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Why do I have to pay a Franchise Fee?

Posted by
Contributor

Message 1 of 56
38,833 Views

What the heck is a Franchise Fee? 

 

Why all the hidden charges?

 

I guess it's more marketable to say you have the:

 

$119.99 Package 

 

and not the

 

$160.87  Package

55 REPLIES
Posted by
Gold Problem Solver

Message 2 of 56
38,822 Views

Jeff64D wrote:

What the heck is a Franchise Fee? 

 

Why all the hidden charges?

 

I guess it's more marketable to say you have the:

 

$119.99 Package 

 

and not the

 

$160.87  Package




Doing a search brought up this below:  OR- you can call 1-800 comcast and speak with someone in the Billing Department too.

 

A Franchise Fee  helps the town or city in which you reside support its cable related needs and interests - this fee is not related to the line of business (cable, internet, phone) you are subscribed to. These fees usually appear in the form of access programming channels for town specific public, educational and government information and are federally regulated.

 



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Posted by
Service Expert

Message 3 of 56
38,819 Views

Also this:

 

http://en.wikipedia.org/wiki/Cable_television_franchise_fee

 

A cable television franchise fee in the United States, the stems from a community's basic right to charge for use of the property it owns. The cable television franchise fees represent part of the compensation a community receives in exchange for the cable operator's occupation and the right-of-way use of public property. A franchise fee is not a tax; it is a rental charge.

 

Franchise fees are governed under Section 622 of the Cable Communications Act of 1984. Section 622, states that municipalities are entitled to a maximum of 5% of gross revenues derived from the operation of the cable system for the provision of cable services such as Public, educational, and government access (PEG) TV channels.

 


 

You pay the fee to Comcast, who then gives it to your city/town.




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Posted by
Email Expert

Message 4 of 56
38,738 Views

In other words, it's a tax.




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Posted by
Contributor

Message 5 of 56
38,613 Views
Would make sense if it was paid by comcast but how do I benefit to charge myself a fee. Is there anyway to opt out of them?
Posted by
Gold Problem Solver

Message 6 of 56
38,583 Views

No.



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Posted by
Email Expert

Message 7 of 56
38,537 Views

You can't opt out of sales taxes, why do you think you should be able to opt out of these taxes?

 

If Comcast didn't report them as line items in the bill, they'd simply include them in the price of the service. Either way, if they have to pay them, they have to get the money from somewhere, and customers are the primary revenue source.

 

The reason they split them out is because the fees are different in every town, but Comcast prefers to have a single price for the services across all towns in an area.




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Posted by
Visitor
Message 8 of 56
35,543 Views

I should be able to opt out.  Comcast is giving me channels I already get free over antenna and then is charging me for them.  I should be able to tell comcast to cancel those channels and opt out of the fee

Posted by
Service Expert

Message 9 of 56
35,539 Views

Customers of other cable companies feel the same way about franchise fees.

 

Comcast is not the only one who recovers the fee from customers.

 

If you could opt out you would, as Barmar said, end up paying the fee when it's built into the cost of service.

 

 




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Message 10 of 56
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It is understandable that the fees be paid.  However, it should not be separated out of the advertised price.  Comcast, as a business, rents the property for the infrastructure.  Rent is a business expense, not a consumer expense.  I understand the argument that the services would cost the same regardless, but that is not the issue.  The issue is the change in advertised price.

 

Imagine if McDonald's (whose franchise owner rents the building) was located across the street from Burger King (who's owner owns the building).  McDonalds advertized hamburgers on their sign for $0.99, and Burger King advertised on their sign $1.69 Burgers.  Then, at the drive through menu it says the same.  Then when you arrive at the window to pay, the have you eat your burger first, then pay.  When it is time to pay for what you already ate, they say, "That will be $0.99 plus a franchise fee of $1.30 for a sub-total of $2.29, plus 10% sales tax = $2.52."

 

You ask, "What is the franchise fee?"

and they say, "It's pay rent on the building, and for all the McDonald's equipment."

 

It's a classic case of bait and switch, which is illegal.

 

The example above is not even the full story of what comcast is doing.  A customer in the example above could go to Burger King the following day.  Comcast, however, used to make you sign a contract agreement for required service period.  The only reason they don't anymore is they lost a lawsuit over the tactic, and the minor change of removing the service agreement and allowing for a 30 day money back guarantee is a legal loop hole to the tactic.

