Cable Franchise Fees in Monroe County Government

10 Feb

IN53-MoCoGov has enjoyed a long winter slumber — but it is time to get moving again. A lot is happening in local government, and of course our friends in the General Assembly are at it again.

House Bill 1432 — Eliminating Cable Franchise Fees

House Bill 1432, which is currently in committee in the Indiana General Assembly, would eliminate the franchise fees that cable companies (actually “video service providers”) that are regulated by the Indiana Utilities Regulatory Commission pay to local units of government, in return for use of the public right-of-ways for their wiring systems. As you might imagine, this bill is being very heavily lobbied by the cable industry — and there are some legitimate arguments that the franchise fees are market-distorting (there are many providers of video services, including satellite, that don’t have to pay any fees to local government).

In 2012, cable franchise fees from the three cable providers serving Monroe County (Comcast, AT&T, and Smithville), brought in $527,064 to Monroe County Government — revenue that would be nearly impossible to make up and would result in noticeable cuts in service from County Government.

Community Access Television Service

The biggest expenditure from cable franchise fees in Monroe County Government is on CATS — our Community Access Television Service. CATS, organized as a department of the Monroe County Public Library, receives funding from the City of Bloomington, Monroe County Government, and the Town of Ellettsville. CATS provides televised access to local government and other community meetings. They are there gavel-to-gavel for every County Council meeting, every County Commissioners meeting, every City Council meeting, school board meetings, etc. I believe that having these meetings televised and available to the public is absolutely central to a transparent local government — and without cable franchise fees funding, CATS would not be able to provide such extensive and accessible coverage of local government meetings.

In 2012, CATS TV provided:

  • Coverage of 407 Government meetings for the City of Bloomington, Monroe County, and Town of Ellettsville, plus MCCSC and RBBCSC and the Library board
  • 400 Community events
  • 1,558 Patron-produced programs
  • 109 Public service announcements, including Candidates on Demand
In the library’s August 2012 community survey (n=746 Monroe County residents) they learned that, at least a few times a year:
  • 69% watch City government meetings.
  • 58% watch County government meetings.
  • 60% watch educational and cultural programs.
  • 31% watch SCOLA international news.

(These stats are courtesy of library director Sara Laughlin).

We cannot afford to lose funding for CATS. Transparency in government must be considered an “essential service”, and without cable franchise fees revenues, our local governments here in Monroe County will have to find some other source to support public access television.

Cable Franchise Fees Revenue

The following table shows the revenues that come each year to Monroe County Government each year from cable franchise fees, as well as the expenditures from that revenue on CATS (labeled CATS Expenditures) and on other government services (labeled Non-CATS Expenditures).

Year Revenues CATS Expenditures Non-CATS Expenditures Total Expenditures
2001  $241,669  $84,914  $192,349  $277,264
2002  $224,070  $100,000  $186,254  $286,254
2003  $286,757  $100,000  $131,483  $231,483
2004  $384,248  $100,000  $196,445  $296,445
2005  $357,986  $90,000  $201,017  $291,017
2006  $370,941  $100,000  $178,931  $278,931
2007  $392,091  $110,000  $151,793  $261,793
2008  $434,796  $151,574  $140,466  $292,040
2009  $430,168  $200,000  $145,966  $345,966
2010  $450,848  $216,000  $179,465  $395,465
2011  $539,286  $221,000  $335,361  $556,361
2012  $527,064  $221,000  $497,130  $718,130
2013  $527,064  $227,330  $408,900  $636,230

The following graph shows how the revenue has changed over the past 10 years.

Cable Franchise Fees 2001-2012

For most of the last decade, it has increased steadily. The last two years saw a leveling-off and even a slight decline. This decline will likely continue, as clearly there are far more technological choices available to consumers today for video delivery, including satellite and other wireless options, so cable franchise fees may not be a sustainable revenue source in the long run. But local governments will need the ability to develop alternate revenue sources to maintain the services currently supported by these revenues.

Cable Franchise Fees Expenditures

So, other than community access television, what does Monroe County Government spend this revenue on? Although the revenue is not legally restricted, and can be spent on any lawful expense of county government, if appropriated by the County Council, the general principle has been that this revenue has been raised through fees on communications lines, and should be spent on communications-related expenses.

