Policy

NCTA Opposes Cities’ Plan

11/07/2004 7:00 PM Eastern

Washington— America’s cities should not be granted a hearing before the U.S. Supreme Court in a case that might allow local governments to collect up to 5% of cable operators’ high-speed data revenue, the National Cable & Telecommunications Association said last Thursday.

Cities from the around the U.S. want the high court to overturn a Federal Communications Commission ruling that denied them authority to collect franchise fees on cable-modem revenue.

The FCC determined in March 2002 that cable-modem service was not a cable service under federal law, a classification that put data revenue beyond the reach of cities’ power to collect franchise fees. The FCC’s ruling was not disturbed by a federal appeals court.

“The cities’ petition presents no question that is worthy of this court’s attention,” NCTA said in Supreme Court brief.

Cities have said the FCC ruling on franchise fees is costing $500 million a year in lost revenue. In 2003, operators paid about $2.4 billion in franchise fees assessed on their video programming and equipment revenue.

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