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HomeMy WebLinkAboutFebruary 21, 2002CITY OF COLUMBIA HEIGHTS 590 40t1r Avenue N.E., Columbia Heights, MN 55421-3878 (763) 706-3600 TDD (763) 706-3692 Visit Our Website nu www.ci. cokanbiu-heighls.mrr.us MEETING OF THE TELECOMMUNICATIONS COMMISSION 7:00 PM, THURSDAY, FEBRUARY 21, 2002 CITY HALL CONFERENCE ROOM Please contact Linda at 706-3609 if you are unable to attend. AG);NDA: 1. Call to Order 2. Roll Call 3. Approval of the Minutes of the Meeting of December 20, 2001 4. Old Business a. Channel Check b. Correspondence Log and Company Follow Up on Complaints- c. Report on Review of Forms 1205 & 1240 for Rate Increases Effective July 2001 d. Summary Regarding Fiber Optic Line in Cenhal Avenue e. Other Old Business 5. New Business a. Annual Privacy Notice b. Franchise Fees Received for 3`d and 4°i Quarter 2001 c. Notice of Domain Name Change d. Notice of Proof of Performance Testing in February e. Other New Business 7. Reports a. Report of Cormnissioners Assigned Co Access Channels: Educational Access--Dennis Stroik; Library Access-Bob Buboltz; Government Access--Ken I-Ienke; Public Access-- Reuben Ruen b. Report of AT & T Broadband- October-December 2001 Reports January 2002 Reports --Programs Produced --Installation and Service Activity Report --Current Channel Line Up and Setroice Charges c. Report of the Cable Attorney d. Report of the Assistant to the City Manager 8. Adjournment The City of Columhla Heights does not discrlmina[o on the bnsie of disability hr the admission m' access tq or h'entment or employment in, its services, programs, or actlvl[ics. Upon regnest, accununoda[ion will 6e provided to allow Individuals with disabllltles [o pmticipate in all Cily of Columbia Aeigh[s' services, programs, mul activities. Auxiliary aids for handicapped persons are available upmr request whmr the regnest is made a[ leas[ 96 boars in advance. Please call [he Deputy City Clerk at 706-3611, to make nrrmlgements. (TDD 706-3692 for deaf or hearing impaired only) THE CITY OF COLUMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BA515 OF DISABILITY IN EMPLOYMENT OR THE PROVISION OF SERVICES EQUAL OPPORTUNITY EMPLOYER THE MINUTES OF THE TELECOMMUNICATIONS COMMISSION FROM THURSDAY, DECEMBER 20, 2001 The meeting was called to order at 7:10 p.m. by Ken Henke, Vice Chair. ROLL CALL: Commission Members: Dave Mahoney, Bob Buboltz, Ken Henke, Brad Peterson, and Reuben Ruen Dan Swee arrived at 7:30 pm Council Representative: Bruce Nawrocki City Representative: Linda Magee and Jean Kuehn AT 8z T Broadband Rep: Kathi Donnelly-Cohen Also present were Gordon Awsumb, Managing Partner of the 3989 Central Avenue Business Center and John Lampland from SavvyNet, an Internet Communications Company. APPROVAL OF MINUTES Motion by Bob Buboltz, second by Reuben Ruen, to approve the minutes from the meeting of October 18, 2001, with the following correction: New Business, Item E. to reflect an average of 20 rnimues hold time, not 45 minutes as written. All ayes. OLD BUSINESS A. Channel Check B. C The only problems detected were on Access Channels where the message bar quivers and does not sink in properly. Correspondence Log and Complaint Follow Up. There were no complaints received by the City since the last meeting 2000 Annual Report-Remaining Outstanding Item-Financial Information The financial statement prepared by an accountant was enclosed in the agenda packet. This was the last of the information requested for the Annual Report of 2000. Motion By Reuben Ruen, seconded by Brad Peterson, to accept the Annual Report for 2000. All ayes. D. Other Old Business Mr. Nawrocki questioned whether he had been given preferential treatment for the service call made at his residence to correct problems with his cable service. He asked that the Commission members review the facts and discuss the situation. He left the room while the issue was discussed, and the commission came to a decision. Kathi Donnelly Cohen, from AT & T Broadband, reported that she had arranged for customer service to schedule an appointment with Mr. Nawrocki. She has done this for others on numerous occasions, whenever she is made aware of someone who is experiencing problems. The service technician is not made aware of who the subscriber is. He would have received the same service whether he had called customer service himself, or if Kathi reported it as in this case. After reviewing the facts and listening to Kathi Donnelly Cohen, the commission decided that he had received the same service as any cable subscriber with a reception problem. TELECOMMUNICATIONS MEETING MINUTES OF DECEMBER 20, 2001 PAGE 2 NEW BUSINESS A. Notice Regarding Equipment Compatibility Sent to Subscribers A copy of the notice to sent subscribers was enclosed in the agenda packets for review. Kathi explained there are three notices sent to subscribers on an annual basis in order to comply with requirements set by the FCC. B. Notice to Subscribers Regarding Changes in Programming for Analog and Digital Services A copy of the letters sent to subscribers regarding changes in programming for those customers subscribing to analog and digital service were enclosed in the packets. These changes took effect December 18, 2001. Premium services have been moved to digital service only. Subscribers must now have a digital converter box to obtain these channels, but the price for the service has remained the same. C. Notice of Rate Increase Effective January 1, 2002 A letter was received November 21, 2001, notifying the City of the Rate Increase for Basic 2 and Standard Cable, as well as to premium services effective January 1, 2002. The prices for Basic 1 and equipment rates were not adjusted, so we do not have the opportunity to review the charges or regulate them in any way. It was noted that we held the Public Hearing on the last increase from July 2001. The City now has until March 1, 2002, to order any adjustments to that increase. D. Discussion with SavryNet regarding Fiber Access on Central Ave Gordon Awsumb, from the Central Business Center, and John Lampland, from SavvyNet, had recently addressed the EDA Board regarding placement of a Fiber Optic line in Central Avenue while the street is being reconstructed next year. The EDA Board recommended the Telecommunications Commission review this idea and share their thoughts with the EDA Board/City Council. Mr, Awsumb and Mr. Lampland are specifically interested in accessing fiber optic at their building on 40`s and Central Ave to better serve their clients and expand business opportunities at this site. Mr. Awsumb explained the importance of providing high speed data service to further economic development for other areas in Columbia Heights as well. He feels a fiber optic line will help build a strong tax base by providing service for current businesses, as well as attracting new businesses. He envisions Columbia Heights as being the future home of several high tech business centers if we have the foresight to provide the equipment necessary for these businesses to operate using the latest technology available. He stated the costs have been reduced from their first proposal due to the fact that they have discovered Qwest already has a fiber optic line running up Central to 44~' Avenue, with a vault on 42°d Avenue. He estimates that it will cost approximately $150,000 to bring a connection line down from 42°" Avenue to the 40a' Avenue intersection, do the connection to the building, and to cover Engineering and Administration costs. It was noted that Qwest will be connecting Columbia Park Clinic to their line soon. Columbia Park Clinic is paying for this connection, but has to do it according to Mr. Awsumb, on Qwest's timeframe. The Commission members asked Kathi Donnelly Cohen if AT & T Broadband provides this type of service. She states they do, but on a residential scale. They are not equipped at this time to take on large office complexes. TELECOMMUNICATIONS COMMISSION MINUTES OF DECEMBER 20, 2001 PAGE3 Dan Swee asked why the City should pay for this project. Mr. Awsumb explained that itjust made sense to place vaults accessing the duct banks every block along the avenue while it is being reconstructed, so the street will not have to be dug up again in a few years. If the vaults were strategically placed, lines could be fed to future business in other directions. He went on to explain that OC3 lines must be secure and must be inground. These lines provide the larger capacity needed by businesses. While many of the Commission members felt it would be a good idea to provide for digital service while the street is being reconstnrcted, they raised some issues that need to be checked out. They questioned legal issues such as ownership of the lines if additional conduits are run along a State Highway, connection costs and how they would be assessed, usage costs, what could be done with extra space in the conduits, etc. They also questioned what Qwest's plans are for placing additional lines or vaults along Central during reconstruction, and if they had been informed of the reconstruction project. _ There was a long discussion and it was the general consensus of the commission that this is something to pursue after the EDA decides what areas they would like to develop, after certain legal issues are answered, and after fording out what Qwest's plans are. If Qwest has plans for additional work along Central, the City may not have to do anything. E. Other New Business There was no other new business. REPORTS A. Report of Commissioners Educational-Dennis was not present, but he forwarded a memo from the School District reporting on the status of the equipment and training that was purchased with a grant from the Commission. Government- Nothing to report Library-Nothing to report Public-Nothing to report B. Report of AT & T Broadband- The reports for October to present were enclosed in the agenda packets. Kathi Donnelly Cohen passed out a copy of a press release regarding the merger of AT & T Broadband and Comcast. This merger will make them the largest cable provider in the country. C. Report of the Cable Attorney Our legal counsel was not present at this meeting. D. Report of the Assistant to the City Manager The Holiday Dinner will be held at Jax Cafe on January 17, 2002 at 6:30 pm. Notices will be sent out to members in January. Motion by Bob Buboltz, seconded by Brad Peterson, to adjourn the meeting at 9:20 pm. All ayes. Respectfully submitted, Shelley Hanson Secretary J~ t'~.