NCTA Finds Allies in Franchise-Fee Fight

WASHINGTON — Some powerful minority groups have come to the aid of cable operators looking to get out from under what they say are duplicative franchise fees masquerading as taxes.

The Minority Media, Telecom & Internet Council (MMTC) filed a letter on the issue with the Federal Communications Commission on behalf of a dozen and a half civil-rights organizations.

“Allowing a state to impose its own rights-of-way access fee on top of a 5% franchise fee imposed by the local franchising authority would deplete resources that cable operators could otherwise use for broadband deployment,” NCTA–The Internet & Television Association told the FCC, and the MMTC and company are on the same page.

The FCC is looking at ways to update or revamp how cable franchisees are regulated at the state and local level.

In their letter, the groups told the FCC such “duplicative fees” are a definite threat to closing the digital divide, one of the agency’s prime directives.

The fees, ultimately passed on to consumers, represent a regressive tax “most burdensome to lower-income households that spend a far larger share of their income on broadband than wealthier families.”

The groups did not, but could have, mentioned that the fees can be viewed as regressive in another way. If the added expense discourages some from getting broadband access, they would be denied the price break on some services for online transactions. For example, many states offer discounts for renewing a car registration online.

“In effect, these fees make home broadband access even less affordable for those who can least afford it, and widen the digital divide,” they told the commission.

Being able to charge a right-of-way fee in addition to the franchise fee is obviously a way for states, some cash-strapped, to raise more revenue, but that should not justify the move, they say.

Among those signing on to the letter were the NAACP, the Rainbow/PUSH Coalition, and the National Council of Negro Women.

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.