HomeMy WebLinkAboutAGENDA REPORT 2004 0407 CC REG ITEM 09CMOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
ITEM '?. Ce
AC, T
FROM: Hugh R. Riley, Assistant City Man:: er'
DATE: March 26, 2004 (City Council Meeting of April 7, 2004)
SUBJECT: Cable Television Franchise Renewal Update
BACKGROUND
On June 6, 1984, the City Council of the City of Moorpark adopted
Resolution No. 84 -99 granting a 15 -year, Non - exclusive Franchise
for the operation of a cable television system to serve the Urban
West Communities' Mountain Meadows Housing Development to Mountain
Meadows Cable Television, L.P. This franchise was scheduled to
expire on June 6, 1999. The franchise agreement for this system
(`Mountain Meadows System ") was extended to December 20, 2000 by
Resolution No. 98 -1550 on December 2, 1998.
On November 21, 1990, the City Council adopted Ordinance No. 134
granting a ten -year renewal of a non - exclusive franchise to operate
a cable television system in Moorpark to The Chronicle Publishing
Co. doing business as Ventura County Cable Vision ( "the Moorpark
System"). This franchise was in operation when the City
incorporated in 1983.
A series of actions were taken to approve the transfer of control
for these franchise agreements to various entities as the
telecommunications companies were purchased or as mergers were
completed. The transfer of control of both franchise agreements to
Adelphia was approved by the City of Moorpark between November 21,
1990 and August 18, 1999. A chronological history of these actions
by the City of Moorpark is attached to provide a clear
understanding of the evolution of the Cable TV systems ownership in
Moorpark. In June 2000, the City retained the services of
Telecommunications Management Corporation to provide consulting
services for the development and negotiation of the franchise
renewal and for the development of a revised Cable Television
Regulatory Ordinance.
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Honorable City Council
March 26, 2004
Page 2
In December 2001, the franchise agreements with Adelphia were
renewed for a six -month period ending June 30, 2002. No additional
interim extensions have been requested or granted. The City and
Adelphia have been more or less engaged in franchise renewal
discussions since that time with interruptions caused chiefly by
the filing for Chapter 11 Bankruptcy by Adelphia in June 2002.
Various staffing changes at all levels of the reorganized Adelphia
following the bankruptcy also served to disrupt and delay the
renewal process.
DISCUSSION
Over the past 10 months, staff has prepared a Draft Franchise
Agreement combining both franchises, a draft Cable TV Regulatory
Ordinance and an Agreement for Construction and Maintenance of a
Fiber -Optic Network between public buildings in Moorpark (the I-
Net).
FRANCHISE AGREEMENT
Several drafts of the Franchise Agreement have been exchanged with
Adelphia. Staff's recommended renewal objectives for the agreement
are summarized in Attachment 2 to this report. On February 18,
2004, the City Council's Cable TV Ad Hoc Committee (Councilmembers
Harper and Millhouse) reviewed the most recent agreement and
provided comments and direction to staff. City Staff is scheduled
to meet with Adelpia on April 12 to resume negotiations.
CABLE TV REGULATORY ORDINANCE
The Draft Ordinance is still being prepared by staff. The Final
draft of the ordinance will be presented to the City Council for
adoption and included with the Franchise Agreement as an Exhibit.
CONSTRUCTION /MAINTENANCE AGREEMENT FOR I -NET
Several drafts of the agreement have been exchanged with Adelphia,
and public buildings in Moorpark under consideration for connection
to the I -Net have been identified. Present and future facilities at
Moorpark Community College and Moorpark Unified School District
have been included with the City's facilities.
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Honorable City Council
March 26, 2004
Page 3
Adelphia has submitted a proposal for the costs associated with the
construction and future maintenance of the I -Net including the cost
to provide a system connection at each public building location.
These costs to the City are being negotiated along with targeted
funding for a one -time capital grant from Adelphia to support the
future purchase of equipment and programming for the City's Cable
Access Channel 10. Obtaining a commitment for adequate funding for
the I -Net as well as the capital grant funding are the principal
goals for the Ad Hoc Committee.
SYSTEM UPGRADE (REBUILD
The Rebuild /Upgrade Project is about 98% complete. There are five
locations in the City that require either slurry, patching and /or
striping within the City streets. Plans to complete these locations
have been submitted and are currently under review by the City
Engineer. Security deposits provided by Adelphia are adequate to
guarantee the remaining work.
RECENT FEE INCREASES AND CALL - CENTER RELOCATION
Beginning in July 2003, Adelphia began filing a series of fee
adjustments for equipment and premium services with the Federal
Communications Commission. Presently, the City of Moorpark does not
regulate Adelphia's services rates because the only part of the
rate structure subject to such regulation by the FCC or local
government is the basic service rate which rarely increases.
Digital service, premium channels and other optional services are
not subject to regulation. Last fall, Adelphia announced a complex
and somewhat confusing fee adjustment to its digital customers in
Moorpark. The City received a written formal complaint from one
customer and several telephone complaints as a result of the fee
increases.
Early in 2004, Adelphia announced that it was consolidating
administrative facilities in its service region and would be
relocating its customer call center to Ontario, California (from
Newbury Park) in order to "improve telephone response time" and
provide better training and supervision for its operators.
In October 2003, Steve Naber was named to replace Dan Deutsch as
Adelphia's Area Manager for the Ventura County Area. Mr. Naber will
attend the April 7 City Council meeting to augment this report and
answer questions from the City Council.