~ RESOLUTION NO. ORDER REGARDING THE MAXIMUM PERMITTED EQUIPMENT AND INSTALLATION RATES SET FORTH IN THE FEDERAL COMMUNICATIONS COMMISSION FORM 1205 FILED BY AT&T BROADBAND ON OR ABOUT MARCH 1, 2001 WHEREAS, under Section 623 of the Cable Communications Policy Act of 1984, 47 U.S.C. § 543, as amended, the City of Columbia Heights, Minnesota (hereinafter the "City") is permitted to regulate rates for equipment and installations; and WHEREAS, the City is certified as a rate regulation authority pursuant to rules of the Federal Communications Commission (hereinafter "FCC"); and WHEREAS, MediaOne North Central Communications Corp. d/b/a AT&T Broadband (hereinafter "AT&T") filed with the City an FCC Form 1205 "Determining Regulated Equipment and Installation Costs, `Equipment Form"' (hereinafter the "2001 FCC Form 1205"), dated March 1, 2001, purporting to set forth and justify the rates it proposed to charge to subscribers in the City for equipment and installations; and WHEREAS, the City's legal counsel retained Ashpaugh & Sculco, CPA's, PLC (hereinafter "A&S") to assist the City in reviewing and analyzing AT&T's 2001 FCC Form 1205; and WHEREAS, the City, with the assistance of A&S, reviewed the 2001 FCC Form 1205, and held a public hearing to solicit the views of interested persons; and WHEREAS, the rates set forth herein will govern AT&T's equipment rates and installation charges until AT&T lawfully implements a further rate change pursuant to applicable FCC regulations. NOW, THEREFORE, the following is resolved by the City Council of the City of Columbia Heights, Minnesota: FINDINC:S AND CONCLUSIONS 1. The City's financial consultants, A&S, have reviewed and analyzed the 2001 FCC Form 1205. A&S's conclusions are contained in a report dated January 29, 2002, appended hereto as Attachment 1 (hereinafter "A&S Report") and made a part hereof. 2. FCC rules place the burden on AT&T to prove that its proposed rates for equipment and installation are reasonable under applicable federal law and regulations. 47 C.F.R. § 76.937(a). The City has provided AT&T with ample opportunity to provide the necessary support for its rates. Hence, to the extent AT&T has failed to carry its burden of proof, the City may order AT&T to reduce its rates and provide refunds based on the information submitted by AT&T and conclusions reached thereon by the City. A. 2001 FCC Form 1205: Installation Activities 3. In reviewing the 200 ] FCC Form 1205, A&S determined that AT&T did not include any free activities (e.g., free installations) when it developed its national aggregation of installation costs. As a result, AT&T undercounted actual installations by 25 percent. This is significant because AT&T calculates labor hours by multiplying the number of installations by the installation times. The end result is that AT&T has understated the number of labor hours. By understating the number of labor hours, AT&T is proposing an hourly service charge that over-recovers AT&T's actual costs. 4. AT&T also erred in its determination of the number of installations by counting the number of "customers" rather than the number of "activities" in certain reports. AT&T uses this information in the determination of labor hours. Since the number of customers is less than the number of activities, AT&T has understated its number of labor hours in its nationally aggregated data. As indicated above, by understating the number of labor hours, AT&T calculated installation charges that over-recover actual costs. 5. According to the A&S Report, the 2001 FCC Forn~ 1205 is further flawed because the insta]lation times reported by each of the forty sample systems do not agree with the apparent times used in charging for those activities. A&S reached this conclusion by using the times AT&T reported for "B" type activities as a baseline. Appendix K of the A&S Report shows how A&S developed times for various activities using the baseline. The times calculated by A&S differ significantly from AT&'I"s sample times, thereby calling into doubt the accuracy of the data used in the 2001 FCC Form 1205. 6. Another problem discovered by A&S is that the sample data concerning installation activities and maintenance hours is for the year ended September 30, 2000, while the 2001 FCC Form 1205 and all other information in AT&T's national aggregation is for the year ended December 31, 2000. The significance of this additional three months is shown in Appendix J to the A&S Report. 7. To correct the errors identified in paragraphs 3-ti, the A&S Report developed an alternative FCC Form 1205 using the best information available. This approach was necessitated by the fact that AT&T's use of nationally aggregated data precludes any local regulatory body from making wholesale changes due to the overwhelming amount of work that would be required and the unavailability of necessary information. The City and A&S requested local information with which to construct an alternative FCC Form 1205, but AT&T stated that such information was not available. 8. The City finds A&S's alternative FCC Form 1205 to be reasonable in light of the issues raised in paragraphs 3-6. B. 2001 FCC Form 1205: Unbundling 9. In its 2001 FCC Form 1205, AT&T is seeking to recover in excess of $6.27 per subscriber per month in the equipment and installation basket. This amount represents an increase of $2.56 per subscriber per month over the highest amount previously attributed to equipment and installation in prior rate Filings. Pursuant to the FCC's unbundling requirements, AT&T should have implemented a cottesponding reduction in programming rates in order to maintain the relationship between programming rates and equipment rates and installation charges that was established in the FCC Forms 1200 and 1205 filed in 1994. AT&T, however, did not reduce its programming rates by $2.56 per subscriber per month. 10 If AT&T persists with a nationally aggregated filing that continues the unbundling described in paragraph 9, the City ftnds that it will need to address adjustments to programming rates. C. Conclusions 11. The City finds A&S's determination of rates to be reasonable and appropriate. 12. AT&T's 2001 FCC Form 1205 is rejected, in light of the issues discussed in paragraphs 3-6 and paragraph 9 above. 13. The City adopts the A&S Report, including the appendices thereto. ORDERING CLAUSES Based on the foregoing Findings and Conclusions, the City hereby enters the following orders: 1. AT&T's maximum permitted rates for equipment and installation are hereby set in accordance with the rates calculated in the A&S Report, as follows: (a) Remote Control: (b) Addressable Converter: (c) Non-Addressable Converter: (d) Installation of Unwired Home: (e) Installation of Prewired Homes: (fj New Outlet Install/LJnwired Home: (g) New Outlet Install/Separate Trip: (h) Tier Change with Service Call: (i) Tier Change without Service Call: (j) Hourly Service Charge: $0.47 (excluding the 5% franchise fee) $2.72 (excluding the 5% franchise fee) $0.00 $38.27 (excluding the 5% franchise fee) $30.61 (excluding the 5% franchise fee) $15.31 (excluding the 5% franchise fee) $30.61 (excluding the 5% franchise fee) $30.61 (excluding the 5% franchise fee) $1.99 (excluding the 5% franchise fee) $30.61 (excluding the 5% franchise fee) 2. As soon as possible, but in any event within sixty (60) days from the effective date of this Order, AT&T shall make any rate reductions and refunds that are necessary based on the rates shown above. AT&T shall refund any amounts charged to subscribers for equipment and/or installation that exceed the maximum permitted amounts specified herein. Refunds shall be made in accordance with 47 C.F.R. § 76.942(d), and shall include interest computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments, pursuant to 47 C.F.R. § 76.942(e). 3. Any charges for equipment, installation or other services based on an hourly rate shall reflect an Hourly Service Charge ("HSC") no greater than the maximum permissible HSC determined above. 4. AT&T shall file with the City within thirty (30) days of the date of this Order materials sufficient to demonstrate its proposed methodology for making any refunds required herein. Such materials shall include, without limitation, a narrative explanation in detail of the methods used to calculate all refunds, including how the refund amount was detern~ined and how interest was calculated on aper-subscriber basis; the aggregate amounts of any refunds to be made for each affected rate, including separate itemization of the amounts attributable to interest; and specific examples (for which any individual identifying infonnation may be redacted) of sample calculations of all refunds for representative classes of subscribers. The materials provided should be sufficient to permit the City to verify whether AT&T's refunds comply with the requirements of this Order and applicable law. If AT&T claims that no refunds are due, AT&T shall provide a complete written explanation to the City. 5. AT&T shall file with the City within ninety (90) days from the date of this Order a certification, signed by an authorized representative of AT&T, stating whether AT&T has complied fully with all provisions of this Order, describing in detail the precise measures taken to implement this Order, and showing how any refunds (including interest) were actually calculated and distributed. 6. AT&T shall not charge any rate higher than the applicable maximum permitted rate set herein, nor increase that rate, unless such rate is first filed with and approved by the City, in accordance with applicable law and regulations, including but not limited to the notice requirements imposed by 47 C.F.R. § 76,932, or as otherwise expressly permitted under applicable law and regulations. 