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HomeMy WebLinkAboutjuly 2010 min THE MINUTES OF THE TELECOMMUNICATIONS COMMISSION MEETING OF THURSDAY, JULY 15, 2010 The meeting was called to order at 7:00 p.m. by Chair Dennis Stroik. ROLL CALL: Members Present: Brad Peterson, Robert Peltier, Bob Buboltz, and Dennis Stroik. Members Absent: Dan Swee, Ken Henke Council Representative: Bruce Nawrocki Other Council Members: Gary Peterson City Representative: Linda Magee Cable Representative: Kathi Donnelly-Cohen Legal Counsel: Steve Guzzetta Others in attendance: Adam Davis, Bob Odden, and Bryan Olson. APPROVAL OF MINUTES Motion by Bob Buboltz, seconded by Brad Peterson, to approve the minutes of May 20, 2010. All ayes. Motion Passed. OLD BUSINESS A. Channel Check The channel check was done and no problems were found. B. Correspondence Log and Follow Up on Complaints No complaints were received by the City since the last meeting. C. Other Old Business No other old business. NEW BUSINESS A. Update on Process to get Customers Ready for Digital Service and Programming Copies of the notices sent to subscribers were enclosed in the agenda packets. The digital changes, referred to as “The World of More” are scheduled to take place August 17, 2010. The planned change will compress signals so more channels can be offered. Kathi stated that 65 additional HD channels would be added also. Nawrocki asked if subscriber rates would go down since more channels would mean more advertising revenues. Kathi stated that they would not go down, because there is also a cost for the additional channels. TELECOMMUNICATIONS COMMISSION MINUTES JULY 15, 2010 PAGE 2 B. Franchise Renewal Agreement Guzzetta stated he felt a good agreement had been reached on behalf of Columbia Heights. He acknowledged that the negotiating team consisting of him, Bruce Nawrocki, Walt Fehst and Linda Magee worked hard over the last couple of years with Kathi Donnelly-Cohen, Emmett Coleman and Steve Holmes from Comcast to reach the agreement. He went on to summarize the terms for renewal of the Cable Franchise with Comcast for the members. The highlights of which are as follows: SUMMARY OF FRANCHISE RENEWAL TERMS FOR THE CITY OF COLUMBIA HEIGHTS, MINNESOTA I. PUBLIC, EDUCATIONAL AND GOVERNMENTAL ACCESS SUPPORT/OBLIGATIONS * Within thirty (30) days of the effective date of the renewal franchise, Comcast of Minnesota, Inc. (“Comcast”) will provide the City of Columbia Heights, Minnesota (the “City”) with a capital grant in the amount of $194,842.00 that can be used to purchase new video equipment, for institutional network construction or for other permitted capital purposes. Comcast will recover this grant, plus 4.5% interest, via a line item on subscriber bills over the term of the franchise. This will amount to approximately $.85/month per subscriber. * Comcast will provide all cabling and other electronics, equipment, software and other materials necessary to transport all public, educational and governmental (“PEG”) access signals from their origination points at City Hall, the public library and the high school to the appropriate subscriber network channel (e.g., Channel 15). * Comcast will reserve and dedicate four (4) downstream channels on the cable system for PEG access use. This is the number requested by the City based on current usage and availability of programming. One of these channels will immediately be loaned to Comcast for commercial use but can be reclaimed by the City. Two of the remaining channels will be utilized by the City, (for government and library programming). I.S.D. #13 will retain its channel for educational use. Additional PEG channels can be procured if the standards set forth in Minn. Stat. § 238.084 are met. * Due to lack of demand, the City will not initially have a public access channel or dedicated studio for use by the community. However, the City can reclaim the loaned PEG channel for public access use or re- designate one of the other PEG channels for that purpose. It may also be possible for citizens to use the studio at the high school to produce programming for carriage on any future public access channel. * Comcast is responsible for ensuring that PEG channels are at the same or better level of technical quality and reliability as commercial channels carried on the cable system. * Comcast agrees to waive any right it has to recover from the City or subscribers any uncollected PEG costs from the current franchise. * Comcast will continue to carry regional channel 6 in accordance with state law. TELECOMMUNICATIONS COMMISSION MINUTES PAGE 3 JULY 15, 2010 II. SEPARATE LETTER AGREEMENT * In addition to a franchise agreement, the City and Comcast will enter into a separate letter agreement which contains a number of financial and in-kind commitments that Comcast has made to the City. The purpose for entering into a separate agreement is to insulate the City from claims that certain PEG access-related costs can be offset against or deducted from franchise fees. In addition, because the obligations in the letter agreement are not technically franchise requirements, the costs associated with certain obligations cannot be passed through to subscribers in basic service, equipment and installation rates. A copy of this letter agreement was included in the agenda packets. * Pursuant to the letter agreement, on the effective date of the franchise, Comcast will transfer ownership of $65,000.00 worth of equipment currently housed at the community access studio to the City. It is anticipated that this equipment will be installed at the high school studio and will be available for use by students, school officials and the City, free of charge. * If Comcast moves PEG channels during the franchise term, it will pay the City $3,500.00 per relocation event to defer costs associated with changes of letterhead and signage and designing promotional spots. Comcast will also provide public service announcements of any relocation on advertiser supported channels. * At no cost to the City, Comcast will interconnect its system with cable systems in adjacent communities under prescribed conditions so as to enable the sharing of PEG signals across jurisdictional boundaries. Comcast may recover reasonably certain and quantifiable interconnection costs in its rate base to the extent permitted by law. III. PEG FEE * The current PEG Fee paid by subscribers is $2.57 per subscriber per month. At present, the PEG Fee is imposed by Comcast primarily to recover the costs of operating the community access studio. Because a stand-alone community access studio will be eliminated as a result of the franchise renewal process, the amount of the PEG Fee should drop considerably. This will then be replaced with the approximate $.85/month figure that will still be indicated as a PEG fee on the bill. * Because PEG-related costs in the renewal franchise agreement are less than those in the prior franchise, subscriber rates should decrease initially. In this regard, the renewal franchise requires Comcast to pass reduced PEG costs through to subscribers. * Comcast will recover the $194,842.00 PEG grant via a line item on subscriber bills. IV. CABLE SYSTEM DESIGN * Comcast will continue to operate and maintain an interactive, state-of-the-art cable system, with a minimum capacity of 200 channels that is capable of being upgraded to meet subscriber demand for new services. TELECOMMUNICATIONS COMMISSION MINUTES PAGE 4 JULY 15, 2010 * The system will conform to or exceed all applicable Federal Communications Commission (“FCC”) performance standards. * System reliability will be ensured by standby power at each power supply location. * The system will have facilities and equipment sufficient to (i) cure violations of FCC technical standards and (ii) ensure compliance with applicable federal, state and local rules, regulations, practices and guidelines pertaining to the operation of cable systems. * Comcast will maintain an emergency alert system (“EAS”) that complies with applicable requirements. V. INSTITUTIONAL NETWORK * Based on the City’s current network needs and capabilities (including the existence of City-owned fiber lines), the existing coaxial cable institutional network (which is very old and hardly used) will be eliminated. * In lieu of providing the old institutional network, Comcast has agreed to construct fiber-optic connections to the public safety facility and the three municipal liquor stores for a cost not to exceed $69,842.00, when requested by the City. The capital grant furnished to the City can be used to defray these construction costs. * After the fiber network is constructed, the City would then enter into a managed network services agreement with Comcast or its affiliate for data speeds ranging from 20 Mbps to 100 Mbps at designated locations. These speeds significantly exceed those currently provided to the City and have been requested by the City’ s IT department to meet current and future needs. The fee for this service would be approximately $2,000/month compared to the $1,400/month we are currently paying to Qwest and Zayo for a much slower speed. Nawrocki wanted to know if the Commission members felt it was worth it to expend money for this purpose. Brad Peterson asked what it would be used for? Linda explained it would be for fiber optic connections to the Public Safety Building and the Liquor Stores. It would be used to transmit and receive video, voice, and data signals. The data speed currently is very slow, and therefore, makes it difficult to provide adequate signals for surveillance cameras and other technology required at these facilities. Peltier thinks it is worth it to connect city buildings, schools, the library, public safety building, and the liquor stores with signals necessary to handle added technology and video requirements. Brad Peterson asked if we could limit the term length since speeds keep increasing at such a fast pace, he thinks a shorter term would be