Cable Television (CATV) Franchise Agreements
- Federal Regulations Cable television franchise agreements are governed by federal law rather than state law and are negotiated with the cable company. Cable TV franchise fees may be levied at a rate up to 5% of gross revenues from the franchise area every year ( 47 U.S.C. §542 (a) and (b)). ...
- Public Access Television ("PEG") Channels ...
- Examples of Cable Franchise Agreements, Codes, and Ordinances ...
How are franchise fees calculated?
- Divide your total gross assets by your total issued shares carrying to 6 decimal places. ...
- Multiply the assumed par by the number of authorized shares having a par value of less than the assumed par. ...
- Multiply the number of authorized shares with a par value greater than the assumed par by their respective par value. ...
- Add the results of #2 and #3 above. ...
What is included in a franchise fee?
The average franchise fee is $34k, but varies heavily by franchise category. Franchise fees are meant to cover the cost of onboarding new franchisees. In return for a franchise fee, you receive training, the rights to use the brand, opening support, operations manuals, and more which we cover below.
How is the franchise fee determined?
When determining the initial franchise fee, we initially evaluate the following:
- The sophistication and uniqueness of the business model;
- The potential ROI and profitability of the franchise business;
- The initial training and support provided to Franchisees by the Franchisor;
- The Franchisor’s costs and expenses associated with the acquisition and grant of a franchise; and
- Anticipated demand for the franchise offering.
What do franchise fees cover?
That initial fee may cover:
- The business launch by the franchisee
- Recruiting
- Training
- Site identification
- Stationery
- Any necessary special equipment
Where to file a complaint with the FCC?
What is the basic tier of cable?
About this website
Why do I pay a franchise fee on my cable bill?
In the United States cable television industry, a cable television franchise fee is an annual fee charged by a local government to a private cable television company as compensation for using public property it owns as right-of-way for its cable lines.
Does a cable station need a franchise from the local government?
Under the Cable Communications Policy Act of 1984 (Cable Act), cable operators must obtain franchises from state or local franchising authorities, and these authorities may continue to condition franchises on various requirements.
How do cable franchises work?
Cable franchise agreements provide the franchisee the right to construct, install, maintain and operate a cable system on County Public Rights-of-Way in exchange for the franchisee's promise to provide cable service to residents of the County.
Can you get franchise fee back?
Bear in mind that the franchise fee is most often non-refundable. This means that you will not get it back in any situation.
Do FCC rules apply to cable?
About the FCC. The Federal Communications Commission regulates interstate and international communications by radio, television, wire, satellite and cable in all 50 states, the District of Columbia and U.S. territories.
What types of violations do the FCC handle?
Technical Rule ViolationsAntenna Structure Registration, Lighting and Marking Requirements.Unlicensed Operations.Wireless 911 and E911 Violations.Emergency Alert System (EAS) Violations.Cable Signal Leakage Enforcement.Interference Complaints.
Can cable companies block channels?
The company can, by sending data to your box, allow or prohibit access to any channel. Most services are encrypted to stop people trying to bypass the cable box.
Why do cable companies drop channels?
When the broadcast stations and cable systems fail to reach an agreement, the local station may be dropped until an agreement is reached.
What is a telecommunications franchise agreement?
Franchises are customarily granted in exchange for an annual fee to place telephone, electric, gas, fiber optic and cable television lines in streets or on public property. The fee is not a tax.
Can you walk away from a franchise?
There are many reasons why a franchisor or franchisee may not want to renew a franchise agreement. Thankfully for the franchisee, there is nothing to stop them from closing up and walking away when the agreement expires.
How can you get out of a franchise?
These are your options:Sell the franchise.Franchisor buy back.Walk out.Dispute resolution and mediation.Negotiating an exit.
What is a reasonable franchise fee?
Franchise fees are typically between $25,000 to $50,000 on average. 2) Startup Costs: These are the expenses you'll incur to get your new business open and operating. Initial investment costs vary widely from franchise to franchise.
What is a local franchise agreement?
Impact of Franchise Agreements A franchise agreement is a negotiated contract between a municipality and an electric service provider that grants the utility the right to serve customers in the city's jurisdiction. The contract often specifies the period of service and a fee remitted back to the municipality.
What is the role of a franchise authority?
