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12/14/2006
Franchise fee agreement cost taxpayers $600k
$600,000 to save $400,000? Not a deal I'd want to buy in to. Appleton Alderman Walter Kalata introduced a feel-good resolution this fall calling for Time Warner Cable (TW) to suck it up and absorb past due franchise fees levied by the triumviral cities – Neenah, Menasha and Appleton. Using common sense, the Safety and Licensing committee defeated the resolution.
After years of back and forth bickering, TW agreed to fork over about $400,000 to the cities in “past franchise fee payments.”
Now, first of all, nothing in the law says a franchise fee has to be levied. If TW had their way, that fee to them (and hence to you) would be 0%. If the city’s fee to TW is more than 0%, TW is allowed – by law – to pass through any franchise fees (up to 5%) directly to you, the cable user. So, the dirty little not-so-secret is that franchise fees are pure and very simple, a municipal tax on your cable bill. And with property tax levy caps in place, there’s no fee or fee increase that city spenders don’t like.
So, is the $400,000 a windfall for the cities? As Peter Drucker would say “always look a gift horse in the mouth.”
What did it cost the cities to get their hands on that $400k?
So far, the three cities have shelled out more than $112,000 in outside legal fees and associated costs. You as a taxpayer paid that $112k! You as a taxpayer also paid your city attorneys and their staffs for the hours and hours they spent on the negotiation. You as a cable user will pay the $400k at the bottom of your monthly bill. And you can bet you as a cable user are paying for TW’s negotiating costs in your monthly bill as well.
So after all is said and done…. This little exercise just cost you maybe $600,000 or $700,000. Geeez.
COMMENTS
I appreciate your insight into what is really happening.
Perry Brown (Fri Sep 29 12:59:02 2006)
Thanks for bringing the facts to us. It seem that governments (all of them) never met a tax that they didn't like.
Dick
Dick Casperson (Thu Dec 14 14:48:05 2006)
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