7. AT&T may charge rates less than the maximum permitted rates indicated above for equipment and installation, as long as such rates are applied in a uniform and nondiscriminatory way, pursuant to applicable federal, state and local laws and regulations. 8. The rates set herein are subject to further reduction and refund to the extent permitted under applicable law and regulations, as the same may be amended from time to time. 9. The findings herein are based on the representations of AT&T. Should information come to the City's attention that these representations were inaccurate in any material way, the City reserves the right to take appropriate action. This Order is not to be construed as a finding that the City has accepted as correct any specific entry, explanation or argument made by AT&T not specifically addressed herein. 10. The City reserves all of its rights with respect to rate regulation, including, but not limited to, any right it may have to reopen this rate proceeding based on new information or rulings by governing authority, if it appears that such new information or rulings would alter the reasonable rates prescribed by FCC regulations, and any right it may have to "true up" overcharges or undercharges in connection with future filings pursuant to 47 C.F.R. § 76.922(e)(3). 11. This Order constitutes the written decision required by 47 C.F.R. § 76.936(a). 12. This Order shall be effective immediately upon its approval by the City. 13. This Order shall be released to the public and to AT&T, and a public notice shall be published stating that this Order has been issued and is available for review, pursuant to 47 C.F.R. § 76.936(b). Passed this day of , 2002. Offered by: Seconded by: Roll Call: Mayor Gary L. Peterson Patricia Muscovitz, Deputy City Clerk ~~ ATTACHMENT 1 A C~ Ashpaugh &Sculco, CPAs, PLC & Certified Public Accountants and Consultants January 29, 2002 AS1028-01/02 Stephen J. Guzzetta, Esquire Creighton, Bradley &Guzzetta, LLC 5402 Parkdale Drive Suite 102 Minneapolis, MN 55416 SUBJECT: Review of the FCC Forms 1240 and 1205 of AT&T Broadband Filed with the City of Colnmbia Heights on March 1, 2001 Dear Mr. Guzzetta Ashpaugh &Sculco, CPAs, PLC ("A&S") were requested to assist the City of Columbia Heights (the "City") with the review of the FCC Forms 1240 and 1205 filed by AT&T Broadband ("ATT-B") on March 1, 2001. The Form 1240 was filed in support of its proposed Basic Service Tier ("BST") rate. This letter report will address the steps taken in the review and our findings. This report also addresses the FCC Form 1205 filed by ATT-B in support of the proposed equipment rates and installation charges. While the filed 1205 will be discussed in detail later in this report, we have our recalculated 1205 to support our determination of equipment rates and installation charges. The City submitted its initial request for information to ATT-B June 14, 2001. ATT-B provided a partial response June 29, 2001 with additional information in response to the initial request and subsequent requests over the period of July 2001 through January 2002. A&S reviewed and analyzed ATT-B's supporting data and its responses and recalculated ATT-B's FCC Forms 1240 and 1205. This report discusses our findings and our recommended changes based on the issues we have identified in the rate filings. Attached to this letter report are: • Appendix A - identifies the rates and charges determined for the City recommended by A&S from our review of these filings; • Appendix B - a comparison of the current programming and equipment rates and installation charges for the City areas with those originally proposed by ATT-B and those recommended by A&S in this report; • Appendix C - A&S's recalculation of ATT-B's FCC Form 1240 supporting our BST rate for the City; • Appendix D - A&S's recalculation of ATT-B's FCC Form 1205 supporting our equipment rates and installation charges; • Appendix E - A&S's analysis of programming costs for each area; 1133 Louisiana Avenue, Suite 106, Winter Park, FL 32789 Telephone: (407) 645-2020 Fax: (407) 645-4070 Email; ascpasQascpas.com Stephen J. Guzzetta, Esquire January 29, 2002 Page 2 of 10 • Appendix F - A&S's recalculation of the number subscribers for each area; • Appendix G - A&S's franchise-related costs; • Appendix H - A&S's comparison of 1205 costs as filed from 1993 to date; • Appendix I - A&S's determination of 1205 costs used in our Form 1205; • Appendix J - A&S's analysis of subscribers and converters from ATT-B's FCC Fonn 1205 sample data; • Appendix K - A&S's analysis of installation times from ATT-B's FCC Form 1205 sample data; • Appendix L - A&S's recalculation of installations activities from ATT-B's FCC Form 1205 sample data; • Appendix M - Copy of the FCC Inflation Updates as of January 4, 2002; • Appendix N Copy of the November 14, 1994 Memorandum of Understanding establishing the PEG Fee with attachments; • Appendix O Copy of customer and equipment information provided by ATT-B in support of the filed 1205; and, • Appendix P Detail of Lines 54 and SS of Appendix L with copies of Cab]eData supporting the amounts used. SU MMARY Our review of the 1240 identified several azeas of concern. We recalculated the number of subscribers in the true-up period. We have recalculated the programming cost of ATT-B for the true-up period and the projected period based on information provided in support of the programming rates. We refreshed the inflation rates in Worksheet 1 and in Module C of the 1240. These changes, which will be discussed in detail below, impact the Maximum Permitted Rate ("MPR"), Line I9 of each 1240, in different directions. Our change of the number of subscribers and recalculation of programming costs reduces the MPR, while the refreshing of the inflation rates increases the MPR. We have reduced franchise-related costs for the embedded amount reflected in subscriber rates at the start of cable television rate regulation. The net result for the City is a decrease of $4.6223 to the filed MPR, from ATT-B's filed amount of $9.1891 to $4.5668. Since ATT-B's Operator Selected Rate ("OSR") of $8.37 is greater than the MPR, we recommend approving our MPR and ordering any necessary refunds. Including the franchise fee, the MPR for the Basic Service Tier is $4.81. We also identified several changes to ATT-B's 1205 filing and the resulting equipment and installation rates, which will be discussed in detail below. Stephen J. Guzzetta, Esquire January 29, 2002 Page 3 of 10 FCC FORM 1240 The first step in our review was to input the FCC Forms filed by ATT-B with the City into the FCC spreadsheets to generate copies of the FCC's forms. With these spreadsheet packages, we were able to duplicate ATT-B's filings and the resulting rates. We verified that the rates and other components of the previous 1240s were carried over to this filing. INFLATION FACTOR Since we were making other changes to the 1240, we were required under the FCC's rules to refresh and correct the inflation factors in Worksheet 1. ATT-B's calculation showed 1.62% for each month of True-Up Period 2. Reflecting the FCC's updated inflation factors released January 4, 2002 increases the Average Inflation Factor for the True-Up Period 2, Line C4 of the 1240, from 1.0027 to 1.0033. (See Appendix M to this letter report.] Additionally, we refreshed the inflation rate on Line CS of the 1240 to the current published rate of 1.0225, The FCC's rules state: Line CS Current FCC Inflation Factor. Enter the factor which will be used to calculate the inflation segment for the Projected Period. Multiply Line C2 by the quarterly inflation factor most recently released by the City. The quarterly inflation factor should be in the form of "1" plus the inflation figure. So, if the figure announced by the City is 3%, perform the multiplication with "1,03". (Emphasis added) NUMBER OF SUBSCRIBERS Our review noted a correction necessary in ATT-B's calculation of the number of subscribers for the true-up period. ATT-B provided support for its determination of the number of subscribers in 2 parts -one set of support for the period of October 1999 through September 2000 and different source documents for the months of October and November 2000. The information for October 2000 also provided a second source of data for September 2000, since it showed the beginning period amounts. As can be seen on Appendix F, switching to the ne~v data source reduces the count of subscribers by 90 for the City, ATT-B claims that these differences are "negligible differences ... due to the timing of the reports." In addition, the EBU (equivalent business units) amounts increase substantially under the new data source. ATT-B is researching these problems and if additional information becomes available fhat impacts our analysis, we will supplement this report. Tt came to our attention in this analysis of subscribers that ATT-B was not including subscribers receiving free service in its count. Traditionally, the FCC has based subscriber counts on an equivalent business unit ("EBU") basis. However, this was principally to add in subscribers receiving discounted service, specifically multiple dwelling units such as apartment buildings, trailer parks and hotels. The difficulty here is that ATT-B has franchise-related costs that it is spreading across subscribers and by not including "free accounts", ATT-B is requiring paying subscribers to subsidize its provision of free service. ATT-B's "free subscribers" should be included in its subscriber count for the true-up period. These subscribers receive the same Stephen J. Guzzetta, Esquire January 29, 2002 Page 4 of 10 programming and benefits of the franchise as ali other subscribers. Some of the free subscribers are reiated to marketing activities, while a significant number are employees. By not including them in the count, all other subscribers are required to subsidize ATT-B's decision to provide free service. We do not believe this is appropriate and have included free subscribers as shown on Line 14 of Appendix E. We requested