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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/24/2004 - DISCUSSION REGARDING CABLE FRANCHISE RENEWAL DATE: February 24, 2004 STUDY SESSION ITEM STAFF: Tom Vosburg/ FORT COLLINS CITY COUNCIL Liz Stroh SUBJECT FOR DISCUSSION Discussion Regarding Cable Franchise Renewal. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED The City is well into the cable TV franchise renewal activities. The purpose of this study session is to report to City Council on the results (to date) of the needs assessment, and to provide an overview of the renewal process and next steps. At the conclusion of the presentation and discussion, staff would like feedback about: • The franchise renewal process—Do Councilmembers feel grounded in the renewal process and the scope of the City's authority regarding the granting of a cable television franchise? • Needs assessment—Is the information about the needs assessment clear? Are there any items that Councilmembers would like to add? • Public,Educational and Governmental(PEG)Channels—there is a growing interest in public access capabilities. Do Councilmembers have any questions about the operation, funding and federal regulations related to PEG channels? ATTACHMENTS 1. Memo from Kenneth Fellman Regarding the Franchise Renewal Process. 2. Summary of Cable Television Needs Assessment Report from River Oaks Communications Corporation. 3. Memo from Telecommunications Board Regarding Cable Franchise Agreement Priorities. ATTACHMENT 1 KISSINGER & FELLMAN, P.C. ATTORNEYS AT LAW PTARMIGAN PLACE,SUITE 900 3773 CHERRY CREEK NORTH DRIVE RICHARD P.KISSINGER DENVER,COLORADO 90209 ROBERT E.JAROS KENNETH S.FELLMAN TELEPHONE: (303)320-6100 1941.2002 BRETTD.CHARDAVOYNE FAX: (303)320-6613 BOBBY G.RILEY www.kamlf.com WADE WARTHEN CHERYL A.TOMAN MEMORANDUM TO: Mayor and City Council Members City of Fort Collins FROM: Kenneth S. Fellman, Esq. DATE: February 12, 2004 RE: Cable Franchise Renewal Process/Study Session Introduction In advance of our study session on February 24, 2004, this memo is intended to provide background information on the cable franchise renewal process and identify specific areas of concern. This process involves various tasks and requires the coordinated efforts of City staff, elected officials, local residents, and your cable consultants. Federal law dictates the process, and the scope of the City's authority to address issues in a cable franchise. In general, City staff, elected officials, and consultants should examine the past performance of the cable operator, identify the community's future cable needs and interests, and then draft a franchise suitable for the citizens and City government. The franchise draft is submitted to the cable operator, and becomes the basis of franchise negotiations. The Cable Franchise Document A cable franchise is a contract between the cable operator and the local government that the cable operator serves. To provide cable services to subscribers, cable companies must locate facilities within public rights of way, either on utility poles or underground. In consideration for a cable operator's right to utilize the City's rights of way, federal law allows the City to require the cable operator to enter into a franchise agreement, and governs what issues can be addressed in that contract. Franchise agreements cover a wide range of topics including: compensation paid to the City by the cable company (the franchise fee); requirements for provision of public, educational and government access channels (commonly referred to as PEG channels); requirements of compliance with conditions under which work in the rights of way can be conducted; customer service standards; the variety of cable services provided; procedures for addressing franchise transfers; and procedures for remedying franchise violations, fines, and franchise termination. February 12, 2004 Page 2 Federal Entitlement of Franchise Renewal Under federal law, a cable operator is entitled to a franchise renewal if it offers and has the legal, technical, and financial ability to comply with a franchise agreement that meets the future cable related needs of the community. Since Comcast clearly has the legal, technical and financial capability to comply with almost any franchise condition, the foundational question becomes whether Comcast will agree to a franchise document that will meet the City's future cable related needs. Determining a community's future cable related needs requires public input — the future cable related needs are not simply what the elected officials believe. This determination can be accomplished by informal conversations, community feedback from public meetings, community focus groups, and/or a survey to citizens within the community. After the City of Fort Collins ascertains the community's future cable related needs, we will have a stronger footing in negotiating its franchise agreement with Comcast. Since last Spring, the City has been in the process of determining these needs and the past performance of the cable operator. River Oaks Communications Corporation is the lead consultant for this portion of the project, and will be present on February 24`h to discuss these issues and the findings that have been made to date. Federal law provides for two types of franchise renewals. The first, and more common, is an informal renewal process. In an informal process, the parties meet and negotiate a mutually acceptable franchise. The informal process is less structured, less confrontational, and less costly. Comcast has expressed the intent to pursue an informal renewal process. If the City and Comcast are unable to informally negotiate an acceptable franchise, under the federal Cable Act, either party may pursue a formal franchise renewal. To commence a formal franchise renewal proceeding, a cable operator may make a written demand for formal proceedings. Within a very structured and limited time period, the franchising