Under this section, municipalities are entitled to a maximum of 5 percent of gross revenues derived from the operation of the cable system for the provision of cable services. Section 626 of the Real Property Tax Law gives cable companies the right to offset the amount payable under this special franchise tax against the amount of their franchise fee payable to the municipality. The U.S. Cable Communications Policy Act of 1984 confirmed that cable televison service came under federal jurisdiction. The maximum fee equals 5 percent of the revenues attributable to the franchise locality. The State's purview includes customer relations, franchising procedures and standards, technical standards, and accounting practices.
State law limits the duration of local franchise agreements to ten years.
Under federal law, cable companies have the right to pass through the amount of the franchise fee directly to subscribers, and to include both the amount of the franchise fee and the name of the franchising authority as a separate line item on each subscriber's bill. In 1999, there were 4.7 million cable subscribers in the State representing 1.9 million households. The distribution of the subscriptions is highly concentrated among three companies. Data provided by the PSC showed that in 1998, three companies provided service to 95 percent of the subscribers.