
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 47USC542]

 
          TITLE 47--TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS
 
                 CHAPTER 5--WIRE OR RADIO COMMUNICATION
 
                  SUBCHAPTER V-A--CABLE COMMUNICATIONS
 
                  Part III--Franchising and Regulation
 
Sec. 542. Franchise fees


(a) Payment under terms of franchise

    Subject to the limitation of subsection (b) of this section, any 
cable operator may be required under the terms of any franchise to pay a 
franchise fee.

(b) Amount of fees per annum

    For any twelve-month period, the franchise fees paid by a cable 
operator with respect to any cable system shall not exceed 5 percent of 
such cable operator's gross revenues derived in such period from the 
operation of the cable system to provide cable services. For purposes of 
this section, the 12-month period shall be the 12-month period 
applicable under the franchise for accounting purposes. Nothing in this 
subsection shall prohibit a franchising authority and a cable operator 
from agreeing that franchise fees which lawfully could be collected for 
any such 12-month period shall be paid on a prepaid or deferred basis; 
except that the sum of the fees paid during the term of the franchise 
may not exceed the amount, including the time value of money, which 
would have lawfully been collected if such fees had been paid per annum.

(c) Itemization of subscriber bills

    Each cable operator may identify, consistent with the regulations 
prescribed by the Commission pursuant to section 543 of this title, as a 
separate line item on each regular bill of each subscriber, each of the 
following:
        (1) The amount of the total bill assessed as a franchise fee and 
    the identity of the franchising authority to which the fee is paid.
        (2) The amount of the total bill assessed to satisfy any 
    requirements imposed on the cable operator by the franchise 
    agreement to support public, educational, or governmental channels 
    or the use of such channels.
        (3) The amount of any other fee, tax, assessment, or charge of 
    any kind imposed by any governmental authority on the transaction 
    between the operator and the subscriber.

(d) Court actions; reflection of costs in rate structures

    In any court action under subsection (c) of this section, the 
franchising authority shall demonstrate that the rate structure reflects 
all costs of the franchise fees.

(e) Decreases passed through to subscribers

    Any cable operator shall pass through to subscribers the amount of 
any decrease in a franchise fee.

(f) Itemization of franchise fee in bill

    A cable operator may designate that portion of a subscriber's bill 
attributable to the franchise fee as a separate item on the bill.

(g) ``Franchise fee'' defined

    For the purposes of this section--
        (1) the term ``franchise fee'' includes any tax, fee, or 
    assessment of any kind imposed by a franchising authority or other 
    governmental entity on a cable operator or cable subscriber, or 
    both, solely because of their status as such;
        (2) the term ``franchise fee'' does not include--
            (A) any tax, fee, or assessment of general applicability 
        (including any such tax, fee, or assessment imposed on both 
        utilities and cable operators or their services but not 
        including a tax, fee, or assessment which is unduly 
        discriminatory against cable operators or cable subscribers);
            (B) in the case of any franchise in effect on October 30, 
        1984, payments which are required by the franchise to be made by 
        the cable operator during the term of such franchise for, or in 
        support of the use of, public, educational, or governmental 
        access facilities;
            (C) in the case of any franchise granted after October 30, 
        1984, capital costs which are required by the franchise to be 
        incurred by the cable operator for public, educational, or 
        governmental access facilities;
            (D) requirements or charges incidental to the awarding or 
        enforcing of the franchise, including payments for bonds, 
        security funds, letters of credit, insurance, indemnification, 
        penalties, or liquidated damages; or
            (E) any fee imposed under title 17.

(h) Uncompensated services; taxes, fees and other assessments; 
        limitation on fees

    (1) Nothing in this chapter shall be construed to limit any 
authority of a franchising authority to impose a tax, fee, or other 
assessment of any kind on any person (other than a cable operator) with 
respect to cable service or other communications service provided by 
such person over a cable system for which charges are assessed to 
subscribers but not received by the cable operator.
    (2) For any 12-month period, the fees paid by such person with 
respect to any such cable service or other communications service shall 
not exceed 5 percent of such person's gross revenues derived in such 
period from the provision of such service over the cable system.

(i) Regulatory authority of Federal agencies

    Any Federal agency may not regulate the amount of the franchise fees 
paid by a cable operator, or regulate the use of funds derived from such 
fees, except as provided in this section.

(June 19, 1934, ch. 652, title VI, Sec. 622, as added Pub. L. 98-549, 
Sec. 2, Oct. 30, 1984, 98 Stat. 2787; amended Pub. L. 102-385, Sec. 14, 
Oct. 5, 1992, 106 Stat. 1489; Pub. L. 104-104, title III, Sec. 303(b), 
Feb. 8, 1996, 110 Stat. 125.)


                               Amendments

    1996--Subsec. (b). Pub. L. 104-104 inserted ``to provide cable 
services'' before period at end of first sentence.
    1992--Subsec. (c). Pub. L. 102-385 amended subsec. (c) generally. 
Prior to amendment, subsec. (c) read as follows: ``A cable operator may 
pass through to subscribers the amount of any increase in a franchise 
fee, unless the franchising authority demonstrates that the rate 
structure specified in the franchise reflects all costs of franchise 
fees and so notifies the cable operator in writing.''


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-385 effective 60 days after Oct. 5, 1992, 
see section 28 of Pub. L. 102-385, set out as a note under section 325 
of this title.


                             Effective Date

    Section effective 60 days after Oct. 30, 1984, except where 
otherwise expressly provided, see section 9(a) of Pub. L. 98-549, set 
out as a note under section 521 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 573 of this title.