 

It's time for another class action.  Are there any lawyers out there ready to take on the task?

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Message 11 of 56
35,046 Views

TheyThey'd should tell you these fees up front when you are signing on as well as telling you theRe is an activation fee which they don't.   They are crooks!

 

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Message 12 of 56
34,962 Views

I noticed the Franchise Fee this month after my cable bill went up $30.  I recently got HD and knew my bill was going to go up $9.95/month but then, of course, they tack on Franchise Fees, which was another $5.32 per month, plus. I was forced to downgrade my Internet to Economy Plus just to save some money. I also think I'm going to be getting rid of HD. I don't really notice a big difference between regular TV and HD. I've had it with Comcast going up and up. They also recently just started charing $1.99 PER OUTLET for anyone that has an adapter when they went from analog to digital. Their bill said the DTA was $.50 per outlet, but the customers service rep told me last night that it was a misprint, and they will be correcting this. They raise prices every 6 months, and I find myself holding my breath when each bill comes in. They upgrade their buildings, but want the customers to pay for it.  I'd be willing to bet that if they lowered prices, more people would join them because Verizon sucks, too.  

Posted by
Visitor
Message 13 of 56
34,372 Views

By rights the percentage should come from comcasts revenues and a tax on them, but somehow they interpret the law as charge the added percent from the customer.  Theres a reason monopolys are outlawed.  Comcast-worst customer service ever.

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Message 14 of 56
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I agree that this indeed is a fee that must be paid somehow and will come from someone. I am just wondering where this line item lands on the balance sheet at tax time for companies that use this line item fee. I will look further but, I would think that the businesses are writing this off as an buss. expense. I would love to total all of these fees from the electric co.,  phone co, cell phone co., water district, waste management co., etc...  and deduct these from my own taxes. I'm just saying.

Posted by
Frequent Visitor

Message 15 of 56
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Thanks for the info. I will look into this regulation. But I disagree with your statement. (this fee is charged to Comcast. There for Comcast must pay this fee) Not give to the athority. It is my belife that this fee is not mandatory to be paid buy the customer rather Comcast chooses to charge the customer because the FCC said it was OK if they did.

 

Give    Comcast doesn't give anything...As I have noticed. They are business. Goal to make as much money as possible. Unlike some good business that do give back to the community. 

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Message 16 of 56
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Why do I have to pay a Franchise Fee and a franchise related fee?
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Message 17 of 56
19,535 Views

Did you know that a franchise fee is charged on each movie you rent?  I rented two movies at 3.99 each and paid a .44 charge for franchise fee.  Why am I being charged on movies as well as equipment?

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Message 18 of 56
19,263 Views

Comcast's net income for 3 quarter through September 2014 was 11 billion dollars. Their customer service is an embarassment and HUGE time waster to get anything done.  Check out the financial results yourself:

 

http://files.shareholder.com/downloads/CMCSA/3890592165x0x788073/8223BBD4-1846-4382-BA24-E1C959FBB44...

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Message 19 of 56
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What I'm finding interesting is the taxs. I had a partial monthly credit of $10.63 that amount was added to the sales tax amount and then removed so they get more money. They are charging sales tax on the broadcast fee, franchise fee and the FCC Fee. I'm not  a lawyer but this seems a little illegal. First the Broadcast fee, franchise fee and the Fcc are part of them doing busines not subject to sales tax as they are already a tax. Second if I receive a partial month credit that should be taken off the top of the bill not the bottom after taxs. Seems to me that this is a Federal crime since this bill was sent through the federal mail.

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Message 20 of 56
19,145 Views

we all need to put pressure on the states attorney general to investigate the business practices of Comcast that are deceptive/illegal/ fraududlent/ in nature.  since they routinely have agents that lie to us, supervisors that try to steer us to soliutions that suit comcast and don't help us as customers  much or at all etc. etc. 

 

I AM GOING TO DEAL WITH THE S.A. office soon. TO TRY TO GET BACK MONEY I PAID TO COMCAST FOR CABLE SERVICE THAT I DID NOT ACTUALLY USE.  Rgardless of the outcome of my personal situatio i will ask the ststes attorny what they are going toi do about comcast.  

 

I will poinyt out al the repeat offenses that comcast customers are routinely plagued with.

 

iF YOU FOLKS WANT RESULTS, you will not get them by just putting a complaint on an online borad or thread regardless of who's site it is.

