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CITY OF MOORPARK ,
AGENDA REPORTw „
TO: Honorable Mayor and City Council
From: Hugh R. Riley, Assistant City Ma er
DATE: June 30 2001 (Meeting of 718 01
SUBJECT: Consider Resolution No. 20a1- and Resolution
No. 2001- Extending Franchise Agreements for
Cable Television Services with Adelphia
Communications Corporation.
SUMMARY:
The City Council is requested to adopt Resolutions No.
2001- and 2001- extending Cable Television
Franchise Agreements with Adelphia Communications
Corporation ( "Adelphia ") for the Mountain Meadows System
and the Moorpark System until December 31, 2001.
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.
0 0 2 nd
City Council Agenda Report
Extension of Cable TV Franchise Agreements
July 18, 2001
Page 2
The renewed franchise agreement was scheduled to expire on
November 8, 2000. The transfer of control of both franchise
agreements to Adelphia was approved by the City of Moorpark
on November 21, 1999 (Resolution Nos. 99 -1642 and 99- 1643).
In the interim period
18, 1999 a series of
transfer of control
various entities as t
purchased or as merg e
history of these act
attached to provide a
of the Cable TV systems
DISCUSSION:
between November 21, 1990 and August
actions were taken to approve the
for these franchise agreements to
he telecommunications companies were
rs were completed. A chronological
ions by the City of Moorpark is
clear understanding of the evolution
ownership in Moorpark.
The City has now completed a technical evaluation of the
Cable Systems and a report recommending certain priorities
to be considered as negotiations for the renewal of these
franchise agreements begins. A study of the community's
governmental and educational cable access needs was also
completed. Copies of both of these comprehensive reports
prepared by Telecommunications Management Corporation are
available in the Assistant City Manager's Office. A summary
of the franchise renewal issues and objectives from the
report was presented to the City Council Cable
Communications Franchises Ad Hoc Committee on March 12,
2001. A copy of the summary is attached to this report.
To enable the City to continue collecting franchise fee
revenue under the agreements and to enable Adelphia to
continue to operate the systems in the City, it is
necessary for the franchise agreements to be extended for a
specific period of time while renewal negotiations take
place.
RECOMMENDATION:
1. Adopt Resolution No.2001-
2. Adopt Resolution No.2001-
System)
(Moorpark System)
(Mountain Meadows
City Council Agenda Report
Extension of Cable TV Franchise Agreements
July 18, 2001
Page 3
Attachments: Chronological History of Cable TV Action
Cable Franchise Renewal Issues and
Objectives Report to Ad Hoc Committee
Resolution No. 2001 -
Resolution No. 2001-
CHRONOLOGICAL HISTORY OF CABLE TELEVISION
FRANCHISE ACTIONS
CITY OF MOORPARK
6/6/84 - Resolution No. 84 -99: Granting 15 -year Cable TV Franchise to
Mountain Meadows Cable Television,
L.P., ( "Mountain Meadows System ").
This Franchise expires on June 5, 1999.
11/21/90 — Ordinance No. 133:
11/21/90 — Ordinance No. 134:
Cable TV Franchise Ordinance,
now Chapter 5.06 of City Code.
Granting Cable TV Franchise
renewal to The Chronicle
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 Tele-
Communications, Inc. ( "TCI ")
Cable Vision of California.
12/2/98 - Resolution No. 98 -1550:
1/20/99 - Resolution No. 99 -1565:
Extending Franchise held by
Entertainment Express (formerly
Mountain Meadows Cable
Television) Mountain Meadows
System to December 20, 2000.
Clarifying Mountain Meadows
System and repealing Resolution
No. 98 -1550.
2/5/99 — Resolution No. 99 -1574:
Approving Change of Control of
Moorpark System where TCI
becomes wholly owned subsidiary
of AT &T.
5/19/99— Resolution No. 99 -1611: Approving transfer of Moorpark
System from TCI of California to
Century-TCI California, L.P.
8/18/99- Resolution No. 99 -1641:
8/18/99- Resolution No. 99 -1642
Approving transfer of Mountain
Meadows System being operated
by Century Communications
Corporation to Century-TCI
California, L.P.
Approving change of- control of
Mountain Meadows System to
Adelphia Communications
Corporation ( "Adelphia ")
8/18/99- Resolution No. 99 -1643: Approving change of control of
Moorpark System to Adelphia
Communications Corporation.
Mountain Meadows System expired on December 20, 2000.
Moorpark System expired on November 8, 2000.
