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HomeMy WebLinkAbout5.210 Original ContractFRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Cable Communications Consultants Becky Upton' City Clerk City of Port Angeles _P.O. -Box 1150 Port Angeles, WA 98362 Dear Becky: As a concluding note to our recent ordeal with State legislation regarding the City's governing of its right -of -way usage, we would like to inform you that no action was taken on this matter this session. However, the rumblings are that this subject will be resurfacing again next session. We will continue to keep you informed as this matter continues to evolve. As always, please feel free to call if you have any questions. Sincerely, Vice President /Director LAH:smj UNICATIONS CONSULTANTS March 19th, 1998 504 East Main Street, Auburn, Washington 98002 (253)833 -8380 1- 800 222 -9697 FAX: (253)833 -8430 5. aio FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Becky Upton City Clerk City of Port Angeles P.O. Box 1150 Port Angeles, Wa 98362 Dear Becky: Enclosed is a copy of the most recent version of State legislation. concerning the City's governing of its right -of -ways. This has already passed the Senate and is currently in Committee in the House of Representative. The impact upon the City is obvious. Please feel free to call me regarding any questions you have. As always, I will continue to keep you updated on this matter. Sincerely. 3 -H CABLE COMMUNICATIONS CONSULTANTS Lon A. Hurd Vice President /Director LAH:snij Enclosure Cable Communications Consultants February 26, 1998 0[[N JL MAR298 CITY OF PORT ANGELE CITY CLERK 504 East Main Street, Auburn, Washington 98002 (253)833 -8380 1- 800 222 -9697 FAX: (253)833 -8430 5.a /o 2/20/98 7:10 a.m. WASHINGTON STATE LEGISLATURE History of SB 6515 SB 6515 Regulating franchises and the use of public rights of way. Sponsors: Senators Strannigan; Finkbeiner; Morton; Swecker 1998 REGULAR SESSION Jan 20 First reading, referred to Energy Utilities. Feb 6 EU Majority; 1st substitute bill be substituted, do pass. Minority; do not pass. Passed to Rules Committee for second reading. Feb 12 Made eligible to be placed on second reading. Feb 13 Placed on second reading by Rules Committee. Feb 16 1st substitute bill substituted. Floor amendment(s) adopted. Rules suspended. Placed on Third Reading. Third reading, passed; yeas, 27; nays 22, absent, 0. IN THE HOUSE Feb 20 First reading, referred to Energy Utilities. 2/20/98 5:34 p.m. WASHINGTON STATE LEGISLATURE Roll Calls on SB 6515 Information is currently being updated on this bill for day 36. Chamber: SENATE 1998 Regular Session Bill No.: SSB 6515 Description: THIRD READING FINAL PASSAGE. Item No.: 17 Transcript No.: 36 Date: 02 -16 -98 Yeas: 27 Nays: 22 Absent: 00 Excused: 00 Voting nay: Senators Bauer, Brown, Fairley, Franklin, Fraser, Goings, Haugen, Jacobsen, Kline, Kohl, Loveland, McAuliffe, Patterson, Rasmussen, Schow, Sheldon, B., Snyder, Spanel, Thibaudeau, Winsley, Wojahn, Wood 6515 -S AAS 2/16/98 S4955.1 +SSB6515 -SAMD -713 By Senators Strannigan, Hargrove and Finkbeiner ADOPTED 2/16/98 Strike everything after the enacting clause and insert the following: NEW SECTION. Sec. 1. The legislature finds that technological developments have made telecommunications evermore important to the health, safety, and welfare of the people of this state and to the efficient and cost effective conduct of the state's economy. The pace of technological change is expected to continue and increase in the future. Massive investment by private industry in telecommunications infrastructure will be required to make the benefits of technological development available to the people of the state. This is particularly true if the modern infrastructure is to reach all parts of the state, rural as well as urban. The legislature also finds it necessary_to clarify and integrate policies on use of public rights of way in order to recognize and foster the changes that are occurring in telecommunications. The legislature declares that government policies for the use of public rights of way should encourage investment in and development of the infrastructure needed for leading -edge applications in telecommunications. These policies.will also serve as an important means of economic development, allowing the state to remain competitive in national and international markets and to attract jobs to and develop robust economies in its rural and underdeveloped areas. The legislature further declares that growth in economic activity resulting from modernized right of way policies will create new jobs and business opportunities as well as bring better service and lower prices to consumers. State and local government will benefit by the availability of improved services and the creation of a larger and more stable revenue base. The legislature declares that rights of way are dedicated, purchased, or held by the government for the use of the public in transportation, the delivery of utility services, and commerce; that government has the steward responsibility to protect these rights of way for these public purposes; and that the use of these rights of way by telecommunications facilities is essential for the protection and advancement of the public's health, safety, and welfare and therefore is in the public's interest. The legislature intends that governments rely on construction and development