Troutdale approves 10-year Comcast franchise; PEG fee reduced as INET language removed

Troutdale city council on April 8 adopted a 10-year franchise agreement with Comcast Corporation, following a recommendation from the Mount Hood Cable Regulatory Commission and staff briefings from commission staff and the city’s representative to the commission.

Andrew Spear, who staffs the Mount Hood Cable Regulatory Commission for the City of Portland, explained the terms developed through multi-year negotiations and noted the draft agreement responds to federal changes such as "FCC Order 06 21," which allows cable operators to pass on certain marginal costs. Spear said the commission-recommended agreement reduces the public, educational and governmental (PEG) fee from the current 3% to 2.5%, primarily because language and funding for an institutional network (INET) build-out were removed from the new contract.

Norm Thomas, Troutdale’s representative to the Mount Hood Cable Regulatory Commission, and Andrew Spear said the commission pursued public input and multiple negotiation rounds; the Commission recommended the agreement to member jurisdictions earlier in the year. "We have come with the proposal before the jurisdictions is a new PEG fee of 2.5%," Spear said. He also noted that Comcast has the contractual ability under federal rules to charge marginal costs for certain services but had not historically done so.

Council discussion addressed potential consequences of rejecting the recommended franchise, funding and where franchise-fee revenue shows in city budgets, and the effects of falling cable subscribership on long-term franchise leverage. Staff said Metro East (the interjurisdictional PEG entity) receives a share of franchise fees and noted projected franchise revenue for the city's budget. One councilor raised highlighted contract provisions that could require the city to pay for optional services such as video-on-demand or program guide vendor services; staff said those charges would require separate four-month notice to the city and in practice had been modest in other jurisdictions.

The item passed by roll-call vote; the meeting record shows all council members present voting yes. Staff and the commission said jurisdictions that decline the commission recommendation could negotiate separately with Comcast, but doing so would require additional staff time and legal resources and could trigger a formal administrative process with higher legal costs and greater risk to negotiated terms.

The contract as presented removes INET wording and updates audit and accounting language and compliance with federal law. The Mount Hood Cable Regulatory Commission used outside counsel (BBK) during negotiations, staff said. The city will receive franchise revenue under the agreement; staff cited a FY budget line showing anticipated franchise income. The council did not direct further edits at the meeting.