K1 21" A
CITY OF MOORPARK
MEMORANDUM
TO: Cable Communications Franchises Ad Hoc Committee
(Mayor Pro Tem Harper and Councilmember Millhouse)
FROM: Kim C. Chudoba, Senior Management Analyst I< e,,
DATE: February, 12, 2001
SUBJECT: CABLE FRANCHISE RENEWAL ISSUES AND OBJECTIVES
BACKGROUND
r:
The City retained Telecommunications Management Corp. (TMC) to
support the City in its cable franchise renewal process. One of
TMC's tasks was to ascertain cable - related needs and interests to
help the City establish franchise priorities.
TMC conducted a technical evaluation of the cable system and met
with City and school representatives to identify governmental and
educational needs. The results are presented in two reports:
".Cable System Evaluation and Recommended Franchise Renewal
Objectives and "Governmental and Educational Needs Assessment."
Key findings are summarized below.
DISCUSSION
System Evaluation
There are two cable systems in Moorpark due to a separate franchise
for Mountain Meadows. Adelphia is now the operator of both
franchises. The Mountain Meadows system, which is a conventional
coaxial cable, 450 MHz design, is obsolete and should be rebuilt to
a hybrid fiber /coaxial configuration. The former TCI system that
serves the rest of the City is not as antiquated, but it should be
upgraded to offer interactive services such as cable modem Internet
access and telephony.
The systems' technical performance meets or exceeds FCC standards,
but the quality of service is marginal. The City operates a
government access channel, and Adelphia operates a public access
studio in Westlake Village.
Needs Assessment
The City is interested in extending the Local Area Network in City
Hall to the satellite offices (Arroyo Vista Recreation Center,
Building and Safety, Police Services, Parks /Public Works Yard, and
0 171
Cable Communications Franchises Ad Hoc Committee
February 12, 2001
!� Page 2
Vector Control). The network could be used for interoffice e -mail,
shared files and printers, financial management data, and Internet
access. Also, the City desires new equipment and facilities to
maintain and expand programming on the government access channel.
The Moorpark Unified School District is interested in establishing
a network that connects District facilities for data communications
and interactive video, such as distance learning and teacher
training. Also, the District desires continued free basic cable
service to each school.
Moorpark College is interested in linking the College and local
high schools for distance learning, i.e., college courses for high
school honor students. -Also, the College desires cablecasting of
video courses.
To address these needs, TMC recommends the following:
1. Require interactive capability among all public buildings
in the City, with adequate bandwidth to carry high -speed
data communications and video signals.
The ideal network would interconnect all public buildings
in the region served by Adelphia. Installation may be
delayed for agencies with no immediate requirements, but
no agency should be precluded from participation.
2. Negotiate discounts for interactive services either at no
cost or a substantial reduction from common carrier
charges.
3. Seek seed money for access equipment and facilities,
expanded network capability, and pilot projects for new
cable - related services. It is possible to negotiate
commitments of 1.5 -3.0o of gross revenues for capital
costs.
Renewal Objectives
During franchise renewal, the following major issues are generic to
all communities.
Franchise Term - Although a 10 -year franchise is becoming common,
state and federal law do not mandate a specific term. Factors to
consider include the cost to upgrade the cable system, the time to
achieve an adequate return on investment, and the pace of
technological change, which could make a long -term franchise
'0:
Cable Communications Franchises Ad Hoc Committee
February 12, 2001
Page 3
obsolete. Because the term should reflect the level of new
investment the cable operator commits to make, it should be one of
the last items negotiated.
System Upgrade - Rebuilding or upgrading a cable system is a major
negotiation item. In Moorpark, a rebuild to a state -of- the -art,
hybrid fiber/coaxial design, with a frequency capacity of up to at
least 750 MHz (preferably 860 MHz) is a top priority. While the
City cannot require the cable operator to offer new services, such
as cable modem Internet access, local and long distance telephony,
and video -on- demand, it can negotiate a system capability that will
support such functions.
Franchise Fee - Under state and federal law, the maximum fee for
cable service is 50 of gross annual revenues. Since the City
already receives this amount, the key issues are (1) how gross
revenue will be defined, (2) what fee the City might receive from
revenue derived from telecommunications services, and (3) how
revenues derived from bundled services (i.e., a telephone and video
package) will be treated.
