47 U.S.C. § 542

Franchise fees

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(a) Payment under terms of franchise

Subject to the limitation of subsection (b), any cable operator may be required under the terms of any franchise to pay a franchise fee.

(b) Amount of fees per annum

For any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator’s gross revenues derived in such period from the operation of the cable system to provide cable services. For purposes of this section, the 12-month period shall be the 12-month period applicable under the franchise for accounting purposes. Nothing in this subsection shall prohibit a franchising authority and a cable operator from agreeing that franchise fees which lawfully could be collected for any such 12-month period shall be paid on a prepaid or deferred basis; except that the sum of the fees paid during the term of the franchise may not exceed the amount, including the time value of money, which would have lawfully been collected if such fees had been paid per annum.

(c) Itemization of subscriber billsEach cable operator may identify, consistent with the regulations prescribed by the Commission pursuant to section 543 of this title, as a separate line item on each regular bill of each subscriber, each of the following:(1) The amount of the total bill assessed as a franchise fee and the identity of the franchising authority to which the fee is paid.(2) The amount of the total bill assessed to satisfy any requirements imposed on the cable operator by the franchise agreement to support public, educational, or governmental channels or the use of such channels.(3) The amount of any other fee, tax, assessment, or charge of any kind imposed by any governmental authority on the transaction between the operator and the subscriber.(d) Court actions; reflection of costs in rate structures

In any court action under subsection (c), the franchising authority shall demonstrate that the rate structure reflects all costs of the franchise fees.

(e) Decreases passed through to subscribers

Any cable operator shall pass through to subscribers the amount of any decrease in a franchise fee.

(f) Itemization of franchise fee in bill

A cable operator may designate that portion of a subscriber’s bill attributable to the franchise fee as a separate item on the bill.

(g) “Franchise fee” definedFor the purposes of this section—(1) the term “franchise fee” includes any tax, fee, or assessment of any kind imposed by a franchising authority or other governmental entity on a cable operator or cable subscriber, or both, solely because of their status as such;(2) the term “franchise fee” does not include—(A) any tax, fee, or assessment of general applicability (including any such tax, fee, or assessment imposed on both utilities and cable operators or their services but not including a tax, fee, or assessment which is unduly discriminatory against cable operators or cable subscribers);(B) in the case of any franchise in effect on October 30, 1984, payments which are required by the franchise to be made by the cable operator during the term of such franchise for, or in support of the use of, public, educational, or governmental access facilities;(C) in the case of any franchise granted after October 30, 1984, capital costs which are required by the franchise to be incurred by the cable operator for public, educational, or governmental access facilities;(D) requirements or charges incidental to the awarding or enforcing of the franchise, including payments for bonds, security funds, letters of credit, insurance, indemnification, penalties, or liquidated damages; or(E) any fee imposed under title 17.(h) Uncompensated services; taxes, fees and other assessments; limitation on fees(1) Nothing in this chapter shall be construed to limit any authority of a franchising authority to impose a tax, fee, or other assessment of any kind on any person (other than a cable operator) with respect to cable service or other communications service provided by such person over a cable system for which charges are assessed to subscribers but not received by the cable operator.(2) For any 12-month period, the fees paid by such person with respect to any such cable service or other communications service shall not exceed 5 percent of such person’s gross revenues derived in such period from the provision of such service over the cable system.(i) Regulatory authority of Federal agencies

Any Federal agency may not regulate the amount of the franchise fees paid by a cable operator, or regulate the use of funds derived from such fees, except as provided in this section.

(June 19, 1934, ch. 652, title VI, § 622, as added Pub. L. 98–549, § 2, Oct. 30, 1984, 98 Stat. 2787; amended Pub. L. 102–385, § 14, Oct. 5, 1992, 106 Stat. 1489; Pub. L. 104–104, title III, § 303(b), Feb. 8, 1996, 110 Stat. 125.)Editorial NotesReferences in Text

This chapter, referred to in subsec. (h)(1), was in the original “this Act”, meaning act June 19, 1934, ch. 652, 48 Stat. 1064, known as the Communications Act of 1934, which is classified principally to this chapter. For complete classification of this Act to the Code, see section 609 of this title and Tables.

Amendments

1996—Subsec. (b). Pub. L. 104–104 inserted “to provide cable services” before period at end of first sentence.

1992—Subsec. (c). Pub. L. 102–385 amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: “A cable operator may pass through to subscribers the amount of any increase in a franchise fee, unless the franchising authority demonstrates that the rate structure specified in the franchise reflects all costs of franchise fees and so notifies the cable operator in writing.”

