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Opening Arguments

Fee for nothing

The JG today has this long story about how the franchise fees paid to the city indicate how the cable companies are doing. Comcast shelled out more than $376,000 for the first quarter, compared with about $343,000 from Frontier, which indicates Comcast nabbed some customers. In the pervious quarter, however, Frontier paid more than Comcast, so it probably had the most customers then:

The companies have to pay 5 percent of either gross annual subscriber receipts or the franchisee's gross annual receipts, whichever is higher, to the city. The cable providers regularly decline to reveal how many subscribers they have, but the franchise fees are an indicator of how they are faring.

But what is the underlying point here, class? Yes, that's right -- there is competition, even, it can be said, robust, healthy competition.

I realize collecting those hefty franchise fees is vital to the free exchange of ideas in an open society. How else would all the cranks, scolds and lonely conspiracy theorists be able to produce and air their wretchedly unwatchable videos? But the original justification for the fees was that a cable company was rewading the city for granting an exclusive contract, needed because no company would pay the upfront infrastructure costs without a guarantee of no competition. That's not exactly valid today, is it? If we don't want Comcast or Frontier, we can choose a satellite service or even a streaming service such as Netflix. The city is collecting a fee for something it is no longer delivering.


Harl Delos
Thu, 05/19/2011 - 11:33am

My memory must be fading. As I remembered it, the tax was originally charged for the easement rights to string cable on public land and public right-of-way.

For the monopoly, the city got public access programming.

Fri, 05/20/2011 - 10:08pm

"The funds used by the City for cable related purposes represents 40% of the franchise fee revenues collected by Comcast Cablevision and paid to the City as compensation for use of the public rights of way, as authorized by federal law. The balance of the franchise receipts are deposited into the General Fund and used to off-set other City non-cable related operating expenses."

From the City of Fort Wayne web site.

Confirming Harl's correct memory took about 30 seconds of googling.

Besides, who cares about television? Internet is where cable companies are holding the US down as a digital backwater. See what's happening in NC.