Washington -- Capital costs expended by operators to
support PEG (public, educational and government) access are not included in franchise fees
for the purpose of computing the 5 percent cap, according to a clarifying letter released
by Deborah Lathen, chief of the Cable Services Bureau of the Federal Communications
The letter was sent in an effort to alleviate confusion
generated by another Lathen letter sent earlier this year to the community of Bowie, Md.
The new letter, released June 25, said a payment for
capital costs required under the franchise is not defined as a fee in Subsection 622 of
the Cable Act. Franchise fees apply only to monetary payments made by the cable operator.
Further, payments operators make voluntarily to support
PEG-access channels are not subject to the 5 percent cap, Lathen wrote.