HomeMy WebLinkAboutAGENDA REPORT 2007 0919 CC REG ITEM 08A rrEM g . A .
CITY OF MOORPARK,CALIFORNIA
City Council Meeting
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ACTIOW
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: John Brand, Senior Management Analyst
DATE: September 12, 2007 (CC Meeting of 9/19/2007)
SUBJECT: Consider Continued Hearing on Potential Breach by Time Warner of
its Customer Service Obligations
BACKGROUND
On June 20, the Council continued its Public Hearing until September 19, and time
Warner Cable requested a meeting with the Cable TV Ad Hoc Committee.
DISCUSSION
On August 15, the Moorpark City Council Cable TV Ad Hoc Committee (Mayor Pro Tern
Millhouse and Councilmember Parvin) met with Time Warner Cable staff. Time Warner
Cable (TWC) provided the City with a status report on its efforts to integrate former
Adelphia and Comcast cable systems. In June, 2007 TWC telephone response times
improved with 75.4% customer calls answered within 30 seconds with a June call
volume of 964,442 customer calls. This is Time Warner's best call center performance
since the Adelphia merger occurred in August 2006. Response time in July, 2007 was
nearly as good, with 73% of calls answered within 30 seconds. TWC reports that these
calls combine regulated calls (regarding cable TV service) with non-regulated calls for
other TWC products and services such as telephone and internet service. Customer
service calls regarding internet access or telephone call services are not subject to the
"30-Second Rule".
The low point in TWC customer service to-date was October 2006, when 44.2% of calls
were answered in 30 seconds, and the call volume was 2,154,234 for the region
including Moorpark. The performance standard for the industry is for 90% of customer
calls to be answered by live person within 30 seconds. Time Warner also reported on its
progress to integrate billing systems and to establish specific divisional call centers by
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Honorable City Council
September 19, 2007
Page 2
the end of August. The City Council Ad Hoc committee had suggested that dedicated
call centers would be able to provide better customer service because they will be more
familiar with the products and services offered by TWC in the area. TWC has hired
1,000 new customer service representatives that are undergoing training.
Time Warner Cable appears to be making substantive efforts to restore compliance with
federal customer service standards. As such staff recommends that the Hearing be
closed after public comments and that staff be directed to monitor their progress keep
Council informed as appropriate.
STAFF RECOMMENDATION
1) Open the Public Hearing, accept public testimony, and close the public hearing.
2) Direct staff to monitor Time Warner Cable's performance and keep Council informed
as appropriate.
Attachments: 1) TWC CATV Monthly Reports
2) June 20 Staff Report with Attachments
Time Warner Cable
City of Moorpark,California
CATV Monthly Report
Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07
Repair Log*
Headend/Transportation/Distribution 0 1 0 0 0 0 1 0 2 1 1
Drop 0 0 0 4 0 0 0 12 12 11 29
Customer Premise 0 2 0 0 2 2 0 2 6 2 6
Administrative 18 7 15 16 14 14 15 0 0 3 1
Other 155 171 180 199 236 236 216 88 99 157 139
0 0 0 0 0 0 0
Total Service Calls 173 181 195 219 252 252 232 102 119 174 176
Less Customer Calls -155 -171 -180 -199 -236 -236 -216 -88 -99 -157 -139
%Calls/Customers 89.6% 94.5% 0.0% 90.9% 93.7% 93.7% 93.1% 86.3% 83.2% 90.2% 79.00A
Total Repair Calls 18 10 15 20 16 16 16 14 20 17 37
%Calls/Repair 10.4"% 5.5% 0.0% 9.1% 6.3% 6.3% 6.9% 13.7% 16.8% 9.8% 21.0%
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Telephone Log n
Total Calls 956,157 1,683,023 2,154,234 1,748,276 1,404,961 1,641,720 1,385,937 1,072,530 1,045,537 1,111,919 964,442 925,025 '
%Busy Signals Received 2.6% 4.0% 2.6°% 2.3% 1.5°% 2.6% 0.3% 0.1% 1.7% 0.2% 0.7"% 0.1% tFil
°%Calls Answered in 30 Sec 51.5°% 57.6°% 44.2% 48.8% 60.7% 50.8% 56.0% 66.3% 63.1% 70.4°% 75.5°% 73.0°% 1-1
Total Calls Abandoned 70,346 60,568 236,825 466,718 298,393 427,302 301,958 119,858 127,905 103,115 52,706 62,167
%calls Abandoned 7.4% 3.6% 11.0% 26.7% 21.2% 26.0°% 21.8% 11.2% 12.2% 9.3% 5.5% 6.7%
*includes non-regulated calls
9/5/2007
NEM
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Joseph Montes, City Attorney
DATE: June 14, 2007 (CC Meeting of 6/20/2007)
SUBJECT: Consider Hearing on Potential Breach by Time Warner of its
Customer Service Obligations
BACKGROUND
Procedural History
The following is a partial summary of the relevant timeline:
• July 21, 2004. The City has a first reading of Ordinance 303 to regulate cable
franchisees.
