Spokane7
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August 23, 2011 in Business
Comcast paying more city and county taxes, fees
Despite a national trend of TV watchers leaving cable companies for other options, Spokane’s Comcast Corp. franchise is paying more taxes and fees to Spokane County and the city of Spokane.
The nation’s largest cable company paid $888,900 last year to the county and $5.4 million to the city, based on fees and taxes it collects and distributes to the two governments.
Comcast’s franchise payments to the city last year were 3 percent higher than in 2009; the company’s payments to Spokane County were 6 percent higher, according to the two governments. The company doesn’t provide specific subscriber numbers for the Spokane area.
The upward trend reflects a nationwide pattern, according to cable industry reports.
Comcast Corp.’s most recent earnings report noted its cable subscribers are now paying 9 percent more on average than they did a year ago. That’s a difference between $124 per month last year and $138 per month this year for all programming, Comcast reported.
Some of that increase is due to annual rate increases. The rest is from cable viewers adding more TV channels to their subscriptions.
If Spokane cable subscribers are following the national trend, the average city customer in 2011 is paying $18 more annually to Comcast in fees and utility taxes than the year before, according to numbers provided by the city of Spokane’s finance office. That money goes into the city’s general fund. A Spokane County cable TV subscriber is paying $8.40 more per year in taxes and fees than in 2010.
The difference is due to the city collecting both a 5 percent franchise fee and a 6 percent utility tax on cable TV revenue collected by Comcast, while the county only charges a 5 percent franchise fee.
Comcast’s phone and Internet service revenue totals are not included in those taxes.
Comcast, like other national cable companies, is seeing a nationwide drop in TV customers. They are opting for less-pricey options, including over-the-air TV or online viewing. At the same time, Comcast said it’s offsetting that loss by gains in Internet customers. Its broadband revenue in the second quarter this year was 10 percent higher than a year ago.
Spokane City spokeswoman Marlene Feist said the franchise fee of 5 percent is the maximum amount a municipality can collect. “You can think of it as a rental fee for Comcast using the city’s right of way” for its cable system equipment, she said.
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JBlim on August 23 at 7:26 a.m.
I’m glad I got rid of Comcast TV. I get free 5.1 high definition TV over the air with my little home-made antenna.
walterneary on August 23 at 10:06 a.m.
Walter Neary of Comcast here in Washington, just to clarify: the story does not completely state the reasons for a 9 percent figure. Here’s what the company said in an Aug. 3 earnings call: “Total revenue per video customer increased to 9% to $138 per month in the second quarter, reflecting strong ARPU management, a higher contribution from Comcast Business Services, and an increasing number of residential customers taking multiple products.”
Among the supporting statistics in the earnings report: in the second quarter of 2010, 31 percent of Comcast cable TV customers subscribed to all three services (TV, phone, Internet). In the second quarter of 2010, that percentage grew to 35 percent. As measured in the same time frame, business services revenue increased 41.7% during the quarter. (Q2 of 2011 compared to Q2 2010)
Anyone interested in the company’s finances can find lots of information at http://www.cmcsa.com/earnings.cfm and news accounts (by Googling ‘Comcast’ and ‘earnings’) at several national news sites including http://www.nytimes.com/2011/08/04/business/media/comcast-gets-a-lift-from-nbcuniversal.html and http://articles.philly.com/2011-08-04/business/29850964_1_ceo-brian-l-roberts-nbcuniversal-from-general-electric-comcast-revenue
de3 on August 23 at 11:00 a.m.
Thank you Walter. I think what you are saying is that the fee payments went up because revenue went up?
Also, while Comcast paid the fees, ultimately they are paid by customers. The fees are a tax on the consumers.
Thoreau on August 23 at 11:10 a.m.
Pay TV is a scam.
When Cable TV first came out, you paid because the programming was free of commercials.
Now, fools pay to be advertised to!
Remember the alarmist scare when analog was phased out recently? That was to gain subscribers to cable.
TV programming will always be free because of the advertisers. Millions of people cannot afford cable, and those advertisers need to reach out to them too.
hawken on August 23 at 11:55 a.m.
It’s what you get when liberal government increases taxes on business. Consumers get it passed to them.
walterneary on August 23 at 12:02 p.m.
Hi de3, the answer to your question is yes. The revenue that’s relevant here - affecting payments to local jurisdictions - is what’s received for video services within the local govt’s boundaries.