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Exploring the Policy Value of Cable Franchise and Exploring the Policy Value of Cable Franchise and
PEG Fees PEG Fees
Duncan Stewart
University of Utah
Lee Shaker
Portland State University
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Stewart, D., & Shaker, L. (2018). Exploring the Policy Value of Cable Franchise and PEG Fees. Journal of
Information Policy, 8, 442-471. doi:10.5325/jinfopoli.8.2018.0442
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Subscribers to cable television typically pay Franchise and Public–Educational–
Governmental (PEG) Fees. Ostensibly, these monthly fees exist to compensate
communities for the private use of public goods and to bolster the marketplace of
ideas. Little empirical research, however, assesses the utility of these fees as policy
mechanisms. In this article, we track the existence and dispensation of the fees
in the largest American cities by examining their recent annual budgets. is
provides a foundation to consider the fees’ contributions in the context of ongo-
ing legal challenges to their existence and the increase of digital television services
beyond their purview.
Keywords: Telecommunication, PEG, franchise, democracy, local media
For decades, most cable subscribers in the United States have paid a pair
of obscure, but not insubstantial, fees every month. Cable Franchise and
Public–Educational–Governmental (PEG) Fees are regulated by both state
and federal law, were historically negotiated city-by-city, and specied in
the individual cable franchise agreements that give cable companies the
legal right to oer paid television services within specic communities.
According to current law, these fees are only attached to traditional cable
pay television packages and are not levied upon satellite television sub-
scriptions, broadband internet services, or “over-the-top” video products
like Netix (which may be subject to dierent taxes). Combined, the fees
usually add – percent to each subscriber’s monthly bill. Conservatively,
they yield many hundreds of millions of dollars in revenue for local gov-
ernments nationwide each year. e particulars of these fees are often
opaque to consumers and it may not be immediately apparent why they
exist in lieu of a traditional sales tax.
Duncan Stewart and Lee Shaker
Duncan Stewart: University of Utah
Lee Shaker: Portland State University
Franchise and PEG Fees were originally conceptualized as a form of com-
pensation for the public provided by cable companies to defray the costs
associated with the use of public resources.
PEG Fees, in particular, were
dened to provide nancial support for the creation and distribution of
grassroots, diverse media content to bolster the marketplace of ideas.
After
more than three decades, little is known about the way that fee proceeds are
used by local governments though this fee regime still supersedes the appli-
cation of regular sales taxes upon cable services in most communities nation-
wide. On one hand, revenue from these fees could be used to bolster local
communities by repairing roads and funding key elements of local informa-
tion landscapes like community media centers, coverage of governmental
proceedings, and libraries.
On the other hand, cities may squander these
resources on bureaucratic oces of information policy or channel them into
general operating funds that oer little accountability or transparency. In
either case, their existence imposes a range of costs upon municipalities, cable
providers, and ultimately consumers as they are negotiated and disbursed.
In this article, we systematically track the existence and dispensation of
Franchise and PEG Fees in each of the largest cities in the United States
during one recent year. By examining annual budgets from each of these
cities, we document the collection and allocation of these fees in as much
detail as possible given the available public records. Our research shows
which cities are collecting which fees and how they are allocating these
resources. In turn, our analysis provides an empirical foundation for assess-
ing the fees’ current and future utility in the context of ongoing legal chal-
lenges to their existence and the increase of digital television services that
exist outside their purview. Results show that these fees provide substantial
funding to cities and that a portion of it is channeled to activities that likely
bolster the marketplace of ideas—but the bulk of related revenue ows into
general operating budgets. Once fee revenue enters general operating bud-
gets, it is dicult to document the activities it supports. In most cities, the
majority of fee revenue does not appear to support communication-related
policies or directly mitigate the costs borne by cities as a result of cable pro-
viders’ infrastructure activities. Consequently, our analysis suggests that the
fees largely function like unrestricted sales taxes and that PEG obligations,
in particular, are not consistently met. Given these ndings, we argue that
. Parker.
. Ali, Media Localism.
. Waldman.
regulators must nd new ways to hold communities accountable or work
to develop alternative mechanisms to pursue local information policy goals
going forward. In the absence of such reform, the special costs imposed by
the current fee regime are not justied by the results in many locales.
Franchise and PEG Fees: An Overview
Building the infrastructure to provide cable television is a disruptive and
costly process. Cities cannot allow cable providers to dig up city streets
without requiring compensation to fund their repair and an orderly pro-
cess to minimize public inconvenience. But at the same time, cable com-
panies cannot justify the large investment that building a complete local
cable system requires without clarity regarding the costs that they will
incur to access potential customers. To balance these interests, cities and
cable providers negotiate franchise agreements. For cities, franchise agree-
ments ideally ensure universal access to cable for local households, enough
revenue to cover public costs incurred as a result of the presence of a cable
system (i.e., road repairs), and additional resources to improve the local
marketplace of ideas. For cable companies, franchise agreements ideally
limit both the amount of compensation to cities and the uncertainty asso-
ciated with providing paid television services within a locale. Federal law
does not require cable companies to serve every home within local com-
munities nor does it require cities to open public land to paid television
providers. Consequently, both sides have some leverage in the negotiation
of local franchise agreements and, more specically, the fees they contain.
e modern form of PEG and Franchise Fees can be traced to the
Cable Communications Policy Act (CCPA) of .
In the wake of sev-
eral attempts by the Federal Communications Commission (FCC) to
develop franchising regulations in the s which were disputed on First
Amendment grounds, Congress implemented the CCPA which estab-
lished durable legislation to guide cable system ownership, rates, content,
and franchising agreements.
Most germane to this research, the CCPA
oered several specic guidelines for the Franchise and PEG Fees that local
governments could include in franchise agreements. According to federal
law, a Franchise Fee may be levied upon cable companies (which may, in
. Parker.
. Ali, Media Localism.
turn, pass it on to subscribers) in exchange for the use of public rights
of way (e.g., cable lines buried beneath local roads). e Franchise Fee
is capped by federal law at a maximum of percent of the gross income
derived from the provision of paid television services. Federal law leaves
the allocation of this income to the discretion of individual locales. In
addition to the Franchise Fee, the CCPA also allows local authorities to
specify a PEG Fee.
Conventionally, the PEG Fee is set between and percent of the
gross revenue from paid television services. Traditionally, federal law did
not cap the PEG Fee, but it mandated that proceeds from the PEG Fee
could only be used for public access broadcasting, educational media and
broadcasting, government access television, and/or the capital costs of
PEG facilities—though enforcement procedures to ensure adherence to
this mandate were not specied.
