An independent audit alleges that Spectrum racked up more than $142,000 in unpaid franchise fees to southern Maine communities between 2017 and 2018 — and some towns say those debts still haven’t been repaid.
The audit — which was conducted by a Minnesota law firm on behalf of the Greater Portland Council of Governments — found that Spectrum owes nine Cumberland County towns between roughly $1,000 and more than $30,000 in franchise fee payments.
Spectrum is owned by Charter Communications, a Connecticut-based telecommunications company.
The nine towns owed money are Cape Elizabeth, Casco, Cumberland, Gray, Harrison, Naples, New Gloucester, Windham and Yarmouth, according to the council. Each paid the law firm $2,000 to conduct the audit.
Along with interest and fees, Spectrum collectively owes the municipalities $165,888, said Tony Plante, the council’s director of municipal collaboration. It’s likely that Spectrum continued to underpay fees in 2019 and 2020, he said.
Spectrum’s largest underpaid franchise fee is in Cumberland — which is due $31,435, the audit alleges. The company also apparently owes $27,421 to Cape Elizabeth and $24,756 to Yarmouth, among a range of other debts to municipalities.
Cable companies pay franchise fees to local governments for the use of public rights of way where they run cables. Those fees are often used to pay for local public access programming like televised municipal meetings.
Under federal law, local governments are entitled to a maximum of 5 percent of gross revenues that come from cable television services, including profits from advertising and subscriptions, the council said.
The council is also helping the municipalities — along with Bridgton, Falmouth, Fryeburg and Scarborough — negotiate franchise agreements. It plans to begin holding informal talks with Spectrum this fall.
“Cable franchise-fee audits like these are routine, and we are reviewing the auditor’s claims and plan to respond to the communities soon,” Charter spokesperson Lara Pritchard told the Portland Press Herald.
She did not directly respond to a question asking if the company would reimburse the nine communities, the Press Herald reported.
Town Manager John Hawley said Naples has sent a letter to Charter Communications demanding repayment of the nearly $20,000 it owes the municipality. He said the town has yet to receive the money.
“These fees are important to small towns as we budget the anticipated revenue, and $20,000 can significantly impact a community,” he said.