• Freedom
  • Innovation
  • Growth

FCC Right To Rein In Cable Fees, Policy Experts Say

Law360 (April 4, 2019, 9:08 PM EDT) -- It would be an appropriate use of authority for the Federal Communications Commission to rein in the services and fees that local cable franchise authorities are allowed to ask for in exchange for right-of-way access, public policy leaders suggested Thursday at a Washington, D.C., event.

During a panel discussion hosted by Consumer Action for a Strong Economy, research group president Tom Giovanetti said there’s no conflict between asking the FCC to limit local cable regulators’ authority and advocating for smaller government.

“In this case, the federal government has actually done a good job. It’s local governments, it’s municipalities that are actually creating a lot of the mischief,” said Giovanetti, who leads the Institute for Policy Innovation. “For a lot of people, this becomes sort of a tension of ‘I thought we were federalists, I thought we believe in local control’ ... [but] the federal government really does have a crucial role here.”

Giovanetti’s comments relate to an FCC proposal that would cap the amount of in-kind contributions a franchising authority may accept from a cable company, and it would subtract the value of “donations” like reserved capacity for local access stations from that overall total. Cable groups have criticized the virtually unlimited "in-kind" contributions as unnecessarily inflating their costs.

Panelists on Thursday mentioned examples of the forms such in-kind contributions can take, such as the free City Hall cable connection that a New Hampshire town rallied around. In-kind contributions can also be unrelated to communications services, such as the hanging flower baskets one town requested to beautify its streets.

Jessica Melugin, an associate director with the Competitive Enterprise Institute, said the fees and donations localities often ask for as a condition for access end up hampering the expansion of cable and internet services.

“It becomes a barrier to entry for new people to come into the market,” she said.

Panelists also pushed back on the suggestion that limiting in-kind donations would decimate resources that communities have come to rely upon.

Sen. Ed Markey, D-Mass., said in a press conference this week that the policy change would make it less enticing for cable companies to offer local access channels that often feature community news and announcements. Drying up in-kind contributions would create a "Sophie's Choice" for localities forced to decide whether maintaining these stations is more important than other services provided by cable companies, he said.

But Bartlett Cleland, the managing director of public strategy firm Madery Bridge Associates, said this framing is “setting up a false dichotomy” between public cable channels and other community benefits. He suggested it wouldn’t be a bad thing for communities to have to choose their in-kind benefits carefully.

“Municipalities will have their 5% cap. If [local stations are] what they find most precious, then by all means, they should go ahead and do it. If they find the hanging flowers to be more valuable somehow, all right,” he said.