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August 15, 2008 9:13 AM

Clarifying My Remarks On PEG Access Fees As Tax In Disguise

Yesterday I wrote a post entitled "Are PEG Access Fees A Tax In Disguise?" in which I explored whether regardless of their intent, that the potential perception and effective reality of these fees are akin to a secret tax on consumers to pay for local community media.

While I tried applying critical thinking to this issue so as not to condemn PEG fees, I admittedly did a poor job of researching the historical background of this issue in relation to the ongoing battle between the PEG community and cablecos. Luckily, I was called out for my intellectual laziness by longtime PEG luminary Chuck Sherwood.

In an email exchange last night I learned about how this debate has been an issue for more than 15 years, with Comcast in particular being notorious for push polling communities that try to raise their PEG fees, say from 3 to 5%, asking the public if they want to pay more for PEG since the cableco is just going to pass this increase through in the form of higher subscription fees. These numbers rarely come out in PEG's favor and then this is used as evidence to push back against any increase that could provide better funding to local community media.

Chuck also lambasted me for failing to recognize that my words could be taken by the free market crowd as an argument against the validity of PEG fees altogether. That there's no role for public money in these situations but that the free market should be allowed to deliver whatever services are needed without government interference.

I appreciate tremendously Chuck bringing these issues to my attention and for pushing back hard when I wrote something he disagreed with. I encourage all of you to do the same. One of the best and worst things about a blog is how easy it is to have an idea, write it down, and put up a post without having to apply the same rigor as publishing in more traditional media.

But my goal in this blog is not to be a provocateur but instead to try and find the truth in these complex and often polarized issues. So if ever you feel I'm straying from the truth, add a comment to a post and I'll contact you so we can discuss in greater detail. I hope to soon do a VidChat with Chuck where he and I can work through this issue in much greater detail, and I look forward to doing the same with anyone who's as passionate and knowledgeable as he is about any of the issues I write about.

Now let's get back to the issue of PEG access fees.

First off, let me say that I am not one who believes there's no role for government involvement in insuring the delivery of services aimed at the public good. If we left every decision up to the public, I'd worry that too many people would instinctively always vote against paying taxes of any sort regardless of the utility of the services or projects they're intended to fund. And I do firmly believe that PEG delivers services for the public good and we have a responsibility to find appropriate funding for it by whatever means necessary.

Secondly, I don't believe that PEG access fees as they're currently structured are an illegitimate means of obtaining that funding. It absolutely makes sense that in exchange for access to a public asset (rights of way) that cablecos should have to provide something for the public good (PEG).

But I still don't think we can ignore some of the issues the cablecos have brought up in their push back against these fees.

First, PEG fees are effectively paid for by consumers. Whether or not you call it a secret tax, and regardless of whether you think cablecos passing the cost through is the right thing to do, they are doing so and therefore any increase in PEG fees are paid for by cable TV subscribers.

Second, while I'm sure this varies dramatically from community to community, in general I do think it's unfortunately the case that many if not most cable subscribers don't see the value of PEG. To them PEG means public access means those crazy shows you only see briefly as you're channel surfing. And PEG as it's currently constructed often delivers little value to anyone who's not interested in local government meetings, high school sports, or the like. I'm not saying this is all PEG's good for or all that it delivers, but again sometimes intent does not line up with public perception, and expanding public support for PEG is a primary challenge that if overcome would dramatically improve PEG's ability to have an even more significant impact in their communities.

Just because we don't agree with what the cablecos are doing or saying doesn't mean we can ignore the issues their positions raise.

Yet I don't see this as a time for despair but instead an opportunity to rethink the model of PEG and find ways to improve it.

Maybe instead of fees on gross revenue the fees should be on profits.

Maybe instead of fees limited to cable TV they should be fees across all services.

Maybe instead of mandatory payment, subscribers should be given the option to contribute to PEG, but not just the minimum 5% but also the opportunity to pay more if PEG is an important thing to them and then be able to count that extra payment as a tax-deductible donation.

These are just a few ideas off the top of my head. I'll dive deeper into new ideas for possible alternatives next week.

But for now I'll leave this issue with the simple statement that if we are to prove the value of PEG and preserve its rightful place at the heart of our communities, we need to find ways to increase public awareness of the value PEG delivers and therefore increase public support for PEG. That way, when a Comcast push polls a community to build evidence against an increase in PEG fees, they'll be met with a strong, unified voice shouting out, "We love our PEG channels! We understand and respect the value they deliver, and we're willing to pay to improve their ability to serve our community. So stop dicking around and start delivering us the service we know our community deserves!"

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Comments (6)


I appreciate how you feel. But I'm sticking with facts.

The majority of cable viewers in Saint Paul.MN when surveyed value their PEG channels, want them, and would pay MORE for them than they do already.

Stop assuming anything about people's beliefs and their use of media until you ask them directly in a scientific - or at least an objective - manner. Your opinions may not be reflective of anything.

Not sure if you're actually posting comments. Do I have to call you lazy like Chuck did to get posted? ;)


Mike Wassenaar

Posted by Mike Wassenaar on August 15, 2008 3:45 PM


The most important aspect of this discussion has been left out: what do the average PEG access fees cost most subscribers.

I am currently working in a very affluent town. The average cable subscriber pays $70 a month for cable TV. Let' say for the sake of discussion the national average is lower -- say $50 a month. This means the range of access fee costs, based on 5% of gross cable revenues is $3.50 to $2.50 per month.

You underplay the enormous value of "local government meetings, high school sports, or the like..." I know of communities where certain cable viewers, watching a contentious debate at a school committee meeting have jumped in their cars and gone down to the meeting to speak. In the future, vidChats may become available, through PEG, for participatory democracy at the local level. High school sports and local, monthly community news "magazine" shows are tremendously popular with cable subscribers.

Massachusetts has the most per-capita number of PEG access centers (nearly 200 in 351 cities or towns), and a total number second only to California. Comcast, RCN and Verizon enjoy thriving enterprises throught the Commonwealth. Our state regulations strongly support local negotiations for public right-of-way fees which pay for PEG

And here we are fussing over a few dollars a month for what amounts to vital community benefits offered by PEG access. When I was working in a Metro Boston city, we received $1.5 million in annual access fees, and provided for community use, for FREE, the equivalent commercial equipment rental value of $2.25 million. Where else does five bucks a month go that far???

Posted by Paul Berg on August 16, 2008 1:36 PM

Are ESPN Fees a "tax in disguise"?
I tend to avoid these conversations, being personally more effective in action than debate, but I wanted to drop a line from a PEG-supporter to let you know that I appreciate your blog, and your open-mindedness in these conversations.
To contribute to the information here, I want to add that when PEG fees were first enacted, the cable companies were not allowed to itemize them on the bill or directly pass them on to subscribers. They were in-place to help compensate the taxpayers for the use of taxpayer-assets (utility poles and public land) with guaranteed access to the communications resources being built using public property.

Most of us agree that SOME things in society should not be purely market-driven. Some feel we should all be able to access health-care, even if we're poor. More feel children should be able to get educated and helped to reach their potential to contribute to society, even if they (or their parents) cannot afford it. Many of us also feel that communication and information should not be entirely market-driven, and one small piece of making communication and information available to everyone is including PEG on CableTV.

The CableCo's knew that itemizing PEG fees on a cable-bill would reduce public support for PEG programming, which is why they fought to list those charges. Even still, when those costs are passed-on to consumers, it could be argued that is a problem with giving cableco's a monopoly in most municipalities. Otherwise, their services would (and should be) far more driven by competition than by a small fee paid to ensure that the public get content in the public interest (not just advertisers interest) via the cable system that is cost-subsidized with public moneys.

PEG fees average $.50/sub/month for a handful of channels that not everyone watches. I'd like to see how popular ESPN would be if they itemized the portion of the cable bill that goes to them... at least 10-times the PEG fees, for a channel that I couldn't care less about.

In the end, even if we educate the community, I fear that if PEG fails to innovate, it is doomed, and so we must do both. We must get people to understand the history and justification for PEG, and hope that our neighbors agree that SOME public services should not be entirely market-driven. Cable-companies have a singular focus on profit, and if we want a focus on public-good, we need to education and also transform Public Access into a more community-led tool whose value to the public is more readily apparent.

PEG nutured a culture of innovation 30 years ago, but it has largely transformed into a culture of entitlement that is as responsible for its slow demise as the many other forces we tend to point our finger at. Industry-friendly government is a big part of the problem, but is largely beyond our control. It would be so much more effective to focus on our own role and revive that culture of innovation and cooperation among PEG stations.

