As more viewers switch to watching their favorite shows on OTT and mobile streaming apps, PEG channel operators are left trying to stretch those shrinking franchise fees from cable subscribers. But with budgets tighter than ever, is there hope for PEG operators to tap into new funding sources that aren’t tied to fading services? And on top of that, how can stations make sure they're getting every penny they're owed from their franchise agreements?
We’ve talked before about using grants and community events to help fill the funding gap, but those are usually best for specific projects or initiatives—not exactly a solution for your station’s entire operating budget. So, let’s take a look at what’s bubbling up around the country to retain current funding and provide comprehensive and long-lasting alternatives.
Where Can PEG Stations Look for Support of Current Funding Models?
PEG stations do have advocates working hard to keep the current franchise fee revenue streams flowing. One PEG-dedicated advocate is the Alliance for Community Media. This June, the United States Conference of Mayors adopted a resolution asking the federal government to pass the Protecting Community Television Act, a response to the FCC’s Third Report and Order from 2019 that made it possible for service providers to include in-kind contributions and costs in the 5% of revenue that makes up their right of way fee in cable franchise agreements. The PCTA would return the scope of franchise fee payments to only a tax, fee, or other monetary assessment.
PEG stations aren’t fighting this battle alone—there are advocates working hard to keep those franchise fee dollars coming in. One big supporter is the Alliance for Community Media (ACM). And just this June, the U.S. Conference of Mayors joined the ACM in supporting a resolution urging the federal government to pass the Protecting Community Television Act (PCTA). This is a response to the FCC’s 2019 decision that allowed service providers to count in-kind contributions and costs toward the 5% revenue cap on franchise fees leaving capital and operational budgets for PEG in jeopardy of shrinking even further. The PCTA would bring things back to how they were—limiting franchise fee payments to actual money like taxes, fees, or other assessments.
As we continue to explore the legislative front, progress is being made in several states to secure entirely new funding models for community media. Let's take a look at the approaches that are gaining the most traction.
Expanding Franchise Fee Requirements to Streaming Providers
One avenue for finding funding for PEG stations is expanding the idea of franchise fees to broadband and streaming providers. For example, Minnesota Rep. Mike Freiberg was one of the authors of the Equal Access to Broadband Act (HF 4182), a bill that would have updated the state’s telecommunications statutes, allowing cities to charge franchise fees to broadband providers. He explained the bill was a way to help cities close the funding gap caused by residents cutting the cord.
The generated fees could have helped PEG stations fund captioning and audio description requirements, among other expenses, but the plan was dropped by the Minnesota House DFL (Democratic-Farmer-Labor) Party. Then there’s HF 4077, which adopted some language from the Equal Access to Broadband Act and was championed by the League of Minnesota Cities. The Senate version of the bill, SF 4097, was passed and signed by the governor in May, but without the franchise fee plan.
Funding PEG Access Operations Through Tax Appropriations
New York is also looking to tax broadcast satellite and video streaming services, with some collected funds being allocated to help fund community media operations across the state. The bill is currently in committee in the New York State Assembly (A5900A) and the Senate (2581A). If passed, the bill would establish a Community Media Reinvestment Fund, but previous attempts at similar legislature have failed.
In an article for Brooklyn Magazine, Wes Jackson from community media network Brooklyn Free Speech emphasized the importance of community media. “In an age where people are choosing streaming providers over cable subscriptions, the emergence of the Community Media Reinvestment Fund is a critical lifeline for the future of media,” he wrote. “Major players must do their part. The survival of public programming and localized storytelling depends on it.” In Vermont, the Fiscal Year 2025 Appropriations Act provided $1 million to support the Vermont Access Network, the non-profit organization that supports PEG channels across the state. Meanwhile, the Senate Finance Committee is proposing a tax on streaming services – an assessment of 5% of the gross revenue streaming companies derived from their business in Vermont. Essentially, Bill S.181 would create a franchise fee for video streaming services. If it passes (it passed in the Senate but is currently with the Vermont House Committee on Environment and Energy), the assessment could bring in an estimated $6-8 million for the 2025 fiscal year.
Not surprisingly, streaming services are opposed to the measure. In a letter to lawmakers, theStreaming Innovation Alliance, which represents Netflix and other streaming services, said thenew fees “would drive up streaming costs” in the state, among other objections. Still, it only takes one state to set the precedent – will it be yours?
How Can PEG Stations Can Retain Current Funding & Effect Positive Change for Future Funding?
While the wheels of government funding turn slowly, don't let cable companies in your area off the hook—make sure they’re paying up on those franchise fees they owe. More on that below. And hey, keep digging into alternative funding models for your PEG station! Who knows, you might even find an advocate to push similar streaming proposals in your state (and definitely keep us posted if you do). For more on these alternative funding initiatives, auditing franchise agreements for underpayments, FCC participation opportunities, and more, check out this recent episode of the Government Video Podcast.
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