• September 1, 2004. The City approves, at second reading, Ordinance 303.
• Effective October 1. 2004. The City entered into a franchise agreement (the
"Franchise Agreement") with Century TC1. Century TCI was owned 75% by
Adelphia Communications Corporation and 25% by entities associated with
Comcast. That Franchise Agreement indicated that compliance with Ordinance
303 was required. Service was provided in Moorpark under the Adelphia name.
• November 2. 2005. Via resolution 2005-2410, Moorpark consented to the transfer
of the Franchise Agreement to Time Warner Cable ("Time Warner") affiliated
entities. Time Warner did not begin providing service in Moorpark until August
2006.
• November 2005. Regional records indicate that for the month of November 2005,
89.8% of phone calls to customer service were answered within 30 seconds.
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Honorable City Council
June 20, 2007
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• March 7. 2007. The City Council continued discussion of Time Warner issues to
March 21, 2007.
• March 14, 2007. The Council Ad Hoc Committee met with Time Warner and again
requested Moorpark-specific information.
• March 21, 2007. The City Council directed staff to send Time Warner written
notice of material default for failure to meet the customer service standards for at
least the last three months.
• March 27, 2007. Joseph Montes, City Attorney, via certified mail, sent a letter to
Time Warner indicating that the City made a preliminary determination that Time
Warner has been in material default of its obligations "for at least the last three
months for failure to meet the customer service standards of Moorpark Municipal
Code 5.06.810." The City gave Time Warner 30 days to either correct the material
violations or provide evidence of non-violation. This letter appears as Exhibit 1 to
this staff report.
• April 18, 2007. The City Council directed staff to provide Time Warner with notice
of a public hearing to be held at the June 6, 2007 Meeting.
• April 27, 2007. Time Warner sent a letter indicating that it did not believe that the
standards of Municipal Code 5.06.810 apply, but rather, that the procedures of
Ordinance 133 apply, namely that during normal business hours:
"a minimum of seventy-five percent (75%) of all
callers for service will not be required to wait for more
than sixty (60) seconds before being connected to a
service representative; and further, a minimum of fifty
percent (50%) of all callers will not be required to wait
more than thirty (30) seconds before being connected
to a service representative; in each case as measured
over a period of thirty (30) consecutive days."
In that letter, Time Warner admits that for the month of March 2007, that even this
more lax standard of 75% of calls being answered within 60 seconds was violated.
[72% were answered within 60 seconds"]. Time Warner acknowledged the
customer service difficulties and indicated they were caused by the purchase of the
Adelphia assets. Time Warner indicated that it has taker' numerous steps to
resolve the ongoing issues including hiring more customer service representatives,
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Honorable City Council
June 20, 2007
Page 5
ninety percent (90%) of the time measured on a quarterly
basis. For the purposes of this Section, "quarterly" shall
mean any consecutive three (3) calendar month period, and
is not necessarily coincident with a calendar quarter. . . ."
These standards are patterned after the federal standards set forth at 47 C.F.R.
