Democrats Seek to Reregulate Cable Franchise Fees — Again

Sen. Ed Markey (D-Mass.)
Sen. Ed Markey (D-Mass.) (Image credit: U.S. Senate)

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. ■

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.