Small cities face dilemmas over franchise fees from Charter, Cable One

The ongoing spat between Cable One and Viacom over how much Viacom's programming is worth—and whether Cable One is willing to pay for it—could cause Duncan, Okla. to lose $130,000 in franchise fees. Meanwhile, in Chippewa Falls, Wis., city officials are considering eliminating the 2 percent franchise fee the city collects from Charter Communications (NASDAQ: CHTR) cable subscribers.

Cable One has substituted 15 channels of alternate programming to take the place of Viacom favorites like MTV, CMT and Nickelodeon but it's not enough to keep subscribers like Candace Boyster happy.

"We have been with them almost eight years," she told KSWO. "I would hate to switch, but I will if I have to."

If others follow her lead and drop the cable service, the city could receive less than  $130,000 in subscriber-based franchising fees this year, ultimately impacting the overall budget. City Manager Jim Frieda, whose office has received complaints about the dispute, said there's not much he can do to resolve it.

"We have a franchise agreement with Cable One" that runs through 2021 and gives the cable company control of what's offered in the town. It's federal law that precludes cities from getting involved with regard to oversight on programming," he said.

Things are a little different in Chippewa Falls, Wis., where the city is actually considering eliminating a 2 percent franchise fee—worth about $60,000 annually—it collects from Charter Communications (NASDAQ: CHTR) cable subscribers.

In the past, the city gave almost all the franchise fee money to Chippewa Valley Community Television so it could record and air council meetings, according to the Eau Claire Leader Telegram. That agreement was ended and the city has spent $30,000 to upgrade its website, train workers and purchase equipment so that city workers can now handle the meeting chores.

That leaves a question about what to do about the franchise fee and whether to continue to collect the money without paying  CTV.  "If we repeal it, we have to find that money in the budget," said Council President Bill Hicks.

Mayor Greg Hoffman, meanwhile, believes the city is using the money wisely and should probably keep the surcharge in place.

For more:
-see this KSWO story
-see the Eau Claire Leader Telegram story

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