regulations that apply generally and uniformly to construction both inside and outside the public right of way to the extent possible in connection with use of the public right of way for telecommunication facilities. It is the intent of the legislature that franchises be used only to coordinate and integrate construction and development regulations, permits, and the requirements of such other laws as specifically apply to the management of the physical assets located in the rights of way and that franchises not be used to impose duplicative requirements on authorized users of the rights of way. It is the intent of the legislature to promote policies that recognize the introduction of competition in telecommunications, and that will result in new entrants into this industry, without needlessly changing or supplanting existing codes, regulations, and standards. As additional companies seek to locate their facilities in public rights of way, it is incumbent on local government to establish uniform, clear, competitively neutral, and nondiscriminatory rules for use of the public right of way. It is the policy of the legislature that fees and charges levied by local governments on the telecommunications industry for use of public rights of way and for franchises, permits, and licenses required for construction, repair, maintenance, use, and operation of facilities for telecommunications shall not be a means of raising general revenue. It is the intent of the legislature and the policy of this state that fees for necessary permits and licenses do not exceed the actual costs incurred in receiving, considering, and issuing the permits and licenses, inspecting work in the right of way, restoring damage to the right of way related to such work, and maintaining the necessary systems and records to effectively manage the use of the right of way. NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout chapter Laws of 1998 (this act). (1) "Authorized facilities" means all of the plant, equipment, fixtures, appurtenances, antennas, and other facilities necessary to furnish and deliver telecommunications services, including but not limited to poles with crossarms, poles without crossarms, wires, lines, conduits, cables, communication and signal lines and equipment, braces, guys, anchors, vaults, and all attachments, appurtenances, and appliances necessary or incidental to the distribution and use of telecommunications services. (2) "Authorized user" means any person providing telecommunications or cable television service to the public. (3) ':Cable television service" means the one -way broadcast or cable transmission of television or radio signals. (4) "Public right of way" means roads, streets, and highways, including limited access highways and does not include federally granted trust lands and the forest board trust lands. (5) "Telecommunications service" means the transmission of information by wire, radio, optical cable, electromagnetic. or other similar means for the public. For the purpose of this subsection, "information" means knowledge or intelligence represented by any form of writing, signs, signals, pictures, sounds, or any other symbols. NEW SECTION. Sec. 3. (1) An authorized user may erect, construct, support, attach, connect, stretch authorized facilities between, maintain, repair, replace, and operate and use authorized facilities in, upon, over, under, along, across, and through public rights of way. These authorized facilities shall be maintained within public rights of way so as not to unreasonably interfere with the free passage of traffic and in accordance with the laws of the state and appropriate codes, regulations, and standards adopted by counties, cities, and towns pursuant to those laws. (2) Nothing in this section waives the responsibility of the authorized users to obtain permits for the installation of authorized facilities as required by counties, cities, and towns. (3) Nothing in this section creates, modifies, or diminishes the priority of use for authorized facilities over other users of the right of way for utility purposes or other purposes subject to local franchise or permit. NEW SECTION. Sec. 4. (1) Neither the state nor any county, city, or town may adopt or enforce regulations that: (a) Discriminate or have the effect of discriminating among authorized users or authorized facilities; (b) In any way conflict with: (i) Federal and state public service laws; (ii) federal or state laws, rules, and regulations that specifically apply to the design, construction, and operation of authorized facilities; or (iii) federal or state worker safety and public safety laws, rules, and regulations; (c) Regulate services of authorized users based upon the content or type of signals that are carried or are capable of being carried over the telecommunications facilities, except where specifically authorized in state or federal law; (d) Impose regulatory requirements that regulate the services and business operations of the authorized user, and that are not directly related to the use of rights of way, except where specifically authorized in state or federal law. To the maximum extent feasible, franchises applicable to telecommunications companies shall be used to coordinate and integrate construction and development regulations and permits and requirements and permits required under other laws relating to