76.309(c)(1)(ii),(iii), which provide:
"(ii) Under normal operating conditions, telephone answer
time by a customer representative, including wait time, shall
not.exceed thirty (30) seconds when the connection is made.
If the call needs to be transferred, transfer time shall not
exceed thirty (30) seconds. These standards shall be met
no less than ninety (90) percent of the time under normal
operating conditions, measured on a quarterly basis.
(iii) The operator will not be required to acquire equipment
or perform surveys to measure compliance with the
telephone answering standards above unless an historical
record of complaints indicates a clear failure to comply.' "
Section 5.06.528 of Ordinance 303 and the Municipal Code provide:
"Normal Operating Conditions. "Normal Operating
Conditions" means those service conditions which are within
the control of the Grantee. Those conditions which are not
within the control of the Grantee include, but are not limited
to, natural disasters, civil disturbances, power outages,
telephone network outages, and severe or unusual weather
conditions. Those conditions which are ordinarily within the
control of the cable operator include, but are not limited to,
special promotions, pay-per-view events, rate increases,
regular peak or seasonal demand periods, and scheduled
maintenance or upgrade of the Cable System."
See 47 CFR 76.309(c)(1)(iii).
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June 20, 2007
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Although Time Warner has not provided Moorpark specific data, staff believes
the City may rely on these data.
It should be noted that these data are not specific to the City of Moorpark, but are
specific only to the general region of which Moorpark is a part. That stated, as
described above, on at least three different occasions between February 2007 and
March 2007, Moorpark has requested that Time Warner provide such information, and
even passed a resolution to that effect. In response, on March 5, 2007, Time Warner
wrote "we are not able to provide Moorpark specific telephone statistics."
2. Second Possible Finding: Instruct Staff to Provide Notice to Time Warner
that the City Will Consider Imposing Liquidated Damages for Failure to
Acquire and Install Equipment for Moorpark Specific Data.
Section 5.06.840 of Ordinance 303 and of the Moorpark Municipal Code requires
Time Warner to provide "sufficient documentation to permit [the City] to verify Grantee's
compliance" with the customer service standards. The only data provided by Time
Warner is regional data. Time Warner has failed to provide data specific to Moorpark,
despite repeated requests for such information, including the passage of Resolution
2007-2567. To date, Time Warner has not provided any data to suggest that the call
service performance in Moorpark is any different from that experienced by the region.
Accordingly, City staff has concluded that Time Warner has failed to meet the
performance standards of Ordinance 303.
Federal law and Sections 5.06.810(c) of Ordinance 303 and the Municipal Code
allow Moorpark to require Time Warner to "acquire equipment or perform surveys to
measure compliance with the telephone answering standards [if] an historical record of
complaints indicates a clear failure to comply." Staff believes that the timeline shown
above demonstrates a "clear failure to comply"with the customer service requirements.
The City Council may find that there is a historical record of complaints which
indicates a clear failure to comply with the customer service standards. The City
Council would authorize staff to send notice that Time Warner Cable must provide this
equipment within 30 days or provide evidence of non-violation, or face a finding that
Time Warner is in material default of the agreement, which may include imposition of
additional liquidated damages.
3 Third Possible Findinq: Determine that a Breach of the Franchise
Agreement and/or Violations of the Moorpark Municipal Code Have
Occurred.
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LA#4849-7266-7905 v
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Honorable City Council
June 20, 2007
Page 9
2. Determine that there was a Material Breach.
If the City determines that there has been a material breach of the 90% standard,
the City Council may consider the following courses of action:
a. Conclude Time Warner Has "Commenced Corrective Action Since March
28, 2007 and Diligently Remedied Such Violation Thereafter." As
described above, consistent with 2.7(a) of the Franchise Agreement, on
March 27, 2007, the City sent notice that a preliminary determination has
been made that Time Warner was in material breach of the Franchise
Agreement, and that it "must either correct these material violations within
30 days or provide evidence of non violation in 30 days. Time Warner
received that notice on March 28, 2007. Therefore, Time Warner had until
April 27, 2007 to either correct the violation, or provide evidence of non-
violation. As described above, Time Warner's April 27, 2007 response is
attached as Exhibit 4 to this Staff Report. The City may determine that
Time Warner has "commence[d] corrective action within the time
prescribed [prior to April 27, 2007] and diligently remed[ied] such violation
thereafter." If the City makes this determination, then the City could not
impose liquidated damages.
b. Conclude that Time Warner Has Not Commenced Corrective Action. The
City Council could conclude that Time Warner has not commenced]
corrective action [prior to April 27] and diligently remedied such violation
thereafter." If the City makes this determination, it can impose liquidated
damages.
