The Federal Cable Communications Policy Act of 1984 established a national policy concerning cable communications. The Cable Act authorizes municipalities to franchise cable operators within their boundaries and sets a wide-range of provisions that guide franchise authorities. This Act was later updated with the "Cable Television Consumer Protection and Competition Act of 1992." The Act was designed to spur competition between the telephone and the cable industries.
The City of Torrance granted a non-exclusive franchise to Paragon Cable d.b.a. as AOL/Time Warner Communications. AOL/TWC later transferred the franchise to Time Warner Cable. TWC is required to provide all services on a non-discriminatory basis, free service to all municipal, school, hospital, and certain non-profit organizations. TWC is also required to set aside channels for local use. TWC pays the City a 5% franchise fee for commercial use of the public rights-of-way.
On September 29, 2006, Governor Schwarzenegger signed AB 2987 to become effective January 1, 2007. The statute, the "Digital Infrastructure and Video Competition Act of 2006" ("DIVCA"), established a new framework for the regulation of cable television.
The fundamental change was beginning January 2, 2008 cities (likely including charter cities) no longer had the authority to issue franchises to video providers; instead, that authority rests solely with the California Public Utilities Commission ("PUC").
On March 1, 2007 the CPUC began accepting applications for a state franchise from entities which wish to provide video service in California. Torrance received notification from AT&T, Time Warner Cable, and Verizon that they had been issued a franchise to provide video services in the City of Torrance.
On March 4, 2008, the City Council adopted an Ordinance for Regulation of State Video Franchises and City Video Franchises.