Even with the passage of the CCPA and the practical motivation shared
by cable companies and local authorities to negotiate workable franchise
agreements, Franchise and PEG Fees have engendered intermittent legal
debate. Shortly after the CCPA’s passage, Saylor
and Krug
suggested that
cable operators could be conceptualized as First Amendment speakers.
From this perspective, Saylor, Krug, and others
argue that cable providers’
speech rights are violated if the presence of either fee cannot be justied
by a direct need for revenue that arises from the cable providers’ activities.
is line of logic rests upon Minneapolis Star and Tribune Co. v. Minnesota
Commissioner of Revenue, a Supreme Court ruling that found a special
tax on the Minneapolis Star unconstitutional because the city did not need
the additional revenue as a result of costs incurred by the operation of the
paper. Similar logic fuels recent reinterpretation of the PEG provisions of
the CCPA.
ough still disputed, recent FCC rulings assert that PEG
Fees in excess of the percent Franchise Fee may only cover capital costs
associated with PEG activities.
Support for programming or sta must
now be deducted from the percent Franchise Fee—substantially reduc-
ing resources available for PEG content. Generally speaking, the FCC’s
role in administering the Fees is limited to adjudicating disputes and the
. Goldfarb, “Public, Educational, and Governmental (PEG) Access.”
. Saylor.
. Krug.
. Geller, Ciamporcero, and Lampert.
. Goldfarb, “Public, Educational, and Governmental (PEG) Access.”
. Federal Communications Commission.
commission does not provide any oversight (or enforcement) regarding the
allocation of the associated revenues.
In addition, since approximately states have enacted legislation
that shifts franchising authority to the state-level and further constrains
Franchise and PEG Fees.
Kentucky, for example, attempted to strip local communities of the
ability to set fees in franchise agreements and substitute lower statewide
Franchise ( percent) and PEG (. percent) rates—though the legislation
was eventually found unconstitutional by the state supreme court.
Similarly,
in San Francisco, annual PEG revenue decreased by nearly ,
because California instituted a lower cap on the fee.
Telecommunications
companies—and some consumer advocates—have worked hard to
encourage the move toward statewide franchising in order to smooth
the entry of new competitors into local markets (and lower costs), often
overcoming strenuous opposition from local governments and community
activists who fear the loss of resources.
Meanwhile, a recent lawsuit in
Iowa led on behalf of subscribers leveraged the Minneapolis Star ruling to
challenge the legality of Franchise and PEG Fees and seek redress for fees
that extended beyond the capital costs incurred by cities as a result of cable
system activities.
In Portland, Oregon, a similar lawsuit alleged that the
city misallocated million of Franchise and PEG Fee revenue,
though it
was quickly dismissed.
To plaintis in these actions, the fees have dubious
value. e most visible use of fee revenue is sometimes risible public access
programming and citizens may struggle to discern other uses of fee fund-
ing. In some cases, cable providers’ actions further obscure and diminish
the value produced by the fees. For example, AT&T recently placed all
PEG programming on a single channel accessible only through a special
digital set-top box after navigating through multiple drop-down menus.
Aside from the recent legal wrangling, both fees face an uncertain future
as the public transitions from traditional cable television packages toward
. Goldfarb, “Public, Educational, and Governmental (PEG) Access.”
. Kentucky League of Cities; “Excise Tax—Multichannel Video Programming Services”;
“Imposition of Tax on Gross Revenues.”
. Waldman.
. Ali, Media Localism.
. Saul.
. Rogoway, “Lawsuit Claims Portland.”
. Rogoway, “Judge Tosses out Suit.”
. Waldman.
new services oered online. Subscribers to Netix, Hulu, and other inter-
net video services do not pay Franchise or PEG Fees and, consequently,
revenue from the fees will naturally wither without new legislation if peo-
ple substitute these services for cable. Yet, even as the media technologies
that deliver television are changing, the public interests that motivated the
Franchise and PEG Fees persist.
Cable Fees, Communication Policy, and Local Media
In the context of cable television, the Franchise and PEG Fees are key
expressions of the federal government’s commitment to media localism
and diversity.
Local media have long been thought to be a vital compo-
nent of well-functioning democratic communities.
Historically, theorists argued that by providing a common informa-
tion base rooted in proximate events and issues, newspapers dened and
oriented communities toward public matters of substance.
Subsequent
shared conversation nurtured the cohesion and cooperation necessary for
healthy civic and political participation.
From this intellectual foment,
localism and diversity emerged early in the twentieth century as media
policy tenets adopted by the FCC during the development of electronic
media. Ideally, regulation following these principles would ensure that
diverse information about local matters and organizations was made widely
accessible even if citizens relied on radio and television outlets rather than
newspapers. In fact, a growing body of recent research
lends empirical
support to the FCC’s embrace of localism and diversity. is work shows
that use of and access to local news media correlates with higher local
political knowledge, more civic engagement, and more local political
participation—all outcomes that justify policy that stimulates production
and consumption of local, diverse information.
More specically, localism is an orientation toward crafting communica-
tion infrastructure around the needs of local communities to enrich a sense
of local identity and strengthen participation in democratic institutions.
. Napoli.
. Janowitz.
. De Tarde.
. Janowitz.
. Hayes and Lawless; Mondak; Schulhofer-Wohl and Garrido; Shaker.
. Napoli.
e FCC’s diversity tenet is intended to produce policy that increases
opportunities for the voices of many dierent community members to be
amplied and heard.
roughout the twentieth century, the FCC sought
to safeguard local, diverse media even as national and international media
expanded. For example, the FCC long enforced ownership limits on broad-
cast (and by extension print) media outlets designed to encourage local
control of media—though these caps have been weakened repeatedly over
time.
e FCC’s position in Carter Mountain Transmission Corporation v.
Federal Communications Commission crystallizes its commitment to local
content in regards to cable television. To protect local voices, the FCC was
willing to ght to curb cable providers’ First Amendment rights by man-
dating that they retransmit local channels and reserve space and resources
for public access television.
e FCC’s interest in public access television may especially be seen
through the lens of a commitment to the diversity principle.
In practice,
public access facilities stimulate the creation and distribution of content
that often falls outside of commercial boundaries because of its production
quality, topic matter, or potential audience.
Public access programming
may at times be farcical, but it can also directly serve the democratic goals
of the diversity principle.
A vein of qualitative research shows that, at
least in some circumstances, PEG funding provides vital support for pro-
ducing and disseminating both records of governmental activity and the
voices of those otherwise not well represented in the public sphere.