 

Join me in this new year to put a stop to the shady business pratices of coamcast.  force them to revela all the hidden charges, and contract info up fron before a contract is evere agreed too.  make it so that a written contract is clear, and transparent  and does not contain tricky language or small print. ...

 

I can't do this by myself folks.  we need each other frankly and you all should realize this.  If you aren't going to actively fight and change things that are wrong then stop complaining...

 

Posted by
Frequent Visitor

Message 21 of 56
19,136 Views

It's not a "franchise" like a McD's franchise - it's a tax the municipality lays on Comcast to give the "franchise" (i.e., the ability to run their cables through the town) - complain to your local politicians - they're gouging you with what is essentially a disguised tax (like the politicians jacking up diesel gas taxes rather than unleaded gas taxes so primarily only truckers get hit with it and companies have to pass the higher tax on to consumers through higher shipping costs and/or higher prices - so they're taxing you but using an indirect method to hide it - same with this franchise tax

Posted by
Frequent Visitor

Message 22 of 56
19,134 Views

Better check the details of the state and various municipality sales taxes - would not surprise me that the crooks in Springfield (and elsewhere) are assessing taxes on the broadcast fee, etc. - their grubby hands never seem to tire stealing money from folks

Posted by
Frequent Visitor

Message 23 of 56
19,131 Views

treyash9 wrote:

Comcast's net income for 3 quarter through September 2014 was 11 billion dollars. Their customer service is an embarassment and HUGE time waster to get anything done.  Check out the financial results yourself:

 

http://files.shareholder.com/downloads/CMCSA/3890592165x0x788073/8223BBD4-1846-4382-BA24-E1C959FBB44...


That $11B you're quoting is operating income, not net income (which is after paying taxes, interest, etc.) - net income was $6.455B (~12% profit margin, which is not excessive) and also note that those numbers include NBCUniversal - it's not just Comcast Cable

 

However they should still provide much higher customer support

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Message 24 of 56
18,586 Views
I recently switched from Blast Plus to X1 Double-play Preferred. My franchise fee went from $0.62 to $12.80. Why would this cause the "fee" to go up by 2000% ?
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Message 25 of 56
18,563 Views
All I can tell you for sure is to communicate with them through the chat. They seem to say what ever you want to hear and do what ever they want with billing. I'm in Indiana and was told it is a flat fee not a percentage. This i believe is negotiated with your local government because that's where the money goes.
Posted by
Contributor

Message 26 of 56
18,535 Views

My Village is listed as the franchise holder on my bill. However, when I've checked with the Village regarding companies available for TV service, they have responded that they have no say-so as to who comes into the village with service. In the past the village has had issues with other companies coming into the village, as the vilage was strong-arming other services as to the amount of $$$ the village would receive per households signing up for services. Unfortunately, there are several companies that are rated much more highly by Consumer Reports available out there, but my village has done nothing to make them available. As I said before, the village says they have no say-so as to who may offers service to residents. Unfortunately, because I live in a highly wooded area, I am stuck with Comcast :-(

Posted by
Cable Expert

Message 27 of 56
18,458 Views

Post removed due to a deliberate forum language filter circumvention violation. Please do not try to bypass the filter. thank you. Forum Guidelines (which everyone should read before making his/her first post) state Please Don't 2. Use Profanity Please keep your posts clean. Our forums have an automated profanity filter to block out inappropriate language. Please do not circumvent it by finding colorful ways to approximate or disguise those words. If you are caught trying to bypass the filters in any way, your posting privileges may be revoked.

Posted by
Visitor
Message 28 of 56
16,522 Views

Interesting that I pay taxes that made the infrastructure they use possible and at the same time I have to pay the company that rents this infrastructure for them using it. This is entirely backwards. In my community they are the only game in town. This somehow seems wrong.

Posted by
Official Employee

Message 29 of 56
16,460 Views

Hello Fstkmaro,


I'm sorry for your troubles. I will be more than happy to address your concerns. A Franchise agreement is a formal legal agreement with a government or regulatory agency that defines the terms and conditions under which Comcast may operate its cable system within the specified Federal Communications Commission (FCC) community area. Comcast pays a Franchise fee to exercise the rights granted to it under the Franchise agreement. I hope this helps. Please let us know if you have any additional questions or concerns in the future.

 

Thank You!




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Message 30 of 56
13,459 Views

Why do I pay a city fee when I legally do not belong to a city?  I am in an unincorporated county. 