streets, roads, and highways. Franchises shall not be used to require additional permits, conditions, or requirements that are duplicated under other laws; or (e) Provide for a period that exceeds one hundred twenty days between filing a complete application for a permit and issuance of the permit, or otherwise unreasonably delay work by authorized users on authorized facilities in the public right of way except where required by specific procedures to assure cooperation of work within the right of way which provide reasonable opportunities for scheduling of work and do not impose unreasonable barriers to entry or with the agreement of the applicant. (2) Counties, cities, and towns are encouraged to develop procedures to provide interim authorizations for the installation of authorized facilities and process a complete permit, where the timeline to complete such an agreement is expected to exceed one hundred twenty days. (3) Counties, cities, and towns are encouraged to work together and with industry, using the experience of the industry and those counties, cities, and towns that have adopted wireless regulations, to develop a model ordinance for the siting of wireless telecommunications facilities by January 1, 1999. NEW SECTION. Sec. 5. (1) Except as provided in subsection (2) of this section, neither the state nor any county, city, or town shall place a moratorium on the acceptance and processing of applications, permitting, construction, maintenance, repair, replacement, extension, operation, or use of any wireless communication facility that is authorized under sections 2 through 6 of this act following the effective date of this section. An existing moratorium that expires following the effective date of this section shall not be extended in whole or in part. (2)(a) A city or town incorporated after the effective date of this section shall be permitted to impose one moratorium that shall not exceed one hundred eighty days and shall not be extendable. (b) Upon the expiration of a moratorium authorized by (a) of this subsection, the authorizing city or town is subject to subsection (1) of this section. (3) This section applies to moratoriums one hundred twenty days after the adoption of a model ordinance under section 4(3) of this act or on April 1, 1999, whichever occurs first. NEW SECTION. Sec. 6. (1) Neither the state nor any county, city, or town may impose, demand, or accept any compensation from an authorized user, whether by fee, charge, license, rent, use of authorized facilities at other than normal charges, provision of in- kind services by authorized users without compensation or at below market rates, or by any other manner for: (a) The use or occupancy of public rights of way for authorized facilities; or (b) Any act authorized by sections 2 through 6 of this act unless the fee, charge, or other compensation is imposed generally and uniformly on projects outside public rights of way. (2) No fee, charge, or other compensation permitted under subsection (1) of this section may recover more than the direct administrative expenses actually incurred by the state, county, city, or town in receiving and approving a construction or development permit, inspecting plans and construction, development and maintenance of record systems and excavation authorizations systems, costs of repair or restoration of the right of way, or preparing a detailed statement pursuant to chapter 43.21C RCW. (3) This section does not preclude a county, city, or town from issuing franchises and imposing franchise fees for cable services as allowed by federal law. (4) This section does not amend, repeal, or modify any law governing the taxing authority of cities or towns. NEW SECTION. Sec. 7. A new section is added to chapter 35.21 RCW to read as follows: Each city or town is subject to the requirements and restrictions regarding telecommunications services and public rights of way under sections 2 through 6 of this act. However, sections 2 through 6 of this act do not'limit or modify the applicability of chapters 35.77, 35.78, and 36.70A RCW. NEW SECTION. Sec. 8. A new section is added to chapter 35A.21 RCW to read as follows: Each code city is subject to the requirements and restrictions regarding telecommunications services and public rights of way under sections 2 through 6 of this act. However, sections 2 through 6 of this act do not limit or modify the applicability of chapter 36.70A RCW. NEW SECTION. Sec. 9. A new section is added to chapter 36.01 RCW to read as follows: Each county is subject to the requirements and restrictions regarding telecommunications services and public rights of way under sections 2 through 6 of this act. However, sections 2 through 6 of this act do not limit or modify the applicability of chapters 36.70, 36.70A, 36.75, 36.78, 36.80, 36.81, and 36.86 RCW. NEW SECTION. Sec. 10. Sections 2 through 6 of this act are each added to chapter 80.36 RCW." SSB 6515 S AMD 713 By Senators Strannigan, Hargrove and Finkbeiner ADOPTED 2/16/98 On page 1, line 1 of the title, after "way;" strike the remainder of the title and insert "adding new sections to chapter 80.36 RCW; adding a new section to chapter 35.21 RCW; adding a new section to chapter 35A.21 RCW; adding a new section to chapter 36.01 RCW; and creating a new section." END I 321 East Fifth Street. PO Box 1150 CITY MANAGER Port Angeles. Washington 98362 -1150 CITY OF