Public Benefits - The Cable Acts permit cities to ask cable
operators to provide government and public access facilities,
equipment, and channels based on community needs. A cable operator
cannot be required to pay ongoing operational expenses, but it may
volunteer to do so. Because cost - effectiveness is a key
consideration, cities have redefined access from one -way television
to various communication services that expand outreach and reduce
costs, i.e., electronic city halls.
Access Needs - The City and schools have a general interest in
higher capacity, lower cost data communications and interactive
video. The ideal medium is a fiber optic institutional network
connecting all public buildings , within the City. This would be
attractive if the cable operator can provide the same capability as
commercial services at lower cost, or improved capability at
equivalent cost.
An institutional network would permit video teleconferencing for
the general public (as a form of public access) at a modest cost.
Also, it could serve businesses along its path; separate fibers
would eliminate potential network management problems.
Franchise Enforcement - Cable franchises often lack a mechanism to
quickly enforce operator commitments, and violations frequently
lead to protracted litigation. To solve this problem, cities are
Cable Communications Franchises Ad Hoc Committee
February 12, 2001
Page 4
negotiating for the ability to assess damages or penalties prior to
legal action. For example, some cities require an irrevocable
letter of credit, with procedures for assessment after the operator
has been provided due process.
"Most Favored Nation" Provision - For franchise terms of 10 years
or more, a 'Most, Favored Nation" provision is helpful. For
example, if other systems in comparable communities provide new
categories of services not offered, in the City, a triggering
mechanism could require the cable operator to provide the same
services to City residents within a specified timeframe.
.:
In Moorpark, the major negotiation items are expected to be a
system rebuild, including an institutional network among public
agencies; the level and nature of access support; the franchise
renewal term; and franchise enforcement mechanisms. A list of
recommended renewal objectives is attached.
STAFF RECOMMENDATION
Staff recommends that the Cable Communications Franchises Ad Hoc
Committee review and prioritize the recommended renewal objectives
for City Council consideration before the City begins franchise
negotiations.
Attachment: Recommended Renewal Objectives
c: Honorable City Council
City Manager
Assistant City Manager
FIGURE 6
RECOMMENDED RENEWAL OBJECTIVES
ITEM
I RECOMMENDATION
COMMENT
Service Area
All dwelling -units in the City, at standard installation
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.
maximum 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 a
Should have concurrence of cable operato]1�h
Act grants authority to franchisors to establ
Standards
new regulatory ordinance. Standards should address
reasonable standards unilaterally.
telephone availability, response to inquiries and
outages, emergency response time and reporting
The FCC standards may be used as a mini
requirements evidencing compliance with standards,
desired.
and also penalties for noncompliance.
31
Figure 6 continued
1:7 ITEM
RECOMMENDATION
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
Facilities
Funding equivalent of up to 3% of gross revenues for
May.require a source of ongoing operating expenses.
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.
a 32
RESOLUTION NO. 2001-
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF MOORPARK, CALIFORNIA, APPROVING
THE EXTENSION OF THE FRANCHISE TERM OF
THE MOORPARK CABLE TELEVISION SYSTEM
WITH ADELPHIA COMMUNICATIONS CORPORATION
PENDING COMPLETION OF NEGOTIATIONS FOR A
FRANCHISE RENEWAL
WHEREAS, Adelphia Communications Corporation,
(hereinafter "Franchisee ") is the duly authorized holder of
a franchise ( "Franchise ") that authorizes the operation and
maintenance of the Moorpark Cable Television System within
the City of Moorpark, California( "the City "); and
WHEREAS, The City's Franchise with Franchisee was
renewed on November 21, 1990 and expired on November 20,
2000; and
WHEREAS, Section 626 of the Federal Cable
Communications Policy Act of 1984 (47 U.S.0 546) (the "1984
Cable Act ") , establishes provisions concerning the renewal
of cable television franchises by franchise authorities; and
WHEREAS, The City and the Franchisee are in the process
of implementing the "informal" renewal procedures permitted
by the 1984 Cable Act; and
WHEREAS, The City and
that they will be unable to
before December 31, 2001; and
the Franchisee mutually agree
complete renewal negotiations
WHEREAS, It is considered to be in the best interests
of the City, the Franchisee, and cable system subscribers to
extend the Franchise term pending completion of the renewal
negotiations.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
MOORPARK DOES RESOLVE AS FOLLOWS:
SECTION 1. The Fifteen -year (15) year franchise which
began November 21, 1990 by and between the City and
Franchisee and its predecessors, as amended (hereinafter
collectively referred to as the "Franchise ") , is hereby
further amended to extend its term for a period of Twelve
(12) months and eleven (11) days, such that, as extended,
the Franchise will expire on December 31, 2001. However,
0221
Resolution No. 2001 -
Page 2
should the City and the Franchisee successfully complete
renewal negotiations resulting in a new franchise, approved
by the City Council, prior to the expiration of the renewal
term specified herein, the original Franchise shall expire
and the new franchise become effective on the date specified
in the new franchise agreement.
