Cable franchise fees, which support the stations, have dwindled for years in an era of cord-cutting
By: Patrick Adrian, Granite State News Collaborative
Public access television stations across New Hampshire face growing uncertainty as their funding declines, forcing stations to seek new sources of revenue to support community television.
“The federal government should be saying that this service is essential for communities,” says Jason Cote, executive director of Manchester Public Television. (Dan Splaine Photography)
Funding for the television stations derives from franchise fees, a charge that appears on a customer’s cable bill. They are an annual payment by a cable company to a municipality in exchange for the use of public property to operate its cable lines.
But the ongoing preference by viewers to “cut the cord” and instead opt for streaming services, as well as a growing customer preference for more customized and cost-effective television options, have led to a dramatic decrease in cable subscriptions nationwide, including in the Granite State.
Nashua Community Television, a city-owned station with four public-access channels, is currently working with the city's Board of Aldermen to cover “a sizable deficit” this fiscal year, said Pete Johnson, NCTV’s education channel access director.
The station, which has a $600,000 operating budget, received $383,000 in franchise fee revenues this year — down nearly 7% from last fiscal year.
“We took a pretty substantial hit this year,” Johnson said. “We knew this downturn was coming (but now) we’ve blown through our reserves.”
For several years, the station supplemented its revenue with money from a surplus reserve, Johnson said. But that reserve is now depleted.
Since 2017, cable subscriptions in the U.S. have declined annually by nearly 5% — from 96 million subscriptions to 68 million in 2024, according to IBISWorld, a global research firm. Comcast, the largest cable TV provider in New Hampshire and second-largest in the U.S., reported a nationwide loss of over 1.8 million cable subscribers between March 2023 and August 2024.
A federal rule that only allows a fee charged to cable services, not to broadband providers, to support community television “hasn’t caught up to the industry,” Nick Lavallee, executive director of Merrimack TV, told the Town Council at a recent meeting. (Dan Splaine Photography)
In Nashua, the revenues from franchise fees have declined 21% since 2017, when the station received $483,000.
The problem, said community television advocates, lies in the federal government’s funding rules for public access stations, which are 40 years old and outdated.
“Consumers are switching to other services (through broadband) that are not regulated the same way as cable,” said Mike Wassenaar, president of the Alliance for Community Media, a national trade organization. “The irony is that there is more and more video being watched today but less and less money going toward the public stations that produce local content.”
The funding conundrum
Franchise fees are governed under the Cable Communications Act of 1984, which sets a national policy for the regulation of cable television communications.
Under federal law, municipalities are entitled to a maximum of 5% of a cable operator’s gross revenues derived from cable subscriptions and related services, such as pay-per-view orders. In New Hampshire, the local government and cable provider negotiate the percentage of this fee when initiating or renewing a franchise agreement. Municipalities may use these revenues for a variety of local purposes, including to fund public, education and government access, or PEG, channels.
“There should be a related public benefit in exchange for allowing private companies to make money off of public property,” said Owen Provencher, director of Derry Community Access Media and president of the N.H. Coalition of Community Media, a group of nearly 40 public access outlets in the state.
“There should be a related public benefit in exchange for allowing private companies to make money off of public property,” says Owen Provencher, director of Derry Community Access Media and president of the N.H. Coalition of Community Media, a group of nearly 40 public access outlets in the state. (Dan Splaine Photography)
But the federal rule allows a fee charged only to cable services, not to broadband providers.
“The law hasn’t caught up to the industry,” Nick Lavallee, executive director of Merrimack TV, told the Town Council at a meeting Sept. 26.
“One can purchase broadband and run streaming apps to access the same video content as cable television (without paying a franchise fee),” Wassenaar said. “It’s a problem across the country, and unless there’s a change in the federal law, this problem will still exist.”
Community television advocates believe that federal law should expand the application of franchise fees to all companies that use public right-of-ways to deliver video content, including internet providers and streaming services.
“The broadband and fiber optics lines are going over the same public right-of-ways as the cable one,” Provencher said in an interview.
Meanwhile, community television stations are already serving a large and growing viewership on internet-based platforms, particularly due to the ability to stream recorded programs, several station managers said.
Jason Cote, executive director of Manchester Public Television, said a live government meeting might draw between 75 and 100 viewers, whereas the video recording of that meeting online will receive “hundreds of views.”
“I brought up 10 years ago that (internet providers) should be involved in funding public access stations,” Cote said. “The federal government should be saying that this service is essential for communities.”
The COVID pandemic, in addition to accelerating the market shift toward video streaming, opened new opportunities for public access television to engage audiences.
Manchester Public TV’s studios are located on Canal Street in downtown Manchester. (Dan Splaine Photography)
For example, Nashua Community TV began covering live school sporting events because the games were closed to the public, Johnson said. The station still provides live game coverage due to its popularity.
“So we find ourselves busier than ever, because people have come to expect that kind of coverage,” Johnson said. “And those are things that we want to continue for the community.”
‘Not sustainable in the long term’
As revenues shrink, some stations are seeking support from their local governments. This includes requests for additional funding or proposals to raise the franchise fee rate.
The Merrimack Town Council, at a meeting Sept. 26, discussed whether to include Merrimack TV in the town budget and fund it from local property taxes instead of franchise fees.
The station’s franchise fee revenue this year — $368,000 — is 7% lower than in 2021, Town Manager Paul Micali told the council. A recent study projected that the station may be operating at a deficit in three years, based on the rate of declining funds and estimated cost increases.
