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ICCA members warn franchise-fee revenue may vanish as providers shift to streaming
Summary
At its April 2 meeting, the ICCA heard that Wow! cable's move to YouTube TV and broader cord-cutting threaten local franchise and PEG fees. Legal limits and the authority greement restrict the ICCA from lobbying; members discussed options including a Metro Act-style per-linear-foot charge but said no immediate fix exists.
At its April 2 meeting, the ICCA discussed the likely loss of franchise and PEG fee revenue after Wow! announced a transition of some customers to YouTube TV and other providers continue moving from traditional cable toward streamed services.
Members heard that a letter from CTC Technology was routed to Michael Watts, an attorney who represents ProTech, an organization working with municipalities to respond to the shift. An authority member summarized the legal position: streaming platforms and many internet-delivered video services are not treated as cable providers and therefore are not subject to traditional franchise-fee or PEG-fee collection.
The discussion centered on two constraints. First, the ICCA uthority greement limits the authority to the activities enumerated in that contract and does not expressly authorize lobbying for changes to fee collection. Second, speakers said federal law and judicial rulings have limited municipalities bility to add fees to internet services, complicating straightforward local remedies.
Members described current options under consideration but stressed none is a short-term fix. One idea discussed was expanding use-of-rights-of-way charges under the METRO Act as a replacement revenue mechanism, effectively converting franchise-fee revenue into a per-linear-foot charge paid by companies that use public rights of way. A speaker described that approach as a possible path for Michigan, but said it had not yet gained traction in the legislative and legal workgroups coordinated by groups such as the Michigan Government Finance Officers Association and municipal associations.
Authority members also said ProTech and other groups have engaged in lobbying and litigation efforts elsewhere, but the ICCA itself lacks both the express authority in its intergovernmental agreement and the dedicated funds to participate directly in such lobbying. The board discussed whether constituent members could contribute funds or whether the ICCA could pass through money to support outside efforts, but no action to fund lobbying was taken.
Members asked staff to continue gathering data on franchise-fee trends and to keep elected officials informed so local leaders can decide on any follow-up. No formal change to ICCA policy or fees was adopted at the meeting.