SECTION 2. Except as amended by the extension of term,
all existing terms and conditions established by the
Franchise shall remain in full force and effect and the City
and the Franchisee agree that this Resolution integrates all
of the terms and conditions mentioned herein or incidental
with the Franchise.
SECTION 3. Neither the City nor the Franchisee waive
or alter any rights of renewal of the franchise, or rights
to deny renewal of the franchise, either party may have in
law, including, but not limited to the 1984 Cable Act.
SECTION 4. The City Clerk is directed to transmit a
certified copy of this Resolution to Adelphia Communications
Corporation, 1 North Main Street, Coudersport, Pennsylvania,
16915 -1141.
SECTION 5. The City Clerk shall certify to the
adoption of this Resolution and to cause a certified
resolution to be filed in the book of Resolutions.
PASSED AND ADOPTED this 18th day of July, 2001.
Patrick Hunter, Mayor
ATTEST:
Deborah S. Traffenstedt, City Clerk
000234
RESOLUTION NO. 2001-
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF MOORPARK, CALIFORNIA APPROVING
THE EXTENSION OF THE FRANCHISE TERM OF
THE MOUNTAIN MEADOWS CABLE TELEVISION
SYSTEM WITH ADELPHIA COMMUNICATIONS
CORPORATION PENDING COMPLETION OF
NEGOTIATIONS FOR A FRANCHISE RENEWAL
WHEREAS, Adelphia Communications Corporation,
(hereinafter "Franchisee ") is the duly authorized holder of
a franchise ( "Franchise ") that authorizes the operation and
maintenance of the Mountain Meadows Cable Television System
within the City of Moorpark, California( "the City "); and
WHEREAS, The City's Franchise with Franchisee was
granted on June 6, 1984 and expired on December 20, 2000;
and
WHEREAS, Section 626 of the Federal Cable
Communications Policy Act of 1984 (47 U.S.0 546) (the 111984
Cable Act ") , establishes provisions concerning the renewal
of cable television franchises by franchise authorities; and
WHEREAS, The City and the Franchisee are in the process
of implementing the "informal" renewal procedures permitted
by the 1984 Cable Act; and
WHEREAS, The City and
that they will be unable to
before December 31, 2001; and
the Franchisee mutually agree
complete renewal negotiations
WHEREAS, It is considered to be in the best interests
of the City, the Franchisee, and cable system subscribers to
extend the Franchise term pending completion of the renewal
negotiations.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF
MOORPARK DOES RESOLVE AS FOLLOWS:
SECTION 1. The Fifteen -year (15) year franchise which
began June 6, 1984 by and between the City and Franchisee
and its predecessors, as amended (hereinafter collectively
referred to as the "Franchise "), is hereby further amended
to extend its term for a period of Twelve (12) months and
eleven (11) days, such that, as extended, the Franchise will
expire on December 31, 2001. However,
Z
Resolution No. 2001 -
Page 2
should the City and the Franchisee successfully complete
renewal negotiations resulting in a new franchise, approved
by the City Council, prior to the expiration of the renewal
term specified herein, the original Franchise shall expire
and the new franchise become effective on the date specified
in the new franchise agreement.
SECTION 2. Except as amended by the extension of term,
all existing terms and conditions established by the
Franchise shall remain in full force and effect and the City
and the Franchisee agree that this Resolution integrates all
of the terms and conditions mentioned herein or incidental
with the Franchise.
SECTION 3. Neither the City nor the Franchisee waive
or alter any rights of renewal of the franchise, or rights
to deny renewal of the franchise, either party may have in
law, including, but not limited to the 1984 Cable Act.
SECTION 4. The City Clerk is directed to transmit a
certified copy of this Resolution to Adelphia Communications
Corporation, 1 North Main Street, Coudersport, Pennsylvania,
16915-1141.
SECTION 5. The City Clerk shall certify to the adoption
of this Resolution and to cause a certified resolution to be
filed in the book of Resolutions.
PASSED AND ADOPTED this 18th day of July, 2001.
Patrick Hunter, Mayor
ATTEST:
Deborah S. Traffenstedt, City Clerk
0,00236