advisable. Kathi stated the price quoted for the agreement was based on the length of the franchise agreement (5 years, to December 31, 2015). She explained that a shorter period of time would increase the amount per month. Gary Peterson asked if the City had to make the decision regarding the fiber network at the same time the franchise is approved. Guzzetta said that it would be constructed at the request of the City, and the City Council can decide at a later date. TELECOMMUNICATIONS COMMISSION MINUTES PAGE 5 JULY 15, 2010 * The City would have exclusive use of the I-Net and could use it to transmit and receive voice, video and data signals for lawful and noncommercial governmental and educational purposes. * Comcast will continue to provide free cable modem service to City Hall, the municipal liquor stores and the new City gymnasium unless and until the fiber connections are constructed and fully functional. VI. FREE SERVICES TO CERTAIN LOCATIONS/SUBSCRIBERS * One free cable system drop, outlet, converter and remote control will be provided or will continue to the locations designated in Exhibit B to the renewal franchise ordinance (i.e., virtually every City building). These locations will also receive free cable service. Additional drops and outlets can be installed at actual cost, which would be borne by the City. * The free universal PEG tier specified in the 1994 Memorandum of Understanding will likely be phased out over the franchise term. As of the effective date of the renewal franchise, no new universal PEG service customers will be added. Existing Universal PEG service subscribers (of which there are approximately 69 in the City) will continue to be served until Comcast converts the basic service tier to a digital-only format. At that point, remaining universal PEG service subscribers will be offered the option of receiving basic cable service at a reduced rate of 50% off the standard rate card then in effect for a period of six (6) months. Comcast may recover the cost of providing this discount in any manner allowed by law. VII. FRANCHISE FEES * Comcast will pay a franchise fee of 5% of gross revenues to the City. Franchise fee payments will be made to the City on a quarterly basis. * The definition of “gross revenues” is broad and addresses the bundling of services (i.e., cable service, Internet access and/or telephone service) in such a way to ensure that package discounts are not unfairly levied on the revenue base that is subject to cable franchise fees. VIII. FRANCHISE TERM * The term of the franchise will run from the effective date until December 31, 2015, unless sooner revoked, terminated, renewed or extended by the City. This term reflects, in part, the amount of financial and in-kind support Comcast is providing to the City, and the likelihood that technologies and the law may change significantly over the next five years. IX. LETTER OF CREDIT * Comcast will file a $25,000.00 letter of credit with the City. The letter of credit can be used by the City to ensure that Comcast pays all amounts due and makes the City whole in the event it fails to comply with the terms and conditions of the franchise. The letter of credit can be drawn on for up to 120 days. After it stops collecting liquidated damages from the letter credit or from Comcast, the City may invoke all equitable and legal remedies available under the franchise and applicable law. TELECOMUNNICATIONS COMMISSION MINUTES PAGE 6 JULY 15, 2010 X. INSURANCE AND INDEMNIFICATION * Comcast will indemnify the City against all liability and damages arising out of or in connection with the construction, operation, maintenance, repair and removal of the cable system, and enforcement of the franchise. * As part of its indemnification, Comcast will obtain general liability and broadcaster’s insurance that names the City and its officers and elected and appointed officials as additional insureds. XI. CUSTOMER SERVICE * Comcast will be required to comply with customer service standards that are based on the standards adopted by the Federal Communications Commission. By way of example, Comcast must operate a 24- hour, toll-free telephone number that subscribers and non-subscribers can call to inquire about services, to register complaints and to make requests. * Under normal operating conditions, telephone answer time by a customer service representative, including wait time, must not exceed 30 seconds from the time a connection is made. If a call needs to be transferred, the transfer time cannot exceed 30 seconds. These standards must be met no less than 90% of the time, under normal operating conditions, measured on a quarterly basis. * Excluding conditions beyond its control, Comcast must begin working on service interruptions within 24 hours after a service interruption becomes known. * Service and installation appointments must be scheduled in four-hour time blocks from at least 8 a.m to 7 p.m. * Comcast will provide a drop box for the payment of bills in