After the Midwest Video decision, the future of cable programming was secure and competition to obtain franchises to supply local cable service became intense. Essentially, a cable franchise is a mini-monopoly awarded by a local community to the most attractive bidder, usually for a fifteen-year period. Although a few large cities permitted two companies to build different parts of their cable systems, most communities granted franchises to only one company so that there wouldn’t be more than one operator trampling over private property to string wire from utility poles or to bury cables underground. Most of the nation’s cable systems were built between the late 1970s and the early 1990s.

During the franchising process, a city (or state) would outline its cable system needs and request bids from various cable companies. (Potential cable companies were prohibited from also owning broadcast stations or newspapers in the community.) In its bid, a company would make a list of promises to the city about construction schedules, system design, subscription rates, channel capacity, types of programming, financial backing, deadlines, and a franchise fee: the money the cable company would pay the city annually for the right to operate the local cable system. Lots of wheeling and dealing transpired in these negotiations, along with occasional corruption, as few laws existed to regulate franchise negotiations (e.g., paying off local city officials who voted on which company got the franchise). Often, battles over broken promises, unreasonable contracts, or escalating rates ended up in court.

Today, a federal cable policy act from 1984 dictates the franchise fees for most U.S. municipalities. This act helps cities and municipalities use such fees to establish and fund access channels for local government, educational, and community programming as part of their license agreement. For example, Groton, Massachusetts (population around ten thousand), has a cable contract with Charter Communications. According to the terms of the contract with Groton, Charter returned 4.25 percent of its revenue to the town (5 percent is the maximum a city can charge a cable operator). This money, which has amounted to about $100,000 a year, helped underwrite the city’s cable access programs and other community services.