Audit Reveals Comcast Underpaid City of Atlanta in Franchise Fees
(APN) ATLANTA — The City Auditor’s Office of the City Atlanta has completed its audit of the City’s Cable Franchise Agreement with Comcast Cable; and determined that Comcast has underpaid the City of Atlanta by at least fifteen thousand dollars in the Fourth Quarter of 2019 alone.
The audit, which was published on August 31, 2020, says that the underpayment by Comcast to the City of Atlanta had to do with errors by Comcast involving its customer database.
“Comcast’s database of eligible service addresses appears to be missing 27,303 Atlanta addresses and incorrectly codes 2,181 addresses as being in the city,” the audit states.
“Depending on how long the database has contained these errors, it is possible that the city may be due more in franchise fees since the effective date of the 2009 agreement,” the audit states.
“We recommend the city work with the GIS group to follow-up with Comcast to determine the total number of addresses that are miscoded within city limits and ensure that the city received the appropriate credit for these addresses between 2017 through 2019,” the audit states.
The City of Atlanta Department of Finance responded to the audit’s recommendation as follows, according to the audit:
“The Department of Finance will partner with Comcast to review revenue allocations and collect all amounts owed from Comcast plus interest as authorized by contractual agreement.”
Members of the Finance/Executive Committee of the City Council of Atlanta had requested the audit to be performed in November 2019, when advocates complained that Comcast had not been subject to an audit since at least the start of the 2009 Franchise Agreement.
“We undertook this audit at the request of City Council,” the audit states.
“Comcast provides cable services to customers and collects franchise fees from those customers. Comcast then pays franchise fees to the city of Atlanta as compensation for use of its public rights-of-way and easements.”
“Citizens have expressed concerns that Comcast overcharged city subscribers and under-paid quarterly franchise fees owed the city.”
Atlanta Progressive News participated as a stakeholder in the Comcast Audit; and APN’s News Editor was interviewed on March 03, 2020, by Amanda Noble, City Auditor; and a team of auditors, regarding APN’s news coverage and investigation of the City’s Cable Franchise Agreement with Comcast.
The interview took place shortly before the closure of City Hall due to COVID-19.
One of the problems that APN has revealed has been the extreme lack of oversight over the Franchise Agreement itself.
For example, the City of Atlanta Code of Ordinances, Part II (“General Ordinances”), Chapter 34 (“Cable Communications Regulations”), Sec. 34-18(b) (“Reports required”), requires that Comcast regularly file numerous reports with the City of Atlanta.
However, when citizen advocate Adrian Coleman requested the reports from the Law Department of the City of Atlanta on November 26, 2019, she did not receive a response until after the Council had already approved a multi-year renewal of the Franchise Agreement.
In the City’s response, Senior City Attorney Amber Ali Robinson revealed that the City of Atlanta did not have the records.
City Attorney Nina R. Hickson was forced to retract misleading statements she made to the Finance/Executive Committee on Nov. 26, 2019, when she incorrectly advised the Committee that the Comcast reports were on her desk.
At the end of the day, no one at the City of Atlanta has been checking in with Comcast to demand that they file the reports required by City Ordinance.
And Comcast should not need a reminder: Comcast has failed to file the reports required by City Ordinance, despite their knowledge of their failure to file said reports and of their requirement to do so.
On October 19, 2020, City Auditor Amanda Noble advised Atlanta Progressive News in an email that her office had determined that it does not appear that Comcast has filed the required reports with the City of Atlanta.
This revelation indicates a failure of three Mayoral Administrations: Shirley Franklin, Kasim Reed, and Keisha Lance Bottoms.
“The city should periodically monitor the Comcast franchise fee agreement to confirm that Comcast is complying with agreement terms by requesting supplemental financial records, as needed, to support the quarterly franchise fee payments made,” the City Auditor’s website states.
“[C]ity code does not explicitly identify the city department responsible for managing the Comcast franchise fee agreement,” the City Auditor’s website states.
Also, Atlanta Progressive News previously reported that Comcast overbilled cable customers over two hundred thousand dollars in Public, Educational, and Government Access channel (PEG) fees under the 2009 Agreement.
Comcast had provided an up-front payment in 2009 of five hundred thousand dollars to support public access television in Atlanta, including Channels 24 (City of Atlanta government channel) and 26 (People TV Atlanta).
Comcast’s agreement with the City allowed Comcast to reimburse itself out of the first five hundred thousand dollars of PEG fees billed to cable customers on their monthly cable bills. However, Comcast billed customers $714,346, not five hundred thousand dollars.
Comcast later referred to the 214,346 dollars in overbilling as “interest” on their up-front payment to City.
The Auditor’s Office found that Comcast charged an interest rate of 11.25 percent; and that Comcast was allowed to charge this interest rate per Federal Communications Commission regulations.
However, while the interest rate may have been permissible under federal law, APN maintains its reporting that the charging of interest was not anticipated under the 2009 Franchise Agreement.
Relatedly, on Feb. 08, 2020, APN’s News Editor requested a signed copy of the 2009 Comcast Cable Franchise Agreement from the Mayor’s Office of Communications.
Michael Smith, Mayor Keisha Lance Bottoms’s spokesman, received the request, but did not respond, in violation of the Georgia Open Records Act.
Then, on May 29, 2020, now-former Senior Supervisory City Attorney Alisha Irene Wyatt-Bullman said that the City of Atlanta was unable to locate a signed copy of the 2009 Comcast Cable Franchise Agreement following a diligent search.
APN later obtained the signed copy of the agreement from Amanda Noble, whose office, in turn, had obtained the document from the Law Department itself.
Michael Smith and Alisha Irene Wyatt-Bullman are currently defendants in an open records action pending in Fulton County Superior Court, 2020-CV-332834, due, respectively, to Smith’s lack of reply and Wyatt-Bullman’s deceptive reply.
(END / Copyright Atlanta Progressive News / 2020)