A franchising authority is the local municipal, county or other government organization that regulates certain aspects of the cable television industry at the state or local level.
What does the filing of forms and reports in a cable operators Public File reflect?
What does the filing of forms and reports in a cable operator's public file reflect? To provide the permissions necessary to allow a cable operator to use the public right-of-way within the franchise area, in order to access and connect customer premises.
Why did the FCC create must carry rules?
These rules were originally designed to protect the local stations, which were competing with cable networks for a limited number of cable channels, from losing market shares. Since their inception, some must-carry rules have been found to be constitutional while others have not.
Regulation of Cable TV Rates - Federal Communications Commission
2 Federal Communications Commission · Consumer and Governmental Affairs Bureau · 45 L Street NE, Washington, DC 20554 1-888-CALL-FCC (1-888-225-5322) · TTY: 1-888-TELL-FCC (1-888-835-5322)
Cable Television | Federal Communications Commission
Introduction The Federal Communications Commission first established rules in 1965 for cable systems which received signals by microwave antennas. In 1966, the Commission established rules for all cable systems (whether or not served by microwave). The Supreme Court affirmed the Commission's jurisdiction over cable in United States v. Southwestern Cable Co., 392 U.S. 157 (1968).
Consumer Rights Regarding Cable Television Service - Government of New York
Complaints When you have a cable television problem: contact your cable operator and report the problem, if your concerns have not been resolved--contact your local government, or
What is a cable franchise fee?
In the United States cable television industry, a cable television franchise fee is an annual fee charged by a local government to a private cable television company as compensation for using public property it owns as right-of-way for its cable. In the US, cable television services are provided by private for-profit companies, ...
How many categories of franchise fees are there?
Justifications or rationales for the franchise fee fall into six basic categories:
How long does a franchise fee last?
It can be renegotiated when the franchise agreement comes up for renewal, usually at intervals of 10 to 12 years. Although it is paid to a government, it is not ...
What is exclusive compensation?
Exclusivity - compensation to the government for allowing the cable operator to maintain a de facto monopoly on cable service in the area.
What is the maximum amount of revenue a municipality can receive from cable?
Section 622, states that municipalities are entitled to a maximum of 5% of gross revenues derived from the operation of the cable system for the provision of cable services such as Public, educational, and government access (PEG) TV channels.
Is the franchise fee on cable bill a tax?
If it just appeared on accounting statements as a lump sum payment by the cable provider, it would be perceived by the public more as a fee-for-service, which is how governments regard it. However, the Communications Act provides the transparency of the franchise fee so that customers of the cable company understand the fee imposed by the government upon the cable company.
Is the cable fee a tax increase?
Cable providers, in contrast, see the fee as a cost of doing business which they are passing along to the customer. By listing on their bill the portion attributable to the fee, customers may feel that government is responsible for that portion, not the cable provider. Also, since customers will immediately notice any increase in the fee, and may interpret it as a "tax increase", listing it on the bill may discourage governments from pushing for an increase in the fee when the franchise agreement is renewed.
What is the FCC's initial draft order?
In the initial draft order, the FCC required cities and other local franchising authorities to use the process outlined in Section 625 of the Cable Act to make modifications to existing cable franchise agreements to comply with the order. The process would have allowed modifications to be initiated at the local level with the cable operator having the opportunity to seek judicial review.
Will the reduction in cable payments affect the city budget?
Review current cable franchise agreements to determine the fiscal impact of the order. The reduction in payments will likely affect current and future city budgets.
Is a PEG a franchise fee?
Only capital costs associated with public, educational, and governmental (PEG) access facilities, including PEG channel capacity, buildout requirements, and PEG transmissions, are exempt from being classified as a franchise fee subject to the cap.
Does the FCC require a franchise for internet?
In addition to the proposed changes to the calculation of franchise fees, the FCC order also preempts state and local governments from requiring a franchise or license for non-cable services provided over a cable system. This includes internet services.
What is the FCC mixed use network ruling?
25, 2018, FNPRM that the "mixed-use network ruling should be applied to prohibit LFAs from using their video franchising authority to regulate non-cable services offered over cable systems by incumbent cable operators," which includes internet access services, and clarifying that they can still regulate institutional networks (I-nets).
Why did the FCC remand Montgomery County v. FCC?
