A group of Democratic legislators are trying to thwart an FCC effort to deregulated franchise fees by ruling that in-kind services or equipment local franchise authorities (LFAs) require those cable operators to provide as part of their franchise agreements must count toward the FCC's 5% (of cable revenues) cap on franchise fees.
The FCC voted along party lines back in August 2019 to count in-kind contributions, with an exception from the in-kind counting for some, but not all, capital costs of providing public, educational and government (PEG) channels, whose public interest value the FCC said it continues to recognize.
FCC chair Ajit Pai said counting in-kind "exactions" from LFAs was necessary "to prevent local authorities from unlawfully evading the 5% statutory cap on franchise fees" via those non-monetary conditions.
But Sen. Ed Markey (D-Mass.) and Rep. Anna Eshoo (D-Calif.), joined by some of the Democratic presidential candidates and others see it very differently. Markey early on asked the FCC to rethink the decision.
They have introduced the Protecting Community Television Act, a bill of only a few lines (Protecting Community Television Act 2020)*, that would make it clear that a franchise fee cap is only on money, not in-kind services, so as to prevent what they 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.
*The bill would change the language in Sec. 622g(1) of the Communications Act by replacing the word "includes" to "means" and adding "other monetary" before "assessments, per the following: (1) the term ''franchise fee'' [MEANS] any tax, fee, or [OTHER MONETARY] assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such."
Also sponsoring the bill are Sens. Tammy Baldwin (D-Wis.), Tina Smith (D-Minn.), Ben Cardin (D-Md.), Chris Van Hollen (D-Md), Bernie Sanders (I-Vt.), Chris Murphy (D-Conn.), Maggie Hassan (D-N.H.), Jeff Merkley (D-Ore.), Jeanne Shaheen (D-N.H.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Kirsten Gillibrand (D-N.Y.), Marie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), and Amy Klobuchar (D-Minn.).
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.
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