July 15, 2019
CASE wishes to thank Chairman Pai and the FCC for their efforts to affirm the legal limits of Section 621 local franchise fee powers over broadband internet providers. On August 1, the Commission will consider a Third Report and Order that would address issues raised by a remand from the U.S. Court of Appeals for the Sixth Circuit concerning how franchising authorities may regulate incumbent cable operators. CASE encourages all Commissioners to supporting this important measure.
This action became necessary after numerous local states and municipalities started to charge companies additional taxes and fees — and in some cases demand in-kind “freebie” services — as part of their agreements with cable operators to use their right-of-ways. This was in clear violation of the law, which caps franchise fees at 5 percent of gross revenues of cable TV service. The FCC action will not only protect consumers from harmful and illegal taxes on internet service, but promote the expansion of high-speed internet access to more Americans and foster the ongoing development of new technology that will keep America on the cutting edge of digital innovation.
The FCC’s action will end the cash-grabs at the expense of consumers, and restore the original intent of Congress. The law as written by Congress struck an important balance between generously compensating localities for accommodating broadband infrastructure, and removing obstacles to ensure the widespread expansion of broadband across the country. Unfortunately some local politicians have been exploiting this arrangement by demanding additional payments and benefits from communications companies for the privilege of providing local broadband services, undermining the intent of Congress and raising costs on consumers totaling into the hundreds of millions of dollars.
The action taken by Chairman Pai affirms that the cap of 5 percent gross revenues on broadband franchise agreements is firm and inviolable, protecting our national broadband infrastructure from local shakedown artists and protecting consumers from the harm of higher costs and diminished service. By providing this regulatory certainty, the FCC has helped restore balance to America’s digital economy that will protect consumers, expand investment in new infrastructure and technology, and boost America’s position as the global leader in digital internet technology.
