Mayors across the United States are all a twitter about proposals for franchise reform currently before the United States House and Senate. In a recent letter to members of Congress, they railed in horror at the thought of their precious franchise authority being ripped from their bosom! Oh my, what can the matter be?
The “matter” is that municipalities have a healthy gravy train of revenue from a late 19th and early 20th century convenience called franchise agreements.
In days of old, communications had only one game in town — two-way voice grade service over copper wires, like the telephone. Even when so-called pay TV (i.e., cable) came into the fray in the early 1970s, there were clear rules about what kind of service the cable companies could provide.
Hence, for a century or more municipal granting of individual franchises with copious license and franchise fees placed upon the provider, who then just shifted it to the end user, was commonplace and perhaps even made some sense.
Well, welcome to the 21st century. No, we can’t stop the flow of technological advancement, but we can slow it down, divert its application and limit its expanse for a while. Ultimately it will become the reality of the day.
And that reality is multi-modal data transmission and distribution (that is data delivered through a variety of means accessed through a variety of electronic products) should not, cannot and will not recognize political subdivision borders.
As is the case so often, the municipalities have the ability to replace the revenue on their own. But that might mean that constituents will begin to know the real cost of municipal government — perish the thought.
Or they can go to the state under a state franchise arrangement as they did in Texas and enjoy a revenue sharing scheme.
But continuing a city-by-city franchising system just doesn’t make sense any longer. And consumers will benefit from both lower costs and wider availability of competitive services when that antiquated system is gone.