3. Impose Liquidated Damages. Consistent with section 2.7(b) of the Franchise
Agreement, the City Manager would request that the City Council consider
imposing liquidated damages, assessable from the Security Fund, of up to Two
Hundred Dollars ($200) per day or per incident for all violations. Section 2.7(c) of
the Franchise Agreement explains that if the City Council elects to assess
liquidated damages, then such election will constitute the City's exclusive remedy
for a period of one hundred twenty days. Thereafter, if Time Warner remains in
non-compliance with the requirements of the Franchise Agreement, the City may
pursue additional remedies (such as revocation of the franchise).
The amount of the liquidated damages would differ, depending upon how the City
wishes to calculate the damages. Here are two permissible methods:
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Honorable City Council
June 20, 2007
Page 11
4. Provide Notice To Require Equipment. The City Council may authorize staff to
notify Time Warner that if it fails to provide Moorpark-specific tracking equipment
within 30 days or provide evidence of non-violation, it may face a finding that
Time Warner is in material default of the agreement, which would allow the City
to impose additional liquidated damages. It is recommended that if the City
Council follows this option, that the City Council find that there is a historical
record of complaints which indicates a clear failure to comply with the customer
service standards.
5. Continue the Hearing. The City Council could opt to continue the hearing to
allow the City to determine with more certainty the full extent of the customer
service violations, and to determine whether Time Warner has cured such
violations. Although it is unclear, it appears that at the subsequent hearing, even
if Time Warner subsequently fixes the current violations, the City could still opt to
impose liquidated damages based upon the extant violations and failures to
sufficiently remedy the violations. (See 5.06.1510.A).
STAFF RECOMMENDATION
1) Open the public hearing, accept public testimony, and close the public hearing.
2) Direct staff as deemed appropriate.
Attachments: 1) Exhibit 1: City Attorney letter to Time Warner dated 3/27/2007
2) Exhibit 2: Time Warner response letter dated 4/27/2007
3) Exhibit 3: City Attorney letter to Time Warner dated 5/17/2007
4) Exhibit 4: Time Warner Chart—Telephone Log
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LA#4849-7266-7905 v
Mr. Stephen Pagano
Gary Matz, General Counsel
March 27, 2007
Page 2
cc: Debi Picciolo, President, North Division, Time Warner Cable
Patricia Fregoso-Cox, Vice President, North Division, Time Warner Cable
Honorable City Council
Steven Kueny, City Manager
John Brand, Senior Management Analyst
Scott Porter, Assistant City Attorney
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LA#4843-4560-9985 vt
being connected to a service representative; in each case as measured over a period of
thirty(30)consecutive days.
. In reviewing the call answering statistics, please be aware that they include calls
from many other franchise areas that are served by the same call centers. These statistics
also include calls regarding services other than the cable video service which is regulated
under the franchise.
With this proviso, we can report that during normal business hours in the month
of March,2007 roughly 69%of the calls were answered within 30 seconds and 72%were
answered within 60 seconds.
As outlined below, we are taking steps to improve phone response time and
anticipate that future statistics will reflect these efforts.
We fully recognize that we have had significant challenges in answering our
phones in as timely a manner as both we and our customers expect. Be assured, we will
not be satisfied to simply meet the standard set in the franchise, but are determined to
exceed them.