For
example, PEG facilities frequently ensure multilingual access to television
programming that is otherwise lacking. “In Minnesota, the Saint Paul
Neighborhood Network (SPNN) oered eight programs for the growing
Somali population in the area” and throughout the United States, public
access channels provided programming in “Greek, Czech, Hungarian,
Albanian, German, French, Portuguese, Vietnamese, Chinese, Korean,
Hmong, Farsi, Arabic, Hebrew, and Swahili.”
At its best, this sort of pub-
lic access content empowers and activates citizens who may otherwise not
nd a connection to established democratic institutions.
. Einstein.
. McChesney.
. Linder.
. Devine.
. Kellner.
. Chen et al.
. Waldman.
e persistent, inexorable decline of traditional local media businesses
is creating new challenges for the FCC’s commitment to localism and
diversity. Annual reports by the Pew Research Center show sustained,
secular declines in daily local newspaper revenue continuing for the past
two decades—a problem that is driving newspapers to lay o reporters,
reduce the number of local stories covered, publish less frequently and, at
times, close entirely.
In addition, growing corporate ownership of local
television stations is often paired with cost-cutting measures that reduce
newsroom stang.
Commercial eorts leveraging new digital technol-
ogies to ll the market for local information—such as Patch.com—have
largely failed so far. A smattering of nonprot approaches—some driving
new online operations, others oriented to support legacy print media—are
being explored across the United States.
Some of these edgling initia-
tives may prove successful, but they may not be easily replicated in dif-
ferent communities with idiosyncratic needs and cultures. Cultivating
healthy local information environments in the twenty-rst century is a
vexing—and controversial—task that looms unresolved.
In the midst of this upheaval, many PEG facilities operating at the
convergence of technological change and shifting audience preferences
are nding ways to stay relevant. Case studies of communities across the
United States show “public access stations” reformulating themselves as
“community media centers.”
In these facilities, the content produced—
distributed online as well as through cable systems—is an outgrowth of
more fundamental contributions: the training and empowering of citizens
and the creation of a locus of community. In community media centers, the
range of activity is broad: traditional television programs and segments are
produced, but there is also an emphasis on teaching media literacy, oer-
ing skills training, and experimenting with new technology. In sum, such
eorts connect “ethnically diverse and economically challenged groups to
advanced digital equipment and skills” which are then used in “empow-
ered forms of participation [by] local residents who use access resources
to pursue wellbeing in dierent spheres of their lives, from community
engagement and self-expression, to vocational and career development.”
. Barthell.
. McLean.
. Ali and Damian.
. Napoli and Friedland.
. Ali, “e Last PEG.”
. Fuentas-Bautista.
For example, in Portland, Oregon, Open Signal—formerly Portland
Community Media—recently invested in incubating a community of vir-
tual reality (VR) hobbyists which, in turn, fed into burgeoning VR activity
at local advertising agencies like Wieden+Kennedy.
ough little research
quanties the eects of these activities, a recent survey-based study in
Austin, Texas found that, in spite of the rise of YouTube and other online
platforms, “PEG channels remain a highly relevant source of information”
particularly for African American, Hispanic, and less-educated residents.
So, as other local media institutions break down, at least some PEG facil-
ities—like public libraries—are evolving to serve community needs in the
twenty-rst century.
As the transition to digital media proceeds, regulatory mechanisms
may bolster local information environments as they have in the past. For
example, the recent expansion of low-power FM radio broadcasting is an
attempt to use policy to stimulate the proliferation of grassroots voices.
Franchise and PEG Fees are an old policy mechanism that may have a
new life in this environment. Wireline and wireless broadband internet
services both rely upon the same public goods—land and spectrum—that
provide the foundation for cable and broadcast media. e same logic that
historically allowed FCC regulation of analog media in favor of localism
and diversity can be used to justify modern policies that echo the Franchise
and PEG Fees. But, before advocating for their extension to digital tele-
vision oerings, the utility of each fee as a mechanism for encouraging
the foment of diverse community media activity should be assessed. As
Anderson
suggests, a policy’s success can best be determined by com-
paring its outcomes to the boundaries of the principles that justied its
implementation. Localism and diversity cannot be said to be advanced by
the Franchise and PEG Fees unless they are increasing the likelihood that
the public is exposed to or engaged with PEG facilities.
is can only be
the case if Franchise and PEG Fees are reliably used to fund community
media centers and related activities. If revenue from these fees is simply
supporting cities’ operating budgets, then it is not being used to stimu-
late the local marketplace of ideas and other tactics to do so should be
investigated.
. Justen Harn, Personal communication, April .
. Chen et al., .
. Dunbar-Hester.
. Anderson.
. Entman and Wildman; Levin.
Research Questions
Ideally, citizens in communities across the United States could easily ascer-
tain both how much they paid in Franchise and PEG Fees and how local
authorities allocated the cumulative proceeds. With this information,
members of the public, academics, and policy makers could determine if
the fees were producing satisfactory outcomes. Generally speaking, how-
ever, both sides of the fee equation are opaque: it is dicult to determine
either how much money is collected or how it is spent. In fact, beyond
anecdote and the occasional case study of local public access facilities,
there is virtually no foundation for an empirical assessment of Franchise
and PEG Fees. In order to remedy this lacuna, the research questions that
drive this research are:
RQ1: Are Franchise Fees being collected in the largest cities in the
United States? If so, how much revenue did they yield in each city?
How is Franchise Fee revenue spent in each city?
RQ2: Are PEG Fees being collected in the largest cities in the
United States? If so, how much revenue did they yield in each city?
How is PEG Fee revenue spent in each city? Is this spending consis-
tent with federal mandates for PEG revenue?
Method
Public accounting of both revenue and expenditure at the local level is an
important starting point for assessing the existence and value of Franchise
and PEG Fees. Accordingly, this research examines annual budgets from
the largest cities in the United States.
e largest American cities were
examined for several reasons. First, these franchise agreements aect the
largest number of subscribers. Second, the cumulative scale of funding
in these large cities produces enough revenue to support more ambi-
tious investments in local information activities than may be possible in
smaller cities. ird, these cities are scattered across the country, provid-
ing a glimpse of conditions in dierent states, regions, and franchising
. ese cities were selected according to city population, not metropolitan area, because cable
franchise agreements are typically negotiated by individual cities.
environments. Finally, a practical consideration: budget information
related to cable activities and pertinent news coverage is much more acces-
sible for the largest cities than for smaller communities.
