Representative Paul McMurtry this week filed a bill on behalf of MassAccess: An Act Relative to Digital Entertainment on Public Rights of Way (H.4045 / previously HD 4389). The Bill would create parity among cable and digital streaming providers using public rights of way in order to sell their services to Massachusetts residents by establishing a 5% fee on digital streaming providers which are already using the rights of way, free of charge. The Bill has 85 Cosponsors.
This bill aims to update the law to include a fee for new entertainment options which have entered the marketplace in the past decade and are growing in popularity. These options include Netflix and Hulu, among others. The fees would generated would be distributed between the state general fund, municipalities and community media centers. Traditional cable, which is delivered through public rights of way, is regulated through franchise license agreements that provide a small percentage of revenue back to the city or town in which they do business in order to support local programming. Community media has thrived in Massachusetts, in part, due to franchise license agreements with cable companies.
“This legislation is a much-needed update to the way consumers receive digital entertainment streaming services” said Representative Paul McMurtry. “Multimillion-dollar media companies are using our public rights of way to deliver their product, yet are not paying their fair share for that use. Fees charged to traditional cable providers support our local community media centers which are an important resource to local public, educational and government (PEG) news and information. As consumers are offered alternative streaming methods we need to modernize our law to assure that community media centers are supported”
New cable alternatives, while often delivered via the same public rights of way wires, are not subject to those same regulations. Digital streaming providers rely on local infrastructure to sell their product to millions of Massachusetts residents, yet pay nothing to use that infrastructure. This bill recognizes that companies which use public rights of way to sell services that are similar to traditional cable should be held to similar rules and regulations.
Community media centers are not the only ones being hurt by a decline in cable subscriptions. Many municipalities in Massachusetts receive a percentage of franchise fees in order to support other projects in their cities and towns.
Monies would be collected at the state level and distributed to the state general fund, municipalities and community media centers. Distribution would be based on population and done via existing methods in place.
This bill updates the current law to include new entertainment options which have entered the marketplace, continue to grow in popularity, and resulting in a decline of cable customers. From 2015-2018, state data shows that total cable households dropped by 7% in Massachusetts. Most community media centers are seeing declining revenue from cable franchise fees for the first time in their histories.
“For decades, the funding provided by cable companies has helped provide funding to support vital programs at the municipal level – including community media centers and PEG channels,” said Melinda Garfield, President of MassAccess. “Community Media centers and PEG channels serve the community, they are an important and vital resource that we need to protect. These new streaming services should be held to the same standards, accept the same responsibilities, and make the same contributions as cable companies.”
MassAccess is the membership-based advocacy group representing over 130 community media organizations in Massachusetts. Local cable television channels, often called “PEG channels” to correspond with the mission of public, educational or government access, provide a valuable public service to the community. There are over 200 local access cable TV centers in Massachusetts, the highest concentration of media centers in the country.
A number of states have already established fees for digital streaming services including Florida, Iowa, Minnesota, Nebraska, North Carolina, Ohio, Pennsylvania, South Dakota, Washington. Additionally, individual municipalities in California, Colorado and Illinois have also established fees for these providers.
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