PORT ANGELES May 7, 1997 TO: FROM: Becky J. Upton, City Clerk SUBJECT: Proposed Changes to Agreement for Cable Television Consulting Services Members of the Utility Advisory Committee Phone (360) 417 -4500 TTY Phone (360) 417 -4645 Fax (360) 417 -1509 Internet address citvm @olvmpus.net Over the past several years, the City has contracted with 3 -H Cable Communications Consultants who has provided the following services: Reporting any excessive rates; Advising the City regarding the use of government and education access channels; Conducting technical inspections and evaluations of the franchisee's system; Analyzing whether the correct franchise fee amount has been paid; Reporting on compliance with franchise requirements; Handling customer complaints; Certification of senior and disabled persons discounts; Keeping the City advised on changes in federal laws and regulations affecting cable TV franchises and rates; and Monitoring the proof -of- performance testing that is required under federal legislation In view of the City's need to decrease expenses, staff has been studying the possibility of changing the terms of the agreement whereby the consulting services would be performed based on specific written requests by the City and would be reimbursed on an hourly rate basis. By virtue of the Federal Telecommunications Act of 1996, companies which formerly only provided telephone service are now enabled to provide cable television service. Similarly, cable television companies, which formerly concentrated on the provision of video programming services, now have an opportunity to provide both local exchange and long distance telephone services. The stated intent of the 1996 Act was to encourage competition among telecommunications and cable television companies and, at the same time, remove regulatory barriers to entry in the marketplace. To that end, cities are now developing Model Telecommunications Ordinances to provide a workable regulatory framework and to allow for the orderly placement of facilities and equipment which will lead to enhanced telecommunications for the citizens The City Attorney, the Public Works Director, and Councilman Campbell are working on such a draft ordinance, and a great deal of the expertise needed in developing such an Utility Advisory Committee May 7, 1997 Page Two ordinance is available through the Association of Washington Cities, as well as Municipal Research Services Center. Both agencies are also readily available to advise the City in the legislative arena. The need, therefore, for additional advice from a consultant is somewhat negated. The City's Government and Education Channel 21 has been functioning quite successfully for some time, and the need for additional services, at this time, is not apparent. Also, staff is willing to accept additional duties in terms of handling customer complaints, analyzing franchise fee accuracy, and certifying appropriate discounts. In the area of technical inspections, Northland Cable has agreed to provide the City with copies of results from those inspections conducted by Northland. Additionally, Northland is inspected by the Federal Communications Commission, and the City will be provided with those inspection results as well. The agreement being proposed is written such that staff can call upon 3 -H Cable Communications Consultants for assistance only when deemed necessary. As set forth in the attached agreement, the consultant would be paid $125 per hour, provided that the total amount paid by the City shall not exceed $5,500, which is the approximate amount paid to 3 -H each year. By virtue of the dollar amount involved with this agreement, the City Manager is authorized to execute the agreement on behalf of the City. Accordingly, the Utility Advisory Committee doesn't need to act on this matter. Attachment CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter 'Agreement is made and entered into effective this 1st day of January, 1997, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles, a municipal corporation duly organized and existing under the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: I. Pro-ject and Scope of Work: Consultant shall be available to perform or cause to be done or performed in good and professional manner, the following described work, subject to the specific written request of the City for such services. Such work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. When requested by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. When requested by the City, Consultant shall furnish the City with a report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. When requested by the City, Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparently excessive rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. When requested by the City, Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of the franchise fee pursuant to the provisions of the franchise. In the event that the franchisee becomes delinquent in its franchisee fee payments, the City may request the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Government and Educational Access Channels. When requested by the City, Consultant shall advise the City regarding the use of access channels provided for the purpose of government and educational broadcasting. Consultant shall, upon request, furnish information with respect to channel availability, program content, operating regulations, and technical needs. Consultant shall be available to review equipment requirements and assist in procurement of necessary items to sustain the level of broadcasting quality appropriate to the City. F. Bond and Insurance. When requested by the City, Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. G. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. When requested by the City, Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. H. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1997 and shall expire on the 31st day of December, 1997. 2 B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III Fee for Consultina Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses), the City shall pay an hourly fee to the Consultant. Such fee shall be $125 per hour, provided that the total amount paid by the City under this Agreement shall not exceed $5,500. A. Payment. Payment by the City for Consultant's services will be made on a semi annual basis. Invoices for such semi- annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement and shall show the method of calculation of the Consultant's fee. IV Successors and Assians. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the performance of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, 3 color, sex national origin, or physical or mental disability. VI Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Aareement. This instrument contains the entire Agreement of the parties and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. 4 Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 CONSULTANT: 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 City of Port Angeles 3 -H Cable munications Consultants By: By Approved as to form: City Attorney ATTEST: City Clerk 5 Vice P esident /Director 321 East Fifth Street. PO Box 1 150 CITY MANAGER Port Angeles. Washington 98362 -1150 May 16, 1997 Lon Hurd Vice President/Director 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 Re: 1997 Agreement for Cable TV Consultant Services Dear Lon: At its meeting of May 12, 1997, the Utility Advisory Committee endorsed the proposed changes to the agreement with 3 -H Cable Communications Consultants. I have enclosed a fully executed copy of the agreement for your file. We sincerely appreciate your willingness to change the contractual arrangement, particularly in light of the City's current economic situation. Rest assured we will be in contact with you at the time we need specific assistance. Best regards, 46, e•-ki-7: Becky J. Upibn, CMC City Clerk Enclosures CITY OF PORT ANGELES Phone (360) 417 -4500 TTY Phone (360) 417 -4645 Fax (360) 417 -4509 Internet address citvm @olvmpus.net CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter 'Agreement is made and entered into effective this 1st day of January, 1997, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles, a municipal corporation duly organized and existing under the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: I. Proiect and Scone of Work: Consultant shall be available to perform or cause to be done or performed in good and professional manner, the following described work, subject to the specific written request of the City for such services. Such work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. When requested by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. When requested by the City, Consultant shall furnish the City with a report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. When requested by the City, Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparently excessive rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. When requested by the City, Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of the franchise fee pursuant to the provisions of the franchise. In the event that the franchisee becomes delinquent in its franchisee fee payments, the City may request the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Government and Educational Access Channels. When requested by the City, Consultant shall advise the City regarding the use of access channels provided for the purpose of government and educational broadcasting. Consultant shall, upon request, furnish information with respect to channel availability, program content, operating regulations, and technical needs. Consultant shall be available to review equipment requirements and assist in procurement of necessary items to sustain the level of broadcasting quality appropriate to the City. F. Bond and Insurance. When requested by the City, Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. G. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. When requested by the City, Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. H. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1997 and shall expire on the 31st day of December, 1997. 2 B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consultina Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses), the City shall pay an hourly fee to the Consultant. Such fee shall be $125 per hour, provided that the total amount paid by the City under this Agreement shall not exceed $5,500. A. Payment. Payment by the City for Consultant's services will be made on a semi annual basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement and shall show the method of calculation of the Consultant's fee. IV. Successors and Assians. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the performance of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, 3 color, sex national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. XII. Notice. Written notices shall be deemed to have been duly served if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CONSULTANT: 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 City if Port Angeles 3 -H Cable C•f mun' cations Consultants ATTEST: Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. CITY: City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 roved as to form: City AttF+prney City Cle 5 r Vice resident /Director FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Cable Communications Consultants Becky Upton Vice President City of Port Angeles 321 East Fifth Port Angeles, WA 98362 Dear Becky; April 25, 1997 Enclosed please find two signed copies of the Cable Television Consultant Services Agreement. The terms, as written are acceptable and, we look forward to the possibility of continuing to serve to the City of Port Angeles. Also enclosed as your requested, is a breakdown of the hours provided for the last two years. Since e y, Lon Hu d Vice President LAH /nd Enclosures 504 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX. (206)833 -8430 Technical Cable Company Meetings Discussions Franchise Fee Ordinance Review Drafting Access Rules Operations Written Correspondence Association Convention Complaints Senior Discounts Sub -Total Total Combined City of Port Angeles Cable Statistics 1995 1996 Consultant I Staff I Consultant I Staff I 8.0 I 3.5 I 8.0 4.0 6.0 6.5 4.0 I 2.0 I 5.0 5.0 16.0 1.5 3.0 4.0 47.5 1.5 3.5 2.5 3.0 3.5 19.5 10.0 1.5 2.0 3.0 3.5 4.0 43.5 67.0 81.0 2.0 4.5 4.0 3.0 L) 16.5 38.5 *Records not kept for reading or research on non specific issues nor day to day clerical services such as filing and mailing etc. *Records not kept on out of pocket costs associated with this project such as printing, postage, mileage etc. A (1) PORT 44fQ t c< fir likiev". 2 ‘11....4.1 C D E P pP April 10, 1997 Lon Hurd Vice President/Director 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 Re 1997 Agreement for Cable TV Consultant Services Dear Lon. This letter is written as a follow -up to our discussions concerning the 1997 agreement for Cable TV Consultant services. In light of the City's current economic situation, it is proposed that the agreement be revised whereby the consulting services would be performed based on specific written requests by the City and would be reimbursed on an hourly rate basis. Two copies of the proposed agreement are enclosed for your review. In conjunction with discussions pertinent to the agreement, it would be helpful if you could advise us as to the typical number of hours you dedicate to working on Port Angeles issues in a given year. We are hopeful this contractual arrangement is acceptable to you. Please feel free to contact me when you have returned to work and we can discuss the agreement in detail. I hope you are feeling much better, and I look forward to hearing from you! Sincerely yours, Becky J. Upton, CMC City Clerk Enclosures 321 F FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (360) 457 -0411 CITY OF PORT ANGELES City Attorney's Office Memorandum Craig D. Knutson City Attorney Dennis C Dickson Sr. Assistant City Attorney Candace Kreider Legal Assistant Chrystina Bruneau Administrative Assistant Jeanie DeFrang Administrative Assistant April 2, 1997 TO: FROM: RE: Attached is a revised version of the Cable Television Consultant Services Agreement for 1997. The primary revision is that the services will be performed based on specific written requests by the City and will be reimbursed on an hourly rate basis. Previous contracts have provided for payment of a flat annual fee, based on a percentage of the franchise fee, in exchange for itemized services to be performed by the consultant during the course of the year. It is my understanding that you will forward a copy of this revised contract to the consultant and will place it on an upcoming UAC agenda. Please let me know if you have any questions or additional revisions. Very truly yours, Craig D. K City Attorney CDK: j d Attachment Becky Upton, City Clerk Craig D. Knutson, City Attorney Cable TV Consultant Services Agreement FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Dear Becky: Cable Communications Consultants Becky Upton City Clerk City of Port Angeles PO Box 1150 Port Angeles WA 98362 Thanks for our informative telephone conversation the other day. We fully realize that when a municipality has a financial shortfall on its hands that belt tightening must take place everywhere and consultants charges, however small, will come under scrutiny. It does seem unfortunate, however, that cable television support resources should not be available to the City of Port Angeles at this critical junction in the telecommunications field. As you so well know cities everywhere are under pressure to effectively manage their rights -of -ways. The cross over of cable television, telephony, data, cellular, satellite and all the rest vast array of services loosely called "telecommunications" are and will descend upon cities even as comparatively isolated as Port Angeles demanding various concessions. As we have spoken we would very much like to continue to assist you in putting