising authorities often imposed fees and other conditions on cable operators in exchange for allowing them to use public rights-of- way to construct their cable systems. Federal courts at the time tolerated this local regulation, noting that because cable systems significantly affect public rights-of-way, "government must have some authority . . . to see to it that optimum use is made of the cable medium in the public interest."

The Cable Communications Policy Act of 1984 (Cable Act) was the first federal statutory scheme to regulate expressly cable television. The act's purposes, as defined by Congress, included "assur[ing] that cable systems are responsive to the needs and interests of the local community," providing the "widest possible diversity of information sources," promoting competition, and minimizing unnecessary regulation in the cable industry. The House Energy and Commerce Committee report accompanying the legislation explained that the act was intended to preserve the "critical role" of municipal governments in the franchising process, while still making that power subject to some "uniform federal standards."

To these ends, the Cable Act added Title VI to the Communications Act to govern cable systems. Specifically, Section 621of Title VI preserved the franchising authorities' power to award franchises and required cable operators to secure franchises as a precondition to providing services. Title VI also permits franchising authorities to require that cable operators designate "channel capacity" for PEG use or provide "institutional networks" ("I-Nets"). But the power of franchising authorities is limited to regulating "the services, facilities, and equipment provided by a cable operator," such as by prohibiting franchising authorities from regulating "video programming or other information services."

Section 622 of Title VI allows franchising authorities to charge fees to cable operators as a condition of granting the franchise, but it caps those fees at 5% of the operator's gross annual revenue from providing cable services. Section 622 defines "franchise fee" to include "any tax, fee, or assessment of any kind imposed by a franchising authority . . . on a cable operator or a cable subscriber, or both, solely because of their status as such[.]" Franchise fees do not include taxes or fees of "general applicability," capital costs incurred by the cable operator for PEG access facilities (PEG capital costs exemption), and any "requirements or charges incidental to the awarding or enforcing of the franchise" (incidental costs exemption).

Congress amended Title VI in the Cable Television Consumer Protection and Competition Act of 1992, with a stated goal of increasing competition in the cable market. Specifically, Congress amended Section 621 to prohibit the grant of exclusive franchises and to prevent franchising authorities from "unreasonably refus[ing] to award an additional competitive franchise." Congress also granted potential cable operators the right to sue a franchising authority for refusing to award a franchise.

Congress amended the Cable Act again in 1996 to further promote competition in the cable television marketplace by enabling telecommunications providers regulated under Title II of the Communications Act (i.e., telephone companies) to offer video programming services. Congress repealed a provision banning telecommunications providers from offering video programming to customers in their service area and added a provision governing the operation of "open video systems," a proposed competitor to cable systems. These amendments also added provisions barring franchising authorities from conditioning the grant of a franchise on a cable operator's provision of telecommunications services or otherwise requiring cable operators to obtain a franchise to operate a telecommunications service.

In the decades following the passage of the Cable Act and its amendments, many phone companies upgraded their networks to enter the cable market. To streamline the process for these new entrants, the FCC issued orders interpreting the franchising provisions of Title VI. The four orders discussed in this sectionâthe First, Second, Reconsideration, and Third Ordersâeach address a range of topics and in some cases retread topics covered by an earlier order. Table 1 summarizes the orders.

In 2007, after gathering evidence suggesting that some local and municipal governments were imposing burdensome demands on new entrants, the FCC adopted the First Order. The Commission observed that the franchising process had prevented or delayed the entry of telephone companies into the cable market. The First Order thus sought to reduce entry barriers by clarifying when Title VI prohibits franchising authorities from imposing certain franchise conditions on new entrants. The FCC gave examples of practices by franchising authorities that constitute an "unreasonable refusal" to award a franchise, such as

1. a delay in making a final decision on franchise applications beyond the time frames set forth in the order; 2. requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; 3. imposing PEG and I-Net Requirements beyond those imposed on incumbents; and 4. requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (called "level-playing-field requirements").

The First Order further clarified when certain costs counted toward the 5% franchise fee cap and maintained that franchising authorities could not refuse to grant a franchise based on issues related to non-cable services or facilities. Several franchising authorities and their representative organizations challenged the legality of the Order in the Sixth Circuit. But the Sixth Circuit denied those challenges in Alliance for Community Media v. FCC , upholding both the FCC's authority to issue rules construing Title VI and the specific rules in the First Order itself.

Although the First Order applied only to new entrants to the cable market, the FCC shortly thereafter adopted the Second Order, extending many of the First Order's rulings to incumbent cable television service providers. Following the release of the Second Order, the Commission received three petitions for reconsideration, to which it responded in the Reconsideration Order in 2015. In the Reconsideration Order, the FCC affirmed its conclusions from the Second Order applying its earlier rulings to incumbent cable operators. The Reconsideration Order also clarified that "in-kind" (i.e., noncash) payments exacted by franchising authorities, even if unrelated to the provision of cable service, may count toward the maximum 5% franchise fee allowable under Section 622. In 2017, in Montgomery County v. FCC , the Sixth Circuit vacated the FCC's determinations in the Second Order and Reconsideration Order on both issues. Following the ruling in Montgomery County, the Commission started a new round of rulemaking and, on August 1, 2019, adopted another order, the Third Order, addressing the issues raised by the Sixth Circuit. In the Third Order, the FCC clarified its basis for counting in-kind payments toward the 5% franchise fee cap, provided additional reasoning for applying the First Order's rulings to incumbent cable operators, and preempted state and local regulation inconsistent with Title VI. While prior orders applied only to local franchising authorities, the Third Order extended the Commission's rules in all three orders to state-level franchising authorities, concluding that there was "no statutory basis for distinguishing between state- and local-level franchising actions." This report addresses issues raised in these various orders in greater detail below.

As the foregoing discussion reflects, the FCC's post-2007 orders have focused on several key issues within Title VI's framework. Most notably, the Commission has addressed (1) when certain franchise requirements amount to an "unreasonable refusal" to award the franchise under Section 621; (2) the types of costs that are subject to the 5% franchise fee cap under Section 622; and (3) the extent to which franchising authorities may regulate "mixed-use" networks operated by cable operators. This section first reviews the relevant statutory provisions from which each of these three issues arise and then discusses the FCC's interpretations of those provisions.

Unreasonable Refusal to Award a Franchise

Title VI prohibits franchising authorities from "unreasonably refus[ing]" to grant a franchise to a cable operator. In the First Order, the FCC identified specific types of franchising conditions or practices that violate the unreasonable refusal standard, such as failing to process an application within certain time periods. The Sixth Circuit reviewed and upheld the First Order's interpretation of this standard, which remains in effect.

Statutory Provisions Governing the "Unreasonable Refusal" Standard

Title VI allows franchising authorities to condition a franchise on the cable operator performing or meeting certain requirements. Sections 621(a)(4)(B) and 621(b)(3)(D) explicitly allow franchising authorities to require cable operators to provide PEG channel "capacity, facilities, or financial support" and to provide I-Net "services or facilities." Section 621(a)(1), however, imposes a significant limitation on franchising authorities' ability to impose such conditions. Under that provision, franchising authorities may not "grant an exclusive franchise" or "unreasonably refuse to award an additional competitive franchise."

FCC Interpretations of the "Unreasonable Refusal" Standard

In the First Order, the FCC clarified when certain practices or requirements amount to an unreasonable refusal of a new franchise under Section 621(a)(1) of Title VI. The FCC gave four specific examples of unreasonable refusals: (1) delaying a final decision on franchise applications; (2) requiring cable operators to "build out" their cable systems to provide service to certain areas or customers as a condition of granting the franchise; (3) imposing PEG and I-Net requirements that are duplicative of, or are more burdensome than, those imposed on incumbents; and (4) requiring that new cable operators agree to franchise terms that are substantially similar to those agreed to by incumbent cable operators (the "level-playing-field requirements").

As for delays in acting on a franchise application, the FCC stated that a franchising authority unreasonably refuses a franchise when it subjects applicants to protracted negotiations, mandatory waiting periods, or simply a slow-moving franchising process. To prevent such delays, the FCC set decision deadlines of 90 days for applications by entities with existing access to rights-of-way and six months for applications by entities without such access. Once these time periods expire, franchise applications are deemed granted until the franchising authority takes final action on the application.

As for build-out requirements, the FCC stated that requiring new franchise applicants to build out their cable systems to cover certain areas may constitute an unreasonable refusal of a franchise. The Commission explained that what constitutes an "unreasonable" build-out requirement may vary depending on the applicant's existing facilities or market penetration, but it clarified that certain build-out requirements are per se unreasonable refusals under Section 621.

The FCC also determined that certain PEG and I-Net terms and conditions constitute an unreasonable refusal. Specifically, the Commission determined that PEG and I-Net requirements that are "completely duplicative" (i.e., a requirement for capacity or facilities that would not provide "additional capability or functionality, beyond that provided by existing I-Net facilities") are unreasonable unless redundancy serves a public safety purpose. The FCC also viewed PEG requirements as unreasonable when such requirements exceeded those placed on incumbent cable operators.

Lastly, the FCC determined that level-playing-field requirements in local laws or franchise agreements amount to an unreasonable refusal of a franchise. The Commission explained that such requirements are unreasonable because new cable entrants are in a "fundamentally different situation" from incumbent operators. The FCC therefore concluded that these mandates "unreasonably impede competitive entry" into the cable market and are unreasonable refusals.

As discussed above, several franchising authorities and their representative organizations unsuccessfully challenged the FCC's interpretation of the unreasonable refusal standard in Alliance for Community Media v. FCC , in which the Sixth Circuit upheld the First Order in its entirety. Applying the framework set forth in Chevron USA , Inc. v. Natural Resources Defense Council, Inc. âwhich guides courts when reviewing agency regulations that interpret the agency's governing statuteâthe court reasoned that the phrase "unreasonably refuse" is inherently ambiguous because the word "unreasonably" is subject to multiple interpretations. The court then held that the First Order's interpretation of this phrase was entitled to deference because it was reasonable and not unambiguously foreclosed by Title VI.

As a result, the First Order's rules on what constitutes an unreasonable refusal remain binding on franchising authorities. Accordingly, if a franchising authority denies a cable operator's franchise request for a reason the FCC's has deemed unreasonableâsuch as the cable operator's refusal to accept build-out or level-playing-field requirementsâthe cable operator may sue the franchising authority for "appropriate relief" as determined by the court. Alternatively, if the franchising authority fails to make a final decision within the allotted time, the franchise will be deemed granted until the franchising authority makes a final decision.

Title VI limits franchising authorities to charging cable operators "franchise fees" of up to 5% of the cable operator's revenue, subject to specific exceptions. However, the types of obligations limited by the 5% cap have been a point of contention. The FCC, in its various orders, has clarified the scope of the exceptions to the 5% cap (in particular, the PEG capital costs and incidental costs exemptions); it has further explained that, unless they fall under one of the express exceptions, non-monetary (or "in-kind") contributions are subject to the 5% cap even if they are related to the provision of cable service. Litigation over the Commission's current interpretations of what constitutes a "franchise fee" is ongoing.

Statutory Provisions Governing Franchise Fees

Section 622 allows franchising authorities to charge franchise fees to cable providers, but it subjects such fees to a cap. For any "twelve-month period," franchise fees may not exceed 5% of the cable operator's gross annual revenues derived "from the operation of the cable system to provide cable service." Section 622 broadly defines "franchise fees" to include "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such." However, Section 622 exempts certain costs from this definition, including

1. "any tax, fee, or assessment of general applicability"; 2. "capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities" (PEG capital costs exemption) ; and 3. "requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages" (incidental costs exemption).

FCC Interpretations of the Statutory Franchise Fee Provisions

The FCC has provided guidance on the types of expenses subject to the 5% cap. In particular, it has clarified (1) when non-monetary (or "in-kind") contributions must be included in the calculation of franchise fees subject to the 5% cap; (2) the scope of the PEG capital costs exemption; and (3) the scope of the incidental costs exemption.

The FCC has elaborated on the types of in-kind contributions that are subject to the 5% cap. In the First Order, the Commission maintained that in-kind fees unrelated to provision of cable serviceâsuch as requests that the cable operator provide traffic light control systemsâare subject to the 5% cap because they are not specifically exempt from the "franchise fee" definition. In the Reconsideration Order, the agency further clarified that the First Order's conclusions were not limited to in-kind exactions unrelated to cable service and that cable-related in-kind contributions (such as providing free or discounted cable services to the franchising authority) could also count toward the 5% cap. The Sixth Circuit vacated this conclusion, however, in Montgomery County v. FCC . The Sixth Circuit recognized that Section 622's definition of "franchise fee" is broad enough to encompass "noncash exactions." But the court explained that just because the term "can include noncash exactions, of course, does not mean that it necessarily does include every one of them." The court faulted the FCC for giving "scarcely any explanation at all" for its decision to expand its interpretation of "franchise fee" to include cable-related exactions, and held that this defect rendered the Commission's interpretation "arbitrary and capricious" in violation of the Administrative Procedure Act (APA).

Following the Sixth Circuit's decision in Montgomery County , the Commission issued the Third Order, in which it detailed its reasons for including cable-related in-kind contributions in the 5% cap. The FCC first explained that, as recognized by the court in Montgomery County , the definition of "franchise fee" is broad enough to encompass in-kind contributions as well as monetary fees. The Commission also acknowledged the Sixth Circuit's observation that just because the definition is broad enough to include in-kind fees "does not mean that it necessarily does include everyone one of them." Nevertheless, the FCC maintained that cable-related in-kind contributions should be included in the fee calculation because there is nothing in the definition that "limits in-kind contributions included in the franchise fee." The Commission further reasoned that Section 622's specific exceptions do not categorically exclude such expenses, as there is no "general exemption for cable-related, in-kind contributions." Along with its construction of Section 622, the FCC rejected arguments that "other Title VI provisions should be read to exclude costs that are clearly included by the franchise fee definition," such as the provision that allows franchising authorities to require that cable operators designate channel capacity for PEG use. According to the Commission, "the fact that the Act authorizes [franchising authorities] to impose such obligations does not mean that the value of these obligations should be excluded from the five percent cap on franchise fees."

While the Third Order concluded that cable-related, in-kind contributions are not categorically exempt from the 5% cap, it recognized that certain types of cable-related in-kind contributions might be excluded. For instance, the FCC concluded that franchise terms requiring a cable operator to build out its system to cover certain localities or to meet certain customer service obligations are not franchise fees. The Commission reasoned that these requirements are "simply part of the provision of cable service" and are not, consequently, a "tax, fee, or assessment." Furthermore, the FCC noted that the PEG capital costs exemption, which exempts costs associated with the construction of public, educational, or governmental access facilities, covers certain cable-related, in-kind expenses, and, as discussed below, the PEG capital costs exemption provides guidance on the types of costs to which it applies. On the other hand, the agency also identified specific cable-related, in-kind expenses that are subject to the 5% cap, such as franchise terms requiring cable operators to provide free or discounted cable service to public buildings or requiring operators to construct or maintain I-Nets.

Lastly, the Third Order concluded that, for purposes of the 5% cap, cable-related in-kind services should be measured by their "fair market value" rather than the cost of providing the services. The FCC reasoned that fair market value is "easy to ascertain" and "reflects the fact that, if a franchising authority did not require an in-kind assessment as part of its franchise, it would have no choice but to pay the market rate for services it needs from the cable operator or another provider."

