atongr.enn of tq.e Nnit.e~ ~tat.en Ba.sqington, llC!r 20515 July 22, 2019 500 The Honorable Ajit V. Pai Chairman Federal Communications Commission 445 12111 Street, S.W. Washington, D.C. 20554 Dear Chainnan Pai: We write in support of your proposal to reaffirm the federal framework for cable franchises, consistent with the Cable Act and bipartisan Federal Communications Commission (FCC) precedent. The Cable Act carefully balanced the need to compensate communities for use of public rights-of-way with imperatives to expand services and limit costs for consumers. Communities may charge cable operators franchise fees of up to 5 percent of cable service gross revenues - roughly $3 billion per year - ensuring that communities are compensated for costs they incur. At the same time, the 5 percent cap on fees, whether those fees are requested in cash or "in kind" contributions, safeguards against excessive costs that reduce funding available for deployment of new services, including broadband, and make service more expensive for consumers. We are concerned that the 5 percent cap, including through "in kind" contributions, is not being appropriately upheld as intended under the statute. These "in kind" contributions, such as free service, programming, or advertising, can be valuable to communities. That is why we are pleased that under your proposal, local officials would continue to have discretion to choose which contributions best meet the needs of their corrununities, while keeping the total cost within the cap to avoid upending the careful balance achieved in the Cable Act. We also recognize that franchise fees and other fees, such as those imposed on broadband services, must remain under the 5 percent cap. Your proposal correctly eliminates extra costs in circumstances where broadband service provided over the same franchised cable system does not add burden on the rights-of-way. These additional fees are contrary to the federal framework, as well as bipa1iisan Congressional intent to keep the internet free from taxation that drives up consumers' bills and discourages broadband adoption. They also deter investment in broadband infrastructure needed to close the digital divide, particularly in rural areas that are already more costly to serve. Therefore, as the FCC brings its rulemaking to conclusion, we encourage the FCC to act on both fronts: reaffirming that " in kind" contributions must be included in the 5 percent cap; and reinforcing that communities cann.ot charge extra fees for using rights-of-way to provide broadband and other non-cable services. Thank you for your attention to this matter. Sincerely, Robe1i E. Latta Member of Congress · : 1 PRINTED ON RE CYCLED PAPER o n Shimkus Steve~~ Scali se - m ber of Congress Member of Congress )0~04- Pete Olson Adam Kinzinger Member of Congress Member of Congress " ~~ Member of Congress Member of Congress Bill Flores Tim Walberg Member of Congress Member of Congress CC: The Honorable Michael O'Rielly, Commissioner, Federal Communications Commission The Honorable Jessica Rosenworcel, Commissioner, Federal Communications Commission The Honorable Brendan Carr, Commissioner, Federal Communications Commission The Honorable Geoffrey Starks, Commissioner, Federal Communications Commission 2