[RP TownTalk] Cable TV Franchise Fees

[James D. Holmes]

Did you know that Comcast Cable TV Customers pay a higher Franchise Fee 
to the Town of Riverdale Park than Verizon Cable TV Customers.

I have made numerous complaints to the Mayor and Town Council over the 
past several years that Comcast is overcharging residents for the Town 
Cable TV Franchise Fee.  For over a year, Comcast was charging a 6.5% 
Franchise Fee.  In March 2012, Comcast lowered the Franchise Fee to 6 %.

I recently received an e-mail message form Councilman Jonathan Ebbeler 
(Ward 2) .  Councilman Ebbeler stated:

" I was curious myself so I took a look at my latest bill from Verizon 
and they are charging exactly 5% based upon my math.  That is not to say 
that Comcast's math is as accurate but without an example it is 
impossible to speculate."


When I asked the Mayor and Council to conduct an investigation to 
determine why Comcast was overcharging the residents of Riverdale Park 
for the franchise fee, I received the below response from Town 
Administrator Sara Imhulse:

"As I understand it, you are currently being charged a 6% franchise fee 
by Comcast.  The Town's franchise fee for cable is 5%.  As I understand 
it, the cable companies are allowed by federal law to recover the 
franchise fees, so in your case the additional 1% charged to your 
account is part of that process.  Here is the language that Comcast sent 
me when I asked that question:"

"Comcast is permitted by Federal Law to recoup any franchise fees that 
are paid to a municipality from its customers.  Franchise fees on 
non-subscriber revenues such as advertising, home shopping revenues are 
not derived from the customer and vary from year to year. Comcast 
updates it franchise fee pass through percentage once a year based on 
the prior 12 months actual subscriber and non-subscriber revenues.  
Comcast goal is to recover all franchise fees from subscribers in 
accordance with federal law.  At the end of the year we compare what was 
paid to what was collected and end up with a dollar amount, either over 
collected or under collected, in order to recoup or give back we convert 
that dollar amount into a percentage so that we can implement that new 
percentage in the billing system."


I am wondering why would the Town would close this complaint based on a 
statement from Comcast without conducting an independent investigation 
on it's own.  It appears the Town is letting the fox guard the hen house.

Did you know that residents of Georgia were also being overcharged by 
Comcast on franchise fees.  The residents banded together and filed a 
class action lawsuit against Comcast.  The lawsuit was settled and 
Comcast paid out over $500,000.00 . (See below web link for the news 
article)



_http://www.ajc.com/news/business/comcast-settles-in-suit-over-franchise-fees/nQZS6/ 
__
_


I am still not satisfied that the Town has addressed my complaint 
properly.  That's why I have asked the Town to allow me to review the 
quarterly financial statements that are received with the Comcast 
franchise payment (these statements are public records).  I sent an 
e-mail message to Town Administrator Sara Imhulse on December 19, 2012 
requesting information.  I did not receive a response.  I followed up on 
this request with a formal written Maryland Public Information Act 
request on January 1, 2013 to Ms. Imhulse.  I still have not received a 
response.


Solution to the Problem

A simple solution to correct the problem of paying a different franchise 
fee amount depending on the company you get your cable TV service from  
Verizon (5% rate) or Comcast (6% rate) is to have the Riverdale Park 
Council can pass a Resolution to specify what the Cable TV Franchise Fee 
is charged for all residents.  Example of new language for the Resolution:

Grantee shall pay to the Town a franchise fee equal to five percent (5%) 
of supplying regular subscriber video service.

I am asking everyone to contact the Mayor and their Council person and 
demand that a Resolution be passed to give all residents equal 
protection from paying a higher franchise fee depending on what cable TV 
service that you decided to select.


J. Holmes

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