Sens. Ed Markey (D-Mass.) and Tammy Baldwin (D-Wis.) have reintroduced a bill that would reregulate cable franchise fees.

The Protecting Community Television Act would “clarify” that the 5% cap on a cable franchise fee applies only to monetary “assessments” and not in-kind contributions.

“In 2019, the FCC allowed cable companies to put a price tag on in-kind contributions they provide to communities, including PEG [public, education and government] channels,” said Markey in re-reintroducing the bill. “Under the rule, cable companies can then subtract the ascribed value from the franchising fees that they pay in order to operate. The FCC’s decision has forced local governments across the country to decide between supporting PEG programming and supporting other public services for schools, public safety buildings, and libraries in cable franchise agreements.”

The bill, first introduced in 2020, was reintroduced in December 2021. Given that the House is now controlled by Republicans, who generally oppose the bill, and that it did not pass when Democrats controlled both Houses makes its fate likely to match those of the earlier, unsuccessful, efforts.

The Federal Communications Commission, under then-chair Ajit Pai, and with the backing of NCTA, voted along party lines in 2019 that non-cash, “in-kind’ exactions from cable operators by local franchise authorities as part of their franchise agreements were indeed fees subject to the 5% cap. It also preempted state or local franchise regulations that conflicted with those conclusions and extended its rules to state as well as local franchises.  A federal appeals court upheld that FCC vote.

Also: Dems Seek to Reregulate Cable Franchise Fees

As an example of one of those non-cash exactions that needed to count toward the fee, the court noted, was “a demand by St. Louis that a cable operator contribute 20 percent of its stock to the city.”

Markey and Baldwin hope that a new Congress will give them a new opportunity to “clarify” the rule, or put another way, reverse the rule voted by an FCC majority and upheld by the courts.

Currently, the FCC could not reverse its own rule unless one of its Republican members supported that move, which would be highly unlikely. ■

A bill billed as protecting public, educational and government (PEG) channels has been reintroduced by a host of congressional Democrats.

The Protecting Community Television Act would "clarify" that the 5% cap on a cable franchise fee applies only to monetary "assessments" and not in-kind contributions.

“Throughout the ongoing pandemic, viewers in Massachusetts and across the country have relied on community media to stay safe, healthy, and informed,” said Sen. Ed Markey (D-Mass.). “I’m proud to re-introduce the Protecting Community Television Act because, in this era of increased media consolidation and globalization, it is critical that we preserve the PEG operations that lift up local voices and air the programming that is most relevant to the lives of our family members and neighbors."

Joining in the bill's re-introduction Thursday (Dec. 9) were Sen. Tammy Baldwin (D-Wis.) and Reps. Anna Eshoo (D-Calif.) and Peter DeFazio (D-Ore.).

The FCC under then chairman Ajit Pai, and with the backing of NCTA, voted in 2019 that non-cash exactions from cable operators by local franchise authorities were indeed fees subject to the 5% cap. A federal appeals court upheld that decision in May of this year.

As an example of one of those non-cash exactions that needed to count toward the fee, the court noted, was "a demand by St. Louis that a cable operator contribute 20 percent of its stock to the city."

The FCC voted along party lines in August 2019 to hold that in-kind services or equipment cable local franchising authorities (LFAs) require those cable operators to provide a part of their franchise agreement must count toward the FCC's 5% (of cable revenues) cap on franchise fees charged by the LFAs. It also preempted state or local franchise regs that conflicted with those conclusions and extended its rules to state as well as local franchises.

Franchising authorities had challenged a 2019 FCC order, with NCTA-The Internet & Television Association, which pushed for the FCC order, weighing in on the side of the FCC.

The Protecting Community Television Act, which was first introduced in 2020 following the FCC decision under Pai, would make it clear that a franchise fee cap is only on money, not in-kind services, so as to prevent what the legislators said was an LFA having to choose between funding public, educational and government channels (PEG) and other services for critical institutions like schools or libraries.

Bill co-sponsors include Sens. Chuck Schumer (D-N.Y.), Mazie Hirono (D-Hawaii), Richard Blumenthal (D-Conn.), Amy Klobuchar (D-Minn.), Jeff Merkley (D-Ore.), Kirsten Gillibrand (D-N.Y.), Chris Van Hollen (D-Md.), Bernie Sanders (I-Vt.), Chris Murphy (D-Conn.), Ron Wyden (D-Ore.), Diane Feinstein (D-Calif.), Elizabeth Warren (D-Mass.), and Ben Cardin (D-Md.).

