Franchise Reform Act of 2006 - Amends the Communications Act of 1934 to designate the State Commission of each state as the franchising authority for any state-issued franchise for the provision of cable or video service in that state. Outlines application requirements for any entity or person seeking to obtain a state-issued certificate of franchise authority. Exempts existing franchises from such application requirements. Requires the holder of a state-issued certificate to pay each municipality in which the holder provides cable or video service a franchise fee of five percent of the gross revenues of such holder.
Requires certificate holders to: (1) comply with applicable customer service standards until there are two or more providers offering service in a municipality; (2) provide municipalities, upon request, with capacity to allow public, educational, and governmental (PEG) access channels for noncommercial programming (with a required minimum number of such channels); and (3) provide for the interconnection of cable and video systems within a municipality for the purpose of providing PEG programming.
Requires local municipalities to allow certificate holders to install, construct, and maintain necessary communications networks within public rights-of-way.
Prohibits certificate holders from denying access to cable or video service to any group of residential subscribers because of the income of the residents in the local area.