Agenda - 02-17-2004-9b - Laserfiche WebLink

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Franchise Related Lxpenses(Public Access or I-Net): Time Warner Cable reported no franchise related expenses for 2003. Franchise related costs incurred by the operator may include such expenses as public, government and education access facilities and equipment, signal transportation, headend acconunodations as well as Institutional Network related expenses.. Pro~rannnin~ Cost Adjustment: Time Warner will collect for the projected period $1..80 monthly, per subscriber, during 200.3 for anticipated BST external costs, most of which is attributable to progrannning costs, Various cable operators have advised that program service providers customarily increase service fees annually. Time Warner attributes its progrannning cost changes to what it must pay for each service offered, However, this amount is relatively low compared to upper cable tier service progrannning costs. Most of the channels on Time Warner's BST are obtained without cost to the company. With respect to upper tier programming and rate increases, the GAO reported in October 2003 that "(d)uring the past three 3 years, the cost of prop'armning has increased considerably (.34%), driven by the high cost of original progrannning,[].' FCC Regulatory Fees: The Federal Couvnunications Commission collects a "Regulatory Fee" from cable operators to fund the FCC's regulatory oversight of cable television matters. This fee is passed on to subscribers by the operator. The FCC permits cable operators to internalize or externalize the regulatory fee. The fee (-$.66/year) is collected incrementally (~$,OS/month) from it cable television subscribers These revenues are not subject to franchise fees or' other taxes and must be remitted to the federal govennnent to compensate the FCC for the cost of operating the Media Bureau°. An examination of the monthly bills sent to cable customers determined the fee is external to the monthly BST rate, hence it is excluded from the rate treatment process, Cable television subscribers served by Time Warner wilt conhibute more than $4294 5 in regulatory fees to the Federal government during the projected period! There are 67 million cable television subscribers in the United States which pay an annual 66-cent regulatory fee to the Federal govennnent. This amounts to $35.5 million annually to fund the FCC's cable television regulatory enforcement activities. Franchise Fees: The County levies a 5°/u franchise fee on the cable operator's gross receipts. Franchise fees are levied on cable program services, advertising revenues, launch fees Home ~lssucs Related to Competition and Subscriber Rates in the Cable Television Industry, United States General Accounting Office, October 2003 The Cable Service Dureau was folded into the Media nureau in a recent FCC reorganization 56506 * 5 66 = 54294 Action Audits, LLC Cable Rate, Franchise Fec, Utility Tax Auditing & Telecommunication Administration 101 Pocono Lane, Cary, North Carolina 27513-5316 Voice ;E 919 467 5392 Fnx ;E 919AG0.6868