The City of Portland ordains.
Section 1. The Council finds:
- In 2012, the City Council granted a cable service franchise agreement to Comcast (Ordinance No. 185112) for a 10-year term that expired in 2021.
- The City is a member jurisdiction of the Mt. Hood Cable Regulatory Commission (MHCRC), which is comprised of the Cities of Portland, Fairview, Wood Village, Troutdale, and Gresham, along with Multnomah County. The City has three Council appointed Commissioners on the MHCRC.
- The MHCRC acts on behalf of the member jurisdictions as authorized by an Intergovernmental Agreement (IGA) to negotiate franchise agreements, monitor contract compliance, and oversee and regulate any cable communications systems operated pursuant to the franchise agreements entered into by the member jurisdictions.
- In addition to having three representatives on the Commission, the City has a contract with MHCRC for administrative support services to the Commission. These services are provided by staff from the Community Technology section of the Bureau of Planning & Sustainability (BPS).
- Commission staff have been negotiating a new franchise agreement with Comcast to replace the expired franchise agreement.
- The MHCRC has adopted Resolution 25-01 (Attachment 1), which accepts the staff recommended franchise agreement (as presented to the Commission); the Resolution recommends the franchise agreement to each MHCRC member jurisdiction for approval by ordinance.
NOW, THEREFORE, the Council directs:
- That a cable service franchise agreement be granted for a term of ten years to Comcast of Oregon on the terms set forth in Exhibit 1.
- The Bureau of Planning & Sustainability to administer the cable service franchise agreement as set forth in Exhibit 1.
Exhibits and Attachments
Impact Statement
Purpose of Proposed Legislation and Background Information
The City of Portland operates a cable franchise with Comcast that allows Comcast to access the right-of-way (ROW) and operate their cable system within the City. The City is a member of Mt. Hood Cable Regulatory Commission (MHCRC), which is the regulatory commission that monitors and enforces cable companies. MHCRC and Commission staff also negotiate and recommend cable franchise agreements to the member jurisdiction for final approval by the governing bodies of each member jurisdiction. (For detailed information on the operating agreements with the MHCRC, see the IGA. MHCRC contracts with the City of Portland (under the IGA) for administrative services, including staff to conduct the operational work on behalf of the Commission. Staff from the BPS Community Technology division provide staff to assist the Commission.
The member jurisdictions of the MHCRC have been operating under an expired franchise agreement (FA) with Comcast since 2021. Since 2020, staff have been working with Comcast to negotiate a FA renewal; however, since that time, there has been significant staff turnover that inhibited negotiations and the parties‘ ability to come to final agreement prior to the expiration date.
Negotiations between MHCRC staff and Comcast resumed in the summer of 2023 and have been ongoing until this past December. In January of 2025, staff recommended to the MHCRC the adoption of a resolution by the Commission to recommend approval to the member jurisdictions (Res. 25-01), which the Commission passed. Staff are now working with each member jurisdiction to present to their governing bodies the FA with exhibits for approval of the agreement.
The process for the negotiations has been for staff to work directly with Comcast to negotiate specific policy and operational items while keeping the Commission briefed. The item of most significance has been the Public, Educational, and Government (PEG) fee that’s paid by Comcast currently at 3% of gross revenues. PEG pays for capital expenses for the infrastructure related to broadcasting the public, education, and government live meetings and recordings onto cable. When staff restarted negotiations in 2023, the PEG percentage offer by Comcast was 1.25%. The agreement that is before Council has a 2.5% PEG amount in the agreement for approval.
Given the current climate of cable service in the member jurisdictions and the continued decline of cable subscribership (cable subscribership Multnomah County-wide is now under 88,000, down from 180,000 in 2010), staff did not have sufficient leverage to maintaining the same provisions of the franchise that were passed in 2012. Since 2012, the FCC adopted an order that allowed cable companies to recover marginal costs that they previously could not. The franchise agreement and ordinance before Council are the result of negotiations to leverage the best outcomes possible while abiding by current federal law that govern cable service.
The agreement complies with all current federal cable service and franchising agreement law(s) and has been reviewed by the Commission’s outside legal counsel, which specializes in cable franchising and federal cable law. The passage of this ordinance gives Comcast of Oregon a 10-year franchise agreement and the general fund revenue impact is "neutral".
Financial and Budgetary Impacts
The passage of this ordinance would not result in any changes to the City’s franchise fees collected or to the City’s general fund. Revenue forecasted from the Comcast franchise is already accounted for in the current City budget and the requested FY 2025-26 budget. The Comcast franchise agreement produces two revenue sources that benefit the City. First, the Mt. Hood Cable Regulatory Commission (MHCRC) collects franchise fees from the Comcast agreement annually, a portion of which goes to the City. The City’s share of that revenue amounts to approximately $4M annually, which goes to the General Fund. Second, Comcast pays approximately $3.5M in PEG (Public Education and Government) fees to the MHCRC annually, which support capital investments in local community media centers (Metro East and Open Signal), and a grant program administered by the MHCRC. PEG fees are managed by the MHCRC and do not come to the City. The recommended agreement reduces the PEG fee from 3% to 2.5%. That reduction impacts the grant program and community media centers but has not direct impact on the City. The City provides administrative staff to the MHCRC using some MHCRC revenues through an Intergovernmental Agreement with the Bureau of Planning & Sustainability. These revenues are slowly declining as the number of cable subscribers declines.
