Company says rate hike is tied to December decision by Hillsboro City Council.

Comcast users in the city of Hillsboro are paying a bit more for their internet these days, as the city and internet giant fight over a fee city leaders imposed on the company last year.

Hillsboro customers of Comcast began seeing a new item on their monthly Comcast internet bills this month. The bills imposed a 7 percent "city license fee" for internet services on residential Xfinity customers.

Peppered with questions about the supposed "license fee" the city government released a statement this week saying it does not charge any such fees for Comcast customers. The city said it has little control of what Comcast charges its customers, or how it labels its bills.

"We don't control how Comcast chooses to message the fees they put on their bills," said Andrew Bartlett, a management analyst in City Manager's Office.

The cost increase stems from actions the Hillsboro City Council took last winter, when the city doubled the fees companies such as Comcast pay to use city infrastructure. Companies are charged a fee based on their gross revenue of sales. That fee — essentially the rent telephone and cable companies pay to run cables under city roads and sidewalks — was raised from 3.5 percent to 7 percent last December, the same amount customers are seeing on their bills.

Comcast spokeswoman Amy Keiter said the new fee on Hillsboro customers was in direct response to Hillsboro's actions in December.

"But for the city's action, customers would not be charged this fee," Keiter told the Tribune on Thursday.

The Council's Dec. 7 fee increase required internet service providers to pay the 7 percent fee as well as telephone and cable providers. Keiter, who represents Comcast in Oregon and Washington, said Comcast had never been charged the previous 3.5 percent fee for its internet services.

"Hillsboro is one of only four jurisdictions within our service area that applies a … fee to internet services," Keiter said. "In the interest of transparency, when there is a change to a customer's bill, we call out the change through a message on the bill and itemize the fee so that our customers are aware of the impact of city fees and taxes on their costs."

The fee is imposed on companies which offer "communications services" within the city, and should have included internet service providers from the start, Barlett said. Hillsboro's is working on launching its own Internet services to city residents sometime in early 2020. That service would also be subject to the fees, Barlett said.

"Internet services fall under the definition of what a communications providers is," Bartlett said.

Bartlett said the increase was meant to bring Hillsboro in line with other nearby cities, but Tim Goodman, director of government affairs with Comcast's Oregon region, told the Council in December it unfairly targeted companies like Comcast and Verizon, and told the council at the time those costs would be passed on to customers.

"This resolution would increase the cost of doing business for every business in Hillsboro, while increasing the cost of residential internet service for every home in Hillsboro," Goodman said.

"This goes directly against one of the city's stated reasons for building its own broadband network and competing against the private sector, which was the lower price point," he added. "This goes away from that. It's increasing prices on customers, not bringing them down."

Bartlett said the city hasn't reached out to Comcast about changing the messaging on its bills.

"It's understandable a company would have concerns about anything that increases their costs," Bartlett said.

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