information on free subscribers for the months of October 1999 through August 2000, but were told this information was not available. Since we had the information for September, October and November 2000, we have added in free subscribers for those months and used the lowest number of free subscribers in those months as an estimate of the amount for the months that data is not available. As shown in Appendix E, Lines ] 0 through 14, this increases the number of subscribers we have input into the 1240 calculation. We have also estimated free subscribers for the Arojected Period based on the level at the end of the True-Up Period in the same manner that we have estimated the other projected subscribers. ATT-B has stated that A&S should increase programming expense for these "free accounts". This is confusing since ATT-B provided documentation showing that it does not pay programming costs associated with "free accounts". Making the above changes increases the level of subscribers for the City for True-Up Period 1 from 4,777 to 4,955, for True-Up Period 2 from 4,725 to 4,917 and for the Projected Period from 4,532 to 4,966. PROGRAMMING EXPENSE Appendix E also shows our determination of programming expenses for each true-up period and the projected period.) We requested that ATT-$ provide supporting detail for programming costs for the true-up period. ATT-B assumed control of this system in 2000 and the programming costs reflect ATT-B's contracts being used at various times in mid-to-late 2000. A"I'T-B and ABcS had to rely on some supporting information from the prior operator. Our analysis shows some changes to the programming costs of ATT-B. White we cannot discuss specific details of our differences due to the request for confidentiality, in genera] the differences relate to (1) claims of per subscriber cost when the cost was a lump amount, (2)not including discounts and credits in the per subscriber rates, and (3) using the wrong rates. FRANCHISE-RELATED COSTS Appendix G shows our analysis of franchise-related costs. The initial rate regulation filing of the FCC Forms 393 by the then current operator, Meredith Cable, identified costs being incurred that are franchise-related costs. Unfortunately, in subsequent filings, Meredith Cable and MediaOne failed to include franchise-related costs in the FCC forms as required by the FCC rules. In the case ~ ATT-B has requested that the specific cost information related to each channel be treated as confidential. As such, only the total cost is shown in our supposing documents. (See Line I S on Page 1 of I of Appendix E.) Should ATT-8 challenge our calculations and it become necessary to provide this detail, we will provide a confidential version of this Appendix. Stephen J. Guzzetta, Esquire January 29, 2002 Page 5 of 10 of City, the amount identified in the 393 was $1.8797 per subscriber. The treatment of these costs was further complicated in November 1994 when Meredith Cable and the City agreed to allow Meredith to charge subscribers a PEG fee to pay these costs. [See Appendix N, a copy of the ageement.] 'T`his PEG fee charge appeared on subscribers' bills in April 1995. Meredith Cable did not reduce its Basic Service Tier rate to reflect this ageement, and ignored the impact of the ageement in subsequent filings of the FCC Forms 1210 and 1240. As such, the original amount identified in the filed 393 is still embedded in subscriber rates, even though the PEG fee continues to be charged. ATT-B claims franchise-related costs in this filing, but has not offset its claimed amount by the embedded amount. As shown on Lines 55 through 58 of Appendix G, A&S has calculated that the amount has now increased to $2.0857 per subscriber for True-Up Period 1 and $2.0888 for True-Up Period 2 due to inflationary increases.2 We have reduced the franchise-related costs shown in Worksheet 7, Lines 707 and 717, by multiplying the number of subscribers in each true-up period by the inflated amount and then by the number of months in the true-up period. This reduces the amount of external costs as determined in Worksheet 7, It should be noted that this adjustment, the reduction for prior franchise-related costs, will be necessary in each future filing. Making the above changes to progamming expenses and franchise-related costs reduces the extemal costs per subscriber computed on Worksheet 7 for the City for True-Up Period 1 from $.5936 to ($1.5196), for True-Up Period 2 from $.6002 to ($1.5147) and for the Projected Period from $.b787 to ($1.4609). CONCLUSION The resulting MPR from our changes is $4.5668 for the City. Since the MPR is less than ATT-B's OSR of $8.37, we recommend the City approve our MPR and require refunds to subscribers for the difference in amounts billed for the BST between June I, 2001 and the date the ordered rate is implemented. In addition, we recommend the City: (i} reject the filing of ATT-B; and, (ii) adopt the Form 1240 of A&S, which is attached as Appendix C to this ]etter report. In the order, the City should state that if any information should become known in the future which would impact this rate, the City may revisit this decision. The City should further state that the respective MPRs as determined in our 1240s are the maximum rates allowed for the Basic Service Tier under the FCC's rules. FCC FORM 1205 ATT-B filed asystem-wide FCC Form 1205 with the City. ATT-B has attempted to aggegate all of its costs for all systems that it owns and operates. This would set equipment rates and installation charges for over 16 million subscribers throughout the nation. Unfortunately, ATT-B's methodology used in compiling the data contains some errors. As will be discussed, the errors Note that we have only inflated the amount for the period of July 1, 1995 through November 30, 2000 using the published inflation factors of the FCC. Since the original amount was from 1993, the City of Columbia Heights may wish to also calculate inflation for the period of 1993 through July I, 1995. Stephen J, Guzzetta, Esquire January 29, 2002 Page 6 of 10 make the rates determined in this form suspect and A&S recommends the City reject the aggregate filing. Alternatively, A&S has developed a FCC Form 1205 based on the prior 1205 filings of Meredith Cable and MediaOne. The rates determined in our recalculated 1205, provided as Appendix D to this report, are similar to and very much the same as rates in effect prior to the instant filing. ATT-B was requested to provide information specific to the City or their region to allow A&S to develop a local 1205, but ATT-B indicated such information was no longer accumulated in that manner and was not available. ATT-B did provide some information for the greater St. Paul area, but it was not all of the information necessary to complete the 1205 and ATT-B indicated that the data for the St. Paul area contained information for systems outside the state of Minnesota. As such, A&S used the best information it had available to calculate the equipment rates and installation charges shown in Appendices A and B. We recommend the City adopt these rates. ATT-B has attempted with this filing to break converter rates into a rate for a subscriber taking only the Basic Tier and for a subscriber taking all other levels of service. While our calculations have not split converters into two categories, it would be the same rate in any event because the City only has one class of converter offering. ATT-B's data provided in support of the aggregated filing shows for the St. Paul area only one class of converters, even though it also shows 13,042 basic service only customers for this area. INSTALLATION ACTIVITIES A&S has recomputed the installation activities from the sample data provided by ATT-B. ATT-B developed its level of installation activity by using a sample of 40 systems. The information from the 40 systems was then extrapolated to apply to ATT-B's entire system. The problem is that the data used for the 40 systems is flawed. ATT-B did not count any free activities, i.e. free installations, free installation of additional outlets. We have only analyzed and recalculated the first month of installation activity for 9 of the 40. (Of the 14 sample systems reviewed, only 9 had support for installation activity.) This recalculation shows an error of over 25% in that ATT-B has under-counted the number of installations. Since ATT-B calculates labor hours by multiplying the number activities by the installation times, this means that ATT-B has severely understated the number of labor hours resulting in an hourly service chazge that over recovers ATT-B's costs. It is important to include free activities in the calculation. ATT-B's documentation shows that it tracks this "discount", which is an expense of ATT-B. If ATT-B is allowed to exclude free activities, subscribers would be required to pay for the mazketing activities and employee benefits of ATT-B, ATT-B has stated that the issue of "free installs" can be "easily confirmed" by the data. This is not the case. ATT-B allocates labor costs at varying percentages within each system. No support was provided for the allocation percentages, even though complete supporting documents were requested. Our experience in reviewing cable rate filings lends A&S to the conclusion that "free activities" were not excluded in determination of the allocation percentages and nothing in the Stephen J. Guzzetta, Esquire January 29, 2002 Page 7 of 10 support provided by ATT-B disputes this. It is our opinion that the allocation percentages for installers and contract labor would be significantly lower had ATT-B excluded "free installs". In addition, ATT-B erred in its determination of the amounts of installation activities in that in certain of the reports it counted the number of "customers" and not the number of "activities" (shown as "Items" on the CableData 2 report included in Appendix P).3 The total number of customers is less than or equal to the number of activities. This can be verified by looking at the "Amount" column that shows the charges to the customer, The amount charged is then computed by multiplying the "Rate" by the "Item". ATT-B based its labor hours calculation on this incorrect determination of activities. We have checked each of the 9 systems referred to in our report and have determined that this error occurs in each. It is our opinion that this error occurs in every month of every sample and is not an isolated incident. This error contributes to the differences in the number of activities between our calculations and ATT-B's calculations identified in Appendix L of our report. A&S does not believe that errors identified are isolated problems. It is our opinion that the errors are prevalent in the entire sample or in the entire information base. It is obvious that ATT-B sent out general instructions to the systems on how this data was to be presented. ATT-B provided standardized sheets where the data was entered by the systems. It appears that this information was then provided to a centralized group and analyzed. By finding the same errors repeated in multiple systems of the sample, it is obvious that these errors occur throughout the analysis. ATT-B has indicated that A&S's review of different data "might (have) yield(ed) a different result". We do not believe that to be the case. As stated above, the standardized use of information that was apparently centrally analysed does not lead one to that conclusion. The installation times reported by each of the sample systems does not agree with the apparent times used in charging for those activities. The charges historically have been set to recover costs. By reviewing the relationship of the charges within a system, estimates of installation times can be determined. ATT-B bases its labor hours calculation on the "assumed" amount of time for each activity times the number of activities. These "assumed" times were provided by each system of the sample and vary to a small degree. The labor hours though should be based on the actual number of hours. When comparing the actual charges to the assumed times, A&S found discrepancies as shown in Appendix K of our report. A&S used as a base the time for the installation activity "Pre-wired Home" identified as "B" type activities in ATT-B's support. Assuming that the times put forth by the systems relative to type B activities was correct then the other times could be determined in relation to B. This is how we developed the times shown as "Per Supporting Documents" in Appendix K. The times vary significantly from the sample times. Using ATT-B's methodology of multiplying the install times by the activities, one would get a much different result using these developed component times. It makes the times in the sample seem suspect. ' See page 3 of Appendix P, Corp. No. 2S0-OS, Page 397, Date 10-21-99, Area: All. For Activity "D", ATT-B added customers in 4G 1\STALL ADDLTV of 218 plus 4W ADD'L TV PREWI of 127 plus IS A/O CONNECT SEP TRIP of I I to get the handwritten amount of 340 shown on the page. tt should have added the number of Items of 233+142+13 to get 388. The handwritten amounts shown in Appendix P were written by ATT-B. Stephen J. Guzzetta, Esquire January 29, 2002 Page 8 of ] 0 Our analysis of the sample, only 14 of the 40 systems, also noted another significant problem. The sample data is for the yeaz ended September 30, 2000, while the filing and the other information in the aggregation is for the year ended December 31, 2000. The significance of this additional 3 months is shown in Appendix J. The additional 3 months only has a change in subscribers of 1.90%, but in standard converters it is a decrease of 71.29% in the year-end reported data. For addressable converters, it is an increase of 19.11% and a 23.2% increase in digital converters. ATT-B has stated that "the collection of accurate installation and maintenance hours is a very time- consuming process". But ATT-B made the decision to use 2 different time periods. It chose to use a sample period different than its test year for its own reasons. If it had used a sample period the same as the test year, it would have delayed the filing of the 1205. The significant discrepancies identified in the mismatch of the test years shows that use of the different periods should not be accepted by the City. The City should not be persuaded by ATT-B's "ample headroom" argument, i.e. just looking at the cost of converters alone justifies the rates charged. The FCC Form 1205 is to determine equipment rates based on costs. The national 1205 used to support ATT-B proposed costs is flawed and should not be used as any foundation for the determination of converter costs. In our opinion, it is flawed in the count of converters, the categorization of converters, and the maintenance hours associated with converters. The City should not use any of the equipment rates or make any decision influenced by the rates developed in the flawed 1205. The change in standard converters is most significant in the system identified as MediaOne of Massachusetts GL409310. At September 30, 2000, this system had 234,131 standard converters. And yet as reported in the aggregated data, this system had no standard converters at December 31, 2000, This is the same for MediaOne of New England. At September 30, 2000, it had 86,638, but the aggregated national data showed 0. For MediaOne of SE Michigan, the opposite is the case. At September 30, 2000, it had 0 and at December 31, 2000 the aggregated data showed 76,665. An additional concern is also noted regarding MediaOne ofNew England. ATT-B uses the number of converters to determine contractor labor hours associated with equipment. The average converters for the year ended September 30, 2000 was 89,638, but ATT-B used 92,138 to determine labor hours. Based on the above concerns, A&S recommends the City reject ATT-B's filed FCC Form 1205 using the nationally aggregated data. Typically, A&S corrects the data concerns of the filing when we identify problems. However, ATT-B's nationally aggregated data precludes us from making these corrections. To make the corrections would require an in-depth analysis of thousands of pages of support, most of which were not included in ATT-B's response to the LFA's data request. Assuming that we needed to correct the timing issue of the 2 periods, sample data based on year ended September 30 and the aggregated data based on December 31, we do not have the data. At this time our only choice is to develop an alternative FCC Form 1205 using the best data we had available. Stephen J. Guzzetta, Esquire January 29, 2002 Page 9 of ] 0 UNBUNDLING Appendix H is a comparison of costs included in the prior 7 filed FCC Fonn 1205s and the instant filing by ATT-B. Line 88 of this analysis shows that ATT-B is attempting with this filing to recover in excess of $6.27 per subscriber per month in equipment rates and installation charges, 2.35 times the amount unbundled in the 1994 1205 of $2.66. The highest amount from any prior filing was $3.71. This is an increase of $2.56 per subscriber per month or $30.72 per subscriber per year. This is the first FCC Form 1205 filed by ATT-B in the City and the increase appears to be only related to using the flawed national aggregation methodology. The FCC's rules established a relationship between the programming rates and equipment rates and installation charges in the FCC Forms 1200 and 1205 filed in August 1994. The FCC's rules made it clear that any changes to the amount of costs "unbundled", moved from the determination of programming rates to the determination of equipment rates and installation charges, from that point forward must be reflected in the rates of the other component. T}~at is, if more costs were "unbundled" into equipment rates, then programming rates must be decreased so that the subscriber is not paying the costs in programming rates and in equipment/installation rates. Obviously, minor shifts have occurred over time as shown on Appendix H, Line 88. Increases in labor rates, inflation and other factors have increased the amount recovered in equipment rates and installation chazges. But, the lat•gest monthly change in any one-year was $.50. A shift of this magnitude, $2.56 per month, requires ATT-B to also reduce programming rates so as to maintain the existing historical relationship of rates in the City. The City should not be opposed to the national aggregation methodology as long as the local relationship is maintained and the rates aze developed appropriately. RECALCULATED 1205 A&S analyzed the prior filed FCC Form 1205s. The data from these filings is summarized in Appendix H as a comparison of costs included in the prior 7 filed FCC Form 1205s and the instant filing by ATT-B. A&S used the information from Appendix H to develop the inputs for our 1205 calculated on Appendix I. Since data for the 1205 was not available, A&S has done a simple linear regression of each of the 1205 inputs from the 6 prior filings, excluding the FCC Form 393 data. This methodology allows for changes in the 1205 components over time. As shown in Appendix H, these 1205 inputs have increased. The resulting rates from our recalculated 1205 aze the same or nearly the same as the rates from the prior filing by MediaOne. We recommend that the City either accept our recalculated 1205 based on our estimated data or accept the prior filing by MediaOne as the best estimate of the determination of reasonable equipment rates and installation charges. CONCLUSION We recommend the City approve the proposed equipment rates and installation charges, as recalculated by A&S and set forth in Appendix A. As with the 1240 discussed above, the City should state that: (i) they reject the filing of ATT-B; (ii) adopt the Form 1205 of A&S, which is Stephen J. Guzzetta, Esquire January 29, 2002 Page ] 0 of ] 0 attached as Appendix D to this letter report; and, (iii) if any information should become known in the future that would impact these rates, the City may revisit this decision. The City should further state that these are the maximum amounts allowed for equipment rates and installation charges under the FCC's rules. If you have any questions or require any further information, please let me know. Very truly yours, ASH~P,AUGH & SCU~LCO, CPAs, PLC ' G/l / ~-"~- - / ~~C~ Garth T. Ashpaugh, CPA President and Member Colwnbia fleighls?001 12401205 Rcpori CITY OF COLUMBIA HEIGHTS MEMO TO: TELECOMMUNICATION COMMISSIONERS CITY MANAGER ASST TO CITY MANAGER ACTING COMMUNITY DEVELOPMENT DIRECTOR FROM: JEAN KUEHN, SPECIAL PROJECTS COORDINATOR. DATE: JANUARY 30, 2002 SUBJECT: SUMMARY REGARDING FIBER OPTIC LINE IN CENTRAL AVE ~~. November 20, 2001 At the Economic Development Authority meeting it was requested that the City consider laying high-speed fiber optic lice in Central Ave as a desirable amenity and incentive to business development along Central Avenue The reconstruction of Central Ave in the spring of 2002 made this the ideal time for such an undertaking. November 30,2001 Staff requested information from Duluth and Mankato as cities who may have done a similar project. December 3, 2001 John Smedberg, Assistant City Attorney, Duluth, M?~I. replying for Mark Winson, City Administrator. He works on cable television and other commrmibatiulls work for the city of Duluth. Duluth considered its own fib°r system in 1994-1995, but has =~Ut P'1t one in. In the refranchising process in 1991-1994, an upQra,lc to fiber cruuk cables was required, rpservi;rg the right to deploy 6 dark fibers with any fiber trwrk cables the company installed as a beginnings of a city/school district fiber optic system. When the company began deploying the fiber trunk, a feasibility study was done to see if a City own system made sense. The study concluded that it did not. Though the cost of the cable itself was not prohibitive, the cost of maintenance and administrative employees to run the system was. As an example, Fiber is difficult to splice and the cost of the splices frequently exceeded the cost of the fiber optic cable itself. Duluth concluded it would not make sense from acost/benefit standpoint for the city to have its own system. Duluth found their decision was probably a wise one. Unknown to city staff at that time, AT&T had installed over 20 million dollars worth of fiber in Duluth in the late 1980's and Duluth was probably overbuilt for the amount of available business. December 12, 2001 Edie French, Media Coordinator for the City of Minneapolis Mimreapolis is aware of the proposed reconstruction of Central Avenue, and their staff agreed it would be an ideal time to install a conduit for any current/proposed/future fiber optic lines that maybe laid on Centiai Avenue. To that end, the City of Mimreapolis had actually formed a task force several years ago with the goal of making Minneapolis a "fiber rich" city that would draw businesses of all types. This plan never came to fnlition. In discussions with Qwest it was learned that fiber lines have already been deployed to businesses that are active heavy users. Minneapolis has also encouraged Cable providers to drop lines into street right of ways when construction is ongoing. The Minneapolis Public Works department has placed open conduits (sleeves) into certain potential high volume streets when they are open, hoping to minimize later disturbances. Minneapolis is willing to have fiber lines in the street, but believe comrnunication companies need to take the responsibility and the irritiative since public dollars are not available. December 12, 2002 John Lampland of Savvy Net, stated that he was now aware that Qwest has fiber "in the area", on the east side of Central Avenue and connectivity and cost were the actual issues to be focused on. Qwest wanted an estimate of level of use before they could quote an annual cost. This creates a "Catch 22" since office space could not be leased with the promise ofhigh-speed access until the access was achtally in place. Mr. Lampland estimated an animal cost of $400,000 based on his research of other projects. The capacity of a T3 or DS3 line or OC1 base level service would adequately serve the Columbia Park Medical, the Business Center and the mall at an estimated cost of $32,000 per month. Medtronic is currently served by fiber and numerous redundant connections. Columbia Park Medical facility has also shown an interest in fiber lines for their business and has taken preliminary steps to be comiected. December 20,2001, Telecommunications nteetirtg--- Placernertt of a Fiber Optic lute in Central Avenue. Gordon Awsumb, from the Central Business Center, and John Lampland, from Savvy Net, Mr. Awsumb and Mr. Lampland are specifically interested in accessing fiber optic aC the building on 40"' and Central Avenue to better serve their clients and expand business opportunities at this site. Mr. Awsumb believes that providing high-speed data service will further economic development for other areas in Columbia Heights as well. He feels a fiber optic line will help build a strong tax base by providing service for current businesses, as well as attracting new businesses. Awsumb stated the costs have been reduced from their first proposal clue to the fact that they have discovered Qwest already has a fiber optic line naming up Central to 44°i Avenue, with a vault on 42"a Avenue. He estimates that it will cost approximately $150,000 to bring a comiection line down from 42"`t Avenue to the 40`x' Avenue intersection, connect to the building, and cover Engineering and Administration costs. It was noted that Qwest will be connecting Columbia Park Clinic to this line soon. Columbia Park Clinic is paying for this connection. Kathi Donnelly Cohen of AT & T Broadband stated, AT & T does provide this type of service, but on a residential scale. They are not equipped at this time to take on large office complexes. COMMISSIONERS QUESTIONS- Q. Why should the City pay for this project? A. Mr. Awsumb stated that it just made sense to place vaults accessing the duct banks every block along the avenue while it is being reconstructed, so the street will not have to be dug up again in a few years. If the vaults were strategically placed, lines could be fed to future business in other directions. Q. Legal issues such as ownership of the lines if additional conduits are run along a State Highway? Connection costs? How would fees be assessed? Usage costs, what could be done with extra space in the conduits, etc? Commissioners also questioned what Qwest's plans are for placing additional lines or vaults along Central during reconstruction, and if they had been informed of the reconshuction project. The Commission had a long discussion and it was the general consensus that fiber optic line and access to it is something to pursue but only after the E.D.A. decides what areas they would like to see developed, after certain legal issues are answered, acrd after finding out what Qwest's plans are. If Qwest has plans for additional work along Central, the City may not have to do anything. RESPONSE TO COMMISSIONERS QUESTIONS Decerber 26, 2001 Kevin Hansen, City Engineer MnDOT would not participate in this type of installation, it would strictly be the City's or others to own and maintain. Any fees for access or recovery of capital cost would have to be determined by who installs it. A rate study and/or cost benefit study would provide more detail on potential users and access fees. Assessing this type of work is very risky, the State requires that when the government places an assessment on properly, the value of that property must increase Uy at least an amount equal to the assessment, supportable by an independent appraisal. Be aware that the Central Avenue Project camiot support additional costs nor is this type of construction State-Aid eligible. Qwest has a fiber optic line on the east side, capacity unknown. For Central Avenue, plans will Ue tiualized in January. Utilities have been contacted through the design process over the past 12-24 months. The current line has an access vault on 43rd Avenue, additional vaults can Ue added, but the City Engineer does not necessarily agree with the concept of less costly. Those vaults can be expensive depending on what they are needed for. There are also operating and maintenance costs associated with access vaults. MrrDOT may have something to say about the location of these, which could affect costs. MrrDOT approves anything in their Right Of Way! This decision would Ue financially driven. A scoping study would be needed to determine interest (would the line be used and by whom7) and a feasibility study to determine initial and fuhue capacity, project cost and how it would be paid for. For coordination on such a large, complex project, the work should be part of our plan set which is going out for Uid in late January with a bid opening in late February. Depending on what needs to Ue placed iu the ROW, i.e, duct bank vs. single conduit. In any case we need to be concerned with the placing of expensive streetscaping where vaults may need to be accessed. If this is the case -consideration should be given for the access vaults to Ue placed outside the ROW, which requires expensive land acquisition. A lot needs Co get thought out and resolved prior to bidding in February and contract award, this April or May. The City Engineer concluded that this is the type of work best left to the experts that do it for aliving - QWEST! Should the City entertain such a financial risk with a yet undefined benefit, without staff capable of managinghnaiutaining it7 December 26, 2001. Qwest Dave Cringer, Manager of Qwest Business Sales Division Daniel Greenlee, Director of the Govermnent group, David Fidelman of Government operations David Fidelman, indicated that Qwest would certainly work to accommodate any business needs in our community and if there was a need not being met, he would do everything he could to expedite the solution. He further stated however, that in these difficult and uncertain financial times "we are not even buying Uoxes of paper clips and Qwest is not going to lay dark fiber on the come". 