FCC, in which the Sixth Circuit Court of Appeals found that the FCC could not use its "mixed-use" rule to bar LFAs from requiring franchisees to provide non-cable services because that would appear to prevent LFAs from regulating institutional networks, which the statute clearly allows them to do.
What is the FCC's deregulatory move?
Rosenworcel also called the deregulatory move part of the FCC's effort to "cut local authorities out of the picture when it comes to infrastructure" --she has registered the same concern about FCC efforts to streamline cell tower citing, including by preempting local citing restrictions or processes.
Do LFAs double tax?
Cable ops also say LFAs double tax them via separate franchise fees or rights-of-way fees on non-cable services offered on those already franchise-fee levied systems.
Can LFAs regulate broadband?
The FCC said local cable franchising authorities (LFAs) cannot regulate a cable operator's broadband service and that in-kind services or equipment they require those cable operators to provide must count toward the FCC's 5% cap on franchise fees.
Is franchise fee counted toward 5% cap?
The court also concluded that the FCC had not sufficiently justified why it had expanded its definition of franchise fees to include non-cash requirements by LFAs and thus counted toward the 5% cap on franchise fees.
What is cable franchise?
These charges are called franchise fees. A franchise is a charge for the privilege of physically occupying the municipality's streets ...
What is a franchise fee?
These charges are called franchise fees. A franchise is a charge for the privilege of physically occupying the municipality's streets and rights of way. Franchises are customarily granted in exchange for an annual fee to place telephone, electric, gas, fiber optic and cable television lines in streets or on public property. The fee is not a tax.
What are some examples of municipal fees?
For example, the municipality may impose permit fees, inspection fees, or encroachment fees on construction or improvements, even if it occurs within the public right of way. Municipalities may regulate and charge for the use of municipal fixtures and improvements — for example, attachment fees for the use of municipally owned poles, or mast arms, or leases for the use of water tanks .
How much is a franchise fee in a municipality?
Traditionally, municipalities charged private parties a franchise fee equal to 3% to 5% of the gross income generated by the activity occupying and using the public property or rights of way within the municipality.
Does the municipality charge for a PEG?
The municipality may not charge any other permit, inspection, or encroachment fee beyond the franchise fee. It may still reserve a right to access one or more "PEG" channels (public, educational or governmental), but must bear all operational costs of providing local access programming.
Does a municipality require a franchise agreement?
The municipality may still require a franchise agreement, and may regulate the terms and conditions on which occupation and work occur.
Do SC municipalities have to have a franchise fee?
First, for all existing local franchises, municipalities should establish a franchise fee rate for such cable service providers upon expiration or termination of the existing franchise with the municipality. Most municipalities did so after the passage of the Competitive Cable Services Act, but it is prudent to check that such an ordinance was adopted and remains in.
How many states allow franchise fees?
The map shows states where cities can have franchise fees and whether they have the authority to set the fee.The updated map below shows data for all states, concluding that franchise fees are allowed in 45 states. Franchise fees can be set at the city level in 40 states, at the state level in 5 states, and are prohibited in 5 states.
Why use franchise fee revenue?
In recent years, cities have considered using utility franchise fee revenue for activities to reduce energy use and promote renewable energy.
Why do cities not charge fees?
Cities that do not charge a fee because: The utility is publicly owned; The municipality opts not to charge a fee; or. The municipality receives free utilities in lieu of a fee. Cities that do charge a fee, structured as: An annual, fixed fee; A one-time application fee; or. An annual fee based on gross sales.
Does Ann Arbor have a franchise agreement?
The 2009 study also noted that only one city (of those studied)––Ann Arbor, Mich.––had a franchise agreement including provisions for renewable energy. In particular, the franchise required the utility to provide at least 10% renewable energy by the fifth and final year of the contract. ILSR was unable to find an example franchise agreement from any other city with a similar provision. Unfortunately, fees charged by monopoly utilities on third parties and changes to Michigan state law invalidated Ann Arbor’s franchise agreement, and no fees have been collected in several years.
Is Minneapolis a franchise?
Minneapolis, Minn., stands out as the most innovative user of the franchise fee in recent years. As its existing franchise contract with private, monopoly electric and gas companies Xcel Energy and Centerpoint Energy wound down in 2013, the city began an exploration of its legal options to accomplish Climate Action and local energy goals. In an “Energy Pathways” study ( summary slideshow ), the city explored the leverage of forming its own, city-owned utility (testing the sway of the “birch rod,” as President Franklin D. Roosevelt famously called the flexing of local authority in his 1932 “Portland Speech”).
