At least 3 MSOs have informed local franchising authorities (LFAs...

LFAs “indicating” it no longer will bill customers for franchise fees for cable modem service, spokesman said. Customers will be notified in next billing cycle, he said. MSO has no plans now to seek reimbursement of franchise fees paid to cities, he said. Time Warner spokesman said he wouldn’t comment on communications it made to LFAs, saying “we would prefer that LFAs not to learn about our letters from the press.” However, attorney for one LFA said TW had informed it that it would stop paying franchise fees for cable modem revenue 10 days after notification was issued. Cablevision doesn’t face issue of stopping cable modem franchise fees because MSO took position with LFAs years ago that cable modem was information service not subject to franchise fees, spokesman said. “Our negotiated agreements with LFAs reflects this position.” AT&T spokeswoman said there wasn’t anything yet to announce on company’s position. Charter spokeswoman said MSO had sent letters in some communities and denied reports company intended to withhold portion of future cable franchise fees to offset cable modem fees it had passed through in last 15 months. There was only “isolated incident” in southern Cal. where Charter had paid cable modem fees but never collected them from customer. In that instance, MSO had notified LFA in Jan. that it would recover modem franchise fees paid in 2001 but hadn’t passed through to customers, she said. Attorney Nicholas Miller, who represents cities, said cable industry didn’t appear to have “read through the legal consequences of what they are doing.” He said cities’ rights were incorporated in existing franchises and it wasn’t possible to draw broad general conclusions on how FCC ruling would affect every community. Cities will look individually at their franchise agreements and respond through letters or legal action, he said. Miller said it appeared that cable industry had “colluded” in seeking to stop cable modem franchise fee payments given “similarity” of letters MSOs had sent to LFAs. Attorney James Baller said FCC’s declaratory ruling seemed to suggest that cable operators, especially those with franchise agreements that allowed collection of franchise fees on high-speed Internet service, should be paying franchise fees until definitive determination was made on issue. He said FCC ruling didn’t make allowance for retroactive action for recovery of modem fees already paid to LFAs and implied that such issues would be addressed in NPRM.