Whatcom County begins negotiating agreement with Comcast

By Oliver Lazenby

Whatcom County and Comcast are negotiating a new franchise agreement five years after the old agreement expired. The agreement determines how much Comcast has to pay to use Whatcom County right of way to install equipment and provide service.

Though the old agreement expired in 2011, Comcast has continued to pay the county a fee of 4 percent of the company’s revenue from cable TV service. That’s what the county required in its 1996 contract with TCI Cablevision, which Comcast inherited in 1999 through a merger. Comcast charges the 4 percent fee to its customers.

Whatcom County deputy executive Tyler Schroeder said the county will likely seek a similar agreement to the one that’s already in place.

There’s not much room for the agreement to change. The franchise fee can’t increase beyond 5 percent due to Federal Communications Commission regulations.

Comcast and county staff worked together to update the contract a few years ago, but when a key Comcast employee retired, both sides dropped the ball, said county deputy executive Tyler Schroeder at a February 23 Whatcom County Council meeting.

The lack of a current agreement hasn’t had much impact on the county, Comcast, or its customers, Schroeder said. But Comcast hasn’t strictly adhered to the agreement.

The 1996 agreement states the company must present the county an audited financial statement annually.

That hasn’t been happening, Schroeder said. Schroeder and deputy prosecuting attorney Dan Gibson will meet with the company this week and Schroeder said they’ll ask Comcast to audit franchise fees from the last couple of years.

Audits in other jurisdictions have turned up some missing money. A franchise fee audit conducted for the city of Bellingham in 2010 found Comcast owed the city $2,733. City of Bellingham staff called the audit process with Comcast “generally positive,” in a report to city council.

The agreement only affects Comcast customers in unincorporated Whatcom County. The city of Blaine has a current agreement in place from 2009, according to the city Ferndale and Bellingham also have current agreements with Comcast.

At the meeting, county staff members didn’t get much direction from council about what to strive for in a new contract. Because of that, Schroeder expects the negotiations to take several months and include reports back to the council.

“We don’t want to be negotiating something that we think is good but at the end of the game is not something that you were looking for at all,” Schroeder told council on February 23.

Councilmember Barry Buchanan expressed a desire to get Comcast to pay for its use of county infrastructure in a way that didn’t come directly from its customers.

The current tax of 4 percent of gross cable sales is passed along to Comcast customers and shows up in customers’ itemized bills. In effect, the money that Comcast pays the county to use its roads and bridges comes directly from Comcast customers who already help fund roads through gas and general taxes.