FCC Votes To Limit Fees Paid to Local Governments

FCC Votes To Limit Fees Paid to Local Governments

Public television advocates worry about the future of local programming

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Some advocates of public access TV programming in Montgomery County were disappointed in last week’s Federal Communications Commission decision that could limit the funding local governments receive from cable companies.

The FCC commissioners voted 3-2 on Thursday to change the Communications Act, which sets out how local governments may collect “franchise fees” from cable companies to pay for programming on public access stations.

The franchise fees represent a portion of the revenue generated from bills paid by customers of the cable companies. This fee is capped at 5% of the total amount of revenue generated in a locality.

Prior to the FCC change, certain “in-kind,” or non-monetary, contributions were not counted toward the 5% cap. The change will require these contributions to be counted toward the cap. Examples of in-kind contributions, as reported by Reuters, include free and discounted cable service for municipal buildings and institutional networks.

Montgomery County has 11 public, educational and governmental (PEG) channels that broadcast public affairs programs such as meetings, news conferences and other events and depend on public funding.

Nannette Hobson, the CEO of Montgomery Community Media, said the FCC’s decision is a “hastening of a part of our funding that was already under threat because of cord cutting.”

“With dwindling cable subscribers, those funds were already diminishing,” she said.

MCM, which is 30 years old, is a nonprofit organization funded in part through franchise fees. It also has outside sources of funding.

According to the fiscal year 2020 operating budget, Montgomery Community Television, the parent organization for MCM that contracts with the county’s Office of Broadband Programs, received $2.7 million in funding from the county.

Hobson said she is confident the organization will survive, but the FCC rule change could mean it will have to rely more heavily on donations, grants and other corporate sponsorships.

Hobson said she hopes the FCC’s decision helps illustrate the value of public television stations such as hers.

“I’m hopeful that what this ruling will do is shed light on how much communities need organizations like ours,” she said.

Mike Wassenaar, the president and CEO of the Washington-based advocacy group Alliance for Community Media, said customers of the three cable companies that serve Montgomery County —  Verizon, Comcast and RCN — will not see their bills decrease, but franchise fees could decrease.

Wassenaar said he isn’t sure of the effect in Montgomery County, because each cable company has a different arrangement with the municipalities.

“That’s the problem with telling this story. Each of these communities is of a different size and they have a different set of agreements. … Will RCN, Verizon and Comcast all say the same thing to Montgomery County? Probably not,” he said.

Wassenaar said the final text of the legislation will likely be published this month and the change will take effect 30 days after that happens.

Montgomery County officials could not immediately be reached for comment on Tuesday afternoon.

U.S. Sen. Chris Van Hollen (D-Md.), who wrote to FCC Chairman Ajit Pai opposing the measure, wrote in a statement Tuesday that the commission’s decision was “deeply concerning.”

“Public television programming is an important resource, and this move will needlessly tax the budgets of our communities. I will continue to fight back against this misguided policy that puts big special interests before local communities,” he wrote.

Dan Schere can be reached at Daniel.schere@bethesdamagazine.com

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