LAKEPORT, Calif. – Due to new information about limits on how the funds can be spent, the Board of Supervisors on Tuesday delayed a decision on an ordinance establishing a pass-through fee to support the county’s cable access television station.
The board passed the first reading of the ordinance to place a 1-percent fee on Mediacom customers’ bills at its meeting on April 9, as Lake County News has reported. The vote was 3-2, with Jim Comstock and Rob Brown voting no.
It’s anticipated that the pass-through fee would raise as much as $55,000 a year for TV8, the Public Education and Government station headquartered at Clearlake City Hall.
Since the board approved the ordinance’s first reading, County Counsel Anita Grant has been researching whether or not the board could, in the future, withdraw the ordinance should it not feel the station’s services and performance are improving, an issue raised by Supervisor Anthony Farrington.
The concerns arose because, beginning this fall, the state will begin handling such franchise agreements as the county has with Mediacom based on changes in the law that took place several years ago. The concern was that the fee would become part of the permanent franchise agreement.
Grant’s conclusion was that under existing law – in particular, the Digital Infrastructure and Video Competition Act of 2006, or DIVCA – the state will take over the franchise but the county will still have limited access, and could withdraw the ordinance and the fee at some future time.
However, there was another concern, namely, that the funds can’t be used for ongoing operations or personnel.
Shawn Swatosh, Mediacom’s senior operations manager for Northern California, had raised that point at the April 9 meeting, noting that the funds could only be used for capital expense. County officials indicated at that the time that they weren’t aware of that rule.
It turns out that Swatosh was right. That changes the picture for PEG, whose board previously had submitted to the county and the cities a business plan that included a proposal to use the pass-through funds to pay for a station manager.
Grant told Lake County News in a Tuesday interview that Swatosh’s comment at the April 9 piqued her curiosity.
“That’s what made me look at it,” she said.
She said she and her staff began digging into FCC rulings and court decisions.
They found that in 2007 the FCC issued two different rulings addressing how fees for PEG stations can be used. In those rulings, the FCC determined that acceptable expenditures included cameras and other equipment, vehicles, even construction of a facility, but not ongoing operational expenses such as salaries.
Those rulings were tested – and, ultimately, affirmed – by the federal Sixth Circuit Court of Appeals, which found that the FCC is entitled to make such rulings, Grant explained.
As such, Grant suggested to the board Tuesday that the proposed ordinance’s language be changed, with a reference to PEG facility operations to be replaced by language stating that the funds would be used for purposes consistent with state and federal law.
That change in language, she said, would require a new first reading of the ordinance, which would have to come back for a second reading before final approval.
Farrington said the information about how the money can be spent changed the picture for him, as he had been advocating for the pass-through based on improving the station’s service and quality.
If they can’t use the funds for personnel but only for capital expenditures, Farrington asked how the station could accomplish those improvements.
“Having just heard this, I’m wondering about that myself,” said PEG Board Vice Chair Ed Robey, adding that the money would have to come from elsewhere.
Farrington said that the 1 percent pass-through fee may generate more money than the station needs for equipment, and he wondered if it made sense to table the discussion and look at a smaller fee.
Robey said the station could use about $50,000 in equipment to fully automate it.
“This kind of changes everything for me,” said Farrington, who said he wanted to look at a smaller percentage or one-time contributions from the cities and county.
Supervisor Jeff Smith said he felt the matter should go back to the PEG Board for further discussion, suggesting that it is the perfect time to have either Yuba College or a local school run the station.
“We can really make the station a state-of-the-art system,” Smith said.
Referring to the pass-through, Supervisor Denise Rushing said she felt they had a window of opportunity that is going to close.
While she agreed that the 1-percent might be a bit rich, she said that is the right amount to get the needed equipment in the first year, and suggested that a sunset or a review could be implemented, although Grant said that would make it difficult for the station’s long range planning.
Grant told the board it could advance the matter to the May 14 meeting and let the PEG Board come back with a proposal covering its needs.
Rushing asked if they could implement 1 percent in the first year and then drop the amount of the pass-through. Grant said yes.
“We have to justify any rate increases we make,” said Farrington.
He said he was more comfortable in seeing a plan if the funds can only be used for capital expenses or equipment. Farrington said he was no longer looking at 1 percent, but rather half a cent.
Rushing asked if they could continue the matter, and Grant said they could.
The board voted 5-0 to put off the matter until 9:30 a.m. Tuesday, May 14. Smith said that will give the PEG Board time to meet on May 8; he also suggested the PEG Board call a special meeting.
The PEG Board apparently took Smith’s advice and issued an agenda on Tuesday afternoon for a special meeting scheduled for 5 p.m. Thursday, April 25. At that meeting they will discuss the supervisors’ action on the ordinance, review the regulations on the pass-through fund uses and develop a response.
Ahead of the special Thursday meeting, Grant said Robey has asked for information and legal citations relating to the FCC rulings and Sixth Circuit Court decisions.
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