The FCC has proposed rules around so-called “in-kind” benefits that effectively redefine what is and is not a franchise fee under federal law. The 1984 Cable Act allows communities to negotiate with cable companies to reach agreements that meet community needs. The FCC’s proposed rules would eliminate most of that right and would effectively rewrite the Cable Act.
Under the 1984 Act, franchise fees paid for the use of public property and public rights-of-way are capped at five percent of gross cable revenues. The FCC’s rules propose to allow non-cash items that benefit the public (promotional advertisements, cable service to classrooms, senior discounts, low income discounts, backhaul services from origination points, program information on electronic interactive navigation guides, and the channels themselves) to be charged back against that franchise fee cap.
The effect of the rule? In some communities, franchise fee support may be eliminated in its entirety and the cable industry would STILL collect fees from consumers! Cities and towns across America will be forced to choose between the rent they collect for the use of their property and the channels they and the public use to connect with one another.
ACM and our partners across the United States strongly oppose the rule. There are now 63 members of Congress
who oppose the rule and several others who are asking about ways to counter its effects.
Our colleagues at NATOA along with the National League of Cities, US Conference of Mayors, and several other municipal associations filed a motion with the FCC to stay its cable franchising order this last week (here’s the motion
I expect the FCC will reject the stay – and it will set the stage for the real legal fight against the FCC in court later this fall. ACM will be among many parties who expect to be suing the FCC in court for overstepping its authority and harming local communities.
At this stage, ACM is asking its members to document any requests for franchise modification that are coming from cable companies so we can document possible harms – and that you consider supporting the legal fight with a contribution to our legal and public policy fund.
Public comments in the Rule Making are closed, but people can still be heard on the matter as the FCC deliberates on the proposed rule. People should contact their Congress members
and ask them to express their disapproval of the proposed rule.