HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/17/2006 - FIRST READING OF ORDINANCE NO. 010, 2006 GRANTING ITEM NUMBER: 21
AGENDA ITEM SUMMARY DATE: January 17, 2006
FORT COLLINS CITY COUNCIL STAFF: Elizabeth Stroh
SUBJECT
First Reading of Ordinance No. 010, 2006, Granting a Non-exclusive Franchise by the City of
Fort Collins to Comcast of Califomia/Colorado LLC and Its Successors and Assigns for the
Right to Make Reasonable Use Of, and Erect, Construct, Operate and Maintain Through, the
Public Rights-of-way, Easements and Other Public Property Any Equipment Necessary and
Appurtenant to the Operation and Maintenance of a Cable System and the Provision of Cable
Services to Citizens Within the City.
RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
The Telecommunications Board has reviewed and discussed the agreement and also
recommends adoption.
FINANCIAL IMPACT
The proposed franchise continues to collect 5% of gross revenues, as allowed by the Federal
Cable Act. Franchise fees are paid to compensate the City for Comcast s use of the public
rights-of-way and generate approximately one million dollars annually.
A new fee is included in the proposed franchise agreement, the purpose of which is to fund
capital and facility needs for Public, Educational and Governmental ("PEG") cable television
programming. The amount of the fee is 50 cents per month per residential subscriber and will be
distributed among the PEG entities as determined by City Council. The estimated annual
revenue is $164,000.
EXECUTIVE SUMMARY
The proposed Cable Franchise Agreement between the City of Fort Collins and Comcast of
Califomia/Colorado LLC ("Comcast'), which was provided to the Council under separate cover
on January 5, 2006 and which is on file in the office of the City Clerk, is a non exclusive
franchise. The main elements of the agreement are:
1. Term. The length of the franchise is nine years
2. Customer Service Standards. The standards will be adopted in February, but are
referenced in this agreement. The proposed franchise agreement would establish
penalties for non-compliance with these standards.
January 17, 2006 -2- Item No. 21
3. Franchise Fee. Five percent (5%) of gross revenues will be paid to the City for use of
rights of way. Federal law allows cable companies to pass this cost through to
subscribers.
4. Public Educational and Governmental Programming. A PEG fee of 50 cents per
subscriber per month will be dedicated to equipment and facility costs associated with
providing PEG programming. Comcast has chosen to pass this fee through to
subscribers.
BACKGROUND
The Federal Cable Acts allow cities and cable companies to begin informal negotiations within
36 months of the expiration of the existing franchise. The City began the renewal process in the
fall of 2003 with a needs assessment as to the legal, financial and technical capabilities of
Comcast to continue to provide cable television services to Fort Collins.
Needs Assessment
Staff used several sources to collect information about the needs of the community, including:
• A statistically valid subscriber/non-subscriber survey,
• An on-line survey,
• A survey of neighborhood groups.
• A telephone call in line for comments,
• meeting (publicized with a news release aid advertising and newspaper
A community g (P , p g
articles)which was rerun on Channel 27 during a 4 week period,
• Surveys of City Departments, Front Range Community College, Colorado State University,
and Poudre School District, followed by workshops,including a technical briefing,
• Phone calls and/or letters to the City's Franchise Administrator,
• Input from the Telecommunications Board identifying priorities for the community.
In addition, consulting firms were hired to evaluate both the financial and technical capabilities of
Comcast's Cable system in the City.
Needs Assessment Results
Based on the results of the needs assessment process, a number of topics were discussed with
Comcast during franchise renewal negotiations. The needs assessment indicated that:
• There is a need for a basic package of cable service(with fewer cable channels at a reduced
price).
• The current cable system should be sufficient for the community needs for the next 5-6
years. A mid-term technology review of the cable system should occur, with subsequent
modifications made as needed to meet the cable-related needs and interests of the
community.