In sum, despite the setback for the Commission in Montgomery County , the FCC has maintained its position that in-kind contributionsâeven if related to cable serviceâare not categorically exempt from the 5% cap. The issue is not settled, however. As discussed later, the Third Order is being challenged in court, and it remains to be seen whether the FCC's position will ultimately be upheld.

The FCC's interpretation of the PEG capital costs exemption has evolved. In the First Order, the Commission interpreted this exemption as applying to the costs "incurred in or associated with" constructing the facilities used to provide PEG access. However, the FCC broadened its interpretation in the Third Order. In the Third Order, the Commission conceded that its earlier statements were "overly narrow" because the plain meaning of the term "capital costs" can include equipment costs as well as construction costs. Consistent with this analysis, the FCC concluded that the term "capital costs" is not limited to construction-related costs, but can also include equipment purchased for the use of PEG access facilities, "such as a van or a camera." The Third Order noted that capital costs "are distinct from operating costs"âthat is, the "costs incurred in using" PEG access facilitiesâand that operating costs are not exempt from inclusion in the franchise fee calculation.

While the Third Order provided additional clarification on the PEG capital costs exemption, it left at least one issue unresolved. Specifically, the FCC determined there was an insufficient record before it to conclude whether "the costs associated with the provision of PEG channel capacity" fall within the exclusion. Consequently, it deferred consideration of this issue and stated that, in the meantime, channel capacity cost "should not be offset against the franchise fee cap."

Ultimately, the scope of the PEG capital costs exemption remains in flux. The FCC's Third Order is being challenged in court, and it is possible the agency's interpretation of the PEG capital costs exemption could be vacated. Even if the Third Order is upheld, it left unresolved whether the costs of providing PEG channel capacity fall under the capital costs exclusion; thus, while franchise authorities are not required to offset such costs against the 5% cap in the interim, it is unclear whether these costs will count toward the franchise fee cap in the long run.

While the FCC has articulated its position on in-kind contributions and the PEG capital costs exemption over the course of several orders, the Commission largely addressed its interpretation of the "incidental costs" exemption in the First Order. There, the FCC read the exemption narrowly to include only those expenses specifically listed in Section 622(g)(2)(D)ânamely, "bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages." The Commission explained that it did not interpret unlisted costsâincluding, among other things, attorney fees, consultant fees, and in-kind paymentsâto be "incidental" costs, based on the text of the exemption and the legislative history of Section 622. The FCC noted, however, that certain "minor expenses" beyond those listed in the statute may be included as "incidental costs," such as application or processing fees that are not unreasonably high relative to the cost of processing the application.

In Alliance for Community Media v. FCC , the Sixth Circuit denied petitions challenging the First Order's interpretation of the "incidental costs" exemption. Petitioners argued that the plain meaning of the phrase "incidental to" meant that the fee had to be "related to the awarding or enforcing of the franchise." According to petitioners, the FCC's per se listing of non-incidental feesâsuch as attorney and consultants' feesâcontradicted this plain meaning. The court, however, upheld the FCC's interpretation. The court reasoned that the phrase "incidental to" lent itself to multiple interpretations, including both the FCC's and the petitioners' readings. Consequently, it concluded under Chevron that the "FCC's rules regarding fees" qualified as "reasonable constructions" of Sections 622(b) and 622(g)(2)(D) that are entitled to deference.

In sum, unlike in-kind contributions and the PEG capital costs exemption, the FCC's interpretation of the incidental costs exemption is not subject to any ongoing legal challenge. Consequently, with the exception of the "minor expenses" mentioned in the First Order, only those expenses listed in Section 622(g)(2)(D) (bonds, security funds, etc.) are exempt from the 5% cap under the incidental costs exemption.

Franchising Authority over Mixed-Use Networks

A continuing area of disagreement between the FCC and franchising authorities has been the extent to which franchising authorities can regulate non- cable services that a cable operator provides over the same network used for its cable service (e.g., a "mixed-use network"). From the First Order onward, the Commission has maintained that, based on its interpretation of various Title VI provisions, franchising authorities may not regulate the non-cable services aspects of mixed-use networks. While the First Order applied this rule only to new entrants to the cable market, the Second Order extended it to incumbent cable operators. The Sixth Circuit upheld this rule as applied to new entrants into the cable market, but vacated the FCC's application of it to incumbent cable operators. The Commission sought to cure this defect in the Third Order, and it further clarified that any efforts by state and local governments to regulate non-cable services provided by cable operators, even if done outside the cable franchising process and relying on the state's inherent police powers, are preempted by Title VI. However, given the ongoing legal challenge to the Third Order, this issue, too, remains unsettled.

Statutory Provisions Governing Mixed-Use Networks

Several Title VI provisions arguably prohibit franchising authorities from regulating non-cable services (such as telephone or broadband internet access service) provided over mixed-use networks, or networks over which an operator provides both cable and non-cable services. Section 602's definition of "cable system" explicitly excludes the "facility of a common carrier" except "to the extent such facility is used in the transmission of video programming directly to subscribers." Further, with respect to broadband internet access service, Section 624(b)(1) states that franchising authorities "may not . . . establish requirements for video programming or other information services." Lastly, Section 624(a) states that "[a] franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with [Title VI]."

FCC Interpretations of Statutory Provisions Governing Mixed-Use Networks

Beginning with the First Order, the FCC has relied on these statutory provisions to clarify the bounds of franchising authority jurisdiction over mixed-use networks. The Commission asserted that a franchising authority's "jurisdiction applies only to the provision of cable services over cable systems." To support its view, the FCC cited Section 602's definition of "cable system," which explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." The Commission did not address whether video services provided over the internet might are "cable services."

The First Order applied only to new entrants to the cable market. However, in the Second Order, the FCC determined that the First Order's conclusions regarding mixed-use networks should apply to incumbent providers because those conclusions "depended upon [the Commission's] statutory interpretation of Section 602, which does not distinguish between incumbent providers and new entrants." The FCC reaffirmed this position in the Reconsideration Order, stating that franchising authorities "cannot . . . regulate non-cable services provided by an incumbent."

In Montgomery County v. FCC , however, the Sixth Circuit vacated the FCC's extension of its mixed-use network rule to incumbent cable providers on the ground that this interpretation was arbitrary and capricious. The court explained that the Commission could not simply rely on the reasoning in its First Order because Section 602 did not support an extension of the mixed-use rule to incumbent cable providers. The court observed that the FCC correctly applied its mixed-use rule to new entrantsâwho were generally common carriersâbecause Section 602's definition of "cable system" expressly excludes common carrier facilities. But most incumbents, by contrast, are not common carriers. Consequently, because the Commission did not identify any other "valid basisâstatutory or otherwiseâ" for its extension of its mixed-use rule to non-common carrier cable providers, the court vacated that decision as arbitrary and capricious.

Responding to Montgomery County , the FCC's Third Order provides additional support for extending the mixed-use rule to incumbent cable operators. The Order first reiterates that Section 602's definition of "cable system" provides the basis for barring franchising authorities from regulating incumbent cable operators when acting as common carriers, because the definition explicitly excludes common carrier facilities except to the extent they are "used in the transmission of video programming directly to subscribers." Similarly, the Commission concluded that franchising authorities cannot regulate non -common carriers to the extent they provide other services along with cable, in particular, broadband internet access. The Third Order supports that conclusion by reference to Section 624(b)(1)'s command that franchising authorities may not "establish requirements for video programming or other information services ." While "information services" is not defined in Title VI, the FCC concluded that, based on Title VI's legislative history, the term should have the same meaning it has in Title I of the Communications Act. The Commission has interpreted "information service" under Title I of the Communications Act to include broadband internet access service, and the D.C. Circuit has upheld that interpretation. The Third Order also notes that "it would conflict with Congress's goals in the Act" to treat cable operators that are not common carriers differently from those that are common carriers, as allowing franchising authorities to regulate non-common carrier operators more strictly "could place them at a competitive disadvantage."

