OCEAN CITY – The Ocean City Mayor and Council took a stand for the long-term existence of the brick-and-mortar Comcast store in Ocean City as the town moves closer to reaching a renewed franchise agreement with the cable company.
During Tuesday’s work session, City Manager Doug Miller explained after over two years of negotiation, Ocean City was close to reaching a renewed franchise agreement with Comcast to provide cable television service in the resort. In the franchise agreement, the town allows Comcast to utilize Ocean City rights-of-way such as streets and sidewalks, for example, for running cable to homes and businesses.
In exchange, Ocean City receives 5% of the cable giant’s gross revenue collected in the resort. Miller said Comcast has expressed interest in ultimately closing the brick-and-mortar store uptown where customers can pick up cable boxes and other equipment, but the town is adamant the store remain open for its non-resident and seasonal property owners.
Before he got into the nuts and bolts of the negotiations, Miller prefaced his presentation by explaining why the agreement with Comcast was now being discussed in open session. Earlier this year, the town was reprimanded by the Open Meetings Compliance Board for negotiating the pier franchise agreement behind closed doors.
“I have to explain why a two-and-a-half-year effort has come down to one item,” he said. “Typically, we negotiate contracts in closed session. What we have with Comcast is a franchise agreement. After the pier franchise negotiations, we were told franchise agreements are not contracts and need to be negotiated in public.”
At any rate, the renewed franchise agreement with Comcast has come down to an accord on how long to keep the brick-and-mortar store open for consumers.
“We are down to one remaining item,” he said. “Ocean City is highly unique in the respect that we have an awful lot of non-resident property owners. When they set up their places for the summer, they want cable service. When they are home, they can have a box delivered and when they come home, it will be there.”
Miller said the current deal on the table calls for a 10-year franchise agreement. However, Comcast wants to maintain its brick-and-mortar store for just five more years, including three years of year-round accessibility followed by two years of just seasonal accessibility for customers.
Councilman Tony DeLuca said the town should take a stand on that one remaining issue and get a guarantee the brick-and-mortar store will remain in place for the length of the franchise agreement.
“We’ve gone around and around on this,” he said. “They are very bold when they come here and ask us to take the current five-year agreement and extend it to 15 years, yet they won’t commit to the one line in the sand we drew. I’m not going to vote for this unless they put in writing the terms of the franchise agreement match the brick-and-mortar store.”
DeLuca said he was comfortable with the seasonal duration for the store, but wanted it to remain open for the life of the agreement.
“In other words, if the franchise agreement is 10 years, the brick-and-mortar store is in place for 10 years,” he said. “I’m okay with seasonal, I just want the store in place for the length of the agreement.”
Mayor Rick Meehan agreed, but questioned just what Comcast means by seasonal.
“The length of the brick-and-mortar store should correspond to the length of the lease,” he said. “They have seasonal as three months. I don’t know what months they’re talking about. When you talk about our non-resident property owners coming down to open up their units, it really is a longer time period. I think seasonal is more like five months. I think it needs to be a little longer.”
Council President Lloyd Martin attempted to explain Comcast’s reasoning for eventually phasing out the store.
“We want the store to be open when the people are here and they need it,” he said. “As technology moves forward, you’re going to need less and less equipment from the cable company. That what they’re looking at. They don’t want to be five years down the road and have a store open that doesn’t get used.”
However, Councilman John Gehrig said it might be a misconception that consumers are getting rid of traditional cable television and turning more and more to alternative television programming platforms based on the most recent numbers. For example, at 5% of the gross revenue, Comcast paid Ocean City nearly $800,000 for the first three quarters of fiscal year 2020 with another $300,000 anticipated in the fourth quarter.
“The thinking is more and more people are cutting the cord, but that’s not the case,” he said. Our last payment from them was an increase. They’re projecting it to be down and they’re basically saying our business is getting killed and we want to close the store, but that’s not what’s happening.”
Miller said he would go back to Comcast with the town’s desire for assurances the brick-and-mortar store will remain open, at least seasonally, for the length of the agreement.