• If the cable system is updated,then all connections for City and educational facilities should
January 17, 2006 -3- Item No. 21
be concurrently modified as needed at Comcast's expense. Access equipment/facilities
upgrades by the City, public schools (K-12), and CSU resulting from changes in Comcast's
system should be at the cable company's expense.
• Free cable drops and Basic and Expanded Basic Service for City buildings, libraries and
educational facilities(for example,public schools[K-12])should be provided. Additionally,
Comcast should be encouraged to provide free service to the digital line-up for all key City,
School District and school buildings. The City should also encourage Comcast to provide
free Cable Internet Service, on a voluntary initiative basis, to key City buildings, public
schools(K-12) and libraries.
• The City's Governmental Access Channel, the Public Access Channel, and the Educational
Access Channels should be preserved,with additional Access channels being made available
based upon trigger mechanisms in the new franchise. Over the life of the new franchise,
there is a need and interest in having enhanced studio and production facilities to enable the
PEG Access Channels to provide for the community s evolving programming needs
• There may be a need in assigning a small portion of the subscribers' cable bills to support
PEG Access facilities and equipment. An Access and I-Net capital grant fund could be
established based upon a monthly per subscriber charge to be negotiated with Comcast. In
addition, the City could negotiate with the cable company for an initial capital grant for
Access and/or I-Net purposes. The up-front capital grant should be sufficient to upgrade or
replace aging Access equipment and further enhance digital capabilities for Channel 14.
The Access/I-Net payments and provision of facilities and equipment need to be in addition
to the franchise fee payments.
• Comcast should construct fiber optic links to all remaining key un-served government sites
with reliable and secure capacity for two-way video,voice and high speed data services.
• As the City or public schools establish new or relocated facilities, Comcast, at its expense,
should provide network connections to such facilities when requested by the City or other
entity.
• There is a need and interest in having comprehensive customer service standards that,
among other things, ensure that deficiencies in operator performance that may have
occurred in the past do not recur.
• A regional interconnection between the Comcast cable system in the City and other
neighboring Comcast cable systems should be effectuated for the purposes of sharing
Access programming, furthering E-Government applications, promoting information
sharing and enhancing homeland security.
• Comcast's financial position was healthy and stable.
Negotiations
The results of the needs assessment were presented to City Council in February 2004. Council
identified the following three top priorities: a low cost basic tier of service similar to those in
January 17, 2006 -4- Item No. 21
surrounding communities; a system that kept pace technically with the industry and was `state of the
art"; and support for PEG access.
The proposed franchise addresses these priorities as follows:
Basic Tier: Although not a part of the franchise agreement, Comcast recently announced the
creation of a basic tier of service that will contain 22 channels at a cost of$13.99 excluding fees
and taxes. The basic tier will consist of Denver broadcast channels, Public Broadcast channels
(PBS), local PEG channels, and additional channels that will make Fort Collins' basic tier
similar in program line up and cost of service in the communities of Greeley, Loveland and
Windsor.
State of the Art Technology: The parties were unable to agree to any language in the proposed
franchise agreement that would requires Comcast to maintain a "state of the art" system.
Because of this, and because the technical consulting firm believes that the current system will
meet the needs of the community for 5-6 years, the term of the franchise was reduced from the
initially proposed 15 years to a 9 year franchise.
Public. Educational and Governmental Access: The availability of bandwidth for PEG
programming is mandated by the Federal Cable Act, but cities cannot require cable companies to
provide a studio or equipment for public use. Therefore, the City took the path of obtaining a
PEG fee to fund local access channel needs, a mechanism that most cities across the nation use.
The provisions in the proposed franchise agreement include a fee of 50 cents per residential
subscriber per month to be dedicated to capital expenses (facilities and equipment) for PEG
entities. Federal law allows cable companies to pass through these costs to subscribers and
Comcast has indicated it will do this. Council will decide how to allocate the PEG revenue,
limited only by the requirement that the funds be spent on capital (equipment and facility)
expenses.
The City is also working collaboratively with Aims Community College Fort Collins Campus
and a group of local citizens to facilitate the production of local programming.
ATTACHMENTS
• Comparison between the current franchise and the proposed franchise
• Telecommunications Board January 4, 2006 Meeting Minutes
• PowerPoint slides
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TELECOMMUNICATIONS BOARD
MEETING MINUTES
January 4, 2006
6:00 PM
Council Liaison: David Roy
Staff Liaison: Liz Stroh, Communications and Technology Services; 221-6522
Board Chair: Curt Cramer
Vice Chair: Herb Saperstone
Present: Curt Cramer, Robert Reichenberger, Herb`Saperstone,:Chip
Cushman, David Heiberg, Ted Funk
Absent: Larry Bontempo
Guest: Stan Reifschneider, Comcast
Staff: Kraig Ecton, Eric Dahlgren, Liz Stroh
Chair Curt Cramer called the meeting to order at 6: 00 PM. Ted Funk was
introduced; he replaces Board member Tim Tillson.
Public Input: None
{
Minutes: 'Robert Reichenberger moved to approve minutes of the November
Board meeting, seconded by Herb Saperstone. The motion passed
unanimously.
Cable Franchise: Chip Cushman asked about the Comcast announcement of a
low cost basic tier coming to Fort Collins. Stan Reifschneider responded that
Comcast had decided to provide Fort Collins subscribers with some of the same
choices offered in surrounding communities.
Herb Saperstone asked about the Customer Service Standards and asked Stan
how subscribers would have access to the information. Stan explained that
summary information is provided to new customers. Liz added that the
information will also be available on the City's web site.
Curt mentioned that the Board would be interested in receiving information on the
percentage of subscribers that take advantage of the low cost tier.
1
Herb expressed concern that the service provided to the schools will be the basic
package. Currently schools have the "extended" basic, and there is
programming available on that tier that is used in classrooms. Stan indicted that
it is not the intention of Comcast to reduce the level of service to the school
district, and suggested that Herb call him for further discussions.
Herb also asked about how PEG access channels would deal with migration to
digital technology. Stan explained that the franchise has language that would
require Comcast to ensure that the PEG channels are available on the system's
basic tier, whether that is digital or analog format.
Board members asked about section 12, which relates to the Cable system
design and functionality. A "state of the art" system was one,of the Board's and
Council's top priorities. Liz explained that Comcast was unwilling to include any
specifics related to system capacity. She explained that the technical
assessment done as part of the needs assessment reported that=the,,,system
would serve the needs of the community for the next 5-6 years Recent: '
improvements implemented in the Fort Collins area, such as High Definition TV
(HDTV) and Video on Demand, indicate that the Fort Collins system is keeping
pace with system improvements in surrounding communities.
Robert indicated a desire to have more specifics in the agreement related to
current practices, such as providing more than one outlet for government and
school buildings, providing extended basic to schools,etc.
Chip made a motion.to make a recommendation to City Council that the
Franchise Agreement be adopted; Robert seconded the motion, which was
approved unanimously. ,
Curt moved to recognize the negotiation team, and applaud the work done over
the course of the negotiations. Chip seconded the motion. Vote was unanimous
to appfO*-
3 :
Annual Repcirt;,,, Liz presented a draft of the annual report for 2005. Upon
review, Herb made a motion to accept the report as written, Chip seconded the
motion. The vofe was unanimous to approve.
Other Business
Curt asked about whether or not Board members should be available at the
Council meeting on January 17. Liz explained that that is usually the case, and
will notify the Board of the approximate time that the agenda item will be
considered.
Herb reported that he had followed up with the Vocational Education Department
with the School District about the 2006 Work Plan item to compile information
about telecommunication providers in the area. As a result, two to three students
2
will work on this as a project, and would be available to report back to the Board
in May on the results. Curt thanked Herb for the initiative, and other Board
members were enthused that the work would provide valuable information to the
community.