Posted by
Service Expert

Message 31 of 56
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Message 32 of 56
12,811 Views

The county is our franchise provider.  Tell me how that works again?  Also, taxes are being collected for the following County services that have nothing to do with cable internet, TV, telephone:

  • ($0.02)
  • ($0.02)
  • ($0.02)
  • ($0.09)

    MARTA is a mass transit authority operated by DeKalb County, GA.  The same county that operates the Comcast franchise.  Our "leaders" are the leading cause of corruption in the state.  
 
Posted by
Most Valued Poster

Message 33 of 56
12,789 Views

Tasq,

A cable television franchise fee in the United States, the stems from a community's basic right to charge for use of the property it owns. The cable television franchise fees represent part of the compensation a community receives in exchange for the cable operator's occupation and the right-of-way use of public property. A franchise fee is not a tax; it is a rental charge.

Franchise fees are governed under Section 622 of the Cable Communications Act of 1984. Section 622, states that municipalities are entitled to a maximum of 5% of gross revenues derived from the operation of the cable system for the provision of cable services such as Public, educational, and government access (PEG) TV channels.

 

You pay the fee to Comcast, who then gives it to your city/town.




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Message 34 of 56
12,775 Views

I have no city and no town which is what unincorporated means.  Where is my money going?

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Message 35 of 56
12,729 Views

blondie58601,

 

Your franchise fee goes towards public, educational, and government access (PEG) TV channels. Also, it goes to surrounding cities.




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Message 36 of 56
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Previously, you said

 

"You pay the fee to Comcast, who then gives it to your city/town."

 

but now it goes to surrounding cities?  Why am I paying for surrounding cities?  I have no city.

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Message 37 of 56
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Shouldn't the accounting department or the IT department be able to trace exactly where my money went to which City/Town? 

 

I asked in the Comcast store over a month ago and was told that I would receive a call on Monday; however, I am still waiting on the call.

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Message 38 of 56
12,715 Views

blondie58601,

 

I have sent you a private message to further assist you.

 

At the top of each Forum page, you will see a small gray envelope icon. This icon will have a number next to it if you have any new messages waiting. To open a PM to read it, double click on the envelope. If you click on the white envelope a window will open with tabs for your Private Message Inbox, Sent Messages, Friends, Ignored Users, and Compose new Message. You can also access this area by clicking on the Username in a Thread or post. By default, Private Messages are enabled. You can disable this feature in My Settings>Preferences> Private Messenger.

 




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Posted by
Valued Contributor

Message 39 of 56
12,420 Views

 Basically Comcast owes fees to the local. It doesn't matter if it is a city, town, island...whatever.  The local government owns the easements,  public access channels and government access channels. In their agreement where they allow Comcast to run their equipment in the easements they told Comcast "hey, a percentage of your profits we want. We're helping you and allowing you this access so you will cover these things ( schools and the channels)  AND PAY us a percentage of what you make".

 

For tax purposes  (I'm sure) Comcast wants to itemize that on the bill instead of just upping the cost of the plans. Why? Because at the end of the year they know exactly what was paid out for their 'cost of operation ' and they can deduct it from their profits- and pay less taxes. 

Posted by
Official Employee Digital Care

Message 40 of 56
12,418 Views

The Cable Act allows local governments to collect "franchise fees" on the sale of "cable services." The amount of the franchise fee is set by the local government or by state law. Comcast collects the franchise fees and gives them to the local government.




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Message 41 of 56
11,754 Views

Amazing that I have a bundled package of $109 which after all of the tacked on fees etc makes that bill $175. Comcast should be forced to quote packages including all of the fees etc so you know exactly what to expect when your bill comes. Comcast closed the local office so we should not have to pay this franchise fee. 

Posted by
Valued Contributor

Message 42 of 56
11,746 Views

Jleoni,

 

This fee is not paid to your local Comcast store, it is paid to your city/town. Franchise fees are governed under Section 622 of the Cable Communications Act of 1984. Section 622, states that municipalities are entitled to a maximum of 5% of gross revenues derived from the operation of the cable system for the provision of cable services such as Public, educational, and government access (PEG) TV channels.

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Message 43 of 56
11,079 Views

From February 2015 to February 2016, the cost of my TV related services has gone up 10.6 %.

Over the same period, the Franchise fee has gone up 42.6%.

I have spoken with my local franchise authority and was told that the local franchise tax is set at 5.0% and has been at that level for some time (over a year).

