We noticed a francise fee on our last Comcast bill. Its been there for years. We just never noticed it. We asked our colleague, John Musolf, to research it and report on it for us. Here's the result:
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The Town of Oro Valley receives approximately $500,000 in franchise fee revenue per year from the Comcast Cable Television Network. This revenue is seen in the xxx fund in the town's budget.
The right to charge this goes back more than 30 years, when Jones Cable ran the system. The Comcast Cable Franchise agreement with Oro Valley was extended from March 19, 2013 to March 19, 2018 for 5 years. It was signed by Greg Caton, Julie Bower, and Tobin Sidles. We cannot find where it was reviewed by the Town Council!
The cable television franchise fee in the United States stems from a community's basic right to charge for use of the property it owns. The cable television franchise fees represent part of the compensation a community receives in exchange for the cable operator's occupation and the right-of-way use of public property. A franchise fee is not a tax; it is a rental charge.
Franchise fees are governed under Section 622 of the Cable Communications Act of 1984.
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. There may be other increased revenue contractual specifications above the 5% such as fee payment based on subscriber volume.
If a citizen of Oro Valley is a subscriber to the Comcast Cable Television Network, they are probably unaware that they are helping Comcast provide some of the franchise revenue to the Town of Oro Valley. On the Comcast subscriber monthly invoice there is a franchise fee that a subscriber is paying to Comcast Company. This in turn is used by Comcast to help pay for the franchise fee to Oro Valley."
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Thanks for the research, John. Call it what you may. The franchise fee is a tax, one that at charged by Oro Valley to Comcast that, in turn, is charged to you.
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2 comments:
Comcast Cable pays $500,000 per year for their franchise fee to the Town of Oro Valley. Does the Town of Oro Valley audit the amount of dollars received in franchise fees received from Comcast Cable or do they simply trust whatever Comcast Cable tells them it should be?
John Musolf
The Town Attorney answers only to Mayor and Council. I don't see how Tobin Sidles could have signed this without it being at their direction. No-one else has the authority to request his signature.
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