Baltimore’s Comcast franchise negotiations, explained

Comcast and the City of Baltimore are in the midst of working out a new cable franchise agreement.
It may sound like the kind of legal document that makes you want to watch TV instead. But that’s exactly the point: This agreement affects your ability to watch TV. And it could potentially affect more than that.
Here’s why.
Under FCC rules, cable TV operators have to have a franchise agreement in place with a government regulator. In Baltimore’s case, the franchise is regulated by local government through the Mayor’s Office of Cable and Communications.
Baltimore’s last franchise was negotiated 12 years ago during the O’Malley administration. This time, city officials are eying a 10-year agreement.
Before you head for the remote, here are answers to a few questions we culled from research, a Q&A provided by the city and info from a recent public hearing:
What does the agreement cover?
Among other things, the franchise agreement covers rights to construct cable TV systems, access to public rights-of-way and customer service. The city can’t regulate rates.
So the city can’t regulate how much residents pay. But is there any money negotiated in the deal?
Yes. Under the current agreement, the city receives five percent of Comcast’s gross annual revenue from Baltimore City customers. That’s the maximum allowed by federal law, so that number can’t get bigger in these negotiations. However, the city also receives 50 cents per customer per month for capital costs to provide Public, Educational and Government (PEG) programming (aka public access) as part of the current agreement, according to city documents. That number could change.
PEG channels were a major point of contention and public advocacy surrounding the last franchise negotiations in 2004, according to the Baltimore Sun. The city-run CharmTV, which is operated by the Office of Cable and Communications, now offers original and on-demand programming.
There is also room to negotiate additional in-kind contributions. For instance, in Baltimore’s current agreement, Comcast agreed to provide $570,000 for public access training, and $430,000 over six years for a public youth summer employment program, the Baltimore Sun reported. In recently completed negotiations in Comcast’s home city of Philadelphia, the company agreed to expand its broadband offering for low-income customers. Last weekend, Seattle officials heard about Philly’s deal and bargained for more access to low-cost internet, our sister site Technical.ly Philly reported this week.
In Baltimore, Comcast recently took a step to expand its low-cost internet service, called Internet Essentials (the same program it expanded in Philly), outside of the negotiations. The $9.95-per-month service is available at 16 new community centers, and can be available to any family with students in Baltimore public schools. In the Philly contract, however, the Internet Essentials expansion went much further to include low-income seniors.
Internet? Wait, so the franchise covers Comcast’s broadband service, too?
Well, actually, no. Under the FCC’s guidelines, the franchise agreement can only cover cable TV services, said Tonia Lee, executive director of the Mayor’s Office of Cable and Communications.
“From a regulatory stance, the FCC does not require a [broadband] franchise agreement as it does with television services,” Lee said at a public hearing on Dec. 1. “In terms of my office, we do not have the ability to negotiate those terms outside of television.” And, at this point, there isn’t a similar regulatory agreement for broadband service.
But at the meeting, Bolton Hill resident Christopher De Arcaneglis pointed out that the two telecom offerings have become “intertwined” over time, and feels like they should “go together in one place.” City Council candidate Mark Parker also asked if conduit fees were included in the negotiations. Officials said they are not.
That said, when it comes to the negotiations, “That doesn’t mean it doesn’t make sense to have a holistic conversation,” Lee said.
The city began to take steps on broadband access outside of Comcast earlier this year. Mayor Stephanie Rawlings-Blake named former gb.tc Executive Director Jason Hardebeck as the city’s Broadband Coordinator, and a city task force released a report with recommendations to improve the city’s internet infrastructure.
OK, so what’s in it for me?
At the public hearing, Philip Spevak voiced a desire to see more attention to customer service. Through his work leading the Baltimore Broadband Coalition, Spevak said he conducted a survey of 900 Comcast subscribers that found 75 percent of subscribers were dissatisfied with the cost, 58 percent were dissatisfied with performance and 86 percent were dissatisfied with customer service.
The city also commissioned a survey, which found better numbers for satisfaction. In that survey, 31 percent of respondents wee dissatisfied with Comcast cable overall. When it comes to customer service, 80 percent were satisfied with available times for service, 78 percent were satisfied with the arrival and another 78 percent were satisfied with the availability of a technician.
Spevak pointed out that 55 percent said their call was not answered in 30 seconds, as required by the franchise.
“I think the real question is, in the new franchise what are they ways we are going to better track these things, and establish remedies that can hold the franchisee accountable?” he said.
Comcast rep Stacy Burnette said the company doesn’t necessarily agree with survey data, and that Comcast has invested millions across the country to improve service.
“We don’t profess to say that our customer service has been perfect, but we are making significant strides to improve our customer service,” she said.
Lee said the city is “very focused” on customer service in the negotiations. She added that the CharmTV website, which is run by the Office of Cable and Communications, recently rolled out a section that explains the process by which customer service issues can be resolved.
Customer complaints? Sounds like room for a competitor. Could another company come in?
They could, but they haven’t. The franchise is a non-exclusive agreement, meaning another company could negotiate a franchise and offer cable.
“To date, no other entity has requested a franchise for cable television in the city of Baltimore,” Lee said. The city also relays that Verizon made a business decision not to offer cable in the city of Baltimore.
So we’re focusing on Comcast. What’s next?
For now, more negotiations.
The city and Comcast will continue their talks. When a proposed agreement is reached, it will go before the City Council. Before a final vote is taken, Lee said there will be more public hearings. The franchise expires Dec. 31, 2016, meaning Mayor Rawlings-Blake’s successor likely won’t be involved, unless a deal can’t be reached before the expiration date.