BRATTLEBORO — A federal agency voted on Aug. 1 in favor of allowing cable companies to include the value of services and equipment that they have previously provided at no cost to states and municipalities for use of public property.
This vote changes a decades-old rule, permitting the telecommunications companies to deduct the value of that equipment and those services from the fees that have long gone in full to local-access public, educational, and government (PEG) cable stations like Brattleboro Community Television (BCTV) and Falls Area Cable TV (FACT TV) in Bellows Falls.
Windham County community broadcasters have long dreaded the decision from the Federal Communications Commission and have been girding for an uncertain future, despite efforts to implore local viewers and government officials to urge the federal regulatory agency to leave intact a rule that has been in place since 1984.
Currently, cable companies pay up to 5 percent of their gross subscription revenue to what is known as local franchising authorities (LFA) in exchange for using public rights-of-way for holding infrastructure such as telephone poles. In Vermont's case, the LFA is the state.
The 3-2 party-line vote will allow cable companies to begin including equipment and in-kind services as part of the 5 percent.
Such items include installing fiber to schools, supporting emergency services' communication systems, or funding public-access television stations, all benefits typically negotiated as part of long-term cable contracts.
A court-ordered decision
Funding for public-access channels like Brattleboro Community Television - the state's first public-access station, founded in 1975 - has come through the 1984 Cable Communications Policy Act.
This act authorized fees on cable companies for their use of the public airwaves. Currently, those fees are assessed on subscribers and make their way to municipalities and stations via the cable companies.
According to documents from BCTV, these fees “are often described as 'rent' for the commercial access and use to the public right of ways within a municipality.”
At the open meeting of the FCC commissioners, members of the FCC's Media Bureau recommended the rule change.
According to the meeting's agenda, the FCC took up the issue in response to a “remand” from the U.S. Court of Appeals for the Sixth Circuit concerning how franchising authorities may regulate incumbent cable operators.
According to court records, in Montgomery County, Md., v. FCC, the court found that the commission had “one set of regulators litigating against another.” The court in essence sent the regulations in question back to the FCC for clarity.
The commission members then spoke, with two Republicans in favor and two Democrats against, followed by the committee's Republican chairperson, Ajit Pai.
Rule change intended to fight 'regulatory overreach'
In Pai's opinion, the rule change would actually bring LFAs into alignment with how the rules should have been carried out in the first place.
The two commissioners who voted in favor of the change framed their arguments in terms of freeing the cable companies' resources to support broadband, specifically to underserved areas. They also contended that the change would rein in state and municipal overreach.
In Commissioner Michael O'Rielly's opinion, the rule change would keep LFAs in their lane and ease the burden “unfair” franchising fees had levied on cable companies. More than once he referred to LFAs using fees on cable companies as “an end run” around the regulations.
Commissioner Brendan Carr echoed O'Rielly, saying, “When you tax something, you get less of it.”
In Carr's opinion, the “illegal taxes” LFAs charged cable companies went beyond the companies' use of public rights of way and hampered the build-out of broadband infrastructure.
He added that the rule change would help “crack down on bad actors who seek to tax broadband.”
Two commissioners lobby for status quo
The two commissioners who voted against the rule change hinted that the FCC's Aug. 1 decision would likely lead to lawsuits.
Meanwhile, they said, states, local authorities, and communities, and local journalism are left with fewer resources.
Both commissioners also noted the high number of public comments the FCC received that supported the current funding structure.
Commissioner Jessica Rosenworcel said that despite a narrative of increasing resources for remote broadband, no actual commitment existed.
“They insist that funding these local [public-access] stations and related efforts damages the ability of this nations' largest broadband providers to extend their networks to communities without high-speed service,” she said. “But comb through the text of this decision - you will not find a single commitment made to providing more broadband service to remote communities.”
Rosenworcel said that effectively reducing funds to public-access channels and other community services will hurt local communities and would go against the FCC's history of supporting free-flowing communications.
“This agency should seize the opportunity to invigorate local news gathering and community coverage,” Rosenworcel said. “But on that score, today's decision misses the mark - that's because it cuts at PEG changes across the country.”
In Rosenworcel's opinion, the FCC decision pointed to a larger trend in Washington - that of cutting local authors out of public infrastructure.
“I believe that the way we are proceeding is at odds with our long legal history and tradition of dual sovereignty in the United States,” she said.
Commissioner Geoffrey Starks said, “I believe this item will end up in litigation.”
In Starks' opinion, changing the composition structure - based on a private company's access to the public rights of way - would unseat hundreds of agreements made over 35 years. He added that the rule change reflected a misinterpretation of the regulations.
The rule change would also “shake the foundation” of public-access television stations and other emergency communication systems like 911iNET that provide critical local services, he said.
Starks said that the franchise fees paid by the cable companies were a small imposition compared to the wider public benefits the fees funded.
Fear of cuts at the local level
According to Lauren-Glenn Davitian, a Burlington-based media advocate and executive director of Channel 17/Town Meeting Television and CCTV Center for Media & Democracy, the funding change represents a shot at a state government's rights and free speech.
“The door is closing on free speech and open access,” Davitian said in a previous interview with The Commons [“Public-access stations gird for massive funding loss,” News, July 10]. “PEG is a foot in the door that is shutting.”
“That's why it is so vital at this time” that people support PEG stations, said Davitian. Fundamentally, this cable funding issue is about the right to free expression, she said -and if society loses this right, it won't get it back.
Locally, stations have been preparing for the rule change, and organizations like BCTV or FACT TV have prepared for significant budget cuts.
FACT TV Executive Director Alex Stradling said the station could potentially see a budget cut of 30 to 40 percent. A decrease in the cable funding would mean a loss of programming for the local community, he added.
In an email to The Commons, BCTV Executive Director Cor Trowbridge wrote that “day to day, BCTV operates as we always have until we receive a quarterly payment that has significantly reduced cable subscriber fees (most likely in December), and then we'll know if we have to make more major changes.”
Earlier this year, BCTV took several steps to, as Trowbridge described it, “future proof” the station.
For the first time in the station's history, BCTV asked for and secured a total of $15,000 from the eight selectboards for which the organization routinely provides gavel-to-gavel meeting coverage.
The station also changed its membership fee structure.
BCTV has traditionally charged one annual membership fee, creating a benefit that allowed people to borrow equipment. Now, memberships start at $15 per year for students and those under the age of 26. Other individuals will pay $25.
The station will also offer subscription packages for community members who want to produce programming for the station, based on how much staff time and equipment is needed.
Legislature launches study committee
At the state level, the Legislature is addressing the impact on local communities of both the rule change and the impact of Vermonters cutting the cord to their cable in favor of streaming services. Even before the rule change was proposed, stations have worried that fewer cable subscribers would mean big cuts in franchise fees.
Earlier this year, the body launched the PEG Access Study Committee, chaired by Senate Majority Leader Becca Balint (D-Windham County) to investigate how it can support public-access channels in the state.
The committee held its first meeting on July 19, where it heard testimony from Davitian, as well as Clay Purvis, director for telecommunications at the Vermont Department of Public Service, and Maria Royle, an attorney with the Office of Legislative Council.
To follow the committee's work, visit legislature.vermont.gov/committee/detail/2020/349.