I was reading Steve Blum’s recent story about the city of Palo Alto’s struggles in collecting the correct amount of franchise fees from companies like Comcast and AT&T. In the story, Blum notes that the city had plenty of blame themselves in that they didn’t collect the fees properly and didn’t spend that money correctly.
But with that said:
“AT&T and Comcast were shortchanging the cities…Comcast and AT&T did not always calculate the fees due in accordance with DIVCA and the municipal code of each of the Cable Joint Powers. As a result, Comcast underpaid about $141,000 in franchise and PEG fees from July 1, 2010, through June 30, 2014, and AT&T underpaid about $76,000 from July 1, 2011, through September 30, 2014.” – Tellusventure.com
What makes this story amazing to me is how little attention this type of story gets considering how often it occurs. It is a major problem for cash-strapped cities and has been for some time.
Time Warner Cable
- Audit found Time Warner Cable owed the city of Austin, Texas nearly $700,000 after TWC “accidently” underpaid the city on Public/Educational/Government (PEG) access fees, Bad Debt fees and Advertising fees.
- Audits found across New York just this year found that Time Warner Cable had been underpaying cities for years. As WKBW reported, “Time Warner Cable owed Cheektowaga $420,000 in franchise fees and at least $123,000 to the City of Buffalo.”
- In Cincinnati, Ohio, a city audit found that Time Warner Cable owed the city over an underpayment of $1.3 million in franchise fees and national ad revenue.
- Audit found that Charter Communications had “accidently” underpaid the City of Owatonna (Minnesota) in entitled franchise fees while also collecting excess franchise fees from city subscribers that totaled close to $35,000. In this case, Charter “forgot” to provide documents that the city was legally entitled to examine, some of which related to the exact issues found in the audit.
- In Reno, Nevada, a city audit found that Charter owed the city nearly $90,000 in franchise fees.
- Audit in Dallas, Texas found that Comcast underpaid the city in franchise fees and owed almost $120,000. The city audit found that when they asked Comcast to support their numbers with their own financial statement, Comcast was unable to do so.
- In Minneapolis, Minnesota, Comcast owed the city $40,000 in franchise fees. Sadly, Comcast only paid this when the city agreed to approve of the failed Comcast/TWC merger.
- In Clark County, Washington, an audit found that Comcast had “accidently” underpaid the city nearly $4,000 in franchise fees. This is not a terrible amount except as the city audit noted, this audit came after past years of Comcast underpaying the city nearly $35,000 in franchise fees.
- In Denver, Colorado, a city audit found that Comcast had massive amounts of underpayment, ranging from owing the city almost $750,000 in PEG fees, $118,00 in Bad Debt fees. As the city noted, Comcast owed the city almost $250,000 in a past audit due yet again to underpayment of franchise fees.
- In Freeport, New York, Cablevision was found to owe the city $163,000 in franchise fees. As the city noted in the audit, even though Cablevision did NOT dispute the underpayment, they refused to pay the money and demanded the city give them a discount on the back-payment. Amazing.
- In 2011, several cities in New York alleged that Cablevision underpaid their franchise fees by a total of almost $750,000.
- In Deland, Florida, a city council was forced to bring Cablevision to court in order to have them pay them $120,000 in underpaid franchise fees.
- In what may be the worst of all cases cited above, Verizon paid New York City $1.41 million in 2013 to settle massive underpayments in not just franchise fees but a variety of other underpayments.
- Just last year, Verizon was sued by several cities in Pennsylvania for underpaying franchise fees. An amount of the underpayment was not reported.
- In Oregon, 69 cities decided to do an audit on Verizon and Qwest services and found that a whopping $3.1 million in franchise fees was not properly paid by the companies.
I could go on and on and on and on. Seriously, I have about 25 other reports of massive underpayments by a variety of cable companies throughout the country.