Last week, the Federal Communications Commission made its highly anticipated ruling relative to cable franchise fees. In the “Third Report and Order”, the FCC ruled that cable companies can now deduct certain in-kind contributions from their financial obligations, including free cable drops and costs tied to running “Institutional Networks” (“I Nets”) in their communities. 

MassAccess maintains its opposition on these points but was also relieved to learn that the FCC is deferring any immediate action on assigning a monetary value to the public access channel capacity itself. The FCC had forcefully proposed to value PEG channel capacity at a “fair market valuation” for the purposes of offsetting municipal franchise fees. Most in our industry believed such an action would be catastrophic to public access funding. It its ruling, the FCC notes:

“[T]he record reveals serious difficulties regarding how to calculate the value of PEG channel capacity…Given this, we find that the questions raised by channel capacity are complex, and that the record is not developed enough to allow us to answer them…we find that the status quo should be maintained, and that channel capacity costs should not be offset against the franchise fee cap. This approach will minimize disruption and provide predictability to both local franchise authorities and cable operators.”

It is here that the Commission made specific reference to comments submitted by MassAccess, as drafted by the Cohen Law Group, which argued the “fair market valuation” of PEG channels, as envisioned by the FCC, would be zero dollars. In essence, the cable operators cannot deduct the “fair market valuation” of PEG channel capacity from the franchise fees its pays municipalities.

According to Cohen Law Firm attorney Joel Winston, “MassAccess scored a significant legal victory for community media centers in Massachusetts and nationwide. The legal arguments against excessive PEG channel valuation were able to disarm the FCC’s multi-year efforts towards dismantling community media and local journalism.”

MassAccess would like to thank its members who contributed to a fund last winter specifically designed to fight this FCC action.  We used that funding in order to draft our comments with the Cohen Law Group.

“The leadership from MassAccess was instrumental in advancing these legal arguments,” said Mr. Winston.

It’s important to note that the FCC has deferred action on this critical item, not taken it off the table. It is likely to come up again, with FCC Commissioner Michael O’Rielly noting at the August 1st meeting that they would like it resolved within a year.

MassAccess remains committed to combating any changes, whether at the federal or state level, that could negatively impact community media centers across Massachusetts.

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