Comcast Used Atlanta Ratepayers as High Interest Borrowers; Contract Raises Concerns (UPDATE 1)

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comcast(APN) ATLANTA — A proposed seven year Franchise Agreement between the City of Atlanta and Comcast Cable, Inc., worth hundreds of millions of dollars in revenue to Comcast, has raised several concerns in the City Utilities Committee of the Atlanta City Council.

 

The Committee has requested an audit of Comcast franchise fees going back the last three years – something the City has not done for at least ten years.

 

City Auditor told the Committee at a November 14, 2019 Public Hearing that the audit results are not expected to be ready until February 2020.

 

ACTION ALERT: The ordinance to authorize the proposed Agreement, 19-O-1598, has been held on the Committee agenda and will be up for a possible vote at the Tuesday, November 26, 2019 City Utilities Committee Meeting at 9:30 a.m., in Committee Room 1, Atlanta City Hall.

 

It is unusual for a local government to approve a Franchise Agreement without having first completed an audit on the past agreement, Comcast acknowledged at the Public Hearing.

 

COMCAST USED ATLANTANS AS HIGH INTEREST BORROWERS

 

At the Public Hearing, Amy Averill, Senior Director of External Affairs for Comcast, revealed that Comcast collected over two hundred and sixteen thousand dollars ($216,000) in interest–at what APN estimates is an apparent rate of over seventeen percent–from Atlanta subscribers between 2009 and 2016.  

 

They did so apparently without authority, Atlanta Progressive News has learned.

 

In 2009, Comcast made a one-time payment of five hundred thousand dollars ($500,000) to the City of Atlanta to support public access programming, known as “PEG,” Public, Education, and Government programming.  

 

This payment was part of the last Franchise Agreement between the City and Comcast, entered into in 2009. (Ordinances 09-0-1220 and 09-O-1223).

 

Neither 2009 ordinance contemplates Atlanta subscribers being charged interest, let alone such a usurious rate.

 

Comcast took it upon themselves to bill Atlanta subscribers ten cents a month for seven years to reimburse themselves for the five hundred thousand dollars and what Comcast described as “interest.”

 

Atlanta Progressive News’s editor, the present writer, had previously raised concerns regarding what seemed to be an excessive collection of PEG fees by Comcast in emails to the City Utilities Committee and in remarks addressed to the Committee.

 

APN’s Editor has been joined by activists Adrian Coleman, Ben Howard, and members of the Atlanta Planning and Advisory Board in raising concerns.

 

APN’s analysis of the 52 month period of fee collection, using a standard amortization calculator, shows that Comcast charged a rate of approximately 17.45 percent, assuming equal fee reimbursements every month.  

 

In fact, Comcast’s subscriber base has been shrinking, so 17.45 percent is probably a low estimate, because there was likely a larger number of Atlanta subscribers paying down the “loan” earlier in the term.

 

COMCAST’S THREATS TO CITY AND PUBLIC ACCESS

 

In back-channel ultimatums and in public statements uttered in passive voice, Comcast has been threatening to go to the State of Georgia, instead of the City of Atlanta, to get a Franchise Agreement.  Comcast falsely argues that this would cause the City of Atlanta to lose two public access channels.

 

The City currently has five channels through its current agreement: Channel 26 City of Atlanta Government; Channel 24 People TV Atlanta; Fulton County Government; Clark Atlanta University; and Atlanta Public Schools/public broadcasting.  

 

Atlanta Progressive News, by the way, has a show on People TV Atlanta, Comcast Channel 24, every Wednesday from 6 to 7 p.m., in which we’ve had enough nerve to be discussing Comcast, on Comcast.

 

Comcast is threatening to take away two of Atlanta’s five channels if the City Council does not approve the proposed Agreement at its next meeting.

 

At the Public Hearing, Averill stated Comcast’s position to the Committee about the channels.

 

Wayne Martin, a former Chief of Staff to Matt Westmoreland (Post 2-at-large) who left the City for Comcast just months ago, has been lobbying for passage of the contract and also addressed the Committee.

 

Comcast claims to support public access, but warns that the State only requires three, not five, channels.  Implicitly, Comcast will only provide the minimum number of channels required of them even if it harms the people of Atlanta.

 

Activist Adrian Coleman, a former producer for People TV, disagrees that Comcast could even deliver on that threat.

 

In an email to Committee Members obtained by APN, Coleman noted that State law provides that in cities like Atlanta, which already have more than three PEG/public access channels in place, that the cable company must provide the number of channels that are already in place.

 

O.C.G.A. 36-76-8 provides: “No cable service provider or video service provider shall be required to provide more than three PEG access channels on its network within a municipality or unincorporated area of a county if there does not exist at the time of the state franchise more than three active PEG channels in such municipality or unincorporated area of the county.” (emphasis added)

 

In the case of Atlanta, five channels currently exist, so, therefore, if Comcast were to enter into a state franchise now, it shall provide more than three PEG access channels.

 

CITY LAW DEPARTMENT MISREPRESENTS AUDIT CLAUSE TWICE

 

Comcast sat by quietly at the October 29, 2019 City Utilities Committee Meeting, as the City Law Department misrepresented the proposed Franchise Agreement to the Committee.

 

The attorney representing the Law Department said that the Agreement would allow the City to audit back three years.

 

However, the proposed agreement, obtained by APN, states in Section 5.1, on page eight, that the City agrees that Comcast is in material compliance up until January 01, 2018, waiving the right to audit prior to that date.  

 

With no audit having been conducted, of course, the City is in no position to acknowledge compliance by Comcast.

 

In public comments, APN’s Editor informed the City Utilities Committee that the Law Department had misrepresented the contract.

 

However, at the Public Hearing over two weeks later, a different city attorney misrepresented the audit clause in the Agreement in the same manner again, for a second time, raising concerns of Councilman Dustin Hillis (District 9).

 

QUESTIONABLE FRANCHISE COMPLIANCE FEE

 

Activists have also raised concerns about a so-called Franchise Compliance Fee of approximately eighty cents per month, which Comcast has assessed to Comcast subscribers in recent years, in addition to the five percenrt Franchise Fee that brings in millions of dollars to the City of Atlanta annually.

 

Averill stated in the public hearing that Comcast was in the process of collecting some 2.6 million dollars from subscribers in connection with a relocation of wires that the Company was forced to undertake in connection with the Atlanta Streetcar.

 

However, it is not clear why Comcast did not simply file a claim with the City for this money.  A search of final action legislation shows that Comcast knows how to file claims with the City for damage to Comcast wires for which the company believes the City is responsible.

 

Moreover, it is not clear where Comcast is authorized to bill subscribers for this cost.

 

COMCAST REFUSES TO ANSWER QUESTIONS

 

Three Comcast Vice Presidents acknowledged receipt of questions emailed by APN weeks ago, but have failed to answer.  

 

A source familiar with the matter said that Comcast is only here to talk with the Atlanta City Council Members, not anyone in the community.

 

Averill said during the Public Hearing that Comcast refuses to disclose its number of subscribers, calling it proprietary information.

 

Councilman Hillis said this lack of transparency by Comcast makes it difficult for the City to calculate any anticipated revenue under the proposed new agreement.

 

(END / Copyright Atlanta Progressive News / 2019)

 

CORRECTION and Update 1: A previous version of this article accidentally stated the estimated audit completion date to be Feb. 2021; the correct date is Feb. 2020.

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