Markey & Co. Ask FCC to Rethink Franchise Fee Item

Some Democrat senators are trying to get the FCC to reverse course on its plan to vote Aug. 1 to count non-monetary considerations in cable franchise agreements toward the 5% cap on franchise fees.

They are concerned that allowing cable companies to assign a monetary value to franchise requirements related to schools, libraries, public safety or PGE (public, educational and government) channels will force localities to choose between PEG and other services, and both might lose out in that choice.

Related: Mayors Unite Against Franchise Fee Reforms

“[PEG] stations connect Americans to their communities, catalyze civic engagement, and keep us up to date on the local issues and activities that affect our lives,” the Senators wrote in a letter to FCC chair Ajit Pai. “Your proposal would force local governments to decide between supporting PEG stations and supporting other important services for critical community institutions like schools and public safety buildings. We strongly urge the Commission to avoid any policy changes that will harm PEG channels and limit needed services to the communities we represent.”

Pai almost certainly has the votes of his Republican majority to require the changes, which cable operators have asked for.

NCTA-the Internet & Television Association, has told the FCC that despite clear direction from Congress, local franchise authorities (LFAs) have been abusing the prices through excessive fees and in-kind "contributions," which include but are not limited to "courtesy equipment, I-Net construction, network capacity, channels, grants, sponsorships, specially created programming, local retail facilities, cash 'contributions,' and free advertising," NCTA has said.

Given the stranded investment of built-out systems, cable providers lack power to refuse the LFA demands, NCTA told the FCC in comments on the proposed reforms.

Signing on to the Markey letter were Sens. Tammy Baldwin (D-Wisc.), Richard Blumenthal (D-Conn.), Tina Smith (D-Minn.), Ben Cardin (D-Md.), Chris Murphy (D-Conn.), Maggie Hassan (D-N.H.), Pat Leahy (D-Vt.), Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), Mazie Hirono (D-Hawaii), Jeanne Shaheen (D-N.H.), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), and Amy Klobuchar (D-Minn). 

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.