the City. This is currently being met with the drop box located at the City’s Liquor Store on Central Avenue. * Comcast may recoup from subscribers any direct and verifiable costs it incurs to comply with customer service standards that are stricter than or in addition to the FCC’s standards, to the extent permitted by law. XII. SCOPE OF FRANCHISE * The renewal franchise only authorizes Comcast to provide cable service in the City. Comcast is not authorized by the franchise to provide non-cable services. * At the same time, however, the renewal franchise does not limit Comcast’s ability to provide non-cable services, as long as Comcast has obtained any requisite authorizations to provide such services. XIII. COMPETITIVE EQUITY * The renewal franchise contains a provision that states that the City will amend Comcast’s franchise, upon request, if the City grants an additional cable service franchise that contains material terms that are substantially more favorable or less burdensome to the additional franchise holder than the material terms in the Comcast franchise. Word for word identical franchises are not required. * The City may also have to modify Comcast’s franchise if federal or state law permits a wireline cable service provider to furnish cable service in the City without a cable service franchise. TELECOMMUNICATONS COMMISSION MINUTES PAGE 7 JULY 15, 2010 XIV. RIGHT-OF-WAY MANAGEMENT * The City retains authority over the use of its public rights-of-way. XV. LINE EXTENSION * Comcast must extend its system, upon request, to provide service to all persons located in the City without charging more than the standard installation charge for an individual drop. Peltier asked if a wireless system could come in and provide service. Kathi Donnelly-Cohen said unless they are providing video/cable service, they do not need a franchise to provide their service. Nawrocki asked Bryan Olson if he had any questions or comments. Mr. Olson stated the list of equipment from the studio going to the high school is good equipment and should have a couple years of use left. He was especially interested in the Grass Valley Switcher, that has proven to be a good piece of equipment. He said not to toss anything, and if it is decided to do so, to contact him as he may be interested in purchasing some of it. His only other comment was losing Universal service and the Public Access Channel, but understands why those decisions were made. Bob Odden suggested combining the access channels to allow all public information to remain as an option. Linda explained we will not have the Public Access Channel since there is so little demand for it, however, we have retained the rights to re-instate it if the City deems there is enough interest by the Public. The studio was expensive to maintain and was not heavily used by the Public. She referenced the handout listing the June programs, and indicated that only 5 programs were produced internally, while 81 were produced externally. She indicated those stats were indicative of those of previous months. General programming of interest and importance to the public can be run on Channel 16, if the information is appropriate for general viewing. Personal type programming would not be allowed however. Brad Peterson stated that if someone is interested in producing programming, they can put it on the internet, since more people view that than the Public Access Channels. Peltier also suggested that people can submit their programming to the Regional Channel 6 if desired. Motion by Peltier, seconded by Buboltz to recommend the City Council hold the first reading of nd Ordinance 1583 in substantially the same form it was presented in at this meeting, and to schedule a 2 reading to adopt Ordinance 1583, being an Ordinance granting a franchise to Comcast of MN, Inc. to construct, operate and maintain a cable system in the City of Columbia Heights, Minnesota to provide cable service and to approve the commitment letter. All ayes. MOTION PASSED. C. Other New Business None REPORTS A. Report of Commissioners Education -Dan Swee-- Nothing to report Library - Bob Buboltz—Nothing to report. Public - Government -Ken Henke--Nothing to report TELECOMMUNICATIONS COMMISSION MINUTES PAGE 8 JULY 15, 2010 B. Report of Comcast- The reports of May-June 2010 were included in the agenda packets for the commissioners to review. Kathi answered questions and noted that Comcast has been replacing taps throughout the City. C. Report of the Cable Attorney Nothing further to report. D. Report of the Assistant to the City Manager Linda thanked the negotiating committee for their time and efforts during the negotiation process. She also acknowledged and thanked Kathi Donnelly-Cohen for being so responsive to issues that arise and for maintaining a professional, yet cooperative relationship between the City and Comcast. Motion by Buboltz, seconded by Peterson, to adjourn the meeting at 8:40 pm. All ayes. Respectfully submitted, Shelley Hanson Secretary