Title
Franchise Agreement with Comcast - Discussion
History
As you are aware, the Comcast Franchise Agreement expired in 2003. The Village staff worked on a model franchise agreement with the Metropolitan Mayors group, Klein Thorpe and Jenkins and other municipalities and attorneys.
Comcast and the Village agree on every article with the exception of the undergrounding of utilities (Section 3.3). However, the current language in section 3.3 of the model franchise agreement does not work in communities that are high growth and who prefer undergrounding utilities.
Comcast maintained that they should not have to underground without compensation. That compensation is not a right for Comcast. The only company who was undergrounding and was reimbursed (because they are defined as a Utility in the State of Illinois) is ComEd. All others (Comcast, AT&T and others) are not afforded those same guarantees.
This all came about when we were embarking on the LaGrange Road project and beginning to plan for the 143rd and 159th widening projects. The Village knew that they might look at asking ComEd to go underground in certain areas. The Village didn’t get any push-back from the other companies at that time, just Comcast. When ComEd removes the poles, it only makes sense that the others to do so as well. There are efficiencies to doing this work altogether and that is exactly what they did on LaGrange Road.
Simply put, the issue is that Comcast wants to be treated as a utility, but they are not. Although, Comcast did pay for the undergrounding on LaGrange Road, Comcast wants to be paid its costs of undergrounding its wires when ComEd is paid to underground its wires. The Village does not owe Comcast any money in that situation. If the Village has to pay for Comcast to go underground, then the Village would have to pay AT&T to go underground too, as AT&T and Comcast are competitors.
The Village has been consistent in its position since 2010, Comcast has appealed to have the Village accept its language. The Village has provided Comcast with alternative language over the years, but Comcast has refused to change its position.
If the Village is willing to change its position and accept the language from Comcast we can move this matter forward. Comcast’s proposed language would require the Village to pay for Comcast to underground its wires when the Village pays any user of the right of way to do so, such as ComEd, when the Village has no legal obligation to do so. As stated above, the impact of this language is that if the Village pays ComEd to go underground, then the Village will be required under the Comcast franchise agreement to go underground, which will trigger the Cable and Video Competition Law requirement for the Village to have to pay AT&T to go underground as well. This could cost the Village hundreds of thousands if not millions of dollars in expenses.
Although the franchise agreement has expired, Comcast is required to pay the Village the franchise fee under Federal law (47 U.S.C. § 542), State law (65 ILCS 5/11-42-11.05) and its “expired” Franchise Agreement. The expired Franchise Agreement remains in effect, to the extent its terms do not conflict with more current Federal law and State law.
Again the Village does not have any legal obligation to pay Comcast to underground, unless the Village is voluntarily paying other utilities to go underground. Utilities operate under a different set of rules than Comcast, and one of the benefits of being a utility is that at times a municipality must pay their undergrounding fees.
At this point, this opens up a policy discussion about what is fair, and that consideration is beyond the realm of legal requirements and is one to be made by the Village Board.
Attached is the Village’s last proposed language to Comcast, from January of 2017, regarding “public transportation improvement projects.” Also attached is the undergrounding costs letter sent to Comcast back in 2010, which spurred this debate.
Financial Impact
Recommended Action/Motion
Discussion only