Analysis of municipal budgets is a challenging task. When possible, the
most recent actual budget gures reported by each city are used in this
analysis. Unfortunately, not all cities publish nal retrospective accounting
numbers so, for eight cities, estimated or projected budget numbers are
used.
While actual budget results are preferable because they document
real revenue and expenditure patterns, budget projections are useful in that
they are (hopefully) reective of prior budget outcomes. Each budget was
thoroughly inspected to determine whether or not it reported the collec-
tion of PEG and Franchises Fees and, if so, the total revenue from those
fees. Any evidence of disbursements to cable-related and/or PEG purposes
in these budgets is also reported here. Finally, state laws, local franchise
agreements, and relevant news coverage were all reviewed to further con-
textualize the information in each budget. Even without nancial specics,
these secondary sources are valuable because they document the likelihood
of missing information in city budgets that thwarts further assessment of
the Franchise and PEG Fees. ey also allow us to distinguish between
cities that fail to report information about fees that exist and cities that
simply do not levy either of the fees.
e results are organized in three sections. First, we report whether
Franchise and PEG Fees exist in each city. e fees are dependent on state
law as well as each unique franchising agreement, so the absence of either
fee in a budget (or in related documentation) can be the result of the
city’s choice not to levy either fee on cable carriers or a statewide prohi-
bition against doing so. For cities that do administer fees, we then sum-
marize the total reported fee revenue and the allocations made to fund
cable-related activities. ese allocations typically go to a department or
oce that is tasked with telecommunication matters such as the collection
and disbursements of Franchise Fees, coordinating PEG programming,
andnegotiating new franchise agreements. Finally, we use the budgets and
other related documentation to categorize and tally city spending in three
cable-related areas as completely as possible: administrative, infrastructure,
and PEG-related expenditures. Administrative expenditures include utility
. Budget cycles also dier across cities, so the specic numbers reported in this analysis are
not all from the same year. See Appendix A for more detail on the data as well as on statewide
legislation and local franchise agreements.
management and sta salaries for departments charged with the operation
of cable television-related activities. Infrastructure expenditures are out-
lays for the cutting and repair of streets and other physical maintenance.
PEG expenditures support the production of public, educational, and gov-
ernment programming through the acquisition of video equipment, the
training of students and members of the public, the stang of production
teams, and even, in the case of San Diego, library improvement. Transfers
to the general fund—explicitly listed or implicitly occurring—are not
included in these categories. Rollover funds from prior or to subsequent
scal years are also excluded from the tabulations.
Results
Table documents the collection of PEG and Franchise Fees. All cities
collected a Franchise Fee. ere is also evidence that of the cities
collected a PEG Fee—though nine cities that likely collect a PEG Fee
do not report details of it in their budgets. Of the cities, local fran-
chise agreements and state laws suggest that only four cities do not levy
a PEG Fee. ere is evidence that all cities support at least some form
of government broadcasting—though of those , only provide public
access broadcasting opportunities. Government broadcasting even in com-
munities like Phoenix which eschew PEG Fees indicates some cities use
other resources to nance the operations of the government and perhaps
even, in some cases, public access broadcasting. Additional detail regarding
the PEG content made available in each city is beyond the scope of this
analysis.
Table documents cable-related revenues and expenditures to the
extent possible using the cities’ public budgets. On the left side of the
table, Franchise and PEG Fee revenues are specied separately. Total
reported cable-related disbursements are listed in the center, followed by a
breakdown of the expenditures by purpose. Revenue derived from the fees
that remains after all reported cable-related allocations is shown in the last
column. is money may be absorbed by a city’s general fund or saved for
the allocation in future years toward PEG or other cable-related purposes.
Franchise Fee revenue is reported in every city except Indianapolis,
but the precise amount collected is unclear in six cities. In several cities
(El Paso, Jacksonville, New York City, San Antonio) cable franchise revenue
is lumped together with telephone franchise revenue and Dallas reports
franchise revenue from all utilities (cable, phone, gas, etc.) in the aggregate.
San Francisco reports a small sum related to cable television nes, but
it is not reporting Franchise revenue clearly. Such accounting procedures
prevent close scrutiny of the cable fees in these communities. Setting aside
these vagaries, the budgets document hundreds of millions of dollars
of cable fee-related revenue across these cities in just one scal year.
Viewed at either the subscriber or the city level, the fees are substantial.
In Austin, Texas, there were , households in the city as of .
If
Austinites subscribed to cable at roughly the national average, percent
of households—or ,—would have active cable connections.
. United States Census Bureau.
. Statista.
Franchise and PEG Fees
City Franchise Fee
Collected
PEG Fee
Collected
Public Access
TV Available
Statewide
Franchising
Austin Yes Yes Yes Yes
Charlotte Yes No Yes Yes
Chicago Yes Not specied Yes Yes
Columbus Yes No No Yes
Dallas Yes Not specied No Yes
Detroit Yes Yes No Yes
El Paso Yes Not specied No Yes
Fort Worth Yes Yes No Yes
Houston Yes Yes Yes Yes
Indianapolis Yes Yes No Yes
Jacksonville Yes No No Yes
Los Angeles Yes Yes Yes Yes
New York Yes Not specied Yes No
Philadelphia Yes Not specied Yes No
Phoenix Yes No No No
San Antonio Yes Not specied Yes Yes
San Diego Yes Not specied No Yes
San Francisco Yes Not specied Yes Yes
San Jose Yes Yes Yes Yes
Seattle Yes Not specied Yes No
Cities that do not specify a PEG Fee are distinct from those in which no fee exists in that relevant
franchise agreements or state laws indicate that a PEG Fee exists—the budgets just fail to report
information about it.