At the meeting, Micali proposed that the council increase the franchise fee rate, from the current 3.75% of cable revenues to 5%, when the agreement is up for renewal in 2029. This increase would not resolve the problem, though it would provide a few additional years of sustainability, Micali said.
Several councilors expressed concern about increasing the burden on cable subscribers for a station accessed by the broader community.
Among them was Thomas Koenig, who said, “I think that’s wrong. If we need to fund it, I think we (all) need to fund it.”
The council has not yet made a decision on the station’s funding.
On the Seacoast, Portsmouth Public Media TV which operates PPMtv, announced in July that its channel may shut down operations after 14 years unless the city council renegotiates a 2009 agreement with the station to increase its funding.
Under that agreement, the city retains $360,000 of the annual franchise fee it receives from Comcast — 5% of the company’s cable revenues — and PPMtv receives the remainder of the revenue. In prior years, the station’s share has averaged roughly between $120,000 and $130,000, said Executive Director Chad Cordner.
But in May, PPMtv learned that its funding share this year would be $86,000 — a 27% drop from 2023 — and that next year’s funding is projected to be a similar amount, Cordner said. The allotted funding is barely enough to pay Cordner’s full-time salary, $46,000, and the station’s two part-time employees, at $20,000 apiece, he said.
The Nashua ETV studio (Dan Splaine Photography)
“PPMtv is tremendously underfunded as compared to other stations,” Studio Operations Manager Jake Webb wrote in an online petition seeking community support. “A more equal split of this fee would allow PPMtv to continue to operate and even grow.”
The station’s Youtube channel has 14,000 subscribers, and its video library has received 4 million total views, Cordner said.
The station is seeking between $50,000 and $100,000 in additional franchise fee revenues to cover equipment and programming costs, including media education workshops and internships, Cordner said.
Several city councilors, at a meeting Sept. 3, expressed reservations about increasing the station’s funding from a shrinking revenue source.
“Even if we gave PPMtv 100% of the franchise fee, that is not sustainable in the long term because that (revenue) will go down significantly, " Councilor Kate Cook said at the meeting.
The city’s franchise fees also fund a government channel that streams municipal meetings, which has a budget of over $200,000 a year, Cook said.
The council directed city staff on Sept. 3 to present recommendations at a future council meeting for ways to sustainably fund PPMtv.
State solutions
Despite a strong consensus in support of changing the federal law, several industry members said that is unlikely to happen.
Congress would need to approve any amendments to the Cable Communications Act. The political divide in Washington already makes bipartisanship difficult, Wassenaar noted.
And many lawmakers would be reluctant to support a fee on Internet services, said Lauren-Glenn Davitian, public policy director at Center for Media & Democracy, a public media advocacy group based in Burlington, Vt.
The Internet Tax Freedom Act, a federal law passed in 1998, prohibits state and local governments from imposing taxes directly on the internet or online activity, including taxes on email accounts or internet access. The law’s stated intent was to support the internet’s use as a commercial, educational and informational tool.
Some states, including Vermont, Maine and Massachusetts, are taking steps to aid their public access stations through legislation or direct funding. Provencher said there is currently no legislation in New Hampshire pertaining to community television funding.
In February, the Maine Legislature passed LD 1967, a law that allows municipalities to charge a franchise fee to any video service provider that uses a public right-of-way, regardless of the technology employed.
The law requires any provider of video, audio or digital entertainment that owns or operates facilities in the public right-of-way to have an agreement with the municipality, said Tony Vigue, a public media advocate in Maine.
The bill’s stated intent is to ensure that all providers of video services, regardless of the platform, receive equal treatment in respect to franchising and regulating.
“Just because the technology has changed, the town still owns a public right-of-way,” Vigue said.
The law, which was not signed by the governor, went into effect in August. The Maine Municipal Association and Maine Connectivity Authority are still drafting a standard agreement form for towns and cities to use, Vigue said.
Massachusetts lawmakers are considering legislation that would levy fees on streaming companies like Netflix and Roku to help fund community media.
Nashua Community Television is currently working with the city's Board of Aldermen to cover “a sizable deficit” this fiscal year, says Pete Johnson, NCTV’s education channel access director. (Dan Splaine Photography)
Senate Bill 2771 proposes a 5% fee on digital streaming providers, based on a company’s gross annual revenue in the state. A portion of the fee would be distributed to municipalities to support their public access television programs. The bill, introduced last year, is still under review in the Massachusetts Senate.
Vermont is considering a similar bill, S.181, which is currently under committee review in the House. That bill would also charge a 5% tax on a company’s statewide revenue.
Though she would like to see a legislative plan, Davitian said she does not support a streaming tax, which would result in many consumers being charged more than once for the same use of a right-of-way, such as cable customers with add-on streaming channels.
“There needs to be a tax on the infrastructure, not streaming (services),” Davitian said.
A separate bill, proposing a $15-per-pole attachment tax for each fiber or copper line attached to a utility pole, was abandoned by the House Ways and Means Committee in February.
The bill received heavy opposition from various stakeholders, including local telephone companies, which said they wouldn’t be able to afford the cost, Davitian said.
In June, the Vermont Legislature approved a one-time appropriation of $1 million in this year’s budget to help Vermont’s community television stations absorb the impact of declining franchise fees.
That money is intended to be a stopgap as legislators continue to seek a funding solution, Davitian said. “It was an interesting victory,” Davitian said. “We are happy to get the money, but we didn’t get to make a public policy.”
The money will be distributed through the Vermont Access Network, an organization representing the state’s 24 public access media centers, which operate more than 80 local cable channels in the state.
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