5~ Kaihi Donnelly-Cohen Director -Government Relations Law & Public Policy Department 6. ~- /4T&T Telephone: (651)493-5281 Facsimile: (651)493-5288 January 30, 2002 Linda Magee Assistant to City Manager Columbia Heights Cable Commission City of Columbia Heights 590 40th Avenue NE Columbia Heights, MN 55421 RE: Annual Privacy Notice Dear Ms. Magee: 10 River Park Plaza St. Paul, MN 55107-1219 In compliance with Franchise requirements and applicable law, we are sending out the enclosed Annual Privacy Notice to all customers in the coming billing cycle. You may recall receiving a copy of the Terms and Conditions and Signal Quality notices. The Privacy Notice was delayed due to changes in Federal Law, the USA Patriot Act of 2001. If you have any questions or concerns, please do not hesitate to contact me. ~O~ Recycled Paper ~b _ ATS~T Telephone: (651)493-5284 Facsimile: (651)493-5288 January 28, 2002 Ms. Linda Magee Assistant to City Manager Columbia Heights Cable Commission City of Columbia Heights 590 40d' Avenue NE Columbia Heights, MN 55421 Re: Franchise Fee Payment Dear Ms. Magee: AT&T Broadband 10 River Park Plaza St Paul, MN 55107-1219 Enclosed please find the franchise fee payment in the amount of $33,615.52 for the quarter ending December 31,2001. If you have any questions regarding this payment, please contact me at 651-493-5284. Veryp trulypy~ours, Tricha Pendzimas Franchise and Compliance Specialist Enclosures ~7p Recycled Paper !!TCI 15 _ ,- -----~~-' AT&T Broadband, LLC Accounts Payable - P O Box 173805 Denver, CO 80217-3805 - (877) 493-6526 INVOICE NO. INV. DATE DESCRIPTION 410511-4QOIFF 01-DEC-OI 4TH QTR OI FRAN FEE/CITY OF COLUMBIA °HEn o 4398211 DISC. PAYMENT AMT 0.00 33,615.52 ~- i i VENDOR# lsasi3 CHECK DATE W.IAN-oz CHECK AMOUNT 33,675.62 A: r- L -. - THIS DOCUMENT IS VOID IF BACKGROUND DESIGN 13 NOT COLORED Accounts Payable ~~AT&TBroadband P.O.Box773805 Denver, CO 80217-3805 (877) 493-6526 PAY EXACTLY ~+ Thirty Three Thousand Six Hundred Fifteen Dollars and 52 cents. 70 THE COLUMBIA HEIGHTS CITY OF MN OROEO~ 590 40TH AVE NE COLUMBIA HEIGHTS, MN 55421-3878 United States MELLON BANK, N. A. PnTSBURGH, PENNSVWANIA 60460 433 uM ER 4398211 VENDOR NO. DATE 193813 09-JAN-02 AMOUNT $ """""33,615.52 ATBT BROADBAND, LLC. VOID AFTER 180 DAVS Authorized Sign¢r ~i IP43982ii11' 1:04330L60i1: 0~7~r1978411^ ~~ ~. T Facsimile: (651) 493-5288 October 26, 2001 Linda Magee City of Columbia Heights 590 40`h Ave. N E Columbia Heights, MN 55421 Re: Franchise Fee Payment Dear Ms Magee: 10 River Perk Plaza S1. Paul, MN 55107-1219 Enclosed please find the franchise fee payment in the amount of $35,239.61. If you have questions regarding this payment please contact Tricha Pendzimas at 651-493- 5284. Very Truly Yours, Tricha Pendzimas Franchise and Compliance Specialist Enclosures `a (,7 Recycled Paper Q f ~~ 1 !3 ~( THIS DOCUMENT IS VOID IF BACKGROUND DESIGN IS NOT COLORED Accounts Payable P.O. Box 773805 AT®T onv~avgill~~ (877) 493-65p6217 3805 PAY EXACTLY Thirty Five Thousand Two Hundred Thirty Nine Dollars and 61 cents. To THE COLUMBIA HEIGHTS CITY OF MN ORDER 590 40TH AVE NE of COLUMBIA HEIGHTS, MN 55421.3878 United States MELLON BANK, N.A. PITTSBURGH, PENNSYLVANIA fi0-160 ~3$ CHECK NUMBER VENDOR NO. :;:1;938'1:3::;:::::::; 4302827 DATE AMOUNT %k~ ~35i2;39:61:;:;:; ATBT aROADBAND, LLC. VOID AFTER 180 DAYS ~~~°2~~ o ANhorizad Signer 97R4n' ----- - - - -11LIVE_, Ott- - - ,- - - - i I !!TCI - - - - - - - - - - - - - - J Kathi Donnelly-Cohen Director-Government Relations Law & Public Policy Department 6 Telephone: (651)493-5281 Facgimile: (651)493-5288 January 11, 2002 Ms. Linda Magee City of Columbia Heights 590 40~h Avenue NE Columbia Heights, MN 55421 RE: Domain Name Change Dear Linda: 10 River Park Plaza St. Paul, MN 55107-1219 The purpose of this letter is to keep you informed about the changes that will be occurring with users of cur high speed data service. By end of March, we will no longer be using the MediaOne name in any form, including the a-mail addresses. Bymid-March, we will be changing all current (a mediaone.com, @mediaone.net. na-mn.mediaone.net and @attbroadband.com e-mail account domain names to the new domain name of (a attbi.com. Between now and mid-March, all current subscribers will receive several messages via e-mail and U.S. Mail informing them of the necessary changes. They can begin to make the necessary changes effective February 1. If a customer makes a change on February 1 and e-mail is sent to the old address, it will be forwarded only until March 20. After that date, all a-mail will be returned to sender. A process is being developed to address the potential of username conflicts. If you have any questions, please do not hesitate to contact me. Sincerely, Kathi Donnelly-Cohen Director- Government Relations Cc: David Seykora ~(7 Recycled Paper FINAL DRAFT!!! PHASE 1 Notification E-mail PLEASE DO NOT REPLY TO THIS E-MAIL MESSAGE. REPLY MESSAGES WILL NOT BE ROUTED PROPERLY TO A CUSTOMER CARE SPECIALIST Subject Line: Important AT&T Broadband Internet Information Dear Valued Customer, In an effort to keep you fully informed and provide excellent customer service, we wanted to notify you about upcoming changes that will impact your AT&T Broadband Internet service. As a result of a legal settlement, AT&T Broadband is required to discontinue use of the mediaone.net domain. Therefore, as of March 15, 2002, your mediaone.net based e-mail and personal Web pages will be changed to attbi.com. With this change, your maximum number of e- mail accounts will increase to six and you will also have IDs for up to six unique personal Web pages. In addition, you will be able to check your e-mail from any Internet connection through a Web-based a-mail system. E-Mail and Personal Web Page Changes Your new a-mail address will be username(a~attbi.com and your new personal Web page address will be http://home.attbi.com/-username/. (Please do not make any changes at this time, as these e-mail and personal Web page addresses are not currently available.) Once you have transitioned to your new e-mail account, please be assured that you will be able to forward email for your mediaone.net account to your new attbi.com account until March 15, 2002. Usernames and Passwords AT&T Broadband has made every attempt to enable customers to keep their current usernames and passwords. The majority of our customers will keep their current username and simply have the attbi.com domain name replace the mediaone.net domain. However, due to some network changes during the transition, a small percentage of customers will have to change their username and/or password to access the new a-mail domain and personal Web page. We will contact you shortly if it is necessary for you to change your username and/or password. Next Steps Please do not take any action until you receive communication from AT&T Broadband in early February with instructions on changing your a-mail and personal Web page settings. The communication concerning the steps necessary to change from your current mediaone.net account to your new attbi.com account will be arriving to your home via e-mail and regular US mail. In addition, we will post announcements regarding the changes on our Online Customer Support Center at ht~t ://help.broadband.att.com. To ensure minimal disruption to your a-mail and personal Web pages, we request that you complete the following: 1. Pay special attention to all mail you receive from AT&T Broadband. 2. Check your AT&T Broadband Internet a-mail account(s) regularly. 3. Keep a current, up-to-date, local copy of your personal Web site on your computer hard drive. This will make it easy to re-create your new site when the new domain is available. Remember, your new a-mail and personal Web page domain are not currently available. As a reminder, please watch for important information from AT&T Broadband notifying you of the steps necessary to change to your new attbi.com account. If you have any questions, please visit the AT&T Broadband Online Customer Support Center. To access this site, go to http://help.broadband.att.com/, enter your ZIP code and view the Announcements and Updates section on the home page. FINAL DRAFT!!! Thank you for your patience as we strive to provide you with the best high-speed cable Internet service possible. We appreciate your business. Sincerely, AT&T Broadband ~Q, 6 January 10, 2002 Linda Magee, Assistant to the City Manager Ciumbia Heights Cable Commission City of Columbia Heights 590 40th Avenue NE Columbia Heights, MN 55421 Re: Proof of Performance'1'esting Dear Linda: 10 River Park Plaza ' ~1 ](l ~ l r ~ ~ / ~~ ~ St Paul, MN 55107-1219 rt1I.1) l(~}~~ This letter is written to inform you that we will be conducting our semi-annual proof of performance testing in February. Please note: the testing process will cause very short (less than 30 seconds) interruptions in service on a few individual channels. This will result in sporadic loss of picture for our subscribers located in the test zones. History has shown that due Co the way the tests are designed and conducted most subscribers are unaware of any interruptions. This testing is required to accurately measure the performance of the system. If you have any questions or concerns about the testing process please contact me at 651- 493-5601. Very ri•uly yours, Mark Bisenius Director of Engineering MB/tmp ~7 (J Recycletl Paper _~_ `~ .~ '9; " r~r~wwr-nw~r AT§~l' arrvrrl~sa-ii~~• COLUMBIA HEIGHTS COMMUNITY'I'ELEVISION OCTOBER 2001 PROGRAMS • xeights Calendar - 0:47:30 • Mayor's Report (10/23} - 0:24:40 • Colwnbia Heights Revitalization - 0:15:25 • Columbia Heights Volleyball vs. Centennial - 2:03:00 • Centennial vs. Spring Lake Paric Football - 2:04:46 • Minnesota Wrestling Superstars - (#28) 0:30:16 (#29) 0:30:05 (#30) 0:27:37 • Vet's Visit On TV (2 shows) @ 0:29:30 • Light On The Gospel - 0:59:05 • Love Power (4 shows) C~ 1:00:00 • Anoka County Board Meeting (10/12) -1:14:23 • Anoka County Board Meeting (10/25) - 1:05:26 • The LaRouche Connection (4 shows) @ 0:58:30 • Timmy Swaggart (4 shows) ©0:58:30 • Army Newswatch (2 shows) @ 0:28;30 • On Main Street (4 shows) @ 0:28:15 • That Which Is (4 shows) @ 0:59:00 • Atheists Talk (4 shows) @ 0:28:00 • IIumanisf Views (4 Shows) @ 0:29:00 • Christopher Close Up (4 shows) @ 0:28:00 • Somali TV of Minnesota (2 shows) @ 0:59:50 • The Prophetic Word (6 shows) C~ 0:28:30 • Care About Kids with Milton Creagh -1:09:47 • Viewpoint - 0:30:00 I't•ograms Produced (internal) 8 Programs Produced {external) 4) CHANNEL PROGRAMMING • Cablecast Programs 86 • Cablecast Hours 76 FACILITY USE • Studio Hours 24 • Editing Hours 32 • Portable Equipment Checkouts 4 CLASSES • No classes were taught in the month of October Notes: • This month saw the first production of Mayors Report, a show that will be taped Che mm•ning following each Columbia Heights City Council Meeting. 