New FCC rules force Grosse Pointe City to eliminate fees for local cable programming

By: K. Michelle Moran | Grosse Pointe Times | Published July 28, 2020

GROSSE POINTE CITY — Public, educational and governmental access channel fees — better known as PEG fees — are going away.

With new FCC rules overriding the state’s Uniform Franchise Act, Grosse Pointe City Manager Pete Dame said PEG fees can no longer be used for anything except equipment, meaning that the fees cannot be applied toward other costs associated with producing community shows.

He said the five Grosse Pointes and Harper Woods had been in talks with the Grosse Pointe Public School System to try and come up with programming to replace the programming that had been produced for decades by The War Memorial through its cable channel, but the new FCC rules also largely eliminated that option. Dame said that, in February, the 10-year agreement the Grosse Pointes and Harper Woods had with The War Memorial to provide local programming and PEG channel support through area cable systems ended.

Further complicating the situation, any PEG fees not used solely for equipment could be deducted by cable companies from the franchise fees paid to municipalities for their use of the public right of way, Dame explained.

“Due to the stumbling block of these new FCC rules, it’s not possible to fund (the creation of programming) anymore,” Dame said during a June 15 Grosse Pointe City Council meeting via Zoom.

As a result, the council voted unanimously to amend the Uniform Video Service local franchise agreements between the City and its cable providers — Comcast and AT&T U-Verse — to eliminate the collection of PEG fees on the bills of City cable subscribers. Comcast subscribers in the City had been paying a 1.15% PEG fee, while U-Verse subscribers had been paying 2%, City officials said. The fee is slated to be taken off the bills as soon as the cable companies can do so.

Mayor Sheila Tomkowiak said the PEG fees go back to the early days of cable TV, because the cable companies were using the public airwaves to broadcast.

“It would give municipalities a chance to do low-cost local programming,” she said. “I think at the time, it was very effective.”

Now, however, it’s more common for people to share information and even programming through the internet, and many people no longer have cable subscriptions, so Tomkowiak said PEG fees for local programming are no longer as relevant as they once were.

“Cable companies don’t have the impact they had before, so the notion of doing this doesn’t make sense,” Tomkowiak said.

As of press time, Grosse Pointe Woods and Park had voted to eliminate PEG fees.

“I do expect all of the other Grosse Pointes to follow suit,” Dame said.