OCEAN CITY – After holding Comcast’s feet to the fire somewhat over the grandfathering of certain discount programs, the Mayor and Council this week approved a renewed franchise agreement with the cable television provider.
Last month, the Mayor and Council approved a proposed resolution to renew a five-year franchise contract with Comcast after working through some salient points in the contract, which had expired in 2017. City Manager Terry McGean and legal staff have been working on a new agreement with Comcast in the years since. When the council approved the draft franchise agreement with Comcast last month, that moved the resolution to the public hearing phase, which was held on Monday.
The proposed agreement presented on Monday represents the fruit of years of negotiations. Under the proposed agreement, the town would receive 5% of the gross revenues, or about $1.1 million annually for the life of the agreement.
The franchise agreement covers the provision of cable television service only. It is not an exclusive agreement as other providers can enter into a similar agreement with the town to offer cable television service. The Federal Communications Commission (FCC) has determined services such as Dish Network or DirecTV, for example, constitute effective competition.
As a sticking point in the negotiations, for years Comcast has expressed a desire to eventually close its brick-and-mortar store within town limits where customers can pick up and drop off equipment and other services, but the town had been adamant that the store should remain open for the convenience of its residents, non-residents and seasonal visitors.
In a compromise of sorts, Comcast agreed to keep the Ocean City store open year-round for the first four years of the new contract and go to an abbreviated schedule from April 1 to Sept. 30 in the fifth and final year of the agreement. During the session last month, the council pressed for an extended amount of time in the fifth year of the contract and Comcast Government Regulatory Affairs Director Chris Comer went out in the hallway to make calls to see if he could affect the change. He returned with an agreement to move the store closing date in the fifth year to Oct. 31.
There was some discussion about moving the start date up to March 15 in the fifth year. On Monday, Mayor Rick Meehan continued to press for keeping the store open year-round in the fifth year of the contract and beyond if necessary, citing his own visit to the Comcast store the very afternoon before the meeting.
“I was in there today and it was remarkable just how convenient it was,” he said. “It was just 20 minutes out of one day, but there were a lot of people streaming in and out. I have to compliment those providing the services. The point is, it was a Monday in December and there were a lot of people coming in and out. I think it’s a needed service.”
Comer said there is no long-term plan in place for closing the store entirely but rather just reducing the months of operation in the fifth year.
“We don’t have any intention of closing the store,” he said. “We appreciate people being able to come in and out of the building and we appreciate being able to provide the services.”
Another issue for discussion was the elimination of certain discounts for senior citizens and another connectivity affordability discount. The previous agreement offered a 10% senior discount to full-time residents over 62 for full standard service. However, that discount was eliminated in the contract as presented on Monday. It should be pointed there were only 20 customers receiving the discount as of 2019. Councilman John Gehrig said the issue should be revisited before the new franchise agreement was inked.
“We knew this was going to come up,” he said. “It’s a connectivity affordability program. It seems like that might impact more people than the senior citizen discount. We’re certainly sensitive to that.”
Comer said Comcast has been moving away from the discounted programs in other areas and Ocean City was no different.
“It’s something we’re getting away from,” he said. “We don’t offer these discounts in Salisbury or Annapolis, and we don’t offer them in the Baltimore area.”
Meehan said it appears many customers weren’t aware of the different programs Comcast offered and suggested at least grandfathering in those who already received the discount under the previous agreement.
“I think it would be helpful if you could provide some information on what the program was,” he said. “At the very least, if we could grandfather in those, that would be a small step in the right direction. Look into it and what it could provide and what it would cost.”
Comer said he was not authorized to amend the contract to include the discounted programs available to some residents in the prior contract. The Mayor and Council advised Comer to go into a hallway and make the calls necessary for including the discount programs in the contract on the table on Monday.
With that said, Comer left the council chamber presumably to make the calls needed to gain approval for extending the discount programs, and the Mayor and Council moved on with the rest of the agenda. It was the second time in less than a month when Comer went out to the hallway to make calls about proposed changes in the contract. Last month, the Mayor and Council asked him to make calls to extend the season for the brick-and-mortar Comcast store in the optional fifth year of the contract.
With the rest of the agenda items dispensed with, Comer returned near the end of the meeting with some answers the Mayor and Council was hoping to hear.
“We’ve agreed to grandfather in anyone currently in the program,” he said. “We can do that for the life of the five-year contract. After five years, we can revisit that.”
Meehan said he was pleased with at least the grandfathering amendment to the contract as presented. City Solicitor Heather Stansbury explained some procedural issues for amending the resolution the council was expected to approve on Monday.
“We realize a minimum amount of people are eligible for the discount,” he said. “But it might be the people who need it the most.”
Council Secretary Tony DeLuca continued to press Comer on Comcast’s drop of certain out-of-market stations on cable television such as WBAL and other stations in Baltimore from whence many of Ocean City’s year-round and seasonal residents come. He said he would not vote for the contract largely because of that issue.
DeLuca also pointed out the brick-and-mortar store issue and the proposed closure of it by Oct. 31 in the fifth year of the contract. He pointed to Meehan’s positive experience on a Monday in December as reason for keeping the store open year-round even in the fifth year of the contract.
“Rick’s example won’t happen in year five,” he said. “If he tries to walk in there on December 5 in year five, he won’t have that same positive experience.”
Gehrig urged his colleague to approve the contract as amended with the grandfathering of the discount program and the extended months of operation for the store in the fifth year.
“We’ve been talking about this for a long time,” he said. “Today, we asked for grandfathering, and he went out and made the call and came back in. He got it done and came back and we keep asking him for more. This is about customer service. This isn’t about WBAL.”
With that said, the council voted 5-1 with DeLuca opposed and Councilman Peter Buas absent to approve the amended contract with the grandfathering and the brick-and-mortar store extension in the fifth year.
