The county is joining a collective of cities, counties and associations challenging a federal order that could imperil Marin’s public access channels.
County supervisors this week authorized filing a petition in the U.S. Court of Appeals to challenge a Federal Communication Commission order that is expected to slash franchise fee payments received by local government, Deputy County Counsel Brian Case said in an email.
“Our legal challenge is that the order, in several respects, is contrary to the Federal Cable Act and must be overturned,” he said.
The FCC voted in August to change the rules governing the franchise fees paid by cable TV companies to local and state authorities. The Cable Communications Act of 1984 capped the franchise fees that cable operators can be required to pay for using public property at 5% of gross revenue on cable bills.
Prior to the order, government authorities could also require other non-financial “in kind” contributions from cable companies. Under the order, however, these “in kind” contributions must be assigned a value and counted against the cap.
“What the FCC reconstrued the Cable Act to say is that almost any sort of non-monetary obligation that is placed on a cable operator counts against the 5% cap,” said Tillman Lay, a partner with Spiegel & McDiarmid, the Washington D.C.-based law firm handling the petition filing. “It takes money out of the pockets of local governments and puts it in the pockets of cable operators and their shareholders.”
The nine Marin municipalities that belong to the Marin Telecommunications Agency – San Rafael, Belvedere, Corte Madera, Fairfax, Mill Valley, Ross, San Anselmo, Sausalito and Tiburon – receive $3.5 million annually in franchise fees. The Community Media Center of Marin gets about $800,000 a year in franchise fees.
So far, the FCC has not included public, education and government, known as “PEG” channels, among in-kind contributions, but the commission has indicated the ruling could be expanded to include other items.
“The three Republicans on the commission have promised to revisit this order and put in some of the elements they had discussed previously,” said Michael Eisenmerger, executive director of the Community Media Center of Marin. “What they want to do is change the FCC’s definition of capital costs. They want to be able to assess a value on the local access channels themselves and deduct that from franchise fees. If they do that, those will probably destroy us.”
Lay is convinced that is where the FCC is headed.
“We’re trying to nip it in the bud now,” he said, “because if we don’t, we’ll be in a much weaker position when FCC does what we expect it to do in a year.”
If PEG operations are included under the 5% cap, they will have to compete with other governmental needs.
“It’s basically blackmailing the cities into abandoning their PEG operations,” Eisenmerger said. “It’s a clever strategy because it shields the cable operators from taking the blame for shutting down PEG by shifting the blame over to the cities.”
Eisenmerger said local governments value the franchise fees highly since their use is unrestricted and can go directly into general funds.
“It is money they can use to pay librarians, pay firemen, fix potholes or do whatever needs to be done,” he said.
The Community Media Center of Marin broadcasts county Board of Supervisors meetings, as well as council meetings in Mill Valley, Sausalito and Fairfax.
In a letter to the FCC, Barbara Coler, who heads the Marin Telecommunications Agency’s board, wrote, “Most regrettable is that this order threatens to limit or eliminate public, educational and government access channels meant to better help inform and empower the public.”
In her letter, Coler also writes that the FCC order “prohibits local governments from regulating the facilities and equipment used by cable operators in the provision of non-cable services, such as wireless communication services.”
As a result, Coler states that cable companies can potentially install small wireless facilities with little to no public input, gaining a significant advantage over their competitors.
The petition that Marin is filing related to cable franchise fees is the second legal action it has pending against the FCC. A year ago, the county joined with more than 20 cities and counties across the U.S. in a legal challenge to new federal policy on the rollout of the next-generation wireless network known as 5G.
That case, which is being heard in the 9th U.S. Circuit Court of Appeals, is fully briefed and oral arguments are expected to begin early next year, Lay said. Spiegel & McDiarmid is also overseeing that legal action.
County officials expect the new petition to be transferred to the 9th Circuit as well since that is where the first petition for review of the FCC’s order was filed by the city of Eugene, Oregon.