Not surprisingly, the bill has the support of National Association of Counties and the National League of Cities. ■

The U.S. Supreme Court has ruled that Manhattan Neighborhood Network (MNN), the private nonprofit that New York City tapped to operate its public educational and government (PEG) channels, is a private speaker, not a governmental entity, and thus not subject to claims of abridgment of speech. 

That came in a ruling reversing the U.S. Court of Appeals for the Second Circuit's finding that MNN was a state actor. The Supreme Court decision was rendered by newest Justice Brett Kavanaugh, who is familiar with communications issues from his time on the D.C. Circuit appeals court. 

Cable franchisees and local governments are prohibited from "'exercis[ing] any editorial control' over the channels, aside from regulating obscenity and other unprotected content."

"It does not matter that a provision in the franchise agreements between the City and Time Warner allowed the City to designate a private entity to operate the public access channels on Time Warner’s cable system," Kavanaugh wrote, referring to the cable system now owned by Charter Communications. "Nothing in the agreements suggests that the City possesses any property interest in the cable system or in the public access channels on that system."

The case centered on a video critical of MNN that DeeDee Halleck and Jesus Papoleto produced and which MNN aired, but then suspended the pair from its facilities. 

The two sued over being denied public access to the channel by the people operating the public access channel, which they said violated their free speech rights. A district court dismissed the claim on the ground that MNN was not a state actor. The Second Circuit disagreed, but the High Court's conservative majority sided--by a vote of 5-4--with the district court.

"Operating public access channels on a cable system is not a traditional, exclusive public function. A private entity such as MNN who opens its property for speech by others is not transformed by that fact alone into a state actor," Kavanaugh wrote. 

Joining Kavanaugh were Supreme Court Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito and Neil Gorsuch. Dissenting were Justices Sonia Sotomayor, Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan. 

Penning the dissent, Sotomayor said that MNN had been appointed by the government to administer a constitutional public forum and that the city "secures a property interest in the channels" when it grants a cable franchisee its license.

"State regulations require those public-access channels to be made open to the public on terms that render them a public forum. The City contracted out the administration of that forum to a private organization, petitioner Manhattan Community Access Corporation (MNN). By accepting that agency relationship, MNN stepped into the City’s shoes and thus qualifies as a state actor, subject to the First Amendment like any other."

Sotomayor and company said the Second Circuit should have been affirmed because: "The channels are clearly a public forum: The City has a property interest in them, and New York regulations require that access to those channels be kept open to all."

That was the minority's theory of the case, but it fell one vote short of being the precedent that has now been set, which is that while governments and cable operators can't regulate speech beyond the extremes of obscenity and other unprotected speech, PEG administrators can.

After hammering away for months, Comcast and its home town of Philadelphia have agreed to terms on a new 15-year franchise agreement that includes a bulking up of the operator’s public, educational and government) commitments to the city, and expanded access to the MSO's low-cost Internet service program.

The agreement was voted out of committee yesterday (December 3), and is slated for a formal vote by the city council and Philadelphia Mayor Michael Nutter next Thursday (December 10).

Before the deal, Comcast has been tightening its ties with the city. Comcast, headquartered in Philadelphia, is in the process of erecting an “Innovation and Technology Center” that, at 59 stories, will be taller than  the Comcast Center.

“This is an unprecedented renewal and a strong indication of our commitment to our hometown,” Comcast spokesman Jeff Alexander said, in a statement. “It will benefit the City and all Philadelphians now and for years to come, broadening access to broadband through Internet Essentials, creating good-paying jobs and careers and much more.”

According to the terms of the new franchise agreement, it includes “enhanced customer service standards” greater than those required of Comcast rival Verizon and what was in the prior Comcast franchise deal. Comcast must adhere to specific performance requirements, regular enhanced reporting, “with audit rights by the City, and liquidated damages up to $500,000 per year for failure to comply.” That’s in addition to $500,000 in liquidated damages for any other violation of the franchise and is twice the liquidated damages provided by the Verizon franchise, per an executive summary of the terms.

