WAREHAM - It’s been hanging over local cable stations all around the country for more than a year, but following a Federal Communications Commission 3-2 split vote this past summer, it was decided that cable providers can change the way they pay back to the communities they serve - and it will likely mean a reduction in money sent each year to local cable access stations around the country.
But the fear of this change, the industry’s reaction to it, and the support of more than 50 members of Congress, as well as hundreds of efforts in state houses across the country to counter any negative financial impact, have left Steve Ruiz of WCTV with “confidence that while it will change, there are ways to make it work out.”
“We still love what we do,” said WCTV’s Ruiz at the station’s annual meeting Wednesday night at Salerno’s in Onset.
“It has definitely been hanging over us for the past year,” said Ruiz. “And yes, the decision this summer means changes are coming, but the contracts will need to be re-negotiated for changes, since we are in annual contracts with (the suppliers). We have at least a year to work things out and there are a lot of politicians behind us.”
How does an FCC change impact cable access stations?
Cable providers, like Comcast and Verizon, pay back to their service communities via “in-kind” services - equipment, technical services and the like, and franchise fees.
The July FCC vote, which also bars local governments from regulating broadband internet access service offered on cable, allows cable providers to deduct the “in-kind” services and equipment from the franchise fees sent each year to the communities. The franchise fees, capped at 5 percent of annual gross revenues from cable bills, support public access channels.
The decision is likely going to result in “communities and states all over the country heading to court,” said Wareham Selectman Alan Slavin.
Public access advocates say the FCC decision is contrary to the 1984 Cable Act, which set up the process of franchise fees going to the communities.
Noting that 63 members of Congress were opposing the FCC changes and that Sen. Ed Markey helped put together the original agreement back in 1984 to have cable providers put funds back into the communities they served, “this change is being fought,” said Ruiz.
To counter the FCC change, state Rep. Paul McMurtry of Dedham filed House Bill 4045, which would impose a 5 percent fee on digital streaming providers (cable providers) using public rights of way - or local infrastructure.
“This is particularly important as media consumption continues to change and transition more toward digital platforms,” said Megan Delaney, legislative aid for state Rep. Susan Williams Gifford, R-Wareham.
Rep. Gifford is a co-sponsor of the legislation.
“The money that is collected would be deposited into a new fund called the Streaming Entertainment Fund,” said Delaney. “The funding will be distributed in the following manner: 1/5 to the state’s General Fund, 2/5 to municipalities and 2/5 to community media members.”
"So, in essence, that five percent (franchise fee) is no longer coming to us whole, but we could be charging back for the streaming," said Ruiz. "So the money would still be coming in, the way we get it would change."