Beyond clarifying that franchising authorities cannot use their Title VI authority to regulate the non-cable aspects of a mixed-use cable system, the Third Order also explicitly preempts state and local laws that "impose[] fees or restrictions" on cable operators for the "provision of non-cable services in connection with access to [public] rights-of-way, except as expressly authorized in [Title VI]." Prior to the Third Order's issuance, for example, the Oregon Supreme Court in City of Eugene v. Comcast upheld the City of Eugene's imposition of a 7% fee on the revenue a cable operator generated from its provision of broadband internet services. Rather than impose the fee as part of the cable franchising process, the city cited as its authority an ordinance imposing a "license-fee" requirement on the delivery of "telecommunications services" over the city's public rights-of-way. The court held that Title VI did not prohibit the city from imposing the fee, as it was not a "franchise fee" subject to the 5% cap because the ordinance applied to both cable operators and non-cable operators. Thus, the court reasoned, the city did not require Comcast to pay the fee "solely because of" its status as a cable operator and the franchise fee definition was not met. In the aftermath of the Oregon Supreme Court's decision, other state and local governments relied on sources of authority outside of Title VI, such as their police power under state law, to regulate the non-cable aspects of mixed-use networks.

The Third Order rejects City of Eugene 's reading of Title VI. The FCC reasoned that Title VI establishes the "basic terms of a bargain" by which a cable operator may "access and operate facilities in the local rights-of-way, and in exchange, a franchising authority may impose fees and other requirements as set forth and circumscribed in the Act." Although Congress was "well aware" that cable systems would carry non-cable services as well as cable, it nevertheless "sharply circumscribed" the authority of state and local governments to "regulate the terms of this exchange." Consequently, the Commission concluded, the Third Order "expressly preempt[s] any state or local requirement, whether or not imposed by a franchising authority, that would impose obligations on franchised cable operators beyond what Title VI allows." The Third Order also concluded that the FCC has authority to preempt such laws because, among other things, Section 636(c) of Title VI expressly preempts any state or local law" that is "inconsistent with this chapter." Thus, in the FCC's view, wherever such express preemption provisions are present, the "Commission has [been] delegated authority to identify the scope of the subject matter expressly preempted."

In sum, while franchising authorities may not use the cable franchising process to regulate non-cable services provided over mixed-use networks by new entrants to the cable market, the FCC's extension of this rule to incumbents has not yet been upheld in court. Furthermore, the Third Order's broad preemption of any state and local law regulating cable operators' use of public rights-of-way beyond what Title VI allows raises even more uncertainty. As discussed further below, the Third Order's preemption raises difficult questions about the extent to which the Commission may rely on Title VI to preempt not only state and local cable franchising requirements but also generally applicable state regulations and ordinances that regulate non-cable services provided by cable operators.

Several cities, franchising authorities, and advocacy organizations have filed petitions for review of the Third Order in various courts of appeals, and these petitions have been consolidated and transferred to the Sixth Circuit. In their petitions, the petitioners generally allege that the Third Order violates the Communications Act and the U.S. Constitution and is arbitrary and capricious under the APA. The same parties filed a motion with the FCC to stay the Third Order, which the Commission recently denied.

While the petitions challenging the order state their legal theories in general terms, this case will likely raise complex issues of statutory interpretation, as well as administrative and constitutional law. For instance, petitioners could argue, as commenters did during the rulemaking process for the Third Order, that the text and structure of Title VI contradicts the FCC's broad interpretation that a franchise fee should include most cable-related, in-kind expenses. Pointing to provisions such as Section 611(b), which authorizes franchising authorities to impose PEG and I-Net requirements without any reference to the franchise fee provision, some commenters argued that Title VI treats the cost of complying with franchise requirements as distinct from the franchise fee.

A reviewing court would likely apply the Chevron framework to resolve such statutory arguments. While it is difficult to predict how a reviewing court would decide any given issue, the Sixth Circuit's decision in Montgomery County indicates that the court might uphold the Third Order's legal interpretation of the franchise fee provision under the Chevron doctrine. Specifically, as discussed above, the Sixth Circuit held that Section 622's definition of franchise fee is broad enough to include "noncash exactions." Given this decision, the Sixth Circuit could potentially hold that the franchise fee definition is broad enough to accommodate the FCC's interpretation and that the FCC's interpretation is reasonable and entitled to deference.

Even were the Sixth Circuit to reach that conclusion, however, that is not the end of the analysis. As the Sixth Circuit's decision in Montgomery County also demonstrates, the FCC's rulings may be vacated regardless of whether the Commission's statutory interpretation enjoys Chevron deference if the court concludes that the FCC's interpretation is arbitrary and capricious under the APA. A federal agency's determination is arbitrary and capricious if the agency "has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." In Montgomery County , the Sixth Circuit held that the FCC had acted arbitrarily and capriciously by failing to give "scarcely any explanation at all" for expanding its franchise fee interpretation to cable-related in-kind expenses and for failing to identify a statutory basis for extending its mixed-use rule to incumbents. While the Commission took pains to address these concerns in the Third Order, it remains to be seen whether a court would find those efforts sufficient or accept other arguments as to why the FCCs interpretations should be held arbitrary and capricious. For instance, those challenging the Third Order might argue that the Commission failed to address evidence that "runs counter" to its rules or failed to consider important counterarguments. One such area of focus for petitioners in their motion to stay the Third Order was the FCC's alleged failure to address potential public safety effects of the Third Order's treatment of cable-related in-kind contributions.

In addition, the Third Order's assertion of preemption may come under scrutiny from state or local challengers who seek to regulate mixed-use networks. A recent D.C. Circuit decision struck down the FCC's attempt to preempt "any state or local requirements that are inconsistent with [the FCC's] deregulatory approach" to broadband internet regulation. Additionally, in a recent opinion concurring in the U.S. Supreme Court's denial of a petition for certiorari in a case involving a state's effort to regulate Voice over Internet Protocol service, Justice Thomas, joined by Justice Gorsuch, voiced concerns about allowing the FCC's deregulatory policy to preempt state regulatory efforts. Both the D.C. Circuit and Justices Thomas and Gorsuch expressed skepticism that the FCC has statutory authority to preempt state and local regulation in areas where the FCC itself has no statutory authority to regulate. Cities and local franchising authorities may seize on the reasoning in these opinions to argue that Title VI's preemption provision cannot extend to non-cable services that fall outside Title VI's purview.

Lastly, along with statutory interpretation and administrative law issues, challengers to the Third Order may assert constitutional arguments. As mentioned, the Third Order prevents state and local governments from relying on state law to regulate non-cable services provided by cable operators. However, some commenters have argued that the Third Order violates the anti-commandeering doctrine, a constitutional rule that prohibits the federal government from compelling states to administer federal regulations. The Supreme Court recently clarified the anti-commandeering doctrine in Murphy v. NCAA . In Murphy , the Court struck down the Professional and Amateur Sports Protection Act of 1992, which prohibited states from legalizing sports gambling. Justice Alito, writing for the Court, reasoned that the anti-commandeering doctrine prohibits Congress from "issu[ing] direct orders to state legislatures," compelling them to either enact certain legislation or to restrict them from enacting certain legislation. The Court explained that the anti-commandeering doctrine promotes accountability, because, when states regulate at Congress's command, "responsibility is blurred." Justice Alito further explained that the doctrine "prevents Congress from shifting the costs of regulation to the States." The Court contrasted unlawful commandeering with permissible "cooperative federalism" regimes. Under such regimes, Congress allows, but does not require, states to implement a regulatory program according to federal standards, and a federal body implements the program when a state refrains from doing so.

