INFORMATION #4 12-03-2007 - Laserfiche WebLink

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FCC order applies 5 percent cap on franchise fees to incumbent cable companies Page 1 of 2 ~- ~1,~~ ~ ~". ~.CiU J c~~ i 11~tC~~~C~TA ~1"r1~5 c~~f~~ ~~aza FCC order applies 5 percent cap. on franchise fees to incumbent cable companies Issue 32 Published: November 15, Ann Higgins On Nov. 6, the Federal Communications Commission (FCC) released its Second Report and Order on implementation of federal cable laws for competitive franchising. The cap on franchise fees that the FCC previously only applied to competitive franchisees was extended. to incumbent cable systems operating i~ compliance with existing local franchises. Though the new FCC order is not yet in effect, some cable attorneys have raised concerns that the effecti date for provisions related to payment of PEG fees and costs for installation and operation of institutiona networks (I Nets) is ambiguous and may be subject to claims that such restrictions would become effecti immediately. In general, however, FCC orders are not effective unti130 days after they are published in ~ Federal Register, which would likely mean that the effective'date would occur at the close of 2007. The order leaves cities and local franchising authorities with many unanswered questions about the implications of the new ruling. In circumstances where local franchise agreements contain provisions foi incumbent to pay additional fees or make in-kind contributions to support local programming for public, educational, and government (PEG) channels and/or maintain I Nets, local officials are uncertain what tr order may mean for future payments or other contributions for support of PEG services. The order does not set aside existing franchises, but raises question about whether cities may anticipate requests by current cable system operators to modify current franchise agreements or to offset such PEG support from the total of the current amount of franchise fee revenues paid to cities. At the national level, the National League of Cities as well as-other groups representing the interests of 1~ franchising authorities, counties, PEG programmers and facilities, and the U.S. Conference of Mayors h~ joined in challenging the latest FCC order. The League will be monitoring the situation and conferring with attorneys who practice cable law in Minnesota as well as with the National League of Cities. We will make cities aware of developments regarding this issue as well as when the FCC findings regarding offsets from franchise fee payments for fee and I-Net obligations may, in some circumstances, be effective sooner. LMC Board Editor: Designer: Executive Director: of Directors Eri..ca.Norris._Perlman. Jason Little Jim_Miller Copyright ©2007 League of~Minnesota Cities 145 University Ave. West, St. Paul, MN 55103 Phone: 651-281-1200 ~ Toll Free: 1-800-925-1122 http://www.lmnc.org/bulletin/story.cfm?id=1637&title_id=1 11/16/2007