In renewing its 15-year franchise with the city, Comcast Corp. has agreed to offer its low-income discount program to seniors and veterans, open a call center to handle Philadelphia subscriber problems, and pay penalties if customer service goals are not met.
The agreement, introduced Thursday in City Council, includes substantial concessions by Comcast, particularly in customer service. In other areas, the telecommunications giant pushed back on priorities laid out by Mayor Nutter, such as offering free broadband service in underserved neighborhoods.
"We got to a place where each party isn't necessarily getting the entire pie, but they have enough of what they want," said the city's chief innovation officer, Adel Ebeid, who led the negotiating team.
The group met with its counterparts at Comcast for a session Wednesday that stretched until 4 a.m. the next morning. The bill introduced Thursday will be vetted at a Nov. 12 Council hearing, with the goal of an agreement being signed by year's end.
Comcast spokesman Jeff Alexander said in a statement that the company was pleased to see progress and looking forward to finalizing "an agreement that is satisfactory to the city, Comcast, and our customers, and enables us to continue investing and innovating in Philadelphia." He offered no details.
At stake are four franchises, each covering different sections of the city, that allow the company access to the public right-of-way, including space under streets to install wires. All have expired, but the terms are in effect until new agreements are signed. The deals are nonexclusive, and other providers, including Verizon FiOS and satellite-TV companies, compete with Comcast throughout the city.
Under the current deal, the city receives 5 percent of Comcast's cable-TV revenue within the city, a percentage capped by federal law that amounted to $17.5 million last year, according to city officials.
That provision would remain under the new agreement. But many other things would change.
Comcast has agreed to:
- Expand the discounted Internet Essentials program, currently available to poor families with school-age children, to eligible low-income seniors, veterans, and individuals with disabilities.
- Offer a discount of at least 10 percent on cable service to low-income seniors.
- Offer a new WiFi system in 224 city buildings, such as health centers, police and fire buildings, and municipal buildings. How the cost would be divided among the parties has yet to be decided, according to the city.
- Fix code violations across the city, such as non-grounded connections, over the next 18 months.
- Hire 200 Philadelphians for a call center that would handle Philadelphia customer problems. These hires would be separate from any Comcast makes when it opens its new Center City tower, according to the city.
- Provide $18 million over the course of the contract to public, educational, and government access (PEG) channels.
The terms announced Thursday offer core elements of the agreement, but little detail on things such as program introduction dates or eligibility requirements. Ebeid said the negotiating committees would continue working on those details "starting Monday morning."
Consumer advocates responded with tepid enthusiasm Thursday, calling the terms a good starting point as Council starts considering the bill. Some voiced specific concerns, particularly on the PEG funding, which falls far short of what the city outlined in a needs assessment released in April: $32 million over a 10-year contract.
While the $18 million, or $1.2 million per year, offer is more than double the $450,000 per year Comcast currently pays, the increase could be seen as minimal considering the rate at which cable prices rose over the last 15-year contract.
Gretjen Clausing, executive director of Philly CAM, the city's public access television network, said she had hoped to see Comcast make a $50 million investment in PEG channels over a 15-year contract.
"For a city of our size, I think [$18 million is] really low," Clausing said.
Nutter stressed broadband expansion when he released the needs assessment and said he wanted Comcast to offer free service in underserved neighborhoods. Ebeid said that although that is not in the current agreement, the broadband expansions are substantial.
"Everybody on the negotiating team recognized connectivity plus digital literacy equals opportunity," he said.
From here, the agreement will go before Council, where several members have said they plan to carefully scrutinize it.
"Council has been working real hard identifying issues that they've been hearing from our constituents and relaying that to Comcast and the City of Philadelphia," said Councilman Bobby Henon, who chairs the committee where the bill will be heard. "So hopefully some of those issues will be incorporated in the legislation."