FCC's Franchise Fee - CableMEMORANDUM
November 14, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Appeal of the FCC's Pasadena Franchise Fee Decision
Cable Franchise Administrator Merrill Crawford is recommending that the City of
Dubuque participate with a coalition of cities, the National League of Cities and NATOA
in a court appeal of the FCC's Pasadena franchise fee decision and that the City
contribute $5,000 from the Cable TV Fund for this effort.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Merrill Crawford, Cable Franchise Administrator
CITY OF DUBUQUE, IOWA
MEMORANDUM
November 8, 2001
MEMO TO: Michael C. Van Milligen, City Manager
FROM: Merrill Crawford, Cable Franchise Administrator
SUBJECT: Appeal of the FCC's Pasadena Franchise Fee Decision
INTRODUCTION: Pursuant to my memo of October 19, 2001, the purpose of this
memorandum is to recommend that the City of Dubuque participate with a coalition
of cities, the National League of Cities and NATOA in a court appeal of the FCC's
Pasadena franchise fee decision.
BACKGROUND: I reported previously about a hostile decision by the Federal
Communications Commission which allows cable operators to saddle their subscrib-
ers with additional charges to cover not only the cost of franchise fees generated by
subscriber revenue, but also to cover the cost of franchise fees derived from adver-
tising, home shopping, and other non-subscriber revenue streams. Already, some
cable operators, including AT&T, have notified local franchise authorities that they
will redirect the burden of franchise fee costs from non-subscriber revenue to cable
subscribers, and will blame cities for what will appear on the bill to be a franchise fee
increase. Further, it appears that AT&T, at least, plans to use nationwide cost-
averaging and some other creative figuring to change the calculaton of franchise fee
payments to cities, while claiming that locally-specific records are no longer available
to justify the amount of franchise fees being paid. As yet, there has been no
indication as to whether Mediacom will follow suit.
As expected, this decision is being appealed in the United States Court of Appeals
for the Fifth Circuit. The appeal is led by the Texas Coalition of Cities For Utility
Issues and joined by the National League of Cities and the National Association of
Telecommunications Officers and Advisors. Our Washington, D.C. law firm, Miller &
Van Eaton, will represent the TCCFUI in the appeal. Cities across the United States
are now asked to join in the appeal, lending their names and such financial
contributions as they can make.
RECOMMENDED ACTION: The Recommended Action is that the City of Dubuque
join in the court appeal of this FCC decision, through the Miller & Van Eaton law firm,
contributing an amount of $5,000 from the Cable TV Fund for this effort.
Cc: Barry Lindahl, Corporation Counsel
Tim O'Brien, Assistant City Attorney