Cable-Related City Finances
City Franchise Fee Revenue PEG Fee Revenue Total Cable
Allocations
Administrative
Expenditures
Infrastructure
Expenditures
PEG-Related
Expenditures
Unaccounted
Revenue
Austin $9,216,223 $1,843,245 $3,344,086 $0 $0 $3,344,086 $7,715,382
Charlotte $7,919,995 No fee $0 $0 $0 $0 $7,919,995
Chicago $29,200,000 Not reported $656,297 $0 $0 $656,297 $28,543,730
Columbus $9,600,000 No fee $1,055,233 $0 $0 $1,055,233 $8,544,767
Dallas $27,394,587
a
Not reported $2,567,235 $343,806 $701,988 $1,521,441 $24,827,352
Detroit $7,188,253 $602,665 $1,440,373 $1,198,390 $0 $241,983 $6,350,545
El Paso $9,682,169# Not reported $670,332 $0 $0 $670,332 $9,011,837
Fort Worth $6,766,484 $1,200,000 $332,200 $0 $0 $332,200 $7,634,284
Houston $23,400,000 $4,675,400 $4,706,738 $2,411,738 $0 $2,295,000 $23,368,662
Indianapolis Not reported $503,075 $503,075 $0 $0 $503,075 $0
Jacksonville $35,300,000# No fee Not reported Unknown Unknown Unknown NA
Los Angeles $12,940,888 $5,900,541 $10,108,489 $9,310,740 $161,405 $636,344 $8,732,940
New York $167,270,000 Not reported Not reported Unknown Unknown Unknown NA
Philadelphia $21,559,000 Not reported Not reported Unknown Unknown Unknown NA
(Continues )
City Franchise Fee Revenue PEG Fee Revenue Total Cable
Allocations
Administrative
Expenditures
Infrastructure
Expenditures
PEG-Related
Expenditures
Unaccounted
Revenue
Phoenix $9,500,000 No fee $4,138,000 $1,948,000 $2,190,000 Unknown $5,362,000
San Antonio $30,700,000# Not reported $7,070,503 $7,070,503 $0 $0 $23,629,497
San Diego $18,600,000 Not reported $2,028,515 $576,473 $45,735 $1,406,307 $16,571,485
San Francisco $2,833,639@ Not reported Not reported Unknown Unknown Unknown NA
San Jose $9,700,000 $1,960,000 $1,538,526 $0 $0 $1,538,526 $10,121,474
Seattle $8,764,264 Not reported $8,636,884 $2,392,212 $1,571,412 $4,673,260 $127,380
a
Reported sum aggregates all Franchise Fees paid to the city by phone, cable, electricity, gas, and other providers.
b
Reported sum includes some phone-specic fees in addition to cable-related fees.
c
Likely to be only a portion of cable TV-related city revenue.
e city collected more than million in fees that year, mostly from
the Franchise Fee which is capped at percent of the gross cost of cable
television. Dividing the amount collected for Franchise and PEG Fees by
the approximate number of cable households suggests that, in , the
average Austin subscriber paid the city about . per month in Franchise
and PEG Fees.
Tracing the precise revenue driven by PEG Fees is even more dicult.
Budget documentation suggests that of the cities levied a PEG Fee,
but nine of these cities do not specify PEG revenues. For these cities—
Chicago, Dallas, El Paso, New York, Philadelphia, San Antonio, San Diego,
San Francisco, and Seattle—the absence of documented PEG Fee revenue
does not mean that the fee does not exist or that PEG programming is
not being produced. However, the absence of clearly stated PEG revenues
does thwart outside oversight of their utilization. New York, for example,
reports cable fees in the aggregate and, while support is clearly being chan-
neled to PEG facilities and purposes, it is not possible to match revenues
and allocations. On the whole, it is dicult to track PEG revenue through
to support for PEG-related activities and there is some evidence that the
funds are likely underutilized. ere are exceptions: Austin’s allocation for
PEG-related activities exceeds its total reported revenue collected speci-
cally from the PEG Fee and Seattle reports spending more than percent
of all cable-related revenue on PEG activities. Per federal law, cities are not
required to spend all revenue in a given year, so it is possible that PEG rev-
enue and allocations ow unevenly across scal years (Cable Act §(b)).
Federal law does not restrict the use of revenue derived from the
Franchise Fee, and it is not possible to precisely account for this money
in most cities. After tracing all specic administrative, infrastructure, and
PEG-related expenditures listed in these city budgets, every city that reports
collecting a Franchise Fee has unallocated revenue remaining. Eight cities
explicitly earmark cable fee revenue for administrative purposes related
to telecommunications; the remaining cities do not specify the source of
funding for oces or sta that deals with communication or cable. Only
ve cities report allocations for infrastructure spending and, generally, the
relevant expenditures are for technological investments rather than road
repairs. Seattle stands out for its transparency: after accounting for admin-
istration costs related to cable activities, infrastructure spending, and PEG
outlays, just . percent of its total reported cable-derived revenue remains.
On the whole, the use of most Franchise Fee funds is unexplained.
Without a mandate to report what purpose Franchise Fee revenue serves,
cities appear to largely absorb such funds into general operating budgets.
In summary, cities can be loosely divided into three categories. First,
there are ten cities (Austin, Charlotte, Columbus, Detroit, Fort Worth,
Houston, Los Angeles, Phoenix, San Jose, and Seattle) that clearly report
their cable-related revenues. ese cities also report cable-related allocations
in an intelligible fashion—except Charlotte, which does not levy a PEG
Fee and consequently has no legal requirements that proscribe the alloca-
tion of its cable-related revenue. Even among these cities, with the excep-
tion of Seattle, the majority of cable-related revenue is apparently absorbed
into general operation budgets. At the opposite end of the spectrum, San
Francisco is not clearly reporting cable-related revenues or expenditures:
its accounting is very opaque. e remaining nine cities—Chicago, Dallas,
El Paso, Indianapolis, Jacksonville, New York, Philadelphia, San Antonio,
and San Diego—report enough information to give some insight, but little
clarity, into their cable-related budgeting. Many of these cities lump rev-
enue driven by phone and cable service together. Several appear to report
Franchise and PEG Fee revenue together. Most disclose only minimal
information about related expenditures. Altogether, it appears that most
cable-related revenue in these cities ows to general operating budgets—
but it is dicult to tally precisely how much money this is.
Discussion
Franchise and PEG Fees are vestiges of a fading technological and regula-
tory environment. ough originally positioned as compensation for the
use of specic public resources and justied as the means to bolster the local
marketplace of ideas, the fees function as sales taxes. Further, their negotia-
tion—often as part of local franchise agreements—creates additional costs
that are likely passed on to consumers. As such, they deserve scrutiny: do
they eectively promote identiable societal benets? More specically,
do they promote local and diverse content within communities across the
country? Do they do so equitably and consistently? Are they otherwise
nurturing communication capacity within communities? Should they be
maintained—or adapted—as separate, freestanding fees? As new technolo-
gies and an evolving, piecemeal regulatory regime reshape these fees, these
questions should be considered as part of a larger process to develop a
cohesive communication policy framework for the twenty-rst century.
