Oxford’s public access cable station, commonly known as Channel 19, got a New Year’s bonus from the Oxford Township Board of Trustees.
At a special meeting Dec. 30, township officials voted 3-1 voted to “pay any future franchise fees from the cable company (Charter Communications, Inc.) directly to the Oxford Area Cable Communications Commission beginning Jan. 1, 2004.”
The cable commission oversees the funding and operation of Oxford Community Television (Channel 19). The township board’s vote will translate into an additional (projected) $38,000 for the public access station.
Cable franchise fees are capped at 5 percent of each Charter cable subscriber’s total monthly bill.
Communities that makeup the cable franchise area – which in this case consists of Oxford Township and Village, Addison Township and the Village of Leonard – are paid the 5 percent franchise fees.
Local governments can use franchise fees for cable-related services like public access channels or equipment purchased.
Since 1983, Oxford Township has kept three percent of the franchise fees and given the remaining two percent to the cable commission.
Trustee Charles Kniffen, who also serves as chairman of the cable commission, made the motion to change how the franchise fee funds are allocated.
Kniffen said his motion was prompted by a series of lawsuits filed against 12 Michigan cities in November 2003.
According to a Nov. 19 article in the Detroit Free Press, the suits, all filed by the same lawyer, Jason Thompson, on behalf of a handful of residents in each city, contend that the monthly franchise fee tacked onto each cable bill in those cities amounts to an unauthorized tax in violation of the Headlee Amendment.
Audits in the 12 cities showed they collected more money than was needed and that the surplus was improperly used for general expenses, such as a new library in Warren, the Free Press article stated.
Thompson told the Free Press he will seek class-action status for the estimated 700,000 cable subscribers in the aforementioned cities and he plans to sue more cities.
“When you put (franchise fees) in the General Fund, that’s ‘taxation without representation’ under the Headlee Amendment because the people didn’t have the right to vote on it,” Kniffen said.
Kniffen expressed his concern that the township could be drawn into a costly lawsuit.
“The public’s getting wind of it and all it takes is one person to pay $10 to file a class-action lawsuit,” Kniffen said.
The trustee explained that he believes it would cost the township more to defend against a lawsuit than pay its 3 percent in franchise fees to the cable commission.
“We could get into a lawsuit that’s going to cost us 10 times more than what we’re paying out (in franchise fees),” Kniffen said.
Treasurer Joe Ferrari tried to explain to Kniffen that the lawsuits publicized in the news media aim to “get rid” of the entire franchise fee, both the township’s and cable commission’s portions.
“They’re looking at making the whole thing invalid,” Ferrari said. “All 5 percent would go. . .If they decide to do away with (franchise fees), cable will lose its portion and we’ll lose our portion.”
Clerk Clara Sanderson agreed with the treasuer’s explanation.
“There would be no franchise fees,” Sanderson said.
Trustee Jerry Dywasuk agreed with Kniffen that all the franchise fees should go to the cable commission.
“I don’t think it’s right that the township would benefit from that money,” Dywasuk said. “I think it needs to either go back into the cable franchise or it needs to be refunded to the people who are paying for it. But I think it’s wrong to keep it in the General Fund.”
Since not everyone subscribes to cable television, Dywasuk compared franchise fees to sewer fees because not everyone in the township is on the sewer system either.
Both cable franchise fees and sewer fees are user fees that not everyone pays, so it’s “wrong” to put them into the General Fund, Dywasuk explained. The trustee’s point was that user fees should be spent on the services their derived from.
“I think it’s a misuse of what that money should be for,” said Dywasuk of the township’s mixing franchise fees into the General Fund. “The way it’s spent is wrong.”
Addison Township and the Village of Oxford also split their franchise fees with 3 percent going toward their general funds and 2 percent to the cable commission. Kniffen said Addison is also looking into giving their entire 5 percent to the cable commission, a fact which was confirmed by Addison Clerk Pauline Bennett.