authority determines its future cable related needs and submits that information to the cable operator. The cable operator then submits a proposed franchise. The franchising authority, within four months of the submission date, must make a preliminary assessment of whether it will accept or deny the cable operator's offered franchise. If the franchising authority does not accept the proposed franchise, the end result, in all likelihood, is federal court litigation. Preparing for the Renewal Process The franchise renewal process begins with key City staff, elected officials and community leaders becoming educated about the process. Elected officials and City Staff consider such topics as the quality of access programming, funding for access programming and equipment, and what other programming shall be allowed on access channels. Customer service issues are evaluated. Community leaders, such as school board officials, the Telecommunications Advisory Board or other civically oriented organizations can provide valuable insight into the community's needs. The City Engineer and General Manager of Utilities should also be involved in the process, since the franchise will address many KISSINGER&FELLMAN,P.C.0 3773 Cherry Cmek North Drive,Sahc 900,Denver,CO 80209•(303)320-6100•FAX:(303)320-6613 February 12, 2004 Page 3 construction and rights of way issues. This is the kind of work that River Oaks has undertaken on behalf of the City. It is also important to understand the limitations of federal law. The City may require an upgrade of the cable system to provide certain cable services and meet technical standards, but cannot require specific transmission technologies. The City may not use the franchise to negotiate for any telecommunications services that are not considered cable services under federal law (i.e., telephone services or high speed Internet services), nor can the City charge franchise fees on non-cable service related revenues. The City may not require Comcast to offer particular channels (i.e., ESPN or CNN), but may require Comcast to offer particular programming categories (i.e., sports channels or news channels). Federal law does allow the City to adopt customer service standards that may be more stringent than the federal standards, without Comcast's consent. When imposing any requirement on the cable operator, federal law provides that it should be reasonable in light of the costs of providing cable services to your community. Assessing Community Needs Whether through surveys, focus groups, public meetings or more likely, a combination of these activities, questions concerning PEG usage, citizens' views of a PEG channel, upgrade issues, high speed cable internet service or telephony issues will be addressed. Inquires are made into whether Comcast has met its prior customer service obligations. For example, when customers call Comcast's customer service line, are they put on hold for an unreasonable time? When a customer reports a cable service problem, approximately how many days pass before Comcast resolves the problem? When a customer calls to request Comcast to bury its cable lines, does Comcast actually bury the cable lines? Has Comcast met its current franchise requirements? Is the Fort Collins Cable system interconnected with other systems in the greater Fort Collins area? The City has retained technical consultants to provide an independent opinion of the technical quality of the cable system. A financial audit is being conducted to ensure that Comcast has complied with its prior franchise fee payments and other financial obligations. Understanding Cable Services Most often, people think of cable services as video programming. As previously mentioned, the City cannot require Comcast to provide specific channels; however, the City can require the cable operator to provide certain broad categories of programming. As channel capacity expands, there is more room on the cable bandwidth to provide additional programming choices. The City will review its current video programming choices and determine if there are other desired programming choices. Federal law authorizes the City to require one or more public, educational or governmental ("PEG") access channels. These are three distinct categories, although it is not uncommon for government and education access to be viewed on a shared channel. The City operates government access channels. Operating a channel includes acquiring the capital KISSINGER&FELLMAN,P.C.0 3773 Cherry Creek North Drive,Suite 900.Denver,CO 80209 9(303)320-6100•FAX:(303)320-6613 February 12, 2004 Page 4 equipment for a studio, developing programming, and staffing. This channel may also be used in conjunction with other governmental entities. An education access channel may be used by public schools, colleges or universities for broadcasting school board meetings, athletic activities, performing arts, programming created by students, or other scholastic type events. Government and education channels currently in operation are Poudre School District (PSD) channel 10, CSU channel 25 and City of Fort Collins channe127. The general public may also operate a public access channel. Comcast presently provides such a channel, which is public access Channel 68. It is this firm's strong suggestion to all of our local government clients to separate public access from government access. Content of government access programming is controlled by the governmental entity, and can be limited to government related issues. Public access is open to anyone, and the content of the broadcasts is subject to First Amendment protections. Therefore, City Council members may wish to maintain the separation of public access from government and education access, lest citizens see programming they might consider objectionable on the same channel that they watch for City Council meetings. When this occurs, citizens tend to assume that the City supports the undesirable programming, because it appears "on the