4.0.a. SWCSR 08-15-2019 - Laserfiche WebLink

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The 621 Order differs from the draft in one important respect. In the draft, the FCC recognized that there may be disagreements about whether the new rules require changes to existing franchises. The FCC's draft would have required a cable operator that seeks to modify its franchise based on the 621 Order to follow a statutory process for reaching agreement on modifications. However, that requirement was removed and the 621 Order instead states: 62. The franchise fee rulings we adopt in this Order are prospective.245 Thus, cable operators may count only ongoing and future in-kind contributions toward the five percent franchise fee cap after the Order is effective. There is broad record support for applying the rulings prospectively; no commenter argues that our rulings should apply retroactively to allow cable operators to recoup past payments that exceed the five percent franchise fee cap.246 To the extent a franchise agreement that is currently in place conflicts with this Order, we encourage the parties to negotiate franchise modifications within a reasonable time.247 If a franchising authority refuses to modify any provision of a franchise agreement that is inconsistent with this Order, that provision is subject to preemption under section 636(c). In turn, the FCC explains in footnote 247 that it considers a 120-days (the period established in the statutory modification process) to be an appropriate timeline for negotiating modifications. Responsible cable operators will seek franchise modifications thru negotiation, but some may simply change their franchise fee or PEG support calculations without notice to the local franchising authority. This is an issue to monitor. Finally, while the 621 Order does not allow cable operators to deduct the value of PEG channels from franchise fees now, the Order indicates that the FCC will consider this issue further. But instead of opening a new proceeding to do so, the FCC invites further comment via the current proceeding. The 621 Order further states: "[t]o the extent that we are provided sufficient information to answer the complex questions raised by channel capacity, we intend to resolve them in the next twelve months." Order, fn. 180. Many franchising authorities will have a significant interest in providing information to the FCC about whether it would be appropriate to allow cable operator to offset the "value"of PEG channels against franchise fees. Clients may want to consider providing information or comment to the FCC about this issue. 2