ASK THE ADVOCATE: Franchise fee

Why does Cox Communications pay East Baton Rouge city-parish government a franchise fee?

Response from East Baton Rouge Assistant Parish Attorney Cynthia Childress Bohrer:

Cox Communications pays the city-parish a franchise fee pursuant to the Amended Franchise Agreement authorized by the Metropolitan Council on March 28, 2012 (Ordinance 15281) and executed on April 13, 2012. Pursuant to the agreement, Cox pays the city-parish a fee equal to 5 percent of its gross revenues from video services advertising, commissions from home shopping and subscription fees from video services delivered over its network in the city-parish rights-of-way. The franchise fee essentially compensates the city-parish for use of its property to construct, install and operate a video services network.

Response from Sharon Bethea, spokeswoman for Cox Communications:

Franchise fees are not specific to Cox. Franchise fees are paid to a governing authority in order to operate in the public rights-of-way. They are paid by any and all entities operating within a particular jurisdiction, and include utility companies and cable providers, such as Eatel, AT&T and Cox. In Baton Rouge, Eatel, AT&T and Cox have franchise agreements with the city-parish and pay the same fees. These fees are ‘pass-thru’ fees paid by the users and subscribers of these companies.