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Policy

Time Warner Wins on Minneapolis Fees

11/22/2005 7:53 AM Eastern

A federal judge has ruled that Time Warner Cable may refuse to pay franchise fees on cable-modem revenue, handing the MSO a legal victory over the city of Minneapolis.

The ruling, handed down Nov. 10 by U.S. District Judge Ann D. Montgomery, accorded with other modem-fee court rulings and key rulings by the Federal Communications Commission.

A spokeswoman for the Minneapolis government was not immediately available to comment on a possible appeal.

Montgomery agreed with Time Warner that franchise fees may be collected only on cable services. She noted that after the FCC classified cable-modem service as an information service in 2002, cities lost authority to impose the typical 5% fee on cable-data revenue.

Montgomery said the FCC's classification was a reasonable decision.

“The FCC and numerous courts have found that under the Telecommunications Act, Congress intended that cable-modem service revenues are not to be included in the assessment of franchise fees," she said.

Minneapolis argued that despite the FCC's ruling, it still had ample authority under federal and state law to collect modem fees. Montgomery disagreed.

"Essentially, Minneapolis' argument is an end-run around pre-emption," she said.

September