Despite chronically opaque accounting practices, our analysis of
municipal budgets makes it clear that cities are collecting many millions
of dollars annually in Franchise Fee revenue. ere is scant evidence that
this revenue is used to defray costs associated with cable system construc-
tion with any regularity. ough it appears that some cities channel a per-
centage of Franchise Fee revenue toward PEG-related purposes, the bulk
of the proceeds are absorbed by general operating budgets. Most cities
supercially account for Franchise Fee revenues, but there is a dierence
between allocating funds to “cable costs” and distinguishing between “road
repair” and “public information sta salaries.” is vague accounting is
entirely legal but it obscures the benets that citizens derive from Franchise
Fees (such that they exist). On one hand, the Franchise Fee could be used
to support municipal (or state) funding to bolster the local marketplace
of ideas. New Jersey, in a possible model, recently drew funding from the
resale of television licenses to create a new fund to support community
news.
But, without additional regulatory intervention, the Franchise Fee
as currently constituted simply provides fungible revenue to municipali-
ties. us, the additional burdens created by the special negotiation of the
Franchise Fee typically are not justied by special benets derived from it
in lieu of a straightforward sales tax.
Meanwhile, PEG Fees and facilities are withering in the face of sustained
legal pressure applied at both the state and federal level. In smaller locales,
more than PEG facilities have closed in recent years.
In the commu-
nities studied here, there is evidence that a few cities (Seattle, Austin) value
PEG-related activities enough to use Franchise Funds to support them. In
most cities, however, PEG revenue is not clearly reported—which makes it
impossible to evaluate whether legal obligations regarding the fee are being
fullled. When revenue is reported, some cities (like Los Angeles) are fail-
ing to fully leverage PEG resources for public benet. In some cases, new
legal restrictions on PEG monies that only allow capital spending ham-
string local governments’ eorts to best utilize the funds that are collected.
On the whole, there is a trend toward less ambitious PEG approaches
that reduce funding and continue to transmit government meetings, but
no longer provide for public access programming or facilities. ough a
comprehensive survey of public access content is beyond the scope of this
article, it is clear that the elimination of public access programming is
. Rojas.
. Goldfarb, “Updating the Statutory Framework.”
a blow to both localism and diversity in mass media. New digital tech-
nologies and platforms like YouTube give voice to individuals and oer
real distribution advantages, but they do not inherently obviate the need
for community-centered information sources or facilities. Such facilities
can empower individuals and build community ties—even among under-
served populations—in ways that are democratically meaningful. Put
simply, reduced access to PEG facilities and content exacerbate problems
arising from the decline of local commercial media.
Yet, the potential good oered by Franchise and PEG Fees is not
enough alone to justify them or their extension to new digital services. As
presently constituted, Franchise and PEG Fees act as sales taxes on certain
television products. Educated, wealthy consumers who disproportionately
rely on broadband to access pay-TV products like Netix may be less
likely to pay these fees today than other segments of the population—
hardly a fair outcome. e bulk of fee proceeds are spent by cities with-
out meaningful oversight and, according to our analysis, typically without
connection to communication-related activities. If cities require funding
to pay teachers or dredge harbors, the rationale for a special tax on cable
television that requires onerous negotiation is not obvious. Rather, a host
of other approaches to municipal taxation might be pursued. One might
advocate for a sales tax applied to all communication products (similar to
the approach Florida has adopted) as part of statewide franchising which
would eliminate negotiation costs and likely benet consumers. Perhaps
an even better approach could be devised within the context of a graduated
local (or state) income tax. Either way, the status quo is not ideal and cities’
stewardship of existing cable fee revenue does not warrant facile extension
of the fees to new digital products.
Even at their best, PEG channels were only a complement to local
commercial media. As the business landscape shifts for local media, the
policy mechanisms that governments rely upon to nurture a healthy civic
information environment must evolve. It is possible that some sort of spe-
cial communication-related fee could be a part of a regulatory approach
to nurturing local, diverse voices. But there may be better tactics—for
example, recent eorts to develop a unique tax-sheltered status for the
Philadelphia Inquirer demonstrate a dierent way to provide public sup-
port for local media.
Scholars
outline many other tools that could be
. Meyer.
. Ali, Media Localism.
used to bolster local, diverse media. Open, active conversations about the
information needs of communities and the policies most likely to meet
them continues to be necessary—even if some parties would prefer that
they not take place.
Coherent policy goals and clear legal support for
preferred mechanisms to achieve them from the federal level down would
help remedy the fragmented, increasingly dysfunctional media regulatory
regime that is developing today. With the continuing retreat of commer-
cial interests from the local information landscape, leadership from the
public sector is more vital today than at perhaps any other recent moment.
Limitations
Several limitations constrain this research. First, the budgets that provide
the foundation for our analysis often oer only partial information regard-
ing cable-related revenues and allocations. e frequent lack of pertinent
detail in these budgets makes it impossible to follow the fee money at a
granular level—and it underscores a persistent obstacle for government
watchdogs. To some degree, this limitation is more of an indictment of
municipal budgeting practices than it is of the research tactics used here.
at said, only cities in a single budget year are analyzed here—the bud-
getary practices and ndings could be dierent had other cities been exam-
ined or a longitudinal analysis attempted. Perhaps more importantly, this
analysis does not delve into the PEG programming produced in dierent
cities. To truly assess the benets derived from the cable-related fees, more
information about this programming is necessary. ough there is anec-
dotal evidence that PEG funds support laudable content, current empiri-
cal research does not document the prevalence of such programming (let
alone the size of its audience or its impact). We do not address this gap in
the literature, which leaves it as an opportunity for future researchers.
Conclusion
Franchise and PEG Fees are at once obscure and substantial,
well- intentioned, and punitive. From their initial codication in the
CCPA, their ostensible purpose—to provide just compensation for the
use of public goods by private corporations and bolster the local market-
place of ideas—was undermined by a lack of oversight and, in many cities,
. Napoli and Friedland.
execution. Legislators may not have foreseen the sharp rise in the cost
of cable, but today these fees are responsible for an increasingly onerous
burden on cable consumers (many of whom have limited resources). In
addition, recent regulatory and legislative actions further undercut the
likelihood that the fees will be consistently used to provide specic, tan-
gible benets to the public. PEG Fees—and by extension PEG facilities
and content—are trending toward a gradual demise. Without useful PEG
access, the conceptual tie between the fees and the FCC’s interest in media
localism and diversity is diminished. In the absence of this commitment,
the fees are largely reduced to an inecient method to fund pothole repairs.
