(July 17, 2020) City officials are standing firm in their requirement for Comcast to maintain its brick-and-mortar facility on 83rd Street in order for the company to receive the council’s final approval for a franchise extension.
City Manager Doug Miller began by stating why the public and the media was hearing about the two-year effort for the first time on Tuesday.
“Typically, we negotiate contracts in closed session,” Miller said. “What we have with Comcast is a franchise agreement, and after the pier franchise [open meetings ruling], we were told that franchises are not contracts, and that they have to be negotiated in public.”
The Maryland Open Meetings Compliance Board released an opinion in June condemning the city’s closed-door sessions for the pier franchise, which resulted in a $9.1 million extension to franchisee Charles “Buddy” Jenkins.
“We are down to the last issue, but I did want to qualify my comments with that so people don’t say, ‘Well you’re just talking about the length of how long a store stays open,’ that’s the reason,” Miller said.
He also explained the ins-and-outs of the cable franchise.
“Comcast needs our right-of-ways to place their infrastructure in,” Miller said. “They need our streets and our sidewalks.”
Following Federal Communications Commission (FCC) standards, Miller said the city is charging Comcast the maximum amount — 5 percent of the company’s gross revenue.
“We also … will protect our infrastructure — our sidewalks, our grassy areas, our streets — and what we will also do is govern by FCC regulations,” he said.
The franchise has nothing to do with internet service, Miller said, it simply dealt with the coaxial cables that deliver services to customers.
He added that the city has no say in Comcast’s programming.
The last issue the council and Comcast needed to hash out was whether Comcast would maintain an office in the resort.
“Ocean City is unique in the respect that we have an awful lot of nonresident property owners here who, when they set up their places for the summer, they want cable service,” Miller said. “… When they’re at home, they can have a [cable] box delivered by UPS, FedEx or whomever … they can’t do that here in Ocean City.”
For this reason, city officials have said they wanted Comcast to keep its phsyical facility on the island, which has caused contention among the two parties.
“They want to get away from that, so we have been back and forth, back and forth,” Miller said.
Instead, Comcast proposed that, “They will maintain a brick-and-mortar store, 12 months out of the year, for three years, and then have the option to pair that down to have a brick-and-mortar location just during the season,” Miller said on Tuesday.
Miller told Ocean City Today, “In their pitch to us, they [Comcast] said that the fast advancement of technology will make standard cable boxes obsolete. They don’t want to obligate to the personnel and operating costs of a fixed location [for that reason].”
Councilman Tony DeLuca opposed the proposal.
“They’re very bold and they come here and … they want to take the current agreement of five years and they want us to extend that to 15 years, yet they won’t commit to the one line in the sand we drew, that’s [the] brick-and-mortar [facility],” DeLuca said.
DeLuca said he only would support the agreement if Comcast fully committed to a physical facility for the term of the contract, whether it was operated year-round or seasonally.
Miller clarified that the council had proposed to a 10-year term, but with the aforementioned brick-and-mortar contigency, which prompted Comcast’s five-year hybrid proposal.
“Keep the agreement for 10 years, require them to have a year-round brick-and-mortar operation for the next three and then move forward with possibly the next seven [years] with a seasonal brick-and-mortar store,” Councilman Matt James said.
Mayor Rick Meehan said he would like to see the definition of seasonal clarified and extended.
“They’ve [Comcast] got it for three months,” Meehan said. “I mean I don’t know what months they’re talking about. When you talk about our nonresident property owners who are coming down here to open up their units and do everything, it’s really longer than that. I think seasonal is more like five months.”
Council President Lloyd Martin said Comcast had valid concerns about the need for the facility down the line because of the technology advancement.
However, “They said that, and I’m sure certain people are cutting the cord, but our customers aren’t cutting the cord at that rate, because I think our recent payment was higher,” Councilman John Gehrig said, which DeLuca confirmed. “They’re projecting to be down, basicially saying, ‘Our business is getting killed we want to close [the brick-and-mortar],’ [but] the numbers aren’t saying that.”
Miller will present the council’s 10-year, brick-and-mortar terms to Comcast and continue the negotations.