County, Comcast negotiate pact to end dispute over Internet service payments

Firm would link offices with fiber-optic network

August 31, 2004|By Laura Barnhardt | Laura Barnhardt,SUN STAFF

Comcast Corp. would build a fiber-optic network to connect Baltimore County government offices as part of a deal that would have the county give up a claim to disputed franchise fees.

Under proposed revisions to the contract between the cable giant and the county, Comcast would connect 14 county sites, including the public safety building and new detention center with the main government complex in Towson. County officials say the network would make video-conferencing possible and allow them to offer more services to residents via the Internet and telephone.

In return, the county would not try to collect a percentage of Comcast's Internet service profits, said County Councilman Kevin Kamenetz, who headed the negotiations with the cable company. Those fees had generated about $800,000 a year for the county.

The proposal would not change customers' bills, according to county and cable officials.

When the Federal Communications Commission ruled last year that local governments cannot collect franchise fees for Internet services, Comcast stopped paying Baltimore County fees from its Internet offerings. However, the county has a franchise agreement with Comcast through 2012 to collect 5 percent of its profits on both television and Internet services.

"If we had gone to court, it would have been a question of contract law versus federal supremacy," Kamenetz, a Pikesville-Ruxton Democrat, said. "We elected to negotiate something we think is most favorable to the taxpayers."

Comcast has agreed to cover the $450,000 cost of connecting the county buildings through fiber optics and $24,000 in annual maintenance and to provide $600,000 worth of additional high-speed Internet connections to county government buildings over 10 years, said Kirstie Durr, a spokeswoman for Comcast.

The cost of developing the fiber-optic network would be more than $6 million if the county had to pay another contractor to build it, said Kamenetz. The county would also save more than $2 million in the next decade because it could stop leasing phone lines for its Internet service, he said.

Baltimore County receives about $8.5 million a year from a 5 percent franchise fee from Comcast, the county's only cable provider. Under both the proposed and current agreements, other cable services could operate in the county if they are willing to offer service to the entire county, Kamenetz said.

The fiber-optic network, which would be completed in 18 months, could eventually allow the county to improve services. For example, it could allow builders to schedule requests for inspections using an automated phone system or allow residents to pay tax bills through the Internet, said Thomas G. Iler, director of the county's Office of Information Technology.

"This enabling technology will have a long-term impact on county government for 10 and 20 years," he said.

The proposed contract - scheduled for a public hearing Sept. 7 - would expire in 2017. The council is expected to vote on the measure Sept. 20.

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