In 2011, the following expenditures were made from cable franchise fees revenues:

  • $221,000 for support of CATS
  • $141,784 for telephone and data services for Monroe County Government
  • $59,228 for radio service for the Sheriff’s Department
  • $120,025 for software licenses for Monroe County Government
  • $3970 for lease of equipment in the Monroe County Extension Office
  • $5000 for the WFIU weather alert system
  • $5351 for maintenance on the Human Resources management software for county government

In 2012, we spent:

  • $221,000 for support of CATS
  • $134,906 for telephone and data services for Monroe County Government
  • $29,333 for radio service for the Sheriff’s Department
  • $98,721 for software licenses for Monroe County Government
  • $3270 for lease of equipment in the Monroe County Extension Office
  • $12,000 for licenses for a grants management system to manage over $19M in grants to Monroe County
  • $5000 for the WFIU weather alert system and $2000 for the WFHB weather alert system
  • $2970 for maintenance on the Human Resources management software for county government
  • $4698 for GPS field tracking equipment
  • $116,230 in technology upgrades to the Nat U. Hill room

The last expense deserves a bit more note. Until the recent courthouse renovation, technology to support meetings in the Nat U. Hill Room (the room in which all county council, commissioners, plan commission, board of zoning appeals, etc. meetings are held) was almost non-existent. Although laptops and projectors were available, presentations were almost unreadable as broadcast on TV, making it difficult for the public watching the meetings to see the same materials that meeting participants were seeing. Further, there was no permanent CATS TV installation in the room, so every single meeting required almost two hours of setup by CATS staff, and a half hour or so of teardown.

When the courthouse was renovated, the County Council appropriated funding out of the Cable Franchise Fees Fund to upgrade the meeting room to add two monitors, which allow meeting participants and the public to more easily view presentations, and to add a permanent CATS installation. Further, the monitor video feeds also now go directly into the CATS TV feed, so presentations are much more readable to the public. This means more CATS can cover more meetings, since it doesn’t require such an enormous investment in staff time to setup and tear down from meetings, and it means better meeting broadcast quality to the public.

Cable franchise fees expenditures in 2013 look to be very similar to 2012 (other than the one-time expenditures on upgrades to the meeting room). Council appropriations for 2013 are:

  • $227,000 for support of CATS
  • $150,800 for telephone and data services for Monroe County Government
  • $40,000 for radio service for the Sheriff’s Department
  • $190,000 for software licenses for Monroe County Government
  • $3600 for lease of equipment in the Monroe County Extension Office
  • $12,500 for licenses for a grants management system
  • $5000 for the WFIU weather alert system and $2000 for the WFHB weather alert system
  • $5000 for maintenance on the Human Resources management software for county government

What’s Next?

All of the expenses paid for by cable franchise fees are essential. Some are highly visible, like CATS TV and the weather alert systems for local public radio stations. Others are not as flashy — maintenance fees on software applications and data services used to maintain county government, an organization with over 500 employees and a budget of over $60M. All would require some other funding source if cable franchise fees were eliminated. All will ultimately require some other funding source in the long run as franchise fees revenues decline naturally. However, local communities — and counties in particular — are hamstrung by the state in terms of their abilities to raise revenues. Although we do have limited home rule, we do not have meaningful home rule– and we certainly don’t have it where it counts, in terms of taxation. That is really the big issue here.

On the particulars of cable franchise fees, we at least may have received a bit of a reprieve. Yesterday at the League of Women Voters Legislative Update, Representative Eric Koch (R-Bedford), chair of the Utilities and Energy committee, said that the bill would not receive a hearing this year, in order to give legislators more time during summer study committees to study the data on how local governments are using the franchise fees revenues (data which is not due until later this year).

Despite this temporary reprieve, it is likely in the foreseeable future that cable franchise fees will be changed — maybe by reducing them and adding fees to satellite operators, but probably more likely in reducing or eliminating them entirely. The broader story is that local communities — local governments — need to have a greater say in raising revenue for government services.  If franchise fees are eliminated, we will need some alternate revenue source, particularly to support public access television. Budgeting is always about setting priorities — and as public access television is one of the few things that county government supports that it isn’t statutorily required to support — without a revenue stream, we would not be able to fund it — at least not anywhere near the level that we currently do. And that would be a shame for our democracy.

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