The FCC should clarify to cable broadband providers that they owe...

The FCC should clarify to cable broadband providers that they owe local franchise fees on cable modem services until the Commission’s rulemaking process on cable modem is complete, House Commerce Committee Chmn. Tauzin (R-La.)said in a March 11 letter to FCC Chmn. Powell. Tauzin asked the FCC to clarify its ruling that cable modem service was an information service after La. parishes expressed concern on the impact of local govt. revenue. He highlighted the portion of the FCC’s ruling that determined that revenue from cable modem service shouldn’t be factored into the computation of franchise fees. Tauzin urged the FCC to clarify that cable companies still must submit the franchise fees until the Commission completed its rulemaking. His spokesman, Ken Johnson, said there were concerns that cable companies not only would forgo paying the cable modem portion of the fee that was currently due, but also could try to recoup fees already paid to localities. “After the Commission’s correct ruling on these 2 issues, certain cable companies have informed parishes that they are no longer going to pay that portion of revenue derived from delivery of cable modem service,” the letter said. “Should the Commission determine it appropriate to exercise its jurisdiction under Section 622 to resolve the issue of previously collected franchise fees based on cable modem service revenues, I urge the Commission to further clarify that its decision is prospective and effects only contracts after the issuance of its ruling. Otherwise, local governments will be exposed to future claims and significant risk.” Johnson said: “This could clearly result in a financial hardship to many local entities and become a legal quagmire.”