According to some commenters, the FCC's Third Order violates the anti-commandeering doctrine because it "effectively command[s] local government[s] to grant right-of-way access on the terms the Commission, not local government or the states set." Further, some commenters, including the National Association of Telecommunications Officers and Advisors and National League of Cities, argue that the Third Order would violate the accountability and cost-shifting principles animating the anti-commandeering doctrine, as explained in Murphy . According to these commenters, the FCC's "mixed-use rule unquestionably blurs responsibility" because residents unhappy with cable operators' use of the right-of-way for non-cable purposes would "blame their local elected officials," and the mixed-use rule would shift cost to local governments by "usurp[ing]" the "compensation local governments may be entitled to for use of the [rights-of-way] for non-cable services." Ultimately, this issue may turn on whether Title VI, as interpreted by the FCC's rules, is a permissible "cooperative federalism" program under Murphy . In its Third Order, the Commission argued Title VI was such a program because it "simply establishes limitations on the scope of [states' authorities to "award franchises" to cable operators] when and if exercised." The FCC further maintained that, rather than "requir[ing] that state or local governments take or decline any particular action," its rules were "simply requiring that, should state and local governments decide to open their rights-of-way to providers of interstate communication services within the Commission's jurisdiction, they do so in accordance with federal standards." It remains to be seen, however, how broadly lower courts will apply Murphy 's cooperative federalism distinction.

Beyond the various legal arguments discussed above, there are notable disagreements over the practical impact of the FCC's rules. On the one hand, localities and their representative organizations have claimed that the Commission's Third Order will "gut[] local budgets" and that, by subjecting in-kind franchise requirements such as PEG and I-Net requirements to the 5% cap, it will force franchising authorities to "choose between local PEG access and I-Nets, and the important other public services supported by franchise fees." Similarly, the two FCC commissioners who dissented from the Third OrderâJessica Rosenworcel and Geoffrey Starksâmaintained in their dissents that the Third Order was part of a broader trend at the Commission of "cutting local authorities out of the picture" and that it would, among other things, diminish the "value of local public rights-of-way." In response, the FCC's chairman, Ajit Pai, and other Commissioners in the majority contended that the rule would benefit consumers because the costs imposed by franchising authorities through in-kind contributions and fees get "passed on to consumers" and discourage the deployment of new services like "faster home broadband or better Wi-Fi or Internet of Things networks."

Given the competing arguments relating to the FCC's interpretation of Title VI's scope, Congress may be interested in addressing the issues raised by the Third Order. For instance, Congress might address the extent to which Section 622's definition of "franchise fee" includes cable-related, in-kind expenses such as PEG and I-Net services. It might also address whether Title VI preempts state and local governments from relying on their police powers or other authorities under state law to regulate non-cable services provided by cable operators. However, Congress also might consider federalism issues implicated by any attempt to prohibit state and local authorities from regulating such services. As discussed in the previous section, the anti-commandeering principle prohibits direct orders to states that command or prohibit them from enacting certain laws, but permits lawful "cooperative federalism" regimes where Congress gives states a choice of either refraining from regulating a particular area or regulating according to federal standards. Thus, Congress may avoid anti-commandeering issues by setting federal standards for regulation of ancillary non-cable services rather than prohibiting states from regulating these services.

Federal Standards and Restrictions on Franchising Authority Power

The following table summarizes functions and areas traditionally regulated by franchising authorities that are subject to federal standards or federal restrictions. This table is not a summary of all federal requirements and regulations cable operators face under the act, only those that implicate the powers of franchising authorities.

Build-Out Requirement: A requirement placed on a cable operator to provide cable service to particular areas or residential customers.

Cable Operator: From the Cable Act, 47 U.S.C. Â§ 522, "[a]ny person or group of persons (A) who provides cable service over a cable system and directly or through one or more affiliates owns a significant interest in such cable system, or (B) who otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system."

Cable Service: One-way transmission of video programming to customers, and any customer interaction required for the selection or use of such video programming.

Cable System: A facility designed to provide video programming to multiple subscribers within a community, with limited exceptions. See note 39 , supra , for the precise exceptions.

Common Carrier: A person or entity who provides interstate telecommunications service.

Franchise: A right to operate a cable system in a given area.

Franchise Fee: From the Cable Act, 47 U.S.C. Â§ 542, "any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such," with several exceptions. See the " Franchise Fees " section, supra , for a discussion of some of these exceptions.

Franchising Authority: A state or local governmental body responsible for awarding franchises.

I-Net: Abbreviation for "institutional network"; a communication network constructed or operated by a cable operator for use exclusively by institutional (non-residential) customers.

Mixed-Use Network: A communication network over which a person or entity provides both cable service and other service(s), such as telecommunications service.

PEG: Abbreviation for "Public, Educational, or Governmental." See note 41 , supra , for more discussion of this term.

Telecommunications : From the Communications Act, 47 U.S.C. Â§ 153, "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received."

Telecommunications Service: The offering of telecommunications directly to the public for a fee.

Title VI: The collected provisions of the Cable Act, as amended.


Immigration: Recent Apprehension Trends at the U.S. Southwest Border

Summary: Unauthorized migration across the U.S. Southwest border poses considerable challenges to federal agencies that apprehend and process unauthorized migrants (aliens) due to changing characteristics and motivations of migrants in the past few years. Unauthorized migration flows are reflected by the number of migrants apprehended by the Department of Homeland Security's (DHS's) Customs and Border Protection (CBP). In FY2000, total annual apprehensions at the border were at an all-time high of 1.64 million, before gradually declining to 303,916 in FY2017, a 45-year low. Apprehensions then increased to 396,579 in FY2018 and 851,508 in FY2019, the highest level since FY2007.

Summary: More notably, the character of unauthorized migrants has changed during the past decade. Historically, unauthorized migrant flows involved predominantly single adult Mexicans, traveling without families, whose primary motivation was U.S. employment. As recently as FY2011, Mexican nationals made up 86% of all apprehensions, and relatively few requested asylum. In FY2019, however, "Northern Triangle" migrants from El Salvador, Guatemala, and Honduras comprised 81% of all apprehensions that year. Economic migrants exclusively seeking employment no longer dominate the unauthorized migrant flow, which is now driven to a greater extent by asylum seekers and those escaping violence and domestic insecurity, or those with motivations involving a mixture of protection and economic opportunity.

Summary: CBP classifies apprehended unauthorized migrants into single adults, family units (at least one parent/guardian and at least one child), and unaccompanied alien children (UAC). In 2012, single adults made up 90% of apprehended migrants at the Southwest border. In FY2019, however, persons in family units and UAC together accounted for 65% of all apprehended migrants that year. In FY2019, CBP apprehended a record 473,682 persons in family units, exceeding all apprehensions of family unit members from FY2012-FY2018 combined. Mothers headed almost half of all family units apprehended in FY2019. In addition, apprehended persons in family units shifted from mostly Mexican nationals (80%) in FY2012 to mostly Salvadoran, Guatemalan, and Honduran nationals (91%) in FY2019. Similar changes occurred in the origin countries of unaccompanied alien children, whose total apprehensions also reached a record (76,020) in FY2019.

Summary: The changing character of the migrant flow has led to logistical and resource challenges for federal agencies, particularly CBP. These include a general capacity shortfall in CBP holding facilities, the lack of appropriate facilities to detain families in Immigration Customs and Enforcement (ICE) detention centers, the reassignment of some CBP personnel who monitor the border to process and respond to migrants in holding facilities, and rapidly expanding immigration court backlogs that delay expeditious proceedings. The changing underlying motivations and border migration strategies of recent migrants also makes apprehension data less useful than in the past for measuring border enforcement. Because many unauthorized migrants now actively seek out U.S. Border Patrol agents in order to request asylum, increases or decreases in apprehension numbers may not reflect the effectiveness of border enforcement strategies.

Summary: In response, the Trump Administration has changed existing policies for apprehended migrants, including implementing the Migrant Protection Protocols (MPP), also known as the "remain in Mexico" immigration policy, which allow DHS to return migrants seeking U.S. admission to the contiguous country from which they arrived on land, pending removal proceedings.

