Bensalem Township Council approved a new five year contract with the cable provider Verizon at Monday nights meeting .
Cable franchise agreements in general terms give providers such as Verizon the right to use municipal roads and rights-of-way to deliver cable TV service. In exchange, the provider typically pays the municipality a franchise fee, up to 5% of gross cable revenue under federal law. The cable provider commits to service standards, customer service requirements, and public access channel obligations, like Bensalem’s channel 34 under a given agreement.
Financial manager John Chaykowski explained to Council that it is a five -year agreement between the Township and Verizon.
Bensalem is part of a consortium that consists of other municipalities and essentially the contract/renewal terms are the same, officials said.
If a municipality outside of Bensalem were to negotiate a better deal, Solicitor Joe Pizzo explained, a legal principle/clause referred to as the “most favored nation ” would kick in” and all the municipalities that are part of the consortium would get that same deal.
Rates that Verizon pay don’t really change, but they are noting that the increase in streaming services are causing a reduction in subscribers, so their might be an issue with decreased payments (from Verizon )going forward.” Chaykowski explained to the council.
Council Vice President Jesse Solan asked about an allowance in the agreement that have the township audit the fees once every three years as opposed to every year.
“How often do we actually do that?” Solan inquired.
Chaykowski explained that the township has never had to run an audit, as they’ve never found an issue of the fee’s dipping way down.
“They do provide a quarterly subscription explanation that gives a bunch of details as far as who’s got just internet, who’s got just the whole package, and everything like that.” Chaykowski said.
Another question Solan asked was about the new agreements leading to consideration of expansions by either Verizon or Comcast, in order to make sure all areas’ are equally covered.
“The only places I think there might be an issue are the apartment complex’s, but every resident has the option of Comcast or Verizon.” Chaykowski said.
Council President Edward Tokmajian Jr asked Chaykowski if the township could expect a drop in revenue from Verizon due to people choosing streaming services over cable packages
Chaykowski said, that according to Verizon, memberships were down by 8% since the last contract agreement, and that the township would still be getting a portion from those who choose to sign up for internet services only.
“You’re still getting at least something from a household.” Chaykowski said, however he didn’t anticipate a drop in income for the township.
Council approved the new deal unanimously.
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