Local Officials Want a Piece of Cable’s Broadband Revenue

Cities need the FCC to scrap the Mixed-Use Rule to collect fees on cable's broadband revenue.

Local Officials Want a Piece of Cable’s Broadband Revenue
Photo of New York City by Jonathan Roger used with permission

WASHINGTON, July 6, 2024 – Cities across the country want to impose new fees on cable operators, claiming a federal rule standing in the way has distorted the market and frustrated efforts to close the digital divide.

For decades, local governments have been able to collect 5% of a cable operator’s video programming revenue. But the Federal Communications Commission has barred imposing the same fee on cable’s broadband revenue, saving the industry billions a year.

Local governments continue to pressure the FCC to abolish its Mixed-Use Rule, which the FCC reaffirmed in 2019 as walling off cable’s broadband revenue from the traditional video fee regime.

The latest salvo in this struggle came in a June 5 letter to the FCC from the Northern Dakota County Cable Communications Commission (NDC4), which was formed by seven small Minnesota cities with about 91,000 residents combined.

“The Mixed-Use Rule frustrates FCC and local efforts to ensure equitable access to quality, affordable broadband," the NDC4 said in the letter. “We urge the Commission to repeal it.”

NDC4 includes Inver Grove Heights, Lilydale, Mendota, Mendota Heights, South St. Paul, Sunfish Lake, and West St. Paul, Minn.

According to S&P Global data cited by the city of Portland, elimination of the Mixed-Used Rule would yield $3.75 billion for local cable regulatory authorities in the first year nationally.

Cities have argued that the Mixed-Use Rule has distorted the market because the rule permits the collection of fees from broadband providers that are not cable operators.

“The broad sweep of the Mixed-Use Rule undermines efforts by the Commission, as well as states and local governments, to address broadband access,” the NDC4 said. “Cable operators are the largest broadband providers in the country. By purporting to preempt state and local franchising authorities from regulating cable operators” broadband services and facilities, the Mixed-Use Rule may sideline the governmental entities best suited to expand broadband access and prevent digital discrimination.”

In 2019, as a regular FCC Commissioner, Jessica Rosenworcel, who is now the agency’s Chairwoman, voted against the Mixed-Use Rule.

On June 23, the U.S. Conference of Mayors adopted a resolution calling on the FCC to modify the Mixed-Use Rule so that local governments may impose fees on cable’s broadband revenue.

The USCM is a non-partisan organization of cities with populations of 30,000 or more.

NCTA – The Internet & Television Association, which represents Comcast Corp. and Charter Communications, the two largest ISPs in the country, has said the FCC would first need to seek public comment on a proposal to modify the Mixed-Use Rule.

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