HomeMy WebLinkAbout20013144 Nov-02-01 05:01pm From- T-312 P.02/03 F-550
AT&T Broadband
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8000 East DIM Avenue
Denver,Colorado 80231
November 2, 2001
VIA FACSIMILE AND US MAIL
Weld County Commissioners
Attn: Weld County Clerk
P.O. Box 459
Greeley, Colorado 80632
Subject: FCC Decision Regardinn Franchise Fees
Dear County Clerk:
On October 4, 2001, the Federal Communications Commission ("FCC") issued a Memorandum
Opinion and Order clarifying that cable operators may pass through to their customers and
itemize on monthly bills the entire amount of the franchise fee assessed by a local franchising
authority, including franchise fees paid on non-subscriber related revenues. The FCC's order
did not create any new authority for cable operators-- it only addressed disputed interpretations
of existing federal law.
As you are probably aware, the pass through and itemization of franchise fee payments, in
whole or in part, is a discretionary action on the part of cable operators. We are neither
prohibited nor required by law to do so. AT&T Broadband currently pays franchise fees to
Weld County on non-subscriber related revenues, but historically has not recovered these
payments through the franchise fee itemized on customer bills.
Although the FCC's decision gives AT&T Broadband the clear right to pass through to
customers a higher franchise fee amount to account for franchise fees paid on non-subscriber
revenues, the FCC also noted that if LFAs and cable operators do not want to burden
subscribers with higher franchise fee pass throughs, they may expressly omit certain items,
such as advertising revenue and home shopping commissions,from the gross revenue
definition." It is certainly our desire to keep customer franchise fee pass throughs to a minimum;
therefore, we would like to ask you to consider excluding non-subscriber related revenue from
our franchise fee payment obligation. Please contact me at your earliest convenience if you are
interested in discussing this exclusion.
At this time,we are making preparations to exercise our lawful right to collect from customers
and itemize on customer bills the full amount of the franchise fees paid to your community,
including those franchise fees paid on non-subscriber related revenues, effective in January
2002. If we receive confirmation either now or in the future that you agree to reduce our
franchise fee payment obligations by excluding non-subscriber related revenue, we will adjust
the franchise fee pass through to customers on a going-forward basis accordingly. This
adjustment will lower the franchise fee amount paid by customers, and reduce our franchise fee
payments to your community by a corresponding amount.
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We have conservatively calculated that recovery of franchise fees paid on non-subscriber
related revenues will result in increasing the franchise fee collected from customers by .23%.
This means, for example, that on a $40 monthly bill, the franchise fee amount will increase by
approximately 9 cents.
Customers will be notified of this change in the franchise fee calculation via a legal notice that
will be published in the Greeley Tribune on November 8, 2001. In addition, we will include a bill
message the month the change is implemented which states:
"Please note that your franchise fee has changed as a result of AT&T
Broadband's implementation of a clarification recently issued by the FCC
regarding franchise fees."
As always, please contact Wendy Farley at 303-603-5013 or myself at 303-603-5012 if you
have any concerns or questions regarding this issue.
Sincerely,
AT&T Broadband of Colorado, LLC I/k/a AT&T Broadband
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Natalie Mihalek
Franchise Compliance Coordinator
C: Wendy Farley
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