1. and the Maine Model Franchise
Welcome!
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
(Everything Charter doesn’t want you to know)

2. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
Community Television Association of Maine

3. Franchise Fees are Not a Tax
"Franchise fees are not a tax, however, but essentially a form of rent:  the price paid to rent use of public right-of-ways.....In sum, there can be no doubt that franchise fees imposed on the cable operator are part of a cable operator's expense of doing business. There is no plausible basis to conclude that cable operators are acting as collection agents on behalf of franchising authorities."

4. The Right of Way Compensation Premise
Cable operators are using public property for commercial enterprise, so a rental fee is appropriate.
Phone and power are exempt because:
They are considered necessities, cable is not
They are regulated by the PUC, cable is not
The only regulation of cable is the Franchise and two State Statutes under Title 30A.
§3008. Ordinances relating to cable television systems
§3010. Consumer rights and protection relating to cable television service

5. The Back Story
2003 – Court decision allowed cable operators to pass all franchise fees along to subscribers and show the franchise fee on subscribers bills but did not specify where.
Cable operators show the fee at the bottom so it appears to be a tax by the town.
The cable operator will charge what the market will bear, which includes taxes and fees.
They know how much they can charge before folks cut the cord and get a dish.
By requiring a franchise fee, the municipality is capturing profit from the operator, so expect a cool reception and a “warning” from them.

6. The Back Story If questioned, public should be told the truth:
It’s a rental fee for the use of public property that the cable operator has chosen to pass through to its subscribers.
It is to be used for operational expenses associated with improved municipal communications with the public, i.e. televising and streaming municipal and school meetings and events, thus returning value to the subscriber.

7. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
Require Up to 5% of Gross Revenue, Paid Quarterly
“New Money” vs. Historical Receipts
Example of Recent Annual Amounts:
500 subscribers – $29,338.00
7,000 subscribers - $350,000.00
Community Television Association of Maine

8. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
2. Public, Educational, & Governmental (PEG) Channels
Community Television Association of Maine

9. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
2. Public, Educational, & Governmental (PEG) Channels
3. Capital Grants
Community Television Association of Maine

10. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
2. Public, Educational, & Governmental (PEG) Channels
3. Capital Grants
4. Build Out
Community Television Association of Maine

11. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The Franchise Fee
2. Public, Educational, & Governmental (PEG) Channels
3. Capital Grants
4. Build Out
5. Municipal I-Nets
Community Television Association of Maine

12. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Community Television Association of Maine

13. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Form a Municipal Cable Committee
Community Television Association of Maine

14. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Form a Municipal Cable Committee
Create a Cable Ordinance or update current one
Community Television Association of Maine

15. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Form a Municipal Cable Committee
Create a Cable Ordinance or update current one
Conduct Surveys & Hold Public Hearing
Community Television Association of Maine

16. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Form a Municipal Cable Committee
Create a Cable Ordinance or update current one
Conduct Surveys & Hold Public Hearing
Create Ascertainment Report and Vision Plan
Community Television Association of Maine

17. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
2. PEG Channels – First Steps
Form a Municipal Cable Committee
Create a Cable Ordinance or update current one
Conduct Surveys & Hold Public Hearing
Create Ascertainment Report and Vision Plan
Specify Video Return Locations
Community Television Association of Maine

18. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
3. Capital Grants – Created by Ascertainment Report, &
equipment needs, used to create Vision Plan
Community Television Association of Maine

19. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
3. Capital Grants – Created by Ascertainment Report, &
equipment needs, used to create Vision Plan
4. Build Out – Still negotiable, but not much leverage
Require “Universal Coverage” – If not possible, do a ride-out with the cable rep and be creative
Specify cable drops & video return locations from
Municipal Buildings, Schools and Libraries.
Community Television Association of Maine

20. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
5. Municipal I-Net’s or Intra-Net
Very difficult to negotiate, may incur maintenance charges on existing I-Nets due to current
regulatory landscape. These charges may be deducted from the franchise fee.
Community Television Association of Maine

21. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
6. Proposed FCC Rule changes
If enacted, will change the Franchise Fee description from a “Proprietary” use to “Regulatory” only.
Community Television Association of Maine

22. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
That is, a “proprietary” rental fee of 5% of gross revenues for the commercial use of the public right of way would be replaced by limiting state and local governments to charging “regulatory” fees that are no greater than a “reasonable approximation” of the municipal costs for processing applications and for managing deployments in the rights-of-way.
Community Television Association of Maine

23. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
In addition:
Cable-related in-kind contributions required by municipalities from cable operators as a condition or requirement of a franchise agreement would be treated as “franchise fees” subject to the statutory five percent franchise fee cap and thus could be subtracted from the Franchise Fee. This would include:
Community Television Association of Maine

24. and the Maine Model Franchise
Municipal Benefits
Under FCC Regulations
and the Maine Model Franchise
1. The value of channel capacity set aside for PEG use, 2. The value of bandwidth capacity set aside for I-Net use. For those of you whose cable franchise includes PEG capacity (channels) and/or I-Net requirements, the FCC’s proposals, if adopted, could mean that the 5% monetary cable franchise fee payments your operator is currently making to your municipality could drop precipitously or even disappear.
Community Television Association of Maine

25. General Do’s and Don’t’s
1. Don’t Take The Franchise They Offer
Community Television Association of Maine

26. General Do’s and Don’t’s
1. Don’t Take The Franchise They Offer
Start With The Formal Process
Community Television Association of Maine

27. General Do’s and Don’t’s
1. Don’t Take The Franchise They Offer
Start With The Formal Process
Create An RFP With Your Terms Using The
Maine Model Franchise
Community Television Association of Maine

28. General Do’s and Don’t’s
1. Don’t Take The Franchise They Offer
Start With The Formal Process
Create An RFP With Your Terms Using The
Maine Model Franchise
2. Local Channels Are Valuable !
Ave. Annual Lease = $25, per year in So. ME
Community Television Association of Maine

29. General Do’s and Don’t’s
3. Don’t Let Them Bluff You – That’s their specialty
Community Television Association of Maine

30. General Do’s and Don’t’s
3. Don’t Let Them Bluff You – That’s their specialty
The “Pass-Through” – a “business decision”
Gross Annual Revenue Definition
Community Television Association of Maine

31. General Do’s and Don’t’s
3. Don’t Let Them Bluff You – That’s their specialty
The “Pass-Through” – a “business decision”
Gross Annual Revenue Definition
4. Know Your Rights – And What’s at Stake
Community Television Association of Maine

32. General Do’s and Don’t’s
3. Don’t Let Them Bluff You – That’s their specialty
The “Pass-Through” – a “business decision”
Gross Annual Revenue Definition
4. Know Your Rights – And What’s at Stake
5. Other Resources - equipment & property tax revenue
6. New legislation – PEG Bill
Community Television Association of Maine

33. PEG Non-Discrimination Bill
1. Corrects “exclusive” error in Title 30A §3008
2. Requires 15 HPM minimum for renewals
Prevents automatic franchise renewals on new
franchises & requires a 36 month expiration notice
on existing franchises
4. Prevents PEG channels from being moved
5. Prevents the cable operator from modifying the Maine
Model Franchise without consent of municipality.
Community Television Association of Maine

34. PEG Non-Discrimination Bill
6. Provides PEG protections in Title 30A §3010
7. Requires PEG HD signals if provided to operator
Requires operator to provide PEG access to
channel guide and to designate PEG channels in a
similar manner as other channels.
Requires the cable operator to provide requested information and comply with franchise renewal procedures in a timely manner. (60 Days)
Community Television Association of Maine

35. Thank you !
Community Television Association of Maine