FCC, DOJ, Defend Franchise Fee Decisions

The FCC and Department of Justice have told a federal appeals court it should reject challenges to the FCC's decision to count in-kind cable franchise requirements--network capacity, channels, grants, sponsorships, specially created programming, local retail facilities, cash 'contributions,' free advertising" and more--toward its cap on franchise fees and other elements of its 2019 franchise fee deregulation decision. 

Related: Dems Seek to Re-Regulate Franchise Fees 

In a filing with the court Tuesday (Aug. 11) both agencies said that each of the FCC's decisions "was reasonable, reasonably explained, and consistent with [legislative] text, structure, and history. In other words: Nothing to appeal here, move on. 

The FCC voted along party lines back in August 2019 to hold that cable franchising authorities (LFAs) cannot regulate a cable operator's broadband service and that in-kind services or equipment they require those cable operators to provide 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. 

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.  

Related: Markey & Co. Ask FCC to Rethink Franchise Fee Item 

Various parties sued over various parts of the decision in various courts, the Third, Sixth and D.C. Circuits, with the case consolidated in the Sixth. 

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.