WASHINGTON — Cable operators look like they could have a fight on their hands if they start deducting non-capital PEG (public, education and government) channel costs from their franchise fees.
Cities have been weighing in with the Federal Communications Commission after it adopted a further notice of proposed rulemaking tentatively concluding that could be the case.
With the full-throated support of NCTA–The Internet & Television Association, the commission wants to allow them to count in-kind contributions against the 5% (of revenue) cap on fees a local franchise authority can charge. While that would not include PEG capital costs or buildout requirements, it would include transmission and programming.
Clayton, Calif., said that it may be impossible to figure out the fair-market value of PEG services, which “would likely be a source of litigation between cable operators and local governments.”
Bellaire, Texas, warned of arbitrary deductions and said they would threaten valuable PEG programming — specifically its City Council meetings, which would not otherwise make it onto the schedule.
The nonprofit that runs the government TV system in Comcast’s home base of Philadelphia agrees with Bellaire and Clayton that the public is the beneficiary of the system. Letting cable operators deduct the value of transmission and programming would decimate the PEG provider’s service and be a budget hit, it said.
The Alliance for Community Media, a Washington D.C.-based access advocacy group representing more than 3,000 PEG channels, joined with a handful of local franchise authorities to argue that subjecting PEG channels to the 5% cap “would have devastating fiscal impacts on local communities and their residents and would undermine the Cable Act’s goal of promoting localism and diverse sources of information at a time when these goals are in most need of support.”
It will now be up to the FCC to decide whether to carve out PEG from the cap. It has signaled it is tilting toward giving cable operators that potential price break.
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
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.