Chip asked that Liz arrange for FC-PAN to visit the Board again in March or April
rnm Ad'1ou nt:e
Dave Heiberg moved to adjourn, seconded by Chip. The motion passed
unanimously and the meeting was adjourned at 8:00 PM.
Chair Date
Staff Liaison Date
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ORDINANCE NO. 010, 2006
OF THE COUNCIL OF THE CITY OF FORT COLLINS
GRANTING A NON-EXCLUSIVE FRANCHISE
BY THE CITY OF FORT COLLINS TO COMCAST OF CALIFORNIA/COLORADO
LLC AND ITS SUCCESSORS AND ASSIGNS FOR THE RIGHT TO MAKE
REASONABLE USE OF, AND ERECT, CONSTRUCT, OPERATE AND
MAINTAIN THROUGH, THE PUBLIC RIGHTS-OF-WAY, EASEMENTS
AND OTHER PUBLIC PROPERTY ANY EQUIPMENT NECESSARY AND
APPURTENANT TO THE OPERATION AND MAINTENANCE OF A
CABLE SYSTEM AND THE PROVISION OF CABLE SERVICES TO
CITIZENS WITHIN THE CITY
WHEREAS,Comcast of California/Colorado LLC("Comcast"),is the successor to Heritage
Cablevision of Delaware, Inc. and The World Company and currently holds a cable television
franchise with the City of Fort Collins("City"),granted by Ordinance No. 115,on October 19, 1993,
and amended by Ordinance No. 169, on October 26, 1998; and
WHEREAS, the cable television franchise was extended by Ordinance No. 116, 2005 on
October 18,2005 until March 17,2006 or until anew agreement is entered into between the parties,
or until the cable television franchise is terminated pursuant to its terms; and
WHEREAS, Comcast and the City have been involved in negotiations for the past several
months related to the granting of a new cable franchise agreement to Comcast; and
WHEREAS, these negotiations have resulted in a proposed Franchise Agreement that is
being presented to City Council for its consideration and approval (the "Franchise Agreement:), a
copy of which is on file with the City Clerk; and
WHEREAS, the Franchise Agreement includes the following major terms and conditions:
(1)a term of nine years(2)a requirement that Comcast pay to the City a franchise fee of five percent
of the gross revenues that Comcast receives from the operation of its cable system within City rights-
of-way; (3) updated customer service standards; and (4) public, educational and governmental
funding for public access channels.
WHEREAS, Section 1 of Article XI of the City Charter and Section 6-3 of the City Code set
forth notice requirements that must be satisfied prior to the City granting a cable television franchise.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FORT COLLINS, COLORADO, as follows:
Section 1. That the City Council hereby finds that the notice requirements of Section 1
of Article XI of the City Charter and Section 6-3 of the City Code relating to the granting of a cable
television franchise have been satisfied with respect to the granting of a cable television franchise
to Comcast under the terms and conditions of the Franchise Agreement.
Section 2. That if any portion of this ordinance is held to be unconstitutional or invalid
for any reason, such decision shall not affect the constitutionality or validity of the remaining
portions of this ordinance. The City Council hereby declares that it would have passed this
ordinance and each part hereof irrespective of the fact that any one part be declared unconstitutional
or invalid.
Section 3. That all other ordinances or portions thereof inconsistent or conflicting with
this ordinance or any portion hereof are hereby repealed to the extent of such inconsistency or
conflict.
Section 4. That City Council finds that the City's grant of a cable television franchise
to Comcast in accordance with the terns and conditions of the Franchise Agreement is in the best
interests of the City and its citizens, and will meet the future cable related needs of the community.
Introduced and considered favorably on first reading and ordered published this 17th day of
January,A.D. 2006, and to be presented for final passage on the 7th day of February, A.D. 2006.
Mayor
ATTEST:
City Clerk
Passed and adopted on final reading this 7th day of February, A.D. 2006.
Mayor
ATTEST:
City Clerk