So my questiion is where has the 32% (42.6 -10.6) increase in franchise fee gone?

It certainly has not gone to the local franchise authority.

Posted by
Problem Solver

Message 44 of 56
11,054 Views

Hello Yogibearwan,

 

The Franchise Fees are often a small percentage of the total XFINITY TV service costs and are itemized on the monthly billing statement.  This means that if you service cost increases, then the Franchise Fee will increase.  This is a percentage of all TV services including the package, bundle price, the equipment, and any one-time television charges that may occur during the billing period.

 

Recently, Comcast has increased the prices of many of their services and fees.  With this increase, it is expected that a percentage tax would increase as well.  I hope this explanation helps you to understand why your tax has increased.




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Message 45 of 56
10,897 Views

 Comcast KevinL

 

Let  me be more specific about my concern on my Franchise Fee.

My February 2015 bill for TV service (including the portion of bundled packages allocated to TV, DVR converter, broadcast TV fees and regional sports fees) was $76.60.

At 5.0%, the Franchise Fee for that service was $3.83.

 

My February 2016 bill for the same TV services was $84.75, an increase of about 10.6%

The Fanchise tax rate set by the State of Utah, and imposed by my local francise authority

has been at 5.0% for over a year.  Thus my Francise Fee for February 2016 should have been about $4.24 (5% of $84.75).  It was $5.46, or about 29% more than it should have been.

 

On an individual customer basis, $1.22 ($5.46 -$4.24) seems small.  But scale that up by 

20 million comcast customers, and you're looking at almost $293 million a year in

charges for "franchise fees" that have no basis.

 

Now whether that $293,000,000.00 a year in excess "franchise fees" is going to the local franchise authorities across the country,  or to Comcast, Inc., is immaterial.  It is an over-charge that Comcast customers should not be paying.

 

 

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Message 46 of 56
9,886 Views

does that make me a franchise partner. what is next when i go into mcdonalds and buy a mcdouble will i have to pay part of THEIR franchise fee. they are the owner and i am a coustomer. according to a comcast franchise fee it makes me a part owner. can i be sued if someone other coustomer's feelings are hurt or they get hurt on comcast's property. 

Posted by
Problem Solver

Message 47 of 56
9,878 Views

Hi bh1960,

 

 

A franchise agreement is a formal legal agreement with a government or regulatory agency that defines the terms and conditions under which Comcast may operate its cable system within the specified FCC community area. A franchise fee is paid by Comcast to exercise the rights granted to it under the franchise agreement. Franchise fees differ from one specified FCC community area to another, but the amount paid to the local government equates to 5% of gross video revenues.




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Message 48 of 56
9,875 Views

It's not just the franchise fee. Comcast moved the Turner Movie Classic channel


ComcastKevinL wrote:

Hello Yogibearwan,

 

The Franchise Fees are often a small percentage of the total XFINITY TV service costs and are itemized on the monthly billing statement.  This means that if you service cost increases, then the Franchise Fee will increase.  This is a percentage of all TV services including the package, bundle price, the equipment, and any one-time television charges that may occur during the billing period.

 

Recently, Comcast has increased the prices of many of their services and fees.  With this increase, it is expected that a percentage tax would increase as well.  I hope this explanation helps you to understand why your tax has increased.



from my bundle, moved it into a Sports Bundle that if i wish, I may subscribe for for an extra $9.99/month. I DON'T DO SPORTS! Comcast is a total ripoff!

Posted by
Problem Solver

Message 49 of 56
9,863 Views

Hi DoveDrum2,

 

Each year, Comcast considers changes to the channel lineup to manage overall programming costs and better align our more popular packages with the most viewed programming. The changes to the channel lineup varies by market. As part of those regular reviews, Comcast made the decision to move TCM/ TCM HD from Digital Starter to Digital Preferred package.




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Message 50 of 56
7,760 Views

We are willing to pay for trenching.....would like to put an offer in on a new to us home ASAP.  Future neighbors are wanting Comcast.  The node is 4 miles away.  There is a franchise agreement with the City of Springfield.  What would help our chances of being able to get Comcast?  My husband's work depends on high speed internet.  The competition is nowhere close to beating the speed.  Should I contact the City of Springfield?  I've spoken to representatives on the phone and in the Eugene office....would it help if I spoke to someone in person in the Springfield office?

 

Help!  Would love to put in an offer on this beautiful home before it gets bought by someone else!