NEWS & EVENTS

Organizational Updates

-At the JCLCCC Board meeting on December 17, 2021, the board approved the appointment of Mr. Jonathan S. Ricketts as the new legal counsel for the JCLCCC organization. The board subsequently held a reception for Mr. Ricketts on Wednesday, March 30, 2022 at the Anchorage City Hall for member cities and communication services providers.

-At the JCLCCC Board Meeting on June 29, 2022, Mr. Huff retired, as planned, from the position of JCLCCC Executive Director having served for more than a decade and a half in that role. Attorney James (Jim) Hodge was appointed as acting Chairman to replace Huff's vacancy.

Five Year Operating Highlights-since 2020

These past five years have been very productive for the JCLCCC and we wanted to provide a brief update on our service offerings and to highlight a couple key projects that were accomplished during this time period despite the impact of the pandemic.

First and foremost, was the original Communications Service Franchise Ordinance completed recently for member cities. We believe this new and fully integrated ordinance/franchise agreement sets a new and comprehensive standard going forward for the next decade. All costs related to the development, negotiation, and bid-out process was fully covered under membership dues.

Our Reach Out Program was also highly successful being able to get the 15% of non-member suburban cities certified. These cities were previously not receiving revenues under the excise tax distribution program. As of February 2021, based on DOR and County records, all 80 Jefferson County Suburban Cities are now either receiving excise tax or franchise fee distributions.

With high levels of inflation on the horizon driving up costs for city services, many suburban cities are revisiting the franchise fee option vs. excise tax distributions provided under KRS-136. Accordingly, we have prepared talking points on the matter and have also streamlined the transition process with Charter Communication Executives for those cities that have or are considering transitioning from excise tax distribution to collecting franchise fees. In many cases this action can essentially double city revenue receipts with no cost impact on city subscribers.

Recently finalized Jefferson County League of Cities Cable Commission Standard Right of Way Usage and Franchise Agreement was electronically distributed to member cities for their franchise negotiations with Lumos Fiber of Kentucky, LLC. This agreement is also easily adaptable to use with other telecommunication service providers.

So these deliverables are just some examples of how the JCLCCC is continually assisting member suburban cities and more offerings are currently planned in the coming months. We hope you will find our new brochure informative as well as our web site www.jclccc.com where we post important communications related information. Your city can request brochures by contacting the JCLCCC.

FCC UPDATE-

On September 26, 2019, the FCC’s order on Local Franchising Authorities’ Regulation of Cable Operators and Cable Television Services goes into effect. The order governs how cities & counties may regulate cable providers, including how franchise fees may be levied. Many Kentucky cities charge a franchise fee equal to the statutory maximum of 5% of gross revenue from cable service. The order states that “in-kind” contributions required by a cable franchise are subject to the 5% cap. “In-kind” includes any nonmonetary contributions related to the provision of cable services as a condition or requirement of a franchise, including, but not limited to, free or discounted cable services and the use of cable facilities or equipment. Thus, if a city requires the cable company to provide free cable services to city buildings, the provider will count the cost of that service against the 5% cap on gross receipts. This will reduce the total revenue collected by a city. “In-kind” contributions do not include the cost of build-out requirements; public, education and government (PEG) channels; or the fair market value of PEG channel capacity. However, the FCC has signaled the ruling could be expanded to include other items.

Additionally, the order provides that cities and counties may not regulate the provision of most non-cable services, including broadband internet access and equipment such as small cells, offered over a cable system.

The FCC is seeking comment on whether it should amend its recent small cell antenna rulings or adopt other policies to more effectively implement the Spectrum Act, promote infrastructure deployment, and serve the interests of consumers and on the FCC ’s legal authority to take such actions. https://docs.fcc.gov/public/attachments/DA-19-913A1.pdf Comments are due October 15th and reply comments are due October 30th.

Verizon filed a petition with the FCC seeking a declaration that the recurring fees charged by Clark County, Nevada, for small cell antennas in public rights-of-way exceed costs and under the FCC’s small cell order, violate Sec. 253(a) and are not saves by Sec. 253(c). Comments on Verizon’s petition are due September 25, and reply comments are due October 10.