Summary: Options for Congress could include legislative responses to the series of policies that the Administration has developed to address the changing flow of migrants at the Southwest border. Some proposals may consider changes to the appropriations of agencies charged with processing unauthorized migrants to reshape the system from one that was designed to apprehend and return single unauthorized adults from Mexico with no claims for protection, to one that can more quickly adjudicate those seeking humanitarian protection. Other options may include greater supervision of unauthorized migrants who are released into the United States, and mandating the collection and publication of more-detailed and timely data from CBP to more completely assess the flow of unauthorized migrants, including those in the MPP program, and their impact on border enforcement and the immigration court system.

Over the past two years, increasing migration across the Southwest border of the United States has posed considerable challenges to U.S. federal agencies charged with apprehending and processing unauthorized migrants. From FY2000 to FY2017, unauthorized migration flowsâmeasured in this report by the number of migrants apprehended by the Department of Homeland Security's (DHS's) Customs and Border Protection (CBP)âhad been generally declining. Apprehensions statistics historically have been used as a rough measure of trends in unauthorized migration flows, as well as a rough indicator of border enforcement (see " Interpreting Apprehensions Data " below). After reaching an all-time peak of 1,643,679 in FY2000, apprehensions fell to a 45-year low of 303,916 in FY2017. In FY2018 apprehensions increased to 396,579, and in FY2019 they more than doubled to 851,508.

The Administration and some Members of Congress have characterized the recent increases as a border security and humanitarian crisis. For example, then-CBP Commissioner Kevin McAleenan, in testimony to the Senate Judiciary Committee on March 6, 2019, stated

I have heard a number of commentators observe that even with these alarming levels of migration, the numbers are lower than the historical peaks, and as a result, they suggest what we are seeing at the border today is not a crisis.

I fundamentally disagree. From the experience of our agents and officers on the ground, it is indeed both a border securityâand a humanitarianâcrisis.

What many looking at total numbers fail to understand is the difference in what is happening now in terms of who is crossing, the risks that they are facing, and the consequences for our system.

The difference McAleenan cited refers to the characteristics of apprehended migrants at the Southwest borderâtheir origin countries, demographic characteristics, and migratory motivationsâall of which have changed considerably during the past decade. In prior decades, unauthorized migrant flows involved predominantly adult male Mexicans, whose primary motivation was U.S. employment. If apprehended, they were typically processed through expedited removal and quickly repatriated. Relatively few migrants applied for humanitarian immigration relief such as asylum.

Mexican migrants now make up a minority of total apprehensions. Sizable numbers of migrants from the "Northern Triangle"âthe Central American countries of El Salvador, Guatemala, and Hondurasânow make up the largest group. Smaller numbers of migrants are also arriving at the Southwest border from South America (e.g., Venezuela, Peru), the Caribbean (e.g., Cuba), Africa (e.g., Cameroon, Uganda), Central Asia (e.g., Uzbekistan), and South Asia (e.g., India, Bangladesh), among other regions. Instead of being dominated by adult males, migrant flows over the course of this decade have been increasingly characterized by migrants traveling as families (family units) and unaccompanied alien children (UAC).

While a sizeable proportion of unauthorized migrants seek U.S. employment, a growing proportion of arriving migrants are seeking asylum and protection from violence. Studies of recent migration trends cite persistent poverty, inequality, demographic pressure related to high population growth, vulnerability to natural disasters, high crime rates, poor security conditions, and the lack of a strong state presence as factors that "push" migrants to make the risky and often dangerous journey from the Northern Triangle. "Pull" factors include the increasing use of U.S. asylum policy that, until recently, allowed most asylum seekers to remain in the United States while they awaited a decision on their cases. Lengthy court backlogs allow migrants admitted to the United States the opportunity to reunite with family members and acquire work authorization, typically six months after U.S. admission. Motivations for leaving Northern Triangle countries and choosing the United States are often a mixture of these push and pull factors, which can be interconnected, especially for families and unaccompanied children.

Some observers argue that the recent migrant flows represent a failure of the rule of law. They question the legitimacy of asylum claims being made by recent unauthorized migrants and contend that many are abusing U.S. immigration laws bestowing humanitarian relief in order to gain entry into, or permission to remain in, the United States. Other observers characterize the recent migrant flows as a legitimate international humanitarian crisis resulting from violent and lawless circumstances in migrants' countries of origin. These observers contend that the "crisis" at the border reflects the inability of U.S. federal agencies to adequately process arriving migrants and adjudicate their claims for immigration relief.

The changing character of the migrant flow has reportedly produced a number of logistical and resource challenges for federal agencies. These include a general capacity shortfall in CBP holding facilities, lack of appropriate facilities to detain families in ICE detention centers, reassignment of CBP personnel from port of entry duty to responding to migrants in processing facilities, and lengthy immigration court backlogs that delay expeditious proceedings. During migration peaks, these resource constraintsâcoupled with legal restrictions on the length of time that some migrants may be held âhave forced DHS to release migrants who have entered the United States unlawfully, particularly those in family units, rather than detaining or removing them.

In response to the large increase in arrivals of migrants without proper entry documents, the Trump Administration has initiated changes to existing policy for apprehended migrants, largely designed to discourage these unauthorized migration flows. In January 2019, the Administration implemented the Migrant Protection Protocols (MPP), also known as the "remain in Mexico" immigration policy, which allow DHS to return applicants for admission to the United States to the contiguous country from which they arrived (on land) pending removal proceedings. The MPP sends migrants back to Mexico to await their court proceedings for the duration of their case. This program requires the coordination and assistance of the government of Mexico, a country facing its own high levels of unauthorized migration on its southern border. The program is currently operating in six border locations.

Understanding changing migration patterns over the past decade may help inform Congress as it considers immigration-related legislation. This report discusses recent migrant apprehension trends at the Southwest border. It describes how unauthorized migration to the United States has changed in terms of the absolute numbers of migrants as well as their origin countries, demographic composition, and primary migratory motivations. The report concludes with a brief discussion of related policy implications.

Changing Migration and Apprehension Trends

The Trump Administration's and Congress's responses to the changing characteristics of unauthorized migrants at the Southwest border occur within the context of border security debates. Border security has been an ongoing subject of congressional interest since the 1970s, when unauthorized immigration to the United States first registered as a serious national challenge, and it has received increased attention since the terrorist attacks of 2001. Current debates center on how best to secure the Southwest border, including how and where to place barriers and other tactical infrastructure to impede unauthorized migration as well as the deployment of U.S. Border Patrol agents to prevent unlawful entries of migrants and contraband. Securing the border while facilitating legitimate trade and travel to and from the United States is CBP's primary mission; major shifts in CBP activities can strain resources and disrupt operations.

According to U.S. immigration law, foreign nationals who arrive in the United States without valid entry documentation may pursue asylum and related protections if they demonstrate a credible fear of persecution or torture in their country of origin. These migrants, along with others either apprehended or refused admission at a port of entry, appear in the statistics kept by CBP (see "Interpreting Apprehensions Data" below).

While CBP's responsibilities include monitoring the Southwest and Northern land borders, as well as the Atlantic and Pacific coasts, the Southwest border with Mexico commands most of the agency's resources because of its attendant risks. The Southwest border runs for nearly 2,000 miles along the four Southwestern states of California, Arizona, New Mexico, and Texas. It is not only the locus of most unauthorized migration to the United States but also that of illicit drugs, counterfeit products, dangerous agricultural products, and trafficked children. Much of this activity occurs at U.S. ports of entry at the Southwest border, where CBP officers inspect all individuals and vehicles that seek to enter the United States.

