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story category The Fiscal Problems Of Franchise Laws
There's a problem when telecom companies write legislation
(old news - 10:31AM Saturday Jul 14 2007)
tags: Video · cable · legislation
Tipped by jslik See Profile
The Video Service Competition Act, passed into law last year by the General Assembly in North Carolina, is your basic cable franchise agreement. It was supposed to increase competition, reducing pricing and give consumers more cable service choices. What it wasn’t supposed to do was cost the local and state governments in the area over 25% of their revenue. But that’s exactly what’s happened in the six months since the franchise agreement has been effect because of the way that the tax on cable TV is now funneled through the Department of Revenue. Oh, and by the way, competitive pricing for consumers hasn’t materialized either. This could mean a bad future for the other states that have passed franchise agreements.

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Forums » The Fiscal Problems Of Franchise Laws
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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Huh?

quote:
What it wasn’t supposed to do was cost the local and state governments in the area over 25% of their revenue.

How is the state being deprived of revenue of the video franchise money is now going to the state's Department of revenue?

Did customers get a break on the video franchise tax?
--
Only SHATNER is Kirk.
chemaupr

join:2005-06-06
Alexandria, VA

Re: Huh?

because now the county or city does not collect the money. now it goes to the state central fund and that does not mean that the county will get back dollar per dollar of their residents. the state will decide what to do with the money.
nasadude

join:2001-10-05
Rockville, MD
local is the operative word here, as in

"local governments have received 27.8 percent less across the board under the new system"

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Huh?

said by nasadude See Profile :

local is the operative word here, as in
The summary clearly states that the state government has lost money too. Since the state now collects the franchise fees which would have gone to the local government, how can the state be "losing" money? The only explanation I can think of is if the state gave customers a break on franchise fees.
--
Only SHATNER is Kirk.

marigolds
Gainfully employed, finally
Premium,MVM
join:2002-05-13
Saint Louis, MO

Re: Huh?

Well, on the local level, local municipalities have the burden of proving how much the franchisee has to pay. This normally aggressively pursuing records and essentially delivering a documented invoice to the cable company. The franchisees always submit an initial lower revenue level than they eventually agree to (which any company should be expected to do in the same situation).

I suspect the state is not being nearly as aggressive and just accepting the revenue figures submitted by the franchisees without double checking against subscriber numbers. While franchisees almost always count full revenue when collecting the franchise fee, they will take any feasible deduction when paying the fee.

That could easily result in a shortfall in the new system, though 25% seems awful high.
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MemphisPCGuy
Senior Systems Engineer
Premium
join:2004-05-09
Memphis, TN

whew...

And Tennessee caught a ton of flack for shooting this down. If lobbyists are involved you can rest assured you are about to get screwed...
--
»www.memphispcguy.com
BF69

join:2004-07-28
Camden, TN

Re: whew...

said by MemphisPCGuy See Profile :

And Tennessee caught a ton of flack for shooting this down. If lobbyists are involved you can rest assured you are about to get screwed...
I live in Tennessee and I'm still for statewide franchising. My local government can't do a damned thing right anyways. Giving them less money means less money they waste. Having "local" franchise laws have not done a damned bit of good. Rural areas still don't have cable and prices keep going up. Of course the higher the cable rates the more they collect in franchise fees. So why anyone would feel that "local" control is better is beyond me. You think you're local franchise authority is doing what good for YOU or for THEM?

MemphisPCGuy
Senior Systems Engineer
Premium
join:2004-05-09
Memphis, TN
·Comcast

Re: whew...

There is no reason ATT shouldn't jump through every hurdle Time Warner/Comcast/Bellsouth had to... and since it appears that not doing so does nothing for the people, no reason to do it what so ever. It's not like they CAN'T do it, they just won't if they have to work at it. Maybe if Verizon where coming with FIOS... but who gives a crap about ATT and their lo-tech approach anyway, we got enough hillbilly engineering in this state, thank you very much
--
»www.memphispcguy.com
scooper

join:2000-07-11
Youngsville, NC

elementry

Franchise fees were going directly to the cities and towns. Now it goes through the NC dept of Revenue, where the state takes it's chunk....
fiberguy
My views are my own.
Premium
join:2005-05-20

Re: elementry

It's silly how they wrote the laws... what they should have done was set up boundaries in which area they serve the consumer and pay the fees directly to the local communities and not the state.

MAN I love when I predict these things in advance.

These are the kinds of games that are played when you allow the state to enter into something like this. There is an easy way for the state to allow these agreements to live but instead of the state managing it, they write the law and agreements that they must be based off of communities directly instead.

Law makers never get it right.
--
"Complaining is the least path of resistance for the self-serving, the lazy, and I’m told it’s a woman’s prerogative..."

MrMoody
Liberal Capitalist

join:2002-09-03
Smithfield, NC
·magicjack.com
·Embarq

Idiots

The idiots that run this state are all shrugging, going "duh, we don't know where the money went!"

Read the linked article, it's great.

quote:
Verizon has no plans to offer its FiOS service, a bundle of video and broadband, in North Carolina "for the foreseeable future," according to company spokesperson Robert Z. Elek.
quote:
the [Morganton] council decided to provide its own cable service, which it has done as a public utility since 1992.
...
At the most recent legislative committee meeting on HB 1587, industry lobbyist and attorney Wade Hargrove said, ... the city "drove out" the private cable provider, "said 'no' to free enterprise and went on to build and operate a monopoly, government-owned cable TV business.

After 13 years, Hargrove said, Morganton's cable business is $7 million in debt. Hargrove even suggested that electric bills were higher for Morganton residents as a result of the city's bad investment.

Assistant City Manager Ron George has a different story.
...
The city borrowed money to start the system, but eventually cable subscriptions paid off that debt, George says. "The system became positive not only in terms of cash flow, but it paid back the money that was spent on it."

A couple of years ago, the city borrowed another $7 million to upgrade the system and run fiber throughout the town, making Internet access available to all Morganton's residents, not just those in wealthy neighborhoods. The city is paying off that debt at $1 million per year. George says it is untrue that electric rates have increased to cover that debt—they're the same as they were in 1996.


pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Idiots

said by MrMoody See Profile :

Assistant City Manager Ron George has a different story.
I would not expect someone who works for a local government to proudly say that a government project on which he/she works is a failure. Such an admission might lead a person to seek refuge in the nearest unemployment line.
--
Only SHATNER is Kirk.

MrMoody
Liberal Capitalist

join:2002-09-03
Smithfield, NC

Re: Idiots

Sure, but so would (provably) lying to the press.

Note that the lobbyist's story didn't really disagree much, either, he just left out some important details.
jc100

join:2002-04-10
·RoadRunner Cable


edit:
July 14th, @03:42PM

Where your MONEY GOES

Ted Stevens - Republican of Alaska is a great example of where your money ends up. After all, ask him how useful those funds he diverted from Katrina to build his 300 million slush fund bridge to 50 people panned out. My point here, it's not that they "lost the money'. It's probably being diverted to pet projects like this idiot's.... Next time you take a road to nowhere, that's where the franchise money probably went. That or it simply lined the pockets of the politicians that voted for it. Both are plausible. In the end, the tax payer gets shafted, the city officials lose money to spend, and the state politicians are laughing all the way to the bank.
Forums » The Fiscal Problems Of Franchise Laws


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