Economic and Real Estate Development Impacts
Economic Impact Statement (EIS) for the City of Portland’s Franchise Agreement Renewal with Comcast
The MHCRC is a quasi-governmental body, created by Intergovernmental Agreement, to develop and regulate cable television franchise agreements and manage associated public benefit resources and assets. The MHCRC reports to the City Councils of Portland, Gresham, Troutdale, Wood Village and Fairview, and the Multnomah County Commission. The commission is staffed by the City of Portland through BPS. The IGA stipulates that each participating jurisdiction approve the Commission's recommended budget. The MHCRC is meeting on May 19 to make its recommendation, and adoption must be complete by July 1 to avoid disruption to MHCRC operations.
The MHCRC has an annual budget of about $12M, from two primary revenue sources.
First, franchise fees from cable franchises, a portion of which goes to each participating jurisdiction. The City’s share of that amounts to approximately $4M annually, which goes to the General Fund, and is already incorporated into the City's budget. The participating jurisdictions allocate some funds back to the MHCRC to support its operations (in the FY 25/26 budget the Portland contribution is about $318k through a special appropriation).
Second, franchises pay a PEG (Public Education and Government) fee to the MHCRC, which support capital investments in local community media centers (Metro East and Open Signal), and a grant program administered by the MHCRC. PEG fees are managed by the MHCRC and do not come to the City.
EIS Questions:
- How was the proposed legislation shared with those potentially impacted? How much time did they have to provide input?
- The MHCRC held three public noticed meetings in October and December of 2024, and January of 2025 where 32 people provided public testimony on the Comcast FA.
- Stakeholders included the MHCRC Commissioners, members of the general public and staff from the community media centers (CMC) MetroEast and Open Signal.
- What feedback was shared? How did it shape the proposed legislation?
- Public comments were focused on Section 5 of the franchise agreement which impacts the operation of the Public, Education, and Government (PEG) channels which the CMCs broadcast on behalf of MHCRC member jurisdictions.
- Major areas of concern were:
- Video on-demand costs and number of hours
- Program channel guide costs
- PEG percentage (advocating to keep it at 3%)
- Major areas of concerns were for changes to Section 5 subsections that called for the ability for Comcast to assess marginal cost recover for certain services per FCC Order 621 (2019). Since the passage of FCC Order 621 in 2019, Comcast has not assessed any marginal costs which they were given the ability to do under the current operating franchise agreement.
- Feedback from the CMCs called for edits to be made to Section 5 and MHCRC staff took 11 of the 24 recommended subsections and brought those back to Comcast for renegotiations. 10 of the 11 recommended subsections staff and Comcast agreed on edits requested by CMCs.
- What types of business and/or development projects might be impacted and what could the impact be?
- No new business or business development projects will be impacted from this franchise agreement.
- The PEG fee from this agreement decreases from 3% to 2.5%. Even with that decrease, this agreement’s PEG fee is still the highest in Western Region for Comcast and one of the highest PEG fees in the country. PEG fee declines are proportional to the declines in cable tv subscribers.
- The franchise fee percentage is 5% and remains unchanged from the current agreement. The 5% of gross revenues (franchise) fee is the standard both historically and across the country for the past 100 years[1].
- How does this action influence the timeline and cost of doing business or real estate development in Portland as compared to peer cities?
- This agreement does not influence the cost of doing business or real estate development in the city.
- How would the proposed legislation impact business competitiveness and job growth, affordability, costs of goods, and/or household income?
- No direct impact to business competitiveness, job growth, affordability, cost of goods, or household income.
- How might this proposed legislation impact real estate development project feasibility and housing production?
- No impact from this agreement for real estate development.
- How might potential adverse impacts from this proposed legislation be mitigated?
- This agreement is ‘neutral’ in its outcome since it is a franchise agreement renewal and the operational aspects of the agreement that are related to the access to the right-of-way have not changed.
Community Impacts and Community Involvement
MetroEast and OpenSignal are the two Community Media Centers who the MHCRC and the member jurisdictions work with to broadcast the Public, Educational, and Government (PEG) channels onto the cable system. OpenSignal is the Community Media Center that the City of Portland contracts with to provide PEG services.
The MHCRC and Commission Staff have met with the Community Media Centers, MetroEast and OpenSignal multiple times during public meetings and closed-door sessions to update them on specific language changes in the franchise agreement and substantive policy updates. Staff met with the MetroEast and OpenSignal director level leadership for each organization in two extended meetings in July and October of 2024 to discuss the status of the agreement and specific concerns they had about the agreement. From the last October meeting, Staff brought back 11 items to Comcast for re-negotiations and was able to make substantive changes to 9 items which helped address some of the concerns raised by MetroEast and OpenSignal.
100% Renewable Goal
Not applicable
Financial and Budget Analysis
Analysis provided by City Budget Office
This ordinance grants Comcast of Oregon a renewed 10-year cable franchise agreement to continue accessing the public right-of-way and operating its cable system in Portland. Under the agreement, the City will continue receiving approximately $4 million annually in franchise fees to the General Fund, an amount already included in current and forecasted budgets. Although the PEG (Public, Educational, and Government) fee paid by Comcast will decrease from 3% to 2.5%, this funding supports community media centers and does not impact the City's General Fund. Administrative services provided by the Bureau of Planning & Sustainability to the Mt. Hood Cable Regulatory Commission will continue, funded through MHCRC revenues.
Economic and Real Estate Development Analysis
Analysis provided by Prosper Portland
Prosper Portland staff has reviewed the Economic and Real Estate Development Impact Analysis submitted for this action and finds that it satisfies the requirements set forth in City Council Resolution 37664. The analysis is sufficiently detailed and complete to be considered a final statement for purposes of this action.
Document History
Document number: 2025-197
President's referral: Finance Committee