Two years after they began, cable license renewal negotiations between five Lower Cape towns and Comcast have come to a close. On Feb. 23, the Truro and Wellfleet select boards voted unanimously to approve new 10-year cable agreements with the company.
Eastham’s select board followed suit, unanimously approving that town’s contract on March 1. Brewster and Orleans, the other towns in the group, have yet to vote on their contracts, which expire in the fall of 2021 and spring of 2022, respectively.
The terms of the contracts for all five towns are renegotiated with Comcast every 10 years. From a legal standpoint, the Comcast cable license agreement “doesn’t concern the internet,” said William Hewig, the KP Law attorney who negotiated the agreement on behalf of the five towns.
The same lines that provide cable television service, however, are also the primary source of broadband internet connection on the Outer Cape. As previously reported in the Independent, because of the high fixed costs of cable infrastructure, Comcast has no real competition. It is, essentially, a monopoly. And many residents have no access to broadband because it is not considered a public utility, and Comcast, which ranked number 28 on the Fortune 500 list last year with more than $13 billion in profits, says it can’t afford to provide it for them.
Included in the signed agreements is a reduced density requirement, which could mean that some currently unserved residents will get access to cable lines and, therefore, broadband. Comcast will offer cable to areas with 15 homes per aerial mile, down from 25 homes per aerial mile in the last contract.
“It is the lowest possible density that we or anybody have ever been able to negotiate out of a cable company,” Hewig told the Wellfleet Select Board. “We know that’s an issue — it’s an issue in all the towns.” But, he said, “It’s just not possible to get them below that.”
Eastham Town Administrator Jacqui Beebe noted at the March 1 select board meeting that about 38 homes in Eastham were not eligible for Comcast service under the prior agreement.
“I’m not sure how far this will get us, but it may help some of those homes get connected if they want to,” Beebe said.
Some Are Disheartened
For some town officials, the results of the negotiation were less than satisfying.
“As somebody underserved in Truro with school-aged children who are engaged in virtual learning, I’m a little disheartened by this contract,” Truro select board member Stephanie Rein said at the Feb. 23 board meeting, which she called in to by phone. Rein pays an “an exorbitant fee for satellite internet,” she told the Independent, and the connection does not provide a strong enough connection to join meetings by video.
“I appreciate that we have the lowest number and that the new contract drops the density requirements,” she said. But, Rein noted, requests for cable extension are measured from the existing cables.
Section 3.1 of the contract states: “Licensee shall upon request make Cable Service available to every residential dwelling unit within the Town where the minimum density is at least fifteen (15) dwelling units per aerial mile and twenty (20) dwelling units per underground mile providing, however, that any request for plant extension is measured from the existing Trunk and Distribution System and Licensee is able to obtain from property owners any necessary easements and/or permits in accordance with Cable Act.”
“I don’t want people to have a false impression of how great this is,” said Rein, “because it gives them the chance that’s based on the trunk. I just wanted to point that out, because we are committing to that for the next 10 years.”
“That’s correct,” said Hewig, “and I don’t think it’s great either. But it’s the best we’re going to be able to do with Comcast, and that’s all there is to it. They had their limits and we pushed them to the limit. This is the most we’re going to get on density, unfortunately.”
Eastham Select Board member Art Autorino had his own concerns about Comcast’s access, speed, and reliability at a recent “Meet and Greet” — a virtual meeting of local business owners and managers with staff members of the town planning and development department.
“There’s still quite a bit of consternation around the Comcast program,” said Autorino.
Select board vice chair Aimee Eckman pointed out that the Comcast contract covered only cable television service.
“It really technically has nothing to do with the internet,” she said. “There’s nothing in there that says they have to provide internet.”
Revenue from Comcast’s internet service is not included when calculating the town’s 5-percent payment, Beebe explained. With more and more customers choosing internet-only packages for streaming services, the income to the town from cable fees is expected to decline.
“We are anticipating that this revenue source is going to rapidly decrease over the next few years unless cable has some kind of resurgence,” said Beebe on March 1. “We need to start planning for that.”
Concern About ‘Cord-Cutting’
Since the early days of cable television, local governments have had varying degrees of regulatory control over cable companies. In exchange for permission to run cables along public land, cable companies pay “franchise fees” to municipalities and provide channels for public, educational, and government (PEG) television.
The franchise fee in the current license agreement is 5 percent of Comcast’s gross annual revenues from cable television subscribers within each town.
According to a Congressional Research Service (CRS) report from January 2020, “an increasing number of consumers are substituting streaming services for video services provided by cable companies and telcos. As a result, the amount of revenue state and local governments receive from cable and telco providers subject to franchise fees is declining, which also reduces the amount cable providers can be required to spend to support PEG channels.”
This trend, known as “cord-cutting,” has many in public access television worried.
“I am concerned about cord-cutting, as is the rest of the PEG community, but there are bills actively being worked on in various state legislatures and the FCC to address the anticipated drop-off in cable subscribers” Mia Baumgarten, chair of the Wellfleet Cable Advisory Committee, told the Independent.
As of 2019, according to the CRS report, Federal Communications Commission rules stated that municipalities “may not regulate nonvideo services offered over cable systems by incumbent cable operators. The services covered by this prohibition include broadband internet service, business data services, and Voice over Internet Protocol (VoIP) services.”
When the negotiations began, “we weren’t even sure the license would be renewed,” said Baumgarten. This would have meant a loss of funding for PEG.
Public access TV, including board meeting recordings, is “democratizing public information,” said Baumgarten. PEG “isn’t just a fun thing to watch,” she said, “but an essential public service.” It has always been essential, she added, but it is even more so during the Covid-19 pandemic.