CBP's two components that monitor the Southwest border at and between ports of entryâthe U.S. Border Patrol (USBP) and the Office of Field Operations (OFO)âcollect statistics on individuals who have crossed the border illegally and those who are denied entry. Between ports of entry, USBP agents are responsible for apprehending individuals not lawfully present in the United States. OFO officers are responsible for inspections at U.S. ports of entry and collect data on noncitizens who are denied entry to the United States at ports of entry. Migrants typically are denied entry because they are not in possession of a valid entry document or are determined "inadmissible" on one of several grounds, such as having a criminal record, being a potential public safety threat, or being a public health threat. Inadmissible migrants made up 27%, 24%, and 13% of all migrants arriving at ports of entries along the Southwest border in FY2017, FY2018, and FY2019, respectively. While the number of inadmissible migrants grew slightly from FY2018 to FY2019, their percentage share of all CBP encounters diminished compared to apprehensions, as absolute numbers of apprehensions more than doubled during that period. ( Table 1 ). Both inadmissible and apprehended migrants can be placed in the MPP program.

Apprehensions statistics historically have been used as a rough measure of trends in unauthorized migration flows. The utility of these statistics for measuring border enforcement effectiveness, on the other hand, has long been considered of limited usefulness because of the unknown relationship between apprehensions and successful unlawful entries, among other reasons. Apprehensions data, by definition, do not include illegal border crossers who evade USBP agents. They also do not account for the number of potential migrants who are discouraged from attempting U.S. entry because of enforcement measures. Consequently, it is generally unclear if an increase in apprehensions results from more attempts by migrants to enter the country illegally or from a higher apprehension rate of those attempting to enter the United States illegallyâor both.

However, these statistics are arguably now less relevant than in previous years as a metric of border security efforts. In the past several years, an indeterminate but sizable share of migrants who cross between U.S. ports of entry have actively sought out U.S. Border Patrol agents in order to "turn themselves in" to request asylum. In prior years, such migrants typically would have attempted to evade USBP agents. As such, CBP's classification of these migrants as apprehensions may overstate the degree to which the agency's resources, personnel, and strategies prevent migrants from crossing the border illegally and entering the United States.

The number of total apprehensions has long been used as a basic measure of migration pressure and border enforcement. Total annual apprehensions at the Southwest border averaged 687,639 during the 1970s; 999,476 during the 1980s; 1,266,556 during the 1990s; and 1,020,143 during the 2000s; but then declined to 427,766 during the 2010s. Annual apprehensions reached a 45-year low in FY2017 (303,916). In FY2018, total apprehensions increased to 396,579; and in FY2019, they more than doubled to 851,508, the highest level since FY2007 (see Figure 1 ). While high relative to annual apprehensions during the past decade, the FY2019 level is lower than annual apprehension levels for 25 of the past 45 years. Thus, recent changes in the character of the migrant flows during the past decade occurred within the context of historically low numbers of apprehensions since FY2000.

Apprehensions at the Southwest border initially peaked at 1.62 million in 1986, the same year that Congress enacted the Immigration Reform and Control Act (IRCA), which gave lawful permanent resident status to roughly 2.7 million unauthorized aliens residing in the United States. After declining substantially for a few years, apprehensions rose again, climbing from 0.85 million in FY1989 to an all-time high of 1.64 million in FY2000. Apprehensions generally fell after that (with the exception of FY2004-FY2006), reaching a then-low point of 327,577 in FY2011. Since that year, apprehensions have fluctuated, as noted above.

The national origins of apprehended migrants have shifted considerably during the past two decades (see Figure 2 ). In FY2000, for example, almost all of the 1.6 million aliens apprehended at the Southwest border (98%) were Mexican nationals, and relatively few requested asylum. As recently as FY2011, Mexican nationals made up 86% of all 327,577 Southwest border apprehensions in that year.

That share has declined, however, and for most years after FY2013, Mexicans accounted for less than half of total apprehensions on the Southwest border. In FY2019, "other-than-Mexicans" comprised 81% of all 851,508 apprehensions. From FY2012 to FY2019, the number of Mexican nationals apprehended dropped by 37%, from 262,341 to 166,458, while the number of migrants apprehended from all other countries increased six-fold, from 94,532 to 685,050.

CBP classifies apprehended unauthorized migrants into three demographic categories: single adults, family units (at least one parent/guardian and at least one child), and unaccompanied alien children (UAC). Of the three categories, apprehensions of persons in family units have increased the most in absolute terms since FY2012, the first year for which publicly available CBP data differentiated among the three demographic categories (see Figure 3 ).

In FY2012, 321,276 single adults made up 90% of the 356,873 arriving migrants apprehended at the Southwest border, while members of family units numbered 11,116, and UAC accounted for 24,481. By FY2019, however, apprehensions of persons in family units numbered 473,682, more than all family unit apprehensions from FY2012 to FY2018 combined. Together in FY2019, those persons in family units as well as UAC (76,020 apprehensions) accounted for 65% of all apprehensions while the remaining 35% (301,806) were single adults, of whom 84% were men. Approximately 48% of family units apprehended in FY2019 were headed by mothers, 44% were headed by fathers, and about 8% were headed by two parents.

Apprehensions of Family Units by Country of Origin

As the number of apprehensions of individuals in family units has increased in recent years, their national origins have shifted from mostly Mexican, (comprising 80% of all 11,116 family unit apprehensions in FY2012), to mostly Salvadoran, Guatemalan, and Honduran, who together made up 91% of all 457,871 such apprehensions in FY2019 (see Figure 4 ). Apprehensions of individuals in family units from El Salvador increased from 636 (6%) of all such apprehensions in FY2012 to 27,114 (35%) of all 77,674 of such apprehensions in FY2016 before declining to 54,915 (12%) in FY2019. Over the same period, the share of family unit apprehensions from Honduras (513) and Guatemala (340) each grew from less than 5% of the total in FY2012 to 188,416 and 185,233, respectively, about 39% each of the total in FY2019. By comparison, the 6,004 apprehensions of Mexicans in family units made up 1% of the total in FY2019.

Notably, the percentage of persons in family units from "all other countries," has been relatively low over the same period. In absolute numbers, this category registered less than 4,000 apprehensions in all years prior to FY2019, but rose to 37,132 family unit apprehensions in FY2019 (7% of the total, the same share as in FY2012).

Apprehensions of Unaccompanied Alien Children

Over the past decade, the number of unaccompanied alien children apprehended at the Southwest border has increased considerably (see Figure 5 ). From FY2011 to FY2014, UAC apprehensions increased each year, and more than quadrupled from 16,067 in FY2011 to 68,541 in FY2014. From FY2014 to FY2018, UAC apprehensions fluctuated, declining to 39,970 in FY2015; increasing to 59,692 in FY2016; declining again to 41,435 in FY2017; and increasing again to 50,036 in FY2018. In FY2019, UAC apprehensions reached 76,020, a level that exceeds the previous peak in FY2014. In FY2019, approximately 30% of apprehended UAC were girls.

In the past decade, the country-of-origin composition of apprehended UAC, like that of family units, has shifted from mostly Mexican to mostly Salvadoran, Guatemalan, and Honduran. For example, in FY2009 Mexican UAC (16,114) made up 82% of all 19,668 UAC apprehensions in that year, while Salvadoran (1,221), Guatemalan (1,115), and Honduran (968) UAC made up 6%, 6%, and 5%, respectively, of the total. In contrast, by FY2019 Mexican UAC (10,487) made up 14% of all 76,020 UAC apprehensions in that year, while Salvadoran (12,021), Guatemalan (30,329), and Honduran (20,398) UAC made up 16%, 40%, and 27%, respectively, of the total.