Posted by Tony Shawcross on August 17, 2008 1:18 PM


Let me join the chorus of complainants:

Several people have pointed out the fundamental mistake you are making in your assumptions. PEG fees are fees-for-use, contractual obligations, NOT taxes. To buy into that is an intellectual mistake of the first water.You need to deal with that forthrightly. I don't see in this response where you have. Let me try and make the point as sharply as possible:

You've bought into the whole game the incumbents are playing here by even entertaining the idea of "taxation" much less "secret taxation." You're getting an incendiary response because you've been sucked into adopting a bit of deliberately incendiary corporate propoganda.

PEG channels, like franchise fees, are NOT a tax. They are contractual obligations freely taken on by a profit-making corporation in order to gain access to an absolutely essential resource owned by the community: their rights-of-way. Those rights of way are owned and maintained by the community as, often, are the poles or conduit the cable company wishes to use. This is A COST OF DOING BUSINESS. If the cable company does not want to pay up they can always exercise their right to (attempt) buy up passage rights over private land for a (surely MUCH higher) price.

By ANY reasonable analysis of value the cable companies are getting off dirt cheap. (You might want to check in with the cost to run a new pipeline through private property...I assure you, as someone who comes from pipleline territory that the cost of maintaining that right for hundreds of miles is huge. And those never run through several thousand front yards.

A thought experiment: Let's, instead of buying into corporate propaganda try the classic objective approach to solving a dispute: mediation. Let's suggest the passage of a law which requires an outside mediator to assess the value to the cable companies of the public land they use each year. A reasonable analyst would, of course, look for replacement costs as per above. (I am pretty confident that such a law would instantly and hugely jump the costs assesed cablecos to something approaching their real value.)

As a continuation of our thought experiment let us guess who would howl bloody murder, run out the lobbyist horde, and threaten economic reprisal and the wrath of an outraged god of "free enterprise" on the head of the legislature and which side would have no qualms about entering into the process.

This is not about a fair exchange of value. This is about greed.

The bit about "taxation" is meant to confuse. It's confused you. That is what needs to be clarified.

It really is that simple.

Posted by Anonymous on August 18, 2008 8:03 PM

Hmmm, I'm the commenter from August 18th above. Just wanted to own up to my remarks. It was not my intent to be anonymous...not sure how the pointers got lost...John

Posted by John on August 25, 2008 12:11 AM

This is a great blog and I enjoyed reading each persons response. With that, I would like to add a missing prospective that most don't concetrate on regarding the declining of the PEG Fees (or as I have recently learned for Texas the Cable Access Franchise Fees) are complicating the era of digital medium.

Its no secret that cable subscriber costs have skyrocketed over the past 10-15 years. Could this be from passing the cost of PEG Access to the consumer.... probably so. Yet, with the explotion of broadband internet access, PEG fees were bound to become more associated with franchise fees (or possible surcharges). However, no one seems to get that lobbyists for the cable company are not the real threat to PEG Access. The real threat is Fiber Optic HD Digital Medium. In case most do not understand what this breaks down into, I will explain.

Fiber Optic HD Digital Medium is simply telecommunication giants (such as AT&T; formerly SBC, Verizon Communication, and Sprint) plans to offer interactive television to consumers with use of broadband internet connectivity. Thats right folks, you read correctly. I don't have the exact dates when this began development, however, I can assure you that at this present moment, AT&T; offers Fiber Optic television service to "tester" areas throughout the country. (typically very affluent, high scale areas). These testers have been ongoing since 2003 and from the looks of things, will go nation wide in the next year or two.

Now this plays into a HUGE part of the PEG Access, because the current PEG laws only identifical "cable service providers" as resonsible for contributing monies into the Public Access communication. This is the major reasoning behind Time Warner and ComCast filing discrimination law suits in Texas, Wisconsin and Illinois over the past couple of years.

As you can imagine, should the cable companies lawsuit fail, its going to open a flood gate of problems to local communities throughout the country as the current (Franchise Laws) only require franchise fees be paid by businesses with representation in the jurisdication (a building, storage facility, equipment, etc.) And thus, satelitte companies can easily escape paying the fees by not having physical representation in areas. The same goes for fiber optic providers being they provide telephone service throughout the country, under Nexus laws, this
entitles limitation of multiple fees for a single items use on a company. In other words, AT&T; would only pay the franchise fees for fiberoptic cable ran to connect customers to its network. And can decide not to offer the channel and escape paying the fee. Which are already exists under telecom grandfathering laws.

So to everyone that supports PEG Access (such as myself), please start waiting the motions of fiber optic television. We should not only seek change for the PEG Access fees applied to cable companies, but also look to the future of televison medium (fiber optic).

Posted by Roger on April 9, 2009 3:39 PM

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