‘‘(E) all revenue derived from the cable op-
erator’s cable service pursuant to compensation 
arrangements for advertising; and 
‘‘(F) any advertising commissions paid to 
an affiliated third party for cable services ad-
vertising. 
‘‘(3) EXCLUDED ITEMS.—The term ‘gross reve-
nues’ shall not include the following: 
‘‘(A) any revenue not actually received, 
even if billed, such as bad debt net of any re-
coveries of bad debt; 
‘‘(B) refunds, rebates, credits, or discounts 
to subscribers or a municipality to the extent 
not already offset by subparagraph (A) and to 
the extent such refund, rebate, credit, or dis-
count is attributable to the cable service; 
‘‘(C) subject to paragraph (4), any reve-
nues received by the cable operator or its affili-
ates from the provision of services or capabili-
ties other than cable service, including tele-
communications services, Internet access serv-
ices, and services, capabilities, and applications 
that may be sold as part of a package or bun-
dle, or functionally integrated, with cable serv-
ice; 
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cchase on PROD1PC60 with BILLS
‘‘(D) any revenues received by the cable 
operator or its affiliates for the provision of di-
rectory or Internet advertising, including yellow 
pages, white pages, banner advertisement, and 
electronic publishing; 
‘‘(E) any amounts attributable to the pro-
vision of cable service to customers at no 
charge, including the provision of such service 
to public institutions without charge; 
‘‘(F) any tax, fee, or assessment of general 
applicability imposed on the customer or the 
transaction by a Federal, State, or local govern-
ment or any other governmental entity, col-
lected by the provider, and required to be remit-
ted to the taxing entity, including sales and use 
taxes and utility user taxes; 
‘‘(G) any forgone revenue from the provi-
sion of cable service at no charge to any person, 
except that any forgone revenue exchanged for 
trades, barters, services, or other items of value 
shall be included in gross revenue; 
‘‘(H) sales of capital assets or surplus 
equipment; 
‘‘(I) reimbursement by programmers of 
marketing costs actually incurred by the cable 
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operator for the introduction of new program-
ming; and 
‘‘(J) the sale of cable services for resale to 
the extent the purchaser certifies in writing 
that it will resell the service and pay a franchise 
fee with respect thereto. 
‘‘(4) FUNCTIONALLY INTEGRATED SERVICES.— 
In the case of a cable service that is bundled or inte-
grated functionally with other services, capabilities, 
or applications, the portion of the cable operator’s 
revenue attributable to such other services, capabili-
ties, or applications shall be included in gross rev-
enue unless the cable operator can reasonably iden-
tify the division or exclusion of such revenue from 
its books and records that are kept in the regular 
course of business. 
‘‘(5) AFFILIATE REVENUE.—Revenue of an af-
filiate shall be included in the calculation of gross 
revenues to the extent the treatment of such revenue 
as revenue of the affiliate has the effect (whether in-
tentional or unintentional) of evading the payment 
of franchise fees which would otherwise be paid for 
cable service. 
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