Statutory Notes and Related SubsidiariesEffective Date of 1992 Amendment

Amendment by Pub. L. 102–385 effective 60 days after Oct. 5, 1992, see section 28 of Pub. L. 102–385, set out as a note under section 325 of this title.

Effective Date

Section effective 60 days after Oct. 30, 1984, except where otherwise expressly provided, see section 9(a) of Pub. L. 98–549, set out as a note under section 521 of this title.

Notes of Decisions

Cited in 79 cases (4 in the last 5 years), 1986–2022 · leading case: City of Eugene v. Comcast of Oregon II, Inc., 375 P.3d 446 (Or. 2016).

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City of Eugene v. Comcast of Oregon II, Inc., 375 P.3d 446 (Or. 2016). · cites it 11× “” 47 USC § 542 (b). Thus, the city calculates Comcast’s cable franchise fee based on revenue Comcast derives from its “cable service,” and does not include revenue Comcast derives from noncable services.”

Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007). · cites it 4× “47 U.S.C. § 542 (a), (b). The Act permits cable operators, in turn, to pass the franchise fees through to their subscribers.”

All. for Cmty. Media v. Fed. Commc'ns Comm'n, 529 F.3d 763 (6th Cir. 2008). · cites it 5× “47 U.S.C. § 542 (b). This cap prohibits an LFA from charging a franchise fee in excess of five percent of a cable operator’s revenues from the provision of cable services.”

Comcast Cable of Plano, Inc. v. City of Plano, 315 S.W.3d 673 (Tex. App. 2010). · cites it 10× “The parties have agreed to a single issue on appeal: Does the Federal Communications Act, 47 U.S.C. §§ 542 (b) and 556(c), preempt the City’s claim that its July 11, 1983 Franchise Agreement with Comcast entitled the City to receive a fee equal to five percent of Comcast’s…”

BellSouth Telecomm., Inc. v. Farris, 542 F.3d 499 (6th Cir. 2008). · cites it 4× “See 47 U.S.C. § 542 (c)(3) ("Each cable operator may identify .”

City of Glendale v. Marcus Cable Assocs., LLC, 231 Cal. App. 4th 1359 (Cal. Ct. App. 2014). · cites it 5× “( 47 U.S.C. § 542 (a); Pub. Util. Code, § 5840, subd.”

Liberty Cablevision of Puerto Rico, Inc. v. Mun. of Caguas, 417 F.3d 216 (1st Cir. 2005). · cites it 7× “§ 522 (10) — to impose a maximum of 5% of gross revenues as “franchise fees,” 47 U.S.C. § 542 (b). Franchise fees include “any tax, fee, or assessment of any kind imposed by a franchising authority or governmental entity on a cable operator or cable subscriber, or both, solely…”

City of Chicago v. Comcast Cable Holdings, L.L.C., 900 N.E.2d 256 (Ill. 2008). · cites it 6× “Section 542(b) Preemption At the heart of the parties’ dispute is whether section 542(b) of the Communications Act ( 47 U.S.C. §542 (b) (2000)) preempts the City’s franchise fee because it relies, in part, on revenues from cable modem services.”

Pac. Gas & Elec. Co. v. City of Union City, 220 F. Supp. 2d 1070 (N.D. Cal. 2002). · cites it 11× “Both TSC and TCI have also alleged violation of 47 U.S.C. § 542 , which makes certain excessive fees levied against cable operators illegal.”

Texas Coalition of Cities for Util. Issues v. Fed. Commc'ns Comm'n, 324 F.3d 802 (5th Cir. 2003). · cites it 6× “They argue that the FCC’s order should be reversed because it conflicts with 47 U.S.C. §§ 542 and 543. They also contend that the order is arbitrary and capricious because it contravenes the FCC’s regulations, orders, and policies.”

City of Chicago v. Comcast Cable Holdings, L.L.C., 384 F.3d 901 (7th Cir. 2004). · cites it 2× “They rely on 47 U.S.C. § 542 (b), which provides that “the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator’s gross revenues derived in such period from the operation of the cable system to provide cable…”

Time Warner Ent. Co., L.P. v. Fed. Commc'ns Comm'n United States of Am., Nynex Corp., Intervenors, 56 F.3d 151 (D.C. Cir. 1995). · cites it 2× “They maintain, however, that the Commission cannot require franchising authorities to use their franchise fees for regulatory purposes because 47 U.S.C. § 542 (i) prohibits the Commission from “regulating] the amount of the franchise fees paid by a cable operator, or regulating]…”

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— 47 U.S.C. § 542(g)(2)(A) — 1 case

Comcast of Oregon II, Inc. v. City of Beaverton (D. Or. 2022).

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.