City's channel". The cable franchise allows the City to require capacity on the system for a public access channel if there is interest and funding in the community to operate the channel. We recommend that a franchise allow for a separate public access channel, if the community interest supports it. A public access channel would require an involved group of volunteers and willingness to create and manage a nonprofit corporation. A cable system upgrade was completed in January 2000, with a technical capacity to provide Comcast the capability for advanced services, such as high-speed Internet access and telephony (telephone service over the cable system). Comcast has indicated to City Staff that it has no plans to offer local telephone service in Fort Collins at this time. Federal law regards telephony as a telecommunications service. It is regulated by the Colorado Public Utilities Commission, not through a cable franchise. Federal law currently classifies high speed Internet as an "information service" and may not be directly regulated in a franchise. That classification is currently being appealed in federal court, and if overturned, could result in high speed Internet over cable being regulated under a cable franchise at some point in the future. Customer Service Standards Federal law grants the City the authority to adopt Customer Service Standards addressing the community's needs. In the franchise renewal process we will review with you the federal customer service standards, and ascertain the current quality of Comcast's customer service. We will determine whether it is advisable for the City to adopt more stringent standards to address any specific needs in the community. One of the major issues we will be addressing in this regard is customer privacy. Except in very limited circumstances, federal law does not allow for the local regulation of cable rates. KISSINGER&FKLLMAN,P.C.•3773 Cherry Creek North Drive,Suite 900,Denver,CO 80209 0(303)320-6100•FAX (303)320-6613 February 12, 2004 Page 5 Institutional Network (I-Net) Some cities require their cable operators to construct an I-Net. An I-Net is basically a private network communications system, whereby City offices, schools, or other government buildings are interconnected. An I-Net offers potential long-term savings to the City, compared to costs paid to local telephone companies for private service lines. An I-Net can potentially be used to connect directly to other municipalities, hospitals, fire departments, or police departments, for distance teaming/training, video conferencing and other uses. The City of Fort Collins has not utilized its cable system for network needs in the past, as it utilizes the fiber ring infrastructure provided by Platte River Power Authority (PRPA). Together with CSU and PSD, the City has been in the process of identifying public buildings that are not connected to the PRPA fiber loop, and we may consider negotiating some agreement with Comcast to assist in making these connections. This would not be a traditional I-Net, but it would be within the scope of authority to negotiate under the Cable Act. There are other options for negotiating other connectivity for the network as well. Determinations of I-Net specifics and the particular costs and benefits often require an analysis by your information technology staff and potentially could involve the retention of a technical consultant. Comcast may be willing to build I-Net related infrastructure for the City, but will charge the City its cost in doing so. While I-Net facilities do offer long-term costs savings and other communications benefits, the expense would have to be carefully evaluated. Conclusion We look forward to working with you, Fort Collins staff, and River Oaks, in the cable franchise renewal process. My primary role will be to serve as special legal counsel to the City to address your legal questions regarding the process, and to help draft and negotiate a franchise that will achieve the City's goals within the framework of the federal Cable Act. Should you wish to discuss any questions or comments about the franchise renewal process prior to the study session, please contact Liz Stroh or Steve Roy, and we will make sure we respond accordingly. I look forward to seeing you on February 241h. KISSINGER&FELLMAN,P.C.•3773 Cherry Cmek Nonh Dnve,SujW 900,Denier,CO 80209 0(303)320-6100•FAX.(303)320-6613 ATTACHMENT River Oaks Communications Corporation Colorado Springs Office: Denver Office: 8 South Nevada Avenue, Suite 515 6660 South Yosemite Court, Suite 2000 Colorado Springs, Colorado 80903 Centennial, Colorado 80112 Telephone: (719)477-6850 Telephone: (303) 721-0653 Fax. (719)477-0618 Fax: (303) 721-1746 E-Mail: tduchen@rivoaks.com E-Mail., bduchen®rivoaks.com FORT COLLINS CITY COUNCIL STUDY SESSION February 24, 2004 CABLE TELEVISION NEEDS ASSESSMENT REPORT EXECUTIVE SUMMARY The City of Fort Collins ("City") has been conducting a needs assessment study to determine the current and future cable communications-related needs and interests of the Fort Collins community. The assessment methodology involved several types of information gathering techniques such as a random subscriber/nonsubscriber survey, workshops and a community-at-large meeting. The input gathered from interested citizens and other stakeholders (such as City Departments, Colorado State University ["CSU"], Front Range Community College ["Community College"] and Poudre School District ["School District"]) was analyzed and summarized. Outreach efforts also included, for example, the issuance of a City news release. In addition, a news article was carried by The Coloradoan. The City also made available a comment line for interested citizens to express their views, along with providing an online Survey. Interested residents were also encouraged to participate by sending letters to the City's Information Technology Department to express their views regarding cable television service. A newspaper ad was