What is the purpose of the franchise fee that appears on my cable bill?
Each month when you look at your Cable bill, you may notice a line item labeled “franchise fee." Franchise fees are paid to local franchising authorities (cities) as compensation for the cable company’s use of the public right-of-ways or easements. A franchising authority is the municipality which gives permission to the cable company to use a street or area along residential property, where telephone or electric poles are located.
Franchise fees have always been a part of customer bills. Communities use franchise fees for a variety of purposes. Some use the fee for general services while others dedicate the funds to support their public, educational and governmental access channels. Southfield uses the majority of their fees to finance City Cable operation, which in turn provides local programming to cable subscribers.
Franchise fees are calculated as a percentage of your bill. Clawson's fee is six percent of gross revenues. Another fee that appears on your cable bill is the monthly FCC fee. This is paid to the Federal Communications Commission to support its regulatory activities. The fee can be either four or five cents.