together a Master Telecommunications Plan to provide an umbrella under which these various services may be slotted and regulated. Let's hope that things will work out so that our firm may be given a reprieve at this crucial moment. Sincerely, 3- C E COMMUNICATIONS CONSULTANTS rd Vice esident /Director LH /sw Obp-v- 1 504 East Main Street, Auburn, Washington 98002 RMWE Wit 1EY AF FORT ANGELES CITY CLERK a March 3, 1997 (206)833 -8380 1- 800 222 -9697 FAX: (206)833 -8430 DATE: March 13, 1997 TO: Orville Campbell, City Council Member Jack Pittis, Director of Public Works FROM: Craig D. Knutson, City Attorney Re: Telecommunications Ordinance Attached is a copy of a draft telecommunications ordinance for the City of Renton. It is my understanding that the proposed ordinance was presented to us by Lon Hurd, our cable television consultant. He informed the City Clerk that the ordinance was the product of a series of meetings involving several cities for which he provides telecommunications consulting services. After each of us has reviewed the attached ordinance, perhaps we should get together to discuss it and to decide how to proceed from here. Please let me know your thoughts and /or availability for a meeting. Craig D. utson, City Att ney CDK j d Attachment me cc: ✓Becky Upton, City Clerk MEMORANDUM CITY OF RENTON, WASHINGTON ORDINANCE NO. AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AMENDING TITLE V (FINANCE AND BUSINESS REGULATIONS) OF ORDINANCE NO. 4260 ENTITLED CODE OF GENERAL ORDINANCES OF THE CITY OF RENTON"" BY ADDING CHAPTER 18 ENTITLED TELECOMMUNICATIONS LICENSES AND FRANCHISES." THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO ORDAIN AS FOLLOWS: SECTION I. There is hereby created Chapter 18 entitled "Telecommunications Licenses and Franchises" to Title V (Finance and Business Regulations) of Ordinance No. 4260 entitled "Code of General Ordinances of the City of Renton" which reads as follows: CHAPTER 18 TELECOMMUNICATIONS LICENSES AND FRANCHISES 5 -18 -1: PURPOSE AND INTENT 5 -18 -2: OVERVIEW A. Definitions B. Summary 5 -18 -3: REGISTRATION OF TELECOMMUNICATIONS CARRIERS AND PROVIDERS A. Registration Required B. Registration Fee C. Purpose of Registration 5 -18 -4: TELECOMMUNICATIONS LICENSE A. General B. License Application C. Determination by the City D. Agreement E. Nonexclusive Grant F. Rights Granted G. Term of Grant H. License Route I. Location of Facilities J. Construction Permits K. Compensation to the City L. Service to City Users M. Amendment of Grant N. Renewal Applications O. Renewal Determinations P. Obligation to Cure as a Condition of Renewal 5 -18 -5: TELECOMMUNICATIONS FRANCHISE A. General B. Franchise Application C. Determination by the City D. Agreement E. Nonexclusive Grant F. Term of Grant G. Rights Granted H. Franchise Territory I. Location of Facilities J. Construction Permits K. Compensation to City L. Nondiscrimination M. Service to the City N. Amendment of Grant O. Renewal Applications P. Renewal Determinations Q. Obligation to Cure as a Condition of Renewal *5 -18 -6: CABLE FRANCHISE (refer to Chapter 17) 5 -18 -7: FEES AND COMPENSATION A. Purpose B. Application and Review Fee C. Other City Costs D. Reserved Compensation for Public Ways E. Compensation for City Property F. Construction Permit Fee G. Annual Fees H. Cable Fees *refer to Chapter 17 I. Regulatory Fees and Compensation Not a Tax 5 -18 -8: CONDITIONS OF GRANT A. Location of Facilities B. Compliance with (SEPA C. Construction Permits D. Interference with Public Ways E. Damage to Property F. Notice of Work G. Repair and Emergency Work H. Maintenance of Facilities I. Relocation or Removal of Facilities J. Removal of Unauthorized Facilities K. Emergency Removal or Relocation of Facilities L. Damage to Grantee's Facilities M. Restoration of Public Ways and Property N. Facilities Maps O. Duty to Provide Information P. Leased Capacity Q. Grantee Insurance R. General Indemnification S. Performance and Construction Surety T. Security Fund U. Construction and Completion Bond V. Coordination of Construction Activities W. Assignments or Transfers of Grant 2 3 X. Transactions Affecting Control of Grant Y. Revocation or Termination of Grant Z. Notice and Duty to Cure AA. Hearing BB. Standards for Revocation or Lesser Sanctions 5 -18 -9: CONSTRUCTION STANDARDS A. General B. Construction Codes C. Construction Permits D. Applications E. Engineer's Certification F. Traffic Control Plan G. Issuance of Permit H. Construction Schedule I. Compliance with Permit J. Display of Permit K. Survey of Underground Facilities L. Noncomplying Work M. Completion of Construction N. As -Built Drawings O. Restoration of Improvements P. Landscape Restoration Q. Construction Surety R. Exceptions S. Responsibility of Owner 5 -18 -1: Purpose and Intent The purpose of this chapter is to: A. Establish a local policy concerning telecommunications providers and services; B. Establish clear local guidelines, standards and time frames for the exercise of local authority with respect to the regulation of telecommunications providers and services; C. Promote competition in telecommunications; D. Minimize unnecessary local regulation of telecommunications providers and services; E. Encourage the provision of advanced and competitive telecommunications services on the widest possible basis to the businesses, institutions and residents of the City; F. Permit and manