Meadville Tribune

November 13, 2013

West Mead deal with Armstrong could mean higher rates

By Pat Bywater
Meadville Tribune

WEST MEAD TOWNSHIP — Establishing a franchise agreement with the local cable television, Internet and phone service provider will lower costs for township offices but it remains to be seen if township supervisors will use the agreement to generate new revenue that will in turn increase Armstrong subscribers’ bills.

Under federal regulations, municipalities can establish franchise agreements with companies that use municipality-owned rights of way to run cables offering services such as television, Internet and phone service to homes and businesses. Under these rules, municipalities may receive some free service in exchange for granting the right to use rights of way and they can levy a fee of up to 5 percent on subscribers’ services.

The City of Meadville has for many years held a franchise agreement with Armstrong and levied a 5 percent fee on basic cable service. Armstrong passes this cost onto customers and breaks out this fee in its monthly bill so customers are clear that the amount is mandated by Meadville. The fee generated $172,800 for the city last year, according to Finance Director Tim Groves, and he expects it to generate a similar amount this year.

West Mead Township supervisors recently began exploring the establishment of a franchise agreement when — after an inquiry from a resident concerned about the quality of his cable television service — they discovered that they did not have a franchise agreement. Having a franchise agreement is not required but as supervisors learned as they began researching the agreements, there are benefits.

One plus is that such agreements outline formal responsibility for repairing damage and resolving problems related to work done in the rights of way. And, as supervisors learned at a meeting this week, franchise agreements can include stipulations that free service be provided to municipal entities.

In his meeting with supervisors, Armstrong General Manager Scott Brush explained that some levels of cable and Internet service are typically provided for free, and in West Mead’s case this would apply to the township building, the two township volunteer fire departments and likely the Meadville Area Recreation Complex. Supervisors did not have exact numbers on hand for the amount these services cost now, but they predicted savings of about $300 a month for the township building and perhaps a similar amount for each of the fire departments.

Brush also explained that municipalities can also levy a fee of up to 5 percent on subscriber services and that Armstrong passes this fee on to subscribers directly.

Brush said the company opposes these fees because the fees cannot be levied on providers of similar services that do not use a cable strung through the right of way to provide their service. He said that as a result, the fee puts Armstrong at an unfair competitive disadvantage.

Brush did not have an estimate of how much the township could raise but said he would work to supply numbers this week.

Supervisor Chairman Bill Rosenberger said at the meeting it would probably be a good idea to have a franchise agreement in case there were any issues with work in the township’s right of ways and to save the township some money.

He was less certain about charging a fee, commenting, “if it’s $6,000 it’s probably not worth the aggravation. If it’s $20,000 I might need to think about it.”



Pat Bywater can be reached at 724-6370 or by email at pbywater@meadvilletribune.com.