To place this entire situation in context, it should be borne in mind that the Time
Warner Cable acquisition of both Adelphia and Comcast systems in Southern California
and their integration into Time Warner Cable's LA Region is a merger of technical
platforms,operational processes and company cultures which is of a truly unprecedented
scope in the cable industry. The transaction, which closed on August 1, 2006, is widely
considered to be the most complex cable transaction in the history of the industry. As
you are aware, the Moorpark system was previously operated by Adelphia, a company
that had been in bankruptcy for several years prior to the transfer of the system to Time
Warner Cable. Due to the uncertainties and limitations inherent in operating a system in
such circumstances, there was an inevitable deferral of certain decisions and
improvements during the period in which Adelphia operated the system as a bankrupt
company. The fact that this transfer was from a bankrupt entity has created even greater
challenges than normal in an ownership transition. As such, consequent operating
conditions as we have transitioned from an Adelphia to a Time Warner Cable operation
have been far from normal
The initial integration phase of the Adelphia and Comcast systems into the Time Warner
Cable operation has not begun as smoothly as we had planned. Outlined below are a few
of the contributing factors.
CHALLENGES
Standardization of Products and Services - When Time Warner Cable took
ownership of the Adelphia and Comcast systems in Southern California, our goal
was to make available to our new customers the same advanced services that had
previously been available to Time Warner Cable subscribers in our former, much
smaller service area. This included standardizing our channel lineups and
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Organizationally, we are breaking our operation into smaller, neighborhood work
areas that will bring field service employees closer to the communities they serve. :
As we have seen in other Time Warner Cable divisions, this community-based
structure will enhance our responsiveness to our customers from both a service
and an installation perspective,thus resulting in higher customer satisfaction.
In the field, we are moving from a contractor-based service model previously
employed in the newly acquired systems to Time Warner Cable employee-based
field technician model to further ensure quality control.
E-mail Migration - The Comcast e-mail migration is behind us and will not be a
recurring problem.
Customer Service Improvements- Since the transition,we have been aggressively
hiring and training call center representatives to address our customers'needs.
When we took over operation of the consolidated system, there were
approximately 1,350 call center agents working in six local call centers to address
our subscribers' needs. There were no layoffs or downsizing. At end of 2006, we
grew our customer service ranks to more than 1,650 customer service agents and
today, we have approximately 2,000 call center professionals trained and on the
job to serve our subscribers. In addition to hiring more field technicians and
customer service agents, Time Warner Cable has added staffing in our lobbies,
thereby bringing significant employment opportunities to the Greater Los Angeles
Area.
These new employees receive Time Warner Cable's full compliment of 160 hours
of classroom training as well as 80 hours of supervised on-the-job training to
ensure the highest quality of customer service. Our ongoing education and
training of our existing call center agents continues.
Of course, it takes most new employees some initial time in the job even after
training to become acclimated. We believe our newer employees are now
adapting and their efforts are reflected in the improvements in phone answering
over the past few months.
New Management Team - As you may be aware, we have recently put in place a
new senior management team in Los Angeles with a combined 50 years of
experience in operating a cable system in an urban environment.
Our newly appointed Executive Vice President, Barry Rosenblum has overseen
the New York City system and successfully executed the integration of multiple
systems there. Mr. Rosenblum's responsibilities will be our two major urban
systems in Southern California and New York, exclusively, with the majority of
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May 17, 2007
John E.Fogarty
Vice President and Asst. Chief Counsel
Time Warner Cable
290 Harbor Drive
Stamford, CT 06902
Re: Notice of Public Hearing on Violations of Cable Franchise Obligations
Dear Time Warner Cable:
This office serves as the City Attorney for the City of Moorpark ("Moorpark") and
writes on its behalf. This letter provides notice of a public hearing and responds to your
letter dated April 27, 2007.
Notice of Hearing
With regards to the public hearing, please be advised that the Moorpark City
Council will have a public hearing at its regularly scheduled City Council meeting of
June 20, 2007 at 7 p.m., or as soon thereafter as the item may be heard, to consider
whether Time Warner Cable ("Time Warner") is in material default of its obligations
under the Franchise Agreement and the standards which are set forth in Moorpark
Municipal Code § 5.06.810.
