Franchise fee an issue in TV dispute

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September 17, 2007

By DENISE A. RAYMO The Press Republican Mon Sep 17, 2007, 12:00 AM EDT

MALONE -- Time Warner Cable says the franchise fees it pays communities for hosting its service will not change if a federal rate-regulation exemption is granted.

The Town Council and Supervisor Howard Maneely are concerned that if the Federal Communication Commission grants an exemption to allow Time Warner to raise its basic-cable rates, that could open the door for the company to end its quarterly franchise payments.

That would be $14,500 a quarter in the town and about $11,000 a quarter for the village.

But Jeff Unaitis, vice president of public affairs, said the exemption and franchise fees are two separate issues that do not impact each other.

The fees are based on a percentage of the gross revenue Time Warner takes in from customers in each municipality, up to a maximum of 5 percent.

Unaitis said those agreements will change only if the town opts out of the contract and transfers the cost savings directly to each customer's cable bill each quarter instead of putting the money as a lump-sum payment in the town's general fund.

"Cable customers pay the cable company on their bills, and the company -- up to 5 percent maximum -- pays a franchise fee," he said.

"If a customer's bill is $50, and it's at 5 percent, that's $2.50.

"The town could allow us to credit that to the customers and save the residents a couple of bucks a month."

draymo@pressrepublican.com