Release: Multiple Findings in Report on the Baltimore City Comcast Cable Franchise Agreement
Wednesday Apr 6th, 2022
Bill Henry
Comptroller,
Baltimore City
204 City Hall - Baltimore Maryland 21202
(410) 396-5410
FOR IMMEDIATE RELEASE
Baltimore, MD – City Auditor Josh Pasch presented a report on the Baltimore City Cable Television Franchise agreement to the Board of Estimates on April 6, 2022. This is the first of three reports on the Comcast Cable Franchise.
The objective of the report was to verify the City is monitoring Comcast’s compliance with the Public, Educational, Governmental (PEG) fees owed and reporting requirements of the Franchise Agreement from January 2017 through January 2021. Per the Franchise Agreement the City has the right to “perform a comprehensive audit and evaluation of the Grantee’s [Comcast] performance.”
The Comcast Cable Franchise Agreement was renewed in 2016 (effective in 2017) for ten years. The Mayor’s Office of Cable and Communication (MOCC), the Mayor’s Office of Employment Development (MOED), the Mayor’s Office of Minority and Women Owned Business Development (MWOBD) and the Department of Finance (DOF) are responsible for the oversight and monitoring of the Franchise Agreement.
Among the findings, the City Auditor identified that:
- MOCC does not verify the accuracy and timeliness of fee reports and payments.
- MOCC does not have a procedure in place to ensure Comcast provides PEG Channels without any additional fees to Comcast subscribers.
- MOCC doesn’t have a procedure in place to monitor Comcast is providing the accurate number of channels and videos on demand.
In addition, the franchise agreement requires Comcast to submit to the City:
- An annual hiring report;
- Annual Minority Business Enterprises (MBE) / Women Business Enterprises (WBE) Procurement Report;
- Grantee Annual Report;
- Quarterly service reports; and
- A franchise fee report.
According to MOCC, MOED, MWOBD, and DOF do not receive the above reports or do not receive them consistently. Thus, none of the agencies responsible for oversight are monitoring compliance with the franchise agreement’s provisions.
This is the first of three a three-part audit focused on the Comcast Cable Franchise Agreement. This report will be followed by one that seeks to determine whether Comcast has paid franchise fees and PEG fees to the City in accordance with the Agreement. Similar fee analysis has been done in Atlanta and Dallas. A final report will be on trends and analysis of Comcast Cable Franchises nationwide.
“This report has provided clear outlines of City systems which need to be improved, when previously all we had to work with were a lot of anecdotal complaints,” said Comptroller Bill Henry. “While Comcast is an important stakeholder and respected partner, it’s the City’s responsibility to hold them accountable to promises made. We must ensure Baltimore residents are paying a fair rate and understand their cable bill – and currently, we don't appear to do either.
I look forward to implementing the performance review clause of our franchise agreement, so residents and other stakeholders can ask questions and give feedback in a public setting. My office will be working with the Administration and the City Council to identify the best time and venue for this meeting.”
Recommendations & Action Plan
Based on the findings in this report, the City Auditor made recommendations to MOCC. The following action plan reflects the agency's response. The administration has committed to reporting on their action plan implementation in August 2022 to the Board of Estimates.
Recommendation | Milestones | Responsible Personnel |
We recommend the Director of MOCC identify key contract terms relevant to MOCC and establish formal (written, approved, dated) policies and procedures to: (1) monitor Comcast’s compliance with the Franchise Agreement and (2) retain documentation as evidence of MOCC’s monitoring of the Franchise Agreement and to support Comcast’s compliance with the Franchise Agreement. | Action Plan Milestone # 1: Conduct review of Comcast Franchise Agreement to identify key contract terms, deliverables, and performance metrics to inform policy development. • Action Plan Milestone # 2: Implement internal policy to review all franchisee submissions, ensure compliance, and document financial and operating performance on a monthly basis. • Action Plan Milestone # 3: Convene the Cable Franchise Review Committee (CFRC) on a quarterly basis. | James Bentley, Acting Director, MOCC Jason Hardebeck, Director, Broadband Band and Digital Equity |
We recommend the City Mayor: (1) define how this contract will be managed and whether it would be beneficial to assign the oversight to one or multiple agencies; and (2) inform respective agency(ies). | Action Plan Milestone #1: The Mayor shall establish CFRC with designated representatives from each of the following agencies: · MOCC · Law · MOBDE · MOED · MWOBD · DOT Action Plan Milestone #2: The CFRC shall meet quarterly to review all required reports and ensure compliance with the franchise agreement. •Action Plan Milestone #3: MOCC shall prepare a summary of franchisee performance annually to be presented at the Board of Estimates. | James Bentley, Acting Director, MOCC Jason Hardebeck, Director, Broadband Band and Digital Equity |
Definitions
Public, Educational, and Governmental (PEG) Fees: Access channel fees are assessed by cable franchising authorities for costs associated with those local channels.
Franchise Fees: Fees that are paid to local governments as compensation for Comcast's use of the public rights-of-way and easements. The Federal Cable Act authorizes cable operators to collect from customers the full amount of franchise fees paid to local governments.
Resources
Department of Audits Presentation
Background
The Department of Audits (DOA) is the city's independent auditor, providing various audit attestation engagements and assurance services with the overall goal of improving government accountability.