Concerns raised about FCC’s proposed franchise fee change

The Federal Communications Commission is receiving a flood of concerns about its tentative conclusions that all cable-related “in-kind” contributions amount to “franchise fees” subject to a statutory 5 percent cap, and that local franchise authorities cannot regulate cable operators providing non-cable services such as broadband internet.

Confirmation of these conclusions would upend the understanding of franchise fees and strip power from local governments to control cable operators’ use of rights of way when providing non-cable services.

The overwhelming majority of public comments in the docket (MB Docket No. 05-311) warn the FCC about the adverse consequences of counting “in-kind” contributions toward “franchise fees” and the detrimental effects such a decision would have on public, educational and governmental (PEG) channels.

Commenters assert that the loss of revenue and support would force municipalities to either divert resources away from core municipal and school services in order to maintain PEG programming, or suffer a dramatic reduction in the scope of PEG channels, or lose them altogether.

A high school principal tells the FCC that because of PEG, his high schoolers have been exposed to broadcast media opportunities they would not have had otherwise. A small business owner, who derives some of his income from providing local programming, states that the FCC decision could significantly impact his business.

The president of a Massachusetts Rotary Club comments that it has relied for 20 years on the live broadcast of its annual fundraiser on public access television to raise more than $1 million for local and international charities. The executive director of a nonprofit states that her organization relies on public access television to promote its mission and engage the local community. A disabled couple writes that public access television is their only connection to town government.

When the initial comment period closed on Nov. 14, more than 1,400 comments from Massachusetts residents had been filed with the FCC. There were also responses from town managers and administrators, boards of selectmen, many community television stations and organizations, as well as elected officials from across Massachusetts, including Reps. Michael Day and Shaunna O’Connell, Sen. Julian Cyr, a joint letter from Reps. Denise Provost, Christine Barber, Mike Connolly and Patricia Jehlen, and a joint letter from U.S. Sens. Ed Markey and Elizabeth Warren.

The MMA has also expressed its concerns to the FCC and strongly supports the citizens, local franchising authorities and elected officials who have commented.

In its Nov. 2 comments to the FCC, the MMA wrote, “We strenuously oppose the [proposed rule changes], and we urge you to reconsider and then reject these proposals. We ask you to safeguard the public interest by maintaining the current franchise fee structure and honoring the authority of cities and towns to control the public rights of way.”

The FCC’s “reply comment” period is open until Dec. 14, which allows an additional opportunity to express support or opposition to a particular comment or comments.