Charter/Spectrum Franchise Renewal Process-The JCLCCC has completed franchise negotiations with Spectrum/Charter and a Communications Services Ordinance and Franchise Agreement for JCLCCC Members were developed. On November 13th the Executive Board of the Jefferson County League of Cities Cable Commission (JCLCCC) approved the Communication Services Ordinance and the ten (10) year Franchise Agreement with Charter/Spectrum. Both Charter/Spectrum and the JCLCCC believe these documents are reasonable and fair to both parties. These documents were subsequently mailed to JCLCCC member cities for their review and implementation.

The ordinance creates one set of franchise requirements for all communications companies using City rights of way, including Charter/Spectrum and Verizon (aka “MCI/Metro”), who has recently expressed interest in building fiber in Jefferson County. This is a huge benefit for JCLCCC members because the JCLCCC will provide support for implementing all communications franchises, not just cable franchises.

Not a Member yet?

Non-member cities may contact the Jefferson County League of Cities Cable Commission to explore options to provide these important benefits for their city. Contact JCLCCC Attorney Jonathan Ricketts at jonathan.ricketts@rickettslawoffices.com or 502-896-2302 or contact JCLCCC Chairman Honorable Jim Hodge at hodgejgsr@gmail.com or 502.931.3064 for more information on how to join JCLCCC.

UNDERSTANDING FRANCHISE FEES

The telecommunications taxes imposed under KRS 136.604 and 136.616 were originally enacted as part of Tax Modernization in 2005 (HB 272). Effective January 1, 2006, the bill replaced the franchise value property tax and franchise fees on telecommunications and cable companies with a 3% excise tax on multichannel video programming services and separate gross revenues tax rates on multichannel video programming services and communications services (2.4% and 1.3% respectively). With this legislation, existing local franchise fee collections were prohibited.

In 2017, the Kentucky Supreme Court (Kentucky CATV Association Inc. v. City of Florence, 520 S.W.3d 355, (Ky. 2017)) cleared the way for cities to once again collect franchise fees on cable and telecommunications services. In its opinion, the Supreme Court gave cities that option of “opting to forgo collecting a franchise fee in lieu of participating in the Telecom Tax scheme.”

The Court determined that the portion of Kentucky's telecommunications tax scheme prohibiting cities from collecting franchise fees from utilities in exchange for use of their rights-of-way was invalid, as that power was constitutionally granted to local municipalities pursuant to Ky. Const. §§ 163 and 164.

Important Note:

It is extremely important for a city to determine whether it is in its economic interest to remain in the state’s excise tax distribution scheme or to begin collecting franchise fees.

If a city chooses to opt out of the state’s telecommunications tax distribution program, the Department of Revenue has taken the position that it may not re-enter the program.

If your city has historically had a 3% franchise fee, raising your city’s franchise fee to 5% will have no economic effect on your citizens, but could substantially increase your city’s revenues.

The Effect on opting out of the Commonwealth's Telecommunications Excise Tax Distribution Pool on subscribers.

Under the KRS 136.600 et seq cable providers pay 5.4% of their gross revenues to the state.
This telecommunications excise tax is passed through on customer's bills as line items.
If a city imposes franchise fees at a rate of 5%, the cable operator will pay 5% to the city and .4% to the state.
If a city imposes franchise fees at a rate of 3%, the cable operator will pay 3% to the city and 2.4% to the state.

Therefore, this is a reallocation decision and not a cost increase imposed on the subscribers of the suburban city.

JCLCCC Member Related Information:

The JCLCCC has conducted and provided a financial analysis tor each member city to help them make the determination of staying in the state’s excise tax program or start collecting franchise fees.

Also the JCLCCC has developed, negotiated and bid-out an integrated Communications Services Ordinance and Franchise Agreement with Charter Communications for its member cities.

JCLCCC Meeting Notice

The next regular Board Meeting of the Jefferson County League of Cities Cable Commission will be an in-person meeting at Anchorage City Hall at 4:00 PM on Wednesday, November 19, 2025. We will continue to keep member cities apprised of important communication services issues though periodic Email alerts and postings on this web site.