At the public hearing, Time Warner will have the opportunity to address the City
Council and provide evidence that no material violation has occurred, that Time Warner
has corrected the alleged violations; or that Time Warner has diligently commenced
correction of such alleged violation and is diligently proceeding to fully remedy such
alleged violations.
The Standards Set Forth in Moorpark Municipal Code§ 5.06.810 Apply.
With regards to your letter dated April 27, 2007, you assert that the standards in
Moorpark Municipal Code §5.06.810 do not apply because they were adopted in a June
2005 ordinance. Actually, those standards were adopted in 2004, prior to the effective
date of your franchise.
Recital 7 of the franchise agreement provides:
LA#4831-2304-2305 v 1 000013
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I ime Warner Cable
Exhibit 4
M
X
Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06
Repair Log*
Headend 3 2 0 0 0
Transportion 1 3 0 0 2 0 0 a
Distribution 0 0 7 0 0 0 2
' 0 S 0 0 0
Drop 21 23 22 14 22 28 28 20
Customer Premise 199 231 189 183 147 178
Administrative 0 0 1 SS 192
0 0 0 0 0 0
Total Service Calls 224 2S9 218 197 174 208 183
Less Customer Calls -199 -231 -189 214
-183 -147 -178 -155 -192
%Calls/Customers 88.8% 89.2% 86.7% 92.9% 84.5% 85.6% 84.7%
Total Repair Calls 25 28 29 89.7%
14 27 30 28 22
%Calls/Repair 11.2% 10.8% 13.3% 7.1% 1S.5% 14.4% 15.3%
10.3%
Outage Log
Total Outages 1 2 1 0 1 _ 2
Total Minutes 70 125 1 3
330 0 60 135 110 498
Telephone Log*
Total Calls 841,283 852,755 866,654 883,991 809,838 847,218 848,625 902,279
%Busy Signals Received 0.5% 1.1% 3.2% 2.4% 2.3%
%Calls Answered in 30 Sec 89,896 2.49(' 2.49(+ 2.4%
93.3% 78.0% 75.6% 75.6% 81.1% 75.0% 84.6%
Total Calls Abandoned 10,389 6,098 23,673 21,758 19,114 12,152
%calls Abandoned 1.2% 0.7% 2.7% 2.5% 2.4% 1.4% 20'898 13,089 2.5% 1.5%%
**This was a major outage due to damaged fiber optic lines that had to be respliced.
***This was due to a burned fuse. Replaced fuse system retored.
C
*NOTE: Due to the integration of Adelphia and Time Warner's call centers, the August 2006 telephone log reflects only partial information.
6/12/2007
Time Warner Cable Exhibit 4
Quarterly (90 Day) Summaries
Dec-06 - Sep-06 - June-06 - Mar-06 - Dec-05 -
Report Summary Feb-O7 Nov-06 Aug-06 May-06 Feb-O6
Repair Log
Headend 1 1 0 2 2
Transportion 0 - 4 4 0 3
Distribution 4 2 2 5 7
Drop 43 38 54 78 59
Customer Premise 688 550 493 480 603
Administrative 0 0 0 0 0
Total Service Calls 736 595 553 565 674
Less Customer Calls -688 -550 -493 -480 -603
%Calls/Customers 93.5% 92.4% 89.1% 84.9% 89.6%
Total Repair Calls 48 45 60 85 71
% Calls/Repair 6.5% 7.6% 10.9% 15.1% 10.4%
Outage Log
Total Outages 6 2 1 0 1
Total Minutes 815 95,150 330 0 60
Telephone Log
Total Calls 4,432,618 5,585,533 2,720,990 2,505,681 2,603,400
%Busy Signals Received 1.5% 3.0% 2.5°x6 2.4% 2.2%
% Calls Answered in 30 Sec 55.8% 50.2% 69.0% 77.2% 82.3%
Total Calls Abandoned 1,027,653 764,111 107,841 52,164 51,529
% calls Abandoned 23.2% 13.8% 3.9% 2.1% 2.0%
6/12/2007