One-year extension gives both parties time to ink a new deal

Wilsonville cable ratepayers can breathe easy for at least another year, following the city council’s recent move to extend the city’s existing franchise agreement for cable provider Comcast for an additional 12 months.

The resolution authorizes City Manager Bryan Cosgrove to negotiate a one-year extension to the city’s existing franchise contract with Comcast, which previously was set to expire Jan. 31. Councilors unanimously approved the resolution, even though it is an interim solution to the longer-term issue of provision of cable service to local residents.

“It seems pretty clear staff is working appropriately to me on a route to future agreement, and personally I think we should give them time to do that,” Mayor Tim Knapp said.

Under state law, cities like Wilsonville are allowed to grant service providers exclusive rights to operate in their markets. The rates and fees charged by those companies are laid out by franchise agreements, which can run many years in length. As a result, the negotiation process over those fees can be laborious.

The city’s current agreement with Comcast was inked Feb. 1, 1999, and ran through Jan. 31. It calls for a franchise fee equal to 5 percent of the company’s gross revenue from customers inside the city. That figure that has grown over time and last year totaled $268,922.

The company, however, notified the city in 2011 that it wanted to renegotiate. That’s where the issue has remained until now.

Also of note, the existing agreement was signed when Wilsonville belonged to the Metropolitan Area Communications Commission, which represents a host of Washington County and Clackamas County cities in negotiating rates with service providers. For a number of reasons, Wilsonville ultimately felt it would be better to withdraw from the group, City Attorney Mike Kohlhoff said, leaving the city to negotiate its own standalone agreement with Comcast.

“That was done several years ago,” he said. “But there was a long-term franchise agreement and a number of things had to change.”

For instance, Wilsonville now plans to tie its public access network to Clackamas instead of Washington County, part of a wider move by the city to tie in with an ongoing fiber optic network being laid down by Clackamas County.

“In general, I have no reservations about striking out alone to negotiate a franchise agreement with Comcast,” said Cosgrove, who added the city is in a better position to negotiate on behalf of local interests than is a regional group. “Individual agreements between cities and cable companies is the norm, and I would say that MACC is more the exception statewide.”

Under federal law, cities must conduct citizen surveys prior to signing new franchise agreements. And one of the results of the resolution is that the city now has an extra year to do that.

“We’d keep the same rates for a year while negotiations take place,” Kohlhoff said. “Some communities have extended this for two years, but I’d like to keep us on a tighter time frame if I can.”

Cosgrove said the city is essentially looking to negotiate an extension to the status quo.

“I believe our current negotiating position is that we are looking to maintain the status quo on the franchise fee percentage,” he said, “but maybe looking for some additional for PEG (public, educational, governmental broadcast) equipment.”

Kohlhoff said the city is watching the ongoing negotiations between MACC and Comcast in other jurisdictions closely. He said this also will inform the process in Wilsonville.

“The city is not taking on a large corporation and trying to invent a new wheel, so to speak,” he said. “Rather, the negotiating process will narrow down to a few key provisions and making sure that the parties reach an equitable agreement.”

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