A cable television

Cable television

Cable television is a system of providing television programs to consumers via radio frequency signals transmitted to televisions through coaxial cables or digital light pulses through fixed optical fibers located on the subscriber's property, much like the over-the-air method used in traditional...

 franchise fee in the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, 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

Easement

An easement is a certain right to use the real property of another without possessing it.Easements are helpful for providing pathways across two or more pieces of property or allowing an individual to fish in a privately owned pond...

 use of public property

Public property

Public property is property, which is dedicated to the use of the public. It is a subset of state property. The term may be used either to describe the use to which the property is put, or to describe the character of its ownership...

. A franchise fee is not a tax

Tax

To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

; it is a rental charge

Renting

Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...

.

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 revenue

Revenue

In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....

s derived from the operation of the cable system for the provision of cable services such as Public, educational, and government access

Public, educational, and government access

Public, educational, and government access television, refers to three different cable television specialty channels...

(PEG) TV channels.