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Honorable City Council
March 26, 2004
Page 4
STAFF RECOMMENDATION
Receive and file Report and refer any matters to the Ad Hoc
Committee.
Attachments: 1. Chronological History of Cable Television
Franchise Actions - City of Moorpark
2. Recommended Renewal Objectives
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Attachment 1
CHRONOLOGICAL HISTORY OF CABLE TELEVISION
FRANCHISE ACTIONS
CITY OF MOORPARK
6/6/84 — Resolution No. 84 -99
11/21/90 — Ordinance No. 133:
11/21/90 — Ordinance No. 134:
Granting 15 -year Cable TV
Franchise to Mountain Meadows
Cable Television, L.P., ( "Mountain
Meadows System "). This Franchise
expires on June 5, 1999.
Cable TV Franchise Ordinance, now
Chapter 5.06 of City Code.
Granting Cable TV Franchise
renewal to The Chronical Publishing
Co. dba Ventura County Cable
Vision (" VCC) ( "Moorpark
System "). This Franchise was in
place at the time the City was
incorporated. This Franchise expires
on November 8, 2000.
3/20/96 — Resolution No. 96 -1190: Approving transfer of Ownership of
Moorpark System to
Telecommunications, Inc. ( "TCI ")
Cable Vision of California.
12/2/98 — Resolution No. 98 -1550: Extending Franchise held by
Entertainment Express (formerly
Mountain Meadows Cable
Television) Mountain Meadows
System to December 20, 2000.
1/20/99 — Resolution No. 99 -1565
Clarifying Mountain Meadows
System and repealing Resolution
No. 98 -1550.
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2/5/99 — Resolution No. 99 -1574
5/19/99 — Resolution No. 99 -1611:
Approving Change of Control of
Moorpark System where TCI
becomes wholly owned subsidiary
of AT &T.
Approving transfer of Moorpark
System from TCI of California to
Century -TCI California, L.P.
8/18/99 — Resolution No. 99 -1648: Approving change of control of
Mountain Meadows System to
Adelphia Communications
Corporation ( "Adelphia ")
8/18/99 — Resolution No. 99 -1643:
7/18/01- Resolution Nos. 2001 -1869
& 2001 -1870
6/21/02
Approving change of control of
Moorpark System to Adelphia
Communications Corporation.
Extending the Mountain Meadows
System and the Moorpark System
Franchises to December 31, 2001
Adelphia files for Bankruptcy under
Chapter 11
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RECOMMENDED RENEWAL OBJECTIVES
ITEM
I RECOMMENDATION
I COMMENT
Service Area
All dwelling -units in the City, standard installation
nstallation
and monthly rates.
Commercial areas cabled in accordance with an
agreed -upon schedule.
Free drop connections, basic cable service and basic
Free drop connections and basic cable service
Internet access service to all governmental and
required by current franchise.
educational institutions from the closest node.
Franchise Fee
5%. of annual gross cable service receipts and the
No reason is seen to accept a lower amount.
maimum permissible for telecommunications services
receipts. Agreement on percentage of revenue from
"bundled" services that.is subject to the franchise fee.
Franchise Renewal Term
Based upon enforceable commitment to new
This is a major negotiation item, and should be
investment in the cable system.
determined last.
System Upgrading and /or
Rebuild to 860 MHz, fiber -to- the -node design to
Rebuilding
achieve capability for new services, including I -Net,
programming, cable modem Internet access and
telephony, within a reasonable time
Trigger mechanism for activating new services, based
Use of a "most favored nations" clause can be
upon activation in other comparable systems.
considered.
System Technical Standards
FCC Technical Standards used as minimum
standards.
Customer Service and
Consumer Protection
FCC standards can be adopted, or more
comprehensive standards can be incorporated in
Should have concurrence of cable operator, but Cable
Act
Standards
a
new regulatory ordinance. Standards should address
grants authority to franchisors to establish
reasonable standards unilaterally.
telephone availability, response to inquiries and
outages, emergency response time and reporting
The FCC standards may be used as a minimum, if
requirements evidencing compliance with standards,
desired.
and also penalties for noncompliance.
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Figure 6 (continu
ITEM I RECOMMENDATION I COMMENT
Regulatory Capability
To be incorporated in updated regulatory ordinance.
Should have concurrence of cable operator, but Cable
Act grants authority to franchisors to regulate
consistent with federal law.
PEG Access Equipment and
Funding equivalent of up to 3% of gross revenues for
May a source of ongoing operating expenses.
Facilities
PEG access equipment and facilities to be provided by
operator, appropriate to meet near -term and future
PEG access objectives.
Interactive services (I -Net and Internet Access)
defined as falling within the PEG category, if utilized by
City and educational facilities.
PEG Access Channels
Provision of dedicated PEG channels based on
anticipated level of use.
Institutional Network
Fiber optic I -Net connecting all public buildings in City,
Capabilities
with phased expansion 'to other communities.
Service to Businesses
City and AT &T to negotiate a plan for serving
businesses.
Rates
City and subscribers to be provided advance notice of
rate increases.
Service discounts for low- income seniors and the
handicapped.
Emergency Alert Capability
Consistent with FCC requirements.
Franchise Enforceability
Provision of security fund (preferably cash or letter of
The enforcement mechanism should provide relief
credit) that can be assessed in the event of franchise
prior to entering into litigation.
breaches.
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