[Council Communication]  [ Cable Franchise Agreement - DRAFT]

Council Communication

Title:	Cable Franchise Renewal Status - Charter
Dept:	Legal Department
Date:	June 3, 2003
Submitted By:	Legal Department
Approved By: ...........................	Gino Grimaldi, City Administrator

Synopsis:	The 20-year cable franchise with Charter Cable expired May 19, 2003. Preliminary negotiations with cable company representatives have resulted in practically all matters being resolved. The proposed franchise (attached) comprehensively addresses the terms and conditions of the grant to the franchisee including the use of public streets and rights of way; the fees to be charged the grantee for the use of these rights of way and the financial control over verifying the fees; clear and favorable requirements for public, educational and governmental (PEG) access requirements, and complete terms for any violation or transfer of the franchise. The franchise is granted for five years and the franchisee is required to pay 5% of its gross revenue for use of the city=s rights of way, the maximum permitted under federal law. The remaining significant issue with Charter is the amount of the PEG access fee. The franchise proposes to increase the PEG access fee from the current $0.60 per subscriber to $.075 to match the amount required to be paid by AFN CATV. It has recently been suggested that the fee be increased to $1.00 per subscriber or that a one-time contribution be made in the amount of $75,000 for the purpose of refurbishing the council chambers with upgraded video equipment to enhance the quality of PEG video productions in the council chambers. The breakdown of these costs is attached. Also attached is a spreadsheet of the results from other jurisdictions who have recently negotiated renewal franchises.
Recommendation:	Direct staff to conclude negotiations and bring back a proposed franchise for council review and approval.
Fiscal Impact:	The current Charter PEG access fee raises approximately $23,040 annually (based on 3,200 Charter subscribers). The proposed increase from $0.60 to $0.75 will result in an additional $5,760 for a total of $28,800 annually. A PEG access fee increase to $1.00 per subscriber produces $38,400 annually. PEG access fees are provided to RVTV who facilities the city=s PEG access programming.
Background:	The city=s first cable franchise was entered into in May 1983 with McCaw Communications. The McCaw franchise was transferred to Cooke CableVision in February 1987, which was then re-transferred to TCI in 1990, then to Falcon Cable in July 1998. The City consented to a transfer of control of Falcon Cable to Charter Communications Holding Company, LLC in October 1999. Negotiations regarding renewal of the franchise with Charter began over two years ago with the city utilizing three different city administrators during this time and with Charter having its own corporate reshuffling resulting in several Charter representatives being involved. The franchise proposed to Charter was based on the franchise negotiated with AFN CATV in 1999. At the time that franchise was approved, it was intended that the franchise be the model for future cable franchises. The city should remain competitively neutral and non-discriminatory in its negotiations regarding cable franchises. Franchises involving competing cable companies need not be identical, but the city should not require significantly more or less from one cable provider over another.

0-franchise Charter 10-02-1 draft.pdf (5302KB)

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