Audio Video News

Cable subscribers in some localities may soon find themselves paying higher monthly bills, thanks to a decision by the Federal Communications Commission (FCC) on October 4.

The regulatory agency approved a cable industry request to pass along the franchise fees levied by local governments to cable customers. The fees, similar to local sales taxes, are typically attached to cable's ancillary services, such as local advertising or modem services. Some cities, however, charge cable companies fees equal to as much as 5% of their total gross profit. That is part of the bargain that cable providers agree to, in return for being granted a virtual monopoly over a local market.

The FCC decision will allow cable operators to pass these fees along to their customers. Cable companies lobbied the FCC for the changes after the cities of Nashville, TN, Virginia Beach, VA, and Pasadena, CA instituted levies on their respective cable systems' gross profits.

Cable subscribers, understandably unhappy with the decision, are pressuring their local governments to appeal the FCC's decision. One FCC spokesperson said the request was approved in the hope that it would encourage cable operators and local governments "to negotiate reasonable franchise agreements and franchise fees that put consumers at the forefront of their discussions."