Judge Voids Windy City Modem Fees
By Ted Hearn -- Multichannel News, 9/9/2003 2:00:00 PM
The city of Chicago may not impose franchise fees on revenue local cable companies derive from high-speed-data customers, a federal judge ruled last Thursday.
In a short ruling, U.S. Judge David H. Coar agreed with eight operators sued by the 'Windy City' that under federal law and Federal Communications Commission rulings, cable companies do not need to contribute any cable-modem revenue in the form of franchise fees.
Among the cable companies sued was the former AT&T Broadband, now controlled by Comcast Corp.
Under federal law, cities may demand up to 5% of a cable company's gross revenue from cable services -- an annual take totaling more than $2 billion, according to the National Cable & Telecommunications Association
In March 2002, many operators stopped paying franchise fees on cable-modem revenue after the FCC ruled that cable-modem service was not a 'cable service' as defined in federal law.
Many cable companies said they feared being sued by data subscribers if they continued to collect franchise fees on a noncable service after the FCC ruling.
No related content found.
VIEW ALL GALLERIES