For those concerned with democracy, the plight of Franchise and PEG
Fees is disappointing. ese fees are an example of rare public resources
earmarked for local information environments. At their best, they sup-
port community media centers which function as hubs of placemaking
and empower diverse citizens to engage in the marketplace of ideas. It is
conceivable that fee-related resources could have been—or could still be—
consistently used to meaningfully support public discourse in communi-
ties nationwide. But, given the gradual decline of cable and the increasing
regulatory pressure on PEG Fees, it seems likely now that new mecha-
nisms advancing localism and diversity must be identied and embraced
for modern digital media. Looking ahead, perhaps more energy should
be invested in providing the vision and oversight necessary to cultivate
healthy local information communities. e information needs of com-
munities and their citizens are critical in democratic societies and should
not be subordinated to corporate interests or forsaken for regulatory
expedience.
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Charlotte 2014–2015 Actual Budget
Revenues Allocations Totals Balance
$7,959,632
Franchise Fees
(p. 115)
None reported. $7,959,632 Revenue $7,959,632
All page numbers listed from Charlotte Strategic Plan. Franchise Fee revenue is listed as a mis-
cellaneous source of general revenue. By state law, North Carolina applies a sales tax to video
programming services (including satellite packages) and distributes the funds to local governments
(ACM, ). ere is no mandate to provide PEG funding and Charlotte’s budget includes no refer-
ences to PEG Fees.
Chicago 2016 Budget Forecast
Revenues Allocations Totals Balance
$29,200,000
Franchise Fees
(p. 12)
$656,297 Cable and
telecommunication
public stations
(p. 115)
$29,200,000
Revenue
$28,543,730
$ 656,297
Expenditures
All page numbers listed from Chicago Budget overview. State law requires no less than of gross
television revenue be provided for PEG functions, but the budget does not break PEG revenue out
separately (ACM, ). Chicago does not make public a complete budget that shows actual revenues
and expenditures. Rather, it oers a full budget forecast and an annual assessment of the city’s nancial
health which uses actual data but with limited detail.
Austin 2013–2014 Actual Budget
Revenues Allocations Totals Balance
$9,216,223
Franchise Fees (VOL
2, p. 255)
$3,344,086 PEG
related total expen-
ditures (VOL 2,
p. 263)
$11,059,468
Revenue
$7,715,382
$1,843,245 PEG
Fees (VOL 2, p. 263)
$3,344,086
Expenditures
All page numbers listed from FY – Austin City Budget. Figures reported are for actual –
receipts. Franchise Fees in Texas are set to statewide. Reported revenue in the Austin budget also
includes remittances from other local franchise holders who provide access to natural gas etc. e
budget projects approximately growth in receipts for - over -. It specically projects
PEG revenue of ,,, which is described in the budget to be of gross TV receipts. is gure
is used to estimate actual PEG receipts in - and to estimate the television-specic franchise fee.
To do so, the PEG Fee is multiplied by —as mandated by state law—to estimate actual Franchise
Fee receipts.
APPENDIX:
CABLE FINANCE DETAILS BY CITY
Columbus 2016 Proposed Budget
Revenues Allocations Totals Balance
$9,600,000
Franchise Fees
(p. 16)
$1,055,233 Gov.
television channel
(p. 215)
$9,600,000 Revenue $8,544,767
$1,055,233
Expenditures
All page numbers listed from FY – Columbus City Budget. Columbus does not report actual
budget items by program. Ohio state law dictates that Franchise Fees are set to and PEG Fees are
banned after January , (Goldfarb, ).
Dallas 2015–2016 Proposed Budget
Revenues Allocations Totals Balance
$27,394,587*
Franchise Fees
(p. 560)
$1,521,441 Public
Information Oce
(p. 149)
$ 27,394,587
Revenue
$24,827,352
$343,806 Utility
management
(p.181)
$ 2,567,235
Expenditures
$701,988 Street cut
right of way manage-
ment (p. 220)
All page numbers listed from FY – Dallas City Budget. Dallas does not report actual budget
gures for prior scal years. Dallas also aggregates fees from all providers that use the public right
of way, including cable and electricity companies, in its budget. It reports a applying a fee upon
television services, but does not specify a separate PEG Fee (which, according to state law, should be
in addition to the Franchise Fee) (ACM, ). e Public Information Oce provides PEG-
related services.
Detroit 2012–2013 Actual Budget
Revenues Allocations Totals Balance
$7,188,253
Franchise Fees
(p. C-74)
$1,198,390 Media
services and commu-
nication (p. C-77)
$7,790,918 Revenue $6,350,545
$602,665 PEG Fees
(p. C-74)
$241,983 PEG
expenses (p. C-77)
$1,440,373
Expenditures
All page numbers listed from FY – Detroit City Budget. Data reects actual gures from
–, the most recent year made available. Michigan state law sets Franchise Fees to of gross
television receipts and PEG fees are capped at (ACM, ).
El Paso 2014 Actual Budget
Revenues Allocations Totals Balance
$6,142,819 AT&T
Fees (p. 88)
$128,830 PEG
admin (p. 261)
$9,682,169 Revenue $9,011,837
$3,539,350 Time
Warner Fees (p. 88)
$541,502 PEG
non-governmental
(p. 261)
$670,332
Expenditures
All page numbers listed from El Paso City Budget. Franchise Fee revenue includes some fees
related to AT&T’s landline phone services. PEG Fees not specied by budget.
Fort Worth 2014 Actual Budget
Revenues Allocations Totals Balance
$6,766,484
Franchise Fees
(p. F-12)
$332,200 Cable
Oce Fund
(p. H-318)
$7,966,484 Revenue $7,634,284
$ 1,200,000 PEG
Fees (p. H-317)
$332,200
Expenditures
All page numbers listed from FY Fort Worth City Budget. e PEG revenue is a forecast; only
actual expenditures are reported.
Houston 2014–2015 Estimated Budget
Revenues Allocations Totals Balance
$23,400,000
Franchise Fees
(p. 11-7)
$2,411,738 PEG
administration and
maintenance
(p. x-88)
$28,075,400
Revenue
$23,367,662
$4,675,400 PEG
Fees (p. x-88)
$2,295,000 PEG
non-prot contract
(p. x-88)
$4,706,738
Expenditures
All page numbers listed from FY – Houston City Budget. Figures reect estimated actual
results from -.
Indianapolis 2014–2015 Actual Budget
Revenues Allocations Totals Balance
$503,075 PEG Fee
Revenue (p. 77)
$340,265 Personal services
(p. 77)
$503,075 Revenue $0
$1,605 Material and services
(p. 77)
$503,075
Expenditures
Los Angeles 2013–2014 Actual Budget
Revenues Allocations Totals Balance
$12,400,572
Franchise Fee reve-
nue (p. 269)
$9,310,740
Administrative
appropriations
(p. 269)
$18,841,429
Revenues
$8,732,940
$5,900,541 PEG Fee
revenue (p. 269)
$540,316 Additional
misc. revenue
(p. 269)
$475,534 LA
Cityview PEG chan-
nel (p. 269)
$160,810 PEG capi-
tal costs (p. 269)
$161,405 Other
infrastructure costs
(p. 269)
$10,108,489
Expenditures
All page numbers listed from FY – Los Angeles City Budget. – gures represent the
most recent actual budget totals.