Current statute treats children from contiguous countries (Mexico and Canada) differently than children from non-contiguous countries. While UAC from Mexico can be repatriated promptly through a process known as voluntary departure , UAC from all other countries are placed in formal removal proceedings. The latter are then referred to the Department of Health and Human Services' (HHS') Office of Refugee Resettlement (ORR), where they are initially sheltered and subsequently placed with family members or sponsors while they await their immigration hearing. Hence, the shift in the country-of-origin composition of the apprehended UAC population has had considerable impact on agencies charged with the processing and care of these children.

Over the past two decades, apprehensions have followed a pattern consistent with a seasonal migration cycle. In this cycle, peak numbers of apprehensions occur in the spring months (MarchâJune), followed by progressively lower numbers in the hotter summer months (JulyâSeptember), lower-than-average numbers through the fall months (OctoberâDecember), and even lower numbers in January, before rising again through the spring months when the pattern begins to repeat.

During FY2019, the monthly pattern in total apprehensions at the Southwestern border was similar to the trends during the past two decades (see Figure 6 ). From the peak in May through September of FY2019, apprehensions declined nearly 70%, from approximately 133,000 to just over 40,000.

These data suggest that the declines in monthly apprehensions from May to September of FY2019 stemmed primarily from declining numbers of family unit apprehensions. The number of persons in family units apprehended on a monthly basis dropped from 84,490 in May to 15,824 in September (an 81% decrease). For UAC, apprehensions declined by 72%, from 11,475 in May to 3,165 in September. Apprehensions of single adults saw a smaller decline (42%) over this period, from 36,894 in May to 21,518 in September.

These patterns suggest that declining apprehensions in recent months may have resulted not only from the immigration enforcement policies of the Trump Administration but also from decades-long seasonal migration patterns, among other factors.

This report has described the following major shifts in the composition and character of migrant flows to the Southwest border that have unfolded in less than a decade:

In the past two years, the number of total apprehensions has increased substantially, a reverse of the general trend of declining and relatively low apprehension levels seen since FY2001. The unauthorized migrant flow apprehended at the Southwest border no longer consists primarily of individuals from Mexico, a country with whom the United States shares a border and close economic and historical ties. It now originates largely from El Salvador, Guatemala, and Honduras. Also, growing numbers of unauthorized migrants are originating from Africa, Asia, and the Caribbean. The unauthorized migrant flow is no longer dominated by economic migrants exclusively seeking employment. It is now driven to a larger extent than in past years by asylum seekers and others with similar motivations, such as escaping violence and domestic insecurity, who may also be interested in working in the United States. Such migrants often seek out U.S. Border Patrol agents at the border when crossing illegally between U.S. ports of entry rather than attempting to elude them. The unauthorized migrant flow no longer consists primarily of single adult migrants but rather of families and children traveling without their parents.

Although not previously discussed, changing migration strategies are also altering how federal agencies respond to migrant flows. For example, migrants have been increasingly traveling in large groups, reportedly to protect themselves from harm. In addition, more migrants are arriving at remote CBP outposts along the Southwest border, sometimes overwhelming the relatively few CBP personnel who staff them.

These changing patterns at the Southwest border have considerable policy implications. In comparison with apprehended single adult economic migrants from Mexico, more-recently apprehended migrants require lengthier processing and create a call for greater resources and personnel of more federal agencies. When migrants originate from countries other than the contiguous countries of Mexico and Canada, their removals involve longer processing time, higher transportation costs, and more involved inter-agency coordination. If arriving migrants are unaccompanied alien children from noncontiguous countries, they are protected from immediate removal by statutes that require them to be put into formal immigration removal proceedings and they are referred to the care and custody of ORR. If migrants seek asylum, they generally require a credible fear hearing. They may be detained in DHS facilities for varying periods and must be processed by DOJ's Executive Office for Immigration Review (EOIR).

CBP, among all federal agencies, is arguably the most affected by the break with historical migration patterns. The pressures of large groups of migrants arriving together and the greater vulnerabilities of new arrivals are reportedly testing CBP's border infrastructure, agency personnel, and long-standing policies. When unauthorized migrant flows consist largely of families and children, who often arrive in large groups or at remote U.S. border locations, CBP has adjusted its operations and allocated resources and personnel to accommodate more vulnerable migrants. Some studies also suggest that smuggling guides sometimes direct migrants to cross in specific locations to outmaneuver USBP agents and infrastructure and avoid detection. Moreover, anecdotal evidence suggests migrant arrival strategies can be based upon perceptions of differences in border enforcement policies and practices among and within the nine CBP Southwest border sectors. If enforcement policies vary by sector, CBP can expect migration patterns to shift to sectors that migrants perceive as offering them the greatest chance of acquiring the immigration relief they seek.

The Trump Administration has changed immigration enforcement policies and practices at the border in an attempt to reduce unauthorized migration and discourage fraudulent or frivolous claims for humanitarian immigration relief. President Trump, DHS, DOD, and DOJ have acted together with a series of policy changes that make it more difficult for migrants to be awarded asylum. For example, see the following:

In November 2018, the President issued a proclamation to suspend immediately the entry into the United States of aliens who cross the Southwest border between ports of entry. This proclamation has been challenged in court and a preliminary injunction was issued by a federal district court. As noted above, DHS implemented the Migrant Protection Protocols (MPP) in January 2019, and for the past several years CBP has also used the practice of "metering" migrants. Both of these policies require migrants to wait on the Mexican side of the border. Since April 2018, National Guard personnel have supported DHS at the border, while active duty personnel began providing support in October 2018. In February 2019, President Trump proclaimed a national emergency pursuant to the National Emergencies Act in order to fund a physical barrier at the Southwest border with Mexico using $6.1 billion in funds from the Department of Defense (DOD). In September 2019, the Secretary of Defense deferred funding for military construction projects in order to redirect funds to border barrier projects using his authority under the emergency statute 10 U.S.C., Section 2808. In July 2019, DHS and DOJ jointly issued an interim final rule (IFR) that makes aliens ineligible for asylum in the United States if they arrive at the Southwest border without first seeking protection from persecution in other countries through which they transit. In addition, the United States is working with Mexico to decrease Central American migrant flows and with Central American governments to promote economic prosperity, improve security, and strengthen regional governance.

The changing character of recent migrant flows at the Southwest border also may suggest that apprehensions may be less useful than in the past for measuring border enforcement. Because many apprehended migrants now actively seek out U.S. Border Patrol agents in order to request asylum, increases or decreases in apprehension numbers may not reflect the effectiveness of border enforcement strategies. Rather, an increase in apprehensions combined with the changing characteristics of recently apprehended migrants may increasingly portend greater resource needs for federal agencies because the administrative requirements for asylum claims are more resource-intensive than those for unauthorized migrants who do not request asylum and are quickly repatriated through expedited removal. The challenge of deterring unauthorized migrants from entering the United States has been complicated and overshadowed by the challenge of processing, in a fair and timely manner, relatively greater numbers of migrants seeking asylum.

Recent migration research suggests that forced migration from civil conflict, violence, weather events, and climate change is playing a more prominent role in worldwide migratory patterns. To some extent, patterns described in this report are consistent with that trend. Declining birth rates in parts of Latin America and improving employment prospects in Mexico over the past decade have reduced the relative proportion of single adult migrants whose primary motivation is U.S. employment. In contrast, relatively high levels of violence and lack of public security, among other factors, have increased the relative proportion of Central American and Mexican families and children whose primary migratory motivation is humanitarian relief.

Options for Congress could include legislative responses to the series of policies that the Administration has developed to address the changing flow of migrants at the Southwest border. Some proposals may consider changes to the appropriations of agencies charged with processing unauthorized migrants to reshape the system from one that was designed to apprehend and return single unauthorized adults from Mexico with no claims for protection, to one that can more quickly adjudicate those seeking humanitarian protection. Other options may include greater supervision of unauthorized migrants who are released into the United States, and mandating the collection and publication of more-detailed and timely data from DHS to more completely assess the flow of unauthorized migrants, including those in the MPP program, and their impact on border enforcement and the immigration court system.