Newport Beach to lose Internet fees

June Casagrande

NEWPORT BEACH -- Residents who subscribe to Adelphia Communications

Corp.’s high-speed Internet service will soon see a fee of about $2

disappear from their monthly bills -- and the city will see about $80,000

disappear from its annual revenues -- as the result of a Federal

Communications Commission ruling on cable Internet service.

The ruling last month upheld an Oregon court case that found that

franchise fees don’t apply to cable Internet service. This is because

cable Internet is not entertainment but instead an information service,

the federal court ruled and the commission reaffirmed. As a result, cable

companies, including Adelphia, are expected to immediately stop charging

the franchise fee that they have been collecting for local governments.

In 2000, Newport Beach’s general fund received about $122,000 in cable franchise fees. Cox Cable stopped collecting the fees last year because

of the Oregon court ruling. In 2001, the city received about $80,000 that

had been collected from Adelphia subscribers and none from Cox.

“I would hope this could mean better service for their customers, but

unfortunately there’s no way to guarantee that,” Assistant City Manager

Dave Kiff said.

The city is renewing its contracts with Cox and Adelphia in the midst

of a storm of complaints about the latter company’s Internet service.

City officials are holding public workshops to gather input on what

residents want from their cable providers, in part to try to help assure

better service.