'Phis show recaps the meeting and details various city related issues. • Staff assisted mi two mobile van sports production shoots that were aired on the channel. Mn. Wrestling Superstars continue to produce programming at a fairly impressive rate. They seem to be achieving their goal of completiug a new program every week. AT&T ~ur~wrrar~rwar,wr~~tu? COLUMBIA HEIGH'T'S COMMUNITY TELEVISION NOVEMBER 2001 PROGRAMS • Heights Calendar -1:03:22 Mayors Report (ll/L4) - 0:29:50 • Mayo's Report (11/27) - 0:18:40 • Public Wa•Ics Update - 0:10:00 • No Wastc Holiday Tips - 0:45:50 • Minuesota Wrestling Superstars - (#31) 0:30:00 (#32) 0:30:04 (#33) 0:30:18 (#34) 0:30:00 (#35) 0:31:48 • Vet's Visit On TV (2 shows) @ 0:2>:30 • A Band of Brothers - 0:27:40 • Light On The Gospel - L•00:00 • Love Power (4 shows) C~ 1:00:00 • Anoka County Board Meeting - 1:14:26 • Anoka County Today - 0:29:28 • The LaRouche Connection (4 shows) C~ 0:58:30 • Jimmy Swaggart (4 shows) @ 0:58:30 • Army Ncwswatch (2 shows) @ 0:28:30 • Atheists `t'alk (4 shows) C?~ 0:29:00 • On Main Suect (4 shows) Ca 0:28:15 • That Which Is (4 shows) Cup 0:59:00 • Christopher Close Up (4 shows) @ 0:28:00 Somali TV of Minnesota (2 shows) @ 0:59:50 The Green Party (The People Have the Power) - 1:28:30 • Ralph Nader Rally-0:58:32 • Who Decides Foreign Policy? - 1:57:24 Programs Produced (internal) 10 Programs Produced (external) 41 CHANNEL PROGRAMMING • Cablecast Programs 98 • Cablecast Hours 82 I'ACILII'Y USE • Studio IIours 32 • Editing IIours 50 • Portable Equipment Checkouts CLASSES • No classes were taught in the month of November Notes: • Mn. Wrestling Superstars completed five programs this month. They use our equipment to shoot events in the field and edit their proctuctim~s at the facility. 'T'hey are very organized, highly motivated and produce an entertaining program. • The Public Works Update program produced this month highlighted various projects in progress or completed within the city this quarter. Plans are to produce this program every few months, usually with the change of the seasons. • The Mayor's Report continues to create feedback within the community. It is an important program that keeps people informed about the workings of the city council. nrswwr-nwrr AT1~7 xan~r~uQr~~ri~u' COLUMBIA HEIGHTS COMMUNITY TELEVISION DECEMBER 2001 PROGRAMS • Heights Calendar -1:08:10 • Mayors Report- 0:21:00 • Minnesota Wrestling Superstars - (#36) 0:29:17 (#37) 0:29:05 • Vet's Visil On TV (2 shows) @ 0:29:30 • Environmental Journal (3 shows) @ 0:25:00 • Light On The Gospel (2 shows) @ 1:00:00 • Humanist Views (8 shows) @ 0:29:00 • Love Power (4 shows) C~ 1:00:00 • Anoka County Board Meeting - 1:13:52 • Viewpoint - 0:30:00 • The LaRouche Connection (4 shows) C~ 0:58:30 • Jimmy Swaggart (4 shows) @ 0:58:30 • Army Newswatch (2 shows) @ 0:28:30 • The Prophetic Word (10 shows) Ca 0:28:30 • That Which Is (4 shows) @ 0:59:00 • Atheists Talk (4 shows) C~ 0:29:00 • A Main Sd•eet Chrishnas - 0:58:28 • On Main Street (4 shows) @ 0:28:15 • Christopher Close Up (4 shows) @ 0:28:00 • Somali TV of Minnesota (2 shows) @ 0:59:50 Programs Produced (internal) 4 Programs Produced (external) 55 CHANNEL PROGRAMMING • Cablecast Programs 101 • Cablecast Hours 88 FACILITY USE • Studio Hours 28 • Editing Hours 40 • Portable Equipment Checkouts 9 CLASSES • No classes were taught in the month of December Notes: • End of the year arrival of computer based edit system acquired through the Columbia Heights Recreation Department. Wiring of system will take place in January and classes for middle school students (as part of the CHASE Program) will begin in the spring. • Two of the Panasonic 456 Camcorders damaged by access users were repaired by the staff technician and are back in use. • 12evisiais continue to be made to the channel playback schedule. Since we only have four decks for playback and the number of programs coming in have increased we are doing some dubbing in order to continue playing back all the programs we receive. • Winter class schedule begins next month. _ary ~~~ ~r~T ~n~~YO~ ~~ COLUMBIA HEIGHTS COMMUNITY TELEVISION JANUARY 2002 PROGRAMS • Heights Calendar - 0:58:29 • Mayor's Report (1/15) - 0:22:15 • Mayor's Report (1/29) - 0:19:37 • Witamy Heights - 0:24:25 • Lincoln Community School Holiday Program -1:14:37 • Spring Lake Park vs. Centennial Boys Hockey - 1:36:45 • Minnesota Wrestling Superstars - (#38) 0:30:08 (#39) 0:30:00 (#40) 0:30:00 • Vet's Visit On TV (2 shows) @ 0:29:30 • Anoka County Today (2 shows) @ 0:29:40 • Humanist Views (6 shows) @ 0:29:00 • Love Power (4 shows) @ 1:00:00 • Vote in Honor of aVet - 0:15:00 • The LaRouche Connection (4 shows) @ 0:58:30 • Jimmy Swaggart (4 shows) @ 0:58:30 • Army Newswatch (3 shows) @ 0:28:30 • The Prophetic Word (10 shows) @ 0:28:30 • That Which Is (4 shows) @ 0:59:00 • Atheists Talk (8 shows) @ 0:29:00 • On Main Street (4 shows) @ 0:28:15 • Clu~istopher Close Up (4 shows) @ 0:28:00 • Somali TV of Minnesota (7 shows) @ 0:59:50 Programs Produced (internal) 9 Programs Produced (external) 63 CHANNEL PROGRAMMING • Cablecast Programs 116 • Cablecast Hours 91 FACILITY USE • Studio Hours 26 • )Jditing Hours 65 • Portable Equipmeut Checkouts 7 CLASSES • No classes were taught in the month of January Notes: • Progress is being made on learning I-Movie and the Mac G4 computer system. Plans are to begin teaching to CHASE program participants in June. This gives us plenty of time to complete our learning process and develop a curricuhim with the help of the Recreation Department staff. Cfiannei Line-up for~olumbia HeightslHilltop January 2002 Universal Servic® Basic 1 Basic 2 15 -PUBLIC ACCESS '2 • KTCA (PBS) 24 - OVC 54 -NICKELODEON i6-GOVERNMENT ACCESS 3-N GUIDE CHANNEL 25-ESPN 55-CARTOON NETWORK 16• EDUCATIONAL ACCESS '4-W000 26-ESPN2 56-ANIMAL PLANET 19-LIBRARYACCESS '5-KSTP 27-FOX SOOAs 57-FOX FAMILY 6 -METRO 6 25 -Undetermined 56 - C•SPAN 7 - KPXM 29 •-ESPN CLASSIC 60 - COURY N 5-KMWO (W923) 30-Hallmark 62-TNN '9 - KMSP 31 -CNN 63• GREAT AMERICAN COUNTRY '10 • WFTC 32 -HEADLINE NEWS 64 - VH-1 '11 -KARE 33-CNSC 65-MN '12-KVMB 34-FOX NEWS 66-BET •13-M1N 35-WEATHER CHANNEL 67-ROMANCE CLASSICS OPTIONAL SERVICES: 17-KTCI 36-A&E 70-MSNSC 76 -PPV 20 - GSPAN11 37 -• THE DISCOVERY CHANNEL 77-PPV 21•BRAVO 36-THE HISTORY CHANNEL i6-PPV 22-TBS 39-THE LEARNINGCHANNEL 23 • WGN 40 • AMC 96-HSN 41-TURNER CLASSIC MONIES 96-EWTN/INSP 42-TFIAVEL CHANNEL 99-UNIVISIQJ 43-LIFETIME 4d-FOOD NETWORK 45 - HGN 46-USA 47-TNT 46 - fX 49 - SCI•FI-CHANNEL 50-COMEDY CENTRAL 51-E! 52 - N LAND 53 -DISNEY CHANNEL sib 'd 791 'nN 88Z9C6b199 J,"~~N d~d60~E 2002 'V('NNf January 2002 SERVICE UNIVERSAL SERVICE Basic 1 SERVICE Basic 2 SERVICE STANDARD.CABLE PEG Foe Basic 1 only Converter Non-Basic only Converter Remote Control Additional Digital Outlet PREMIUM SERVICES: HBO/H802 SHOWTIME CINEMAX THE MOVIE CHANNEL STARZI Encore DIGITAL PACI(AGES Bronze (includes Standard Cable) Silver (includes Standard Cable) Gold (includes Standard Cable) Platinum (Includes Standard Cable) PAY-PER•VIEW MOVIES: CABLE PLUS MOVIE Adult or Special Events PRICE NC 8.33 27.40 35.33 2.00 1.86 3.80 35 7.95 DIGITAL 12.99 12.99 12.99 12.99 12.99 4.98 43.99 56.99 66.98 61.99 3.99 3.99 Price varies MONTHLY GUIDE 2.85 SERVICE FEES: LABOR IS CHARGED ON A PER HOUR BASIS PL US MATERIALS Installation -unwired within 125 of existing plant 41.99 Prewired Install 24.99 Additional outlet aI inltlel Install 13.49 Additional outlet -separate trip 19.99 sip .~ Z9~1 nrJ 88Zy£6h159 J,~J,V ~Vd01 £ ZOOl'hl'NUP Relocate outlet 18.99 Upgrade/downgrade/addressible services 1.89 Upgrade -separate trip 15.99 Downgrade optional service -separate trip 9.99 VCR Connection at Inltlal install 5.98 VCR Connection -separate trip 12.98 Return Check fee 20.00 Unreturned addressible wnverter 200.00 Unreturned digital converter 300.00 Home service Plan -whole house 1.20/month Hourly Servlce Charge 27.99 HSD - (o~Home Service If a cable subscriber 45.95 if not a cable subscriber 49.95 Premium Internal Installation 99.95 Basic Internet Installation 49.95 Data Outlet Installation 13.49 NIC/USB 49.95 PCMCIA (Laptop) 49.95 Home Nehvorking 9.95/month Mobile Access 2.00/month Unreturned modem 650.00 fi/9 'd 795('ON 86Z5C661~9 ~,~J,H ~ao~ E aoot'~~'~yr C~L~IMBIA WEIGHTS nao-oT DETAILED 6UTAGE RE~~RT Average Time # Subs Cause Minutes Amts Affected 6/c 'd 79GI 'aN AT8~T ~r~oadk~and Mlunnesc~ta CaE~ Center 100% 95% 90% 85 $0% 75~/° T~eiepi~ome Service Factor Note: Telephone Service FaUor is an onternal Ixnchmark rather then an FCC Service standard. It gauges the percent of calls that were answered in 30 seconds or less. ' Corrected calculation Oct-01 Nav-01 Dec-01 A-T&T Broadband Minnesota Cali Center 50 ~5 a~a 35 ~0 25 2a 15 10 5 0 Average Speed ®f Answer Note: This chart contains raw data that has not been adjusted to conform to FCC measurements- ®ct-01 Nov-01 Dec-01 ATB~T roa~ibanc! Minnesota Cafl Center 100% 90% 80% 70% 60% 50% 4D% sa°i° 20% 10% 0% All Trunks Busy - °lo Oct-01 Nov-01 Dec-01 Date COLUMBIA HEIGHTS DETAILED OUTAGE REPORT Time Cause Minutes Jan-02 Average Subs Affected AT&T Broadband Minnesota Call Center ° 90% .; , t s : ., ,~, ry. .y. s-: "";: r . ~~il~:.~ N~''.5 s~~: F ~ ° . Ye N F i. <' 2 a, ~ :33iPi?N~~y ~q tYY Jan-02 Feb-02 Mar-02 Telephone Service Factor Note: Telephone Service Factor is an internal benchmark rather then an FCC service standard. It gauges the percent of calls that were answered in 30 seconds or less. * Corrected calculation Note: This chart contains raw data that has not been adjusted to conform to FCC measurements.