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U.S. Code as of:
01/19/04
Section 542. Franchise fees
(a) Payment under terms of franchise
Subject to the limitation of subsection (b) of this section, 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 bills
Each 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) of this section, 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" defined
For 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.
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