also placed in the Fort Collins Weekly and The Coloradoan encouraging citizens to attend the community-at-large meeting. A radio interview was also held regarding this phase of the cable television franchise renewal process. As indicated above, part of the assessment methodology included a mail-out survey to a random sample of City residents regarding their level of satisfaction or dissatisfaction with the cable television service provided by Comcast, formerly known as AT&T Broadband. The issues raised in the Community Survey included, for example, customer service experiences, Internet access and usage, interest and support for Channel 27 (the City's Government Access Channel) and an overall perception of Comcast's performance. Surveys were also sent to other organizations within the community. For example, a survey instrument was provided to CSU, the Community College, School District and neighborhood associations. In addition to the aforementioned surveys, three workshops and one community-at-large meeting were held. The first meeting provided City Departments with the opportunity to express their views regarding current and future cable-related needs and interests. The second meeting focused on franchise renewal technology issues for interested stakeholders (including City Departments and representatives from the educational constituencies). A third meeting was held for interested stakeholders with a particular emphasis on the needs and interests of the School District. The community-at-large meeting provided an opportunity for people to express their views on a variety of cable television-related matters, including, for example, customer service, rates, programming and Public Access. Further, as part of the needs assessment process, the City compiled a list of its current Governmental Access equipment. Additionally, the City indicated what Governmental Access equipment will be needed to meet the community's future cable-related needs and interests. Those projections are a starting point for discussions with Comcast. Based upon the results of the needs assessment, issues identified for consideration include, for example: • A basic package of cable service (with fewer cable channels at a reduced price). • A mid-term technology review of the cable system. • Free cable drops and Basic and Expanded Basic cable service for all key City facilities (i.e., City Hall, police and fire stations), public schools (K-12), the Community College, libraries and Access facilities. Also free digital service for all key City, School District and school buildings. • Preservation of Channel 27, the Public Access Channel (Channel 68) and the Educational Access Channels, with additional Access channels as needed; also address Access Channel bandwidth. • Capital funding for Public, Educational and Governmental ("PEG") Access facilities and equipment. • Enhanced studio and production facilities to enable the PEG Access Channels to provide for the community's evolving programming needs. • New, upgraded and replacement equipment for the PEG Access Channels. • Fiber optic links for any key unserved government sites with reliable and secure capacity for two-way video, voice and high speed data services. • Fiber optic connectivity for the Community College and public schools (K-12). • Comprehensive customer service standards. • A regional interconnection between the Comcast cable system in the City and other neighboring Comcast cable systems. ATTACHMENTS MEMORANDUM DATE: February 3, 2004 TO: Mayor and City Council Members FROM: Telecommunications Advisory Board Members RE: Cable Franchise Agreement Priorities A study session on the Cable Franchise Negotiations is scheduled for February 24. One of the primary responsibilities of this board is to provide City Council with input regarding telecommunications issues. In addition to being available at the study session to answer any Council questions, the Board would like to provide a list of issues and suggestions that we believe need to be considered during negotiations. A low cost basic cable service package. Citizens are concerned that some communities along the front range have a basic cable service of 10-15 channels at a significantly lower rate than the basic package offered in Fort Collins. Residents need the ability to choose from a broader tier of packages. It is also important that the push to move from analog to digital format does not result in higher prices, or the necessity to rent additional converters and other equipment. The optimum solution would be to require that Comcast offer "a la carte", and let subscribers choose their own packages. People want to pay for what they use, not be forced to pay high prices with little or no choice. Local Programming. Citizens need access to equipment and facilities to produce and air programs of local interest. Public access programming capabilities are a must, and we also encourage Council to look for ways to continue and enhance local programming provided by community, educational and governmental channels. (Poudre School District, CSU, City of Fort Collins and Public Access channel 68). Future Technology. There are several issues around this topic. Schools must continue to have educational access channels. There also must be provision in the franchise for equipment necessary to migrate from analog to digital format. The capacity for distance learning must also be continued. Because of the rapid changes in technology, the term of the franchise should either be shorter, or additional provisions put in the franchise to require that Comcast keep pace with technical improvements, particularly for the PEG (Public, Educational and Governmental) entities. Please contact the Board's staff liaison, Liz Stroh, in the Information Technology Department if any of these items need clarification. Again, members of the Board will be available during the study session to answer any questions. Attachment: January Telecommunication Board Meeting Minutes