Do cities in the teal blue have franchise fees?
States in the teal blue do not allow cities to manage their own franchise agreements, and the fee is set at the state level. Lastly, states in the dark orange do not allow franchise fees but do allow cities to manage their own franchise agreements.
Can a state limit the power of localities to pursue such goals via a franchise?
States may limit the power of localities to pursue such goals via a franchise, however. When Minneapolis negotiated its franchise contract renewals in 2014, for example, state law precluded including similar requirements in the contract.
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Does Frontier charge $10 a month?
Frontier in particular has been notorious for charging customers $10 a month for their equipment “whether you use it or not” — the company’s words, not mine — but Frontier is clearly aware it won’t be able to do that anymore. Starting this month, the company’s equipment page has changed to remove the part where it talks about the mandatory fee. Here’s an archived copy of the site from last month if you want to compare.
How much of my cable bill goes to Channel X?
So if you pay $100 per month for your cable bill, and you get Channel X, then nominally about $0.50 of your bill goes to that company. It’s not that direct, of course, and the cable company is using giant pools of fungible money on both ends, but that’s the idea.
When did cable companies pass retransmission rates?
That change in regulation opened up the opportunity for broadcast stations to negotiate their own retransmission rates rates with cable companies. Since 1994 , the cable companies have been permitted to pass those costs through to consumers.
Is Comcast playing anymore?
Consumerist readers who have tried to negotiate better TV or triple-play rates with Comcast in recent months tell Consumerist that the company is simply not playing anymore, and the calls are ending either with rates unchanged or with Comcast calling a would-be cord-cutter’s bluff, and cheerfully snipping their service.
Do customers live in competitive markets?
Customers who do happen to live in competitive markets might as well shop around, check with other businesses, and see who’s offering the best deal. Competition has this way of dropping prices and improving available service, after all.
Does Dish have a tax?
Some companies, like Dish and Charter, are particularly opaque about the various taxes you might need to pay.#N#Dish has a line item for “tax” but rolls various state and local taxes into one line item so you can’t see what the real charges are. And when it comes to voice service, Charter completely fails to break out any line items and instead just rolls them all into your monthly fee. Convenient? Sure, maybe, if you’re trying to save space on the bill — but that makes it very hard to tell what the real cost of service is, and where your money goes.#N#On the other end of the spectrum, AT&T Uverse goes so transparent with its invoice details that it loops right back around to being opaque.#N#By breaking out literally every charge into a separate fee, and putting them all in separate sections of the bill, AT&T generates confusion and make it look, incorrectly, like some fees are being assessed twice.#N#The best bills are a happy medium, which — don’t count this as an endorsement — Comcast strikes fairly well.
Where to file a complaint with the FCC?
Visit our Consumer Complaint Center at consumercomplaints.fcc.gov to file a complaint or tell us your story.
What is the basic tier of cable?
The basic service tier must include most local broadcast stations, as well as public, educational and government channels required by the franchise agreement between the LFA and your cable company.
‘in-kind’ Provisions Considered Franchise Fees
In the United States cable television industry, a cable television franchise fee is an annual fee charged by a local government to a private cable television company as compensation for using public property it owns as right-of-way for its cable. In the US, cable television services are provided by private for-profit companies, cable television providers, which sign a franchise agreement with cities and counties to provide cable television to its residents. The franchise fee is set during init…
Bringing Current Franchise Agreements Into Compliance
Mixed-Use Rule
Order Is Not Retroactive
- The FCC order classifies “in-kind exactions” as franchise fees subject to the 5% franchise fee cap. Only capital costs associated with public, educational, and governmental (PEG) access facilities, including PEG channel capacity, buildout requirements, and PEG transmissions, are exempt from being classified as a franchise fee subject to the cap. This means that the fair market value of n…
Potential Next Steps For Cities
- In the initial draft order, the FCC required cities and other local franchising authorities to use the process outlined in Section 625 of the Cable Act to make modifications to existing cable franchise agreements to comply with the order. The process would have allowed modifications to be initiated at the local level with the cable operator having the opportunity to seek judicial review. …