A perennial attempt to eliminate cable television franchise fees has sprouted at the Statehouse. If approved, House Bill 1432 would strip cities and towns of much-needed dollars used for public safety and more. It also would cut the cord on public access television, according to the chairman of the state’s Alliance for Community Media chapter.
“It would eliminate all of our funding,” said Erik Mollberg, assistant manager at Access Fort Wayne, which produces content for the public access and government channels broadcast on both Frontier and Comcast cable services. “We would all be in a slow death spiral.”
The franchise fee is a line item on cable bills amounting to 5 percent of a cable provider’s gross revenue. For most customers, it totals about $5 a month – less than the state sales tax total, which lawmakers increased with little regard for cable customers when they raised Indiana’s rate to 7 percent.
But those same lawmakers now target the franchise fee as an unnecessary burden on consumers. It’s a position driven by the corporate-controlled American Legislative Exchange Council, where a task force concluded that “state policy makers should carefully review how these monies, from this fee, are being used. The reason being is that these franchising fees are usually directly passed on to consumer. This fee actually ends up as a tax; basically the municipality is making the consumer pay for the right of a cable operator to offer service in their home.”
But Mollberg, who also has served on national boards for the Alliance for Community Media, a group dedicated to promoting democracy through communication, said the franchise fee was established by federal communications law in 1972 in consideration of the public right of way granted to cable-service providers. Those providers now complain they are at a competitive disadvantage with satellite TV providers, but the latter use the airwaves, with no effect on public infrastructure.
In Fort Wayne, 60 percent of the franchise fee passed along by Comcast and Frontier goes directly to the city of Fort Wayne’s general fund. The balance goes to a cable fund, which supports public and governmental programming managed by Access Fort Wayne and to educational programming produced by Fort Wayne Community Schools and IPFW.
The city budgeted about $2.6 million in franchise fee revenue this year. Its portion supports salaries, as revenue from the fees does in cash-strapped communities across Indiana. Statewide, cable franchise fees totaled more than $21.5 million, according to the bill’s fiscal impact statement.
The likely loss of public-access programming is troubling. Mollberg noted the programming creates local jobs, is a service to local non-profits and a training resource for students. It’s also a key source of information for residents, who tune in to City Council meetings and learn about available services through public access channels.
“No corporate entity could do the kinds of things we do,” he said. “We are creating more local programming in a month than the commercial stations combined do in a year.”
The bill’s implications for cities and towns are equally disturbing. Lawmakers like to bemoan the reluctance of local government officials to take advantage of tools to raise revenue, but they fail to acknowledge the ways in which they continually reduce authority to collect revenue – notably, the constitutionally protected property tax caps.
Regardless of how the telecommunications industry has changed over time, local government has been forced to rely on cable fees to provide basic services. If legislators want to eliminate franchise fees, they should also offer a way for local government to make up the loss and to continue offering support for public access television.