Jacksonville 2015–2016 Projected Budget
Revenues Allocations Totals Balance
$35,300,000
Projected aggregate
of state tax for all
communication
services (p. 135)
Unreported N/A N/A
Expenditures
unreported
All page numbers listed from FY – Jacksonville City Budget. Actual budget totals not made
available; projected revenue from October , – September , reported here. Florida taxes
communication services at . in lieu of separate Franchise Fees and remits lump payments to
localities annually. State legislation passed in legally terminated discrete PEG support as of July
, (ACM, ; Goldfarb, ).
Revenues Allocations Totals Balance
$127,174 Other services and
charges (p. 77)
$32,556 Properties and
equipment (p. 77)
$1,475 Internal charges
(p. 77)
All page numbers listed from FY – Indianapolis City Budget. Figures are actual results from
-. State law sets Franchise Fees at or the “incumbent level” when the relevant legislation
passed in . Indianapolis’s budget makes no mention of Franchise Fees.
New York 2014–2015 Modied Budget
Revenues Allocations Totals Balance
$167,270,000
Franchise Fees aggre-
gated from all private
telecom providers
(p. 21R)
N/A $167,270,000
Revenue
Expenditures
unknown.
N/A
All page numbers listed from FY – New York City Budget. New York does not report actual
past budget totals, only modied backward-looking estimates. e Department of Information
Technology and Telecommunications oversees franchising relationships as well as PEG activities in
addition to a host of broader responsibilities. In aggregate, the Department has an annual budget of
approximately million and it does not specify allocations for specic programs or purposes. e
budget contains no reference to PEG funding, though current franchise agreements with Verizon
and Time Warner specify millions of dollars of funding for PEG purposes beyond the standard
Franchise Fee.
Philadelphia 2014–2015 Actual Budget
Revenues Allocations Totals Balance
$21,559,000
Franchise Fees
(p. 13)
N/A Expenditures
unknown.
N/A
All page numbers listed from FY Philadelphia Operating Budget. Figures shown are most recent
reported actual budget data. No information is provided about cable-related expenditures or PEG
Fees. Philadelphia franchise agreements with Comcast and Verizon do include provisions that specify
nancial PEG support (Reyes, ).
Phoenix 2015–2016 Projected Budget
Revenues Allocations Totals Balance
$9,500,000
Franchise Fees
(p. 440)
$1,948,000 Public
information /
Communications
Oce (p. 17, 469)
$9,500,000 Revenue $3,069,651
$1,770,000 Street
transportation
(p. 469)
$420,000
Information technol-
ogy (p. 469)
$ Expenditures
All page numbers listed from FY – Phoenix City Budget. Only actual revenues are provided,
so proposed gures are presented here. e Communications Oce coordinates government program-
ming and receives the bulk of its funding from Franchise Fees. Granular allocations for PEG activities
are not specied nor is there evidence of a discrete PEG Fee.
San Antonio 2015–2016 Proposed Budget
Revenues Allocations Totals Balance
$30,700,000
Franchise Fees
(p. 113)
$7,070,503
Government
Information Oce
(p. 409)
$30,700,000
Revenue
$23,629,497
All page numbers listed from FY – San Antonio City Budget. Actual revenues not made
available. Franchise revenue includes funds related to telephone services. No PEG-specic reve-
nue or expenditures are included in the budget, though Texas state law allows for a PEG Fee. e
Government and Public Aairs oce reports producing more than PEG-programs, but does not
document programmatic costs.
San Diego 2014–2015 Actual Budget
Revenues Allocations Totals Balance
$18,600,000
Franchise Fees
(p. 70)
$576,473
Communication
Oce personnel (pp.
132–134)
$45,735
Communication
Oce capital costs
(p. 133)
$18,600,000
Revenue
$2,028,515
Expenditures
$16,571,485
$1,406,307 City TV
funding (p. 158)
All page numbers listed from FY – San Diego City Budget. Actual totals from – are
the most recent available. e budget references the existence of PEG-specic funding, but it does not
specify the amount separately.
San Francisco 2013–2014 Actual Budget
Revenues Allocations Totals Balance
$2,833,639
Reported as licenses
and nes (p. 257)
N/A $2,833,639 Revenue N/A
Expenditures
unknown.
All page numbers listed from FY – San Francisco Budget. Figures from – are the
most recent actual data. According to California’s Digital Infrastructure and Video Competition Act
of , Franchise Fees should be of gross television revenue and PEG Fees can be as much as
in addition. San Francisco is not clearly reporting the balance of either Fee, nor does it specify how it
funds SFGovTV, which it operates through the General Services Agency – Department of Technology.
San Jose 2014–2015 Actual Budget
Revenues Allocations Totals Balance
$9,700,000
Franchise Fees
(p. VI-6)
$1,538,526 PEG
capital costs
(p. IX-29)
$11,660,000
Revenue
$10,121,474
$1,960,000 PEG
Revenue (p. VI-6,
VI-50)
$1,538,526
Expenditures
All page numbers listed from FY – San Jose City Budget. e Franchise Fee in San Jose is
derived solely from subscriptions exclusive of other cable revenue sources. Franchise revenue is
aggregated with other utility-related income in the general revenue section of the budget. No specic
expenditures are drawn from it.
Seattle 2013–2014 Actual Budget
Revenues Allocations Totals Balance
$8,764,264
Franchise Fees
(p. 447)
$3,149,916
Seattle Channel /
Democracy Portal
(p. 447)
$8,764,264 Revenue $127,380
$1,333,344
Community
Technology (p. 447)
$1,571,412
Technology
Infrastructure
(p. 447)
$745,236 Cable
Communications
(p. 447)
$1,646,976 Various
administration costs
(p. 447)
$190,000 transfer to
library (p. 447)
$8,636,884
Expenditures
All page numbers listed from FY – Seattle Budget. Figures for - are the most recent
actual data available. Seattle’s budget does not specify separate PEG revenues. Recent franchise agree-
ments (e.g. Comcast agreement eective January , ) in the city have rolled the Franchise and
PEG Fees together into one charge that is less than the Franchise Fee maximum set by the federal
government.