The new franchise fee provides for the maximum lawful franchise fee of 5% of gross revenues from cable service, which currently exceeds $17 million per year.

At the city’s request, Comcast has agreed to expand the revenues to include all fees and FCC fees collected from customers --elements that aren’t in the Verizon franchise.

Other details include:

-PEG funding: Will rise from $8.2 million under the prior franchise, to $21.3 million under the new one – more than double the funding provided in the Verizon franchise. The franchise also continues Comcast's provision of nearly $1 million per year in complimentary services to Philadelphia municipal locations, schools, and libraries, while the Verizon franchise provides for none.

-PEG Channels:  The agreement provides for 11 channels total - 4 public access channels (PhillyCAM); 2 governmental access channels (Channels 63 and 64); and 5 educational access channels (1 each for SDP, Community College of Philadelphia, Drexel University, Temple University, and LaSalle University).  Two channels are currently available in HD, though the franchise calls for a “reasonable pathway” for the activation of more HD channels.

-PEG VOD capacity:  The new deal increases PEG VOD capacity from 8 hours to 20 hour.

- Institutional Network:  Comcast is providing $10 million in network construction (to more than 200 city locations) at no cost to the city, compared to Verizon’s required $2 million cash payment.  Philadelphia could include he provision of WiFi services at municipal locations. 

-Remediation of cable plant code violations:  Comcast will carry out a city-wide effort to inspect, identify and repair alleged violations of the National Electrical Safety Code and/or National Electrical Code in its cable plant city-wide (including poles, cables, cable drops, equipment in pedestals, etc.).  The project will be completed within 18 months and is guaranteed by up to $2 million in liquidated damages.

-Comcast will has added Philadelphia to a pilot program to extend its $9.95/month Internet Essentials offering to low-income seniors, and to include the city in in the first group of communities to be part of any future program around the low-cost program.

- Comcast, for five years, will partner with a local city non-profit to provide low-income citizens who don’t have school-aged children a chance to participate in the Internet Essentials program at a rate of $29.95, of which the customer pays $9.95 and the organization pays $20.

-Comcast will provide a grant of $500,000 in support of a Digital Inclusion Alliance formed by the city comprised of businesses, non-profit organizations, and governmental agencies.

-Comcast has agreed to begin offering a 10% discount to low-income seniors on limited basic and digital starter cable service.

-The MSO will also launch a Virtual Customer Care Agent program in Philadelphia that will result in the hiring of 150 to 200 Philadelphia residents to work as customer care employees from their homes.

- 5-Year Amnesty Program for 90-Day Requirement in Internet Essentials:  For a five year period in the city, Comcast has agreed to waive the requirement that applicants for Internet Essentials (including the Senior Pilot and Low-Income Programs above) shall not have been Comcast Internet Service customers in the prior 90 days.  

Sens. Ed Markey (D-Mass.) and Tammy Baldwin (D-Wis.) have reintroduced thier Community Access Preservation (CAP) Act, which would ensure funding for, and access to, public, educational and government (PEG) channels.

The bill would insure that public, educational and government (PEG) channels remain on cable's basic tier and would allow PEG funding to be used for salaries, among other things. "The CAP Act involves no federal spending, will address the severe challenges faced by PEG access channels and local community media, and will save thousands of jobs across the country," according to Sen. Markey's website.

“ACT has been working with these offices and many others to create a solution that will reverse the harm done to PEG access television,” said John Rocco, president of American Community Television, in a statement. “The CAP Act is critical to the survival of these important local television channels. We are already losing channels and could lose many more if we don’t restore the intent of the Cable Act, which found PEG access television important to local communities and democracy.”

Last time around, broadcast group TVFreedom backed the bill. Broadcasters have been fighting cable efforts to include a prohibition on basic-tier status for retrans stations, so they share with PEG proponents the goal of preserving their respective basic tier positions.

Specifically, the act "amends the Cable Act to ensure that PEG fees can be used for any purpose, including paying employee salaries. The legislation reaffirms that cable operators must deliver PEG channels to subscribers without additional charges, and via channel placement with the same quality, accessibility and functionality as provided to local television broadcast stations. Finally, it requires operators to provide the support required under state laws, the support historically provided for PEG, or up to 2% of gross revenue — whichever is greater.

The bill could have a hard slog in a Republican-controlled House and Senate.