FCC Denies Motion to Stay on Cable Order

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Yesterday the FCC issued an Order denying our motion to delay the effectiveness of the Cable Franchise (Section 621) Order until the appeals challenging the Cable Order are resolved. We expected the FCC to deny the request, but it was important to ask the FCC to consider this issue and the denial clears the way for the parties challenging the Cable Order to make the same request in court.

There is a partial victory in the FCC’s denial. The denial Order indicates that the cable operator must ask for an amendment to the franchise before offsetting franchise fees and makes clear that it is the cable operator’s burden to prove the existing franchise violates the Cable Order:

The rules in the Order did not supersede provisions in existing franchise agreements on their effective date (September 26, 2019). Instead, the Order encouraged LFAs, in response to a request from a cable operator, to negotiate franchise terms that conform to the Order in a reasonable amount of time, which the Commission found in most cases would be no more than 120 days. Thus, for example, an LFA is not required to assess the costs of in-kind contributions that it currently receives from a cable operator (e.g., free cable service) against the franchise fee until the cable operator asks the LFA to amend the terms of its franchise. At that point, the LFA and the cable operator have 120 days to renegotiate the franchise agreement. If negotiations fail, the terms in the franchise remain in effect unless and until a cable operator challenges those terms and proves that the terms violate the Order’s requirements. (Par. 21)

This language should be helpful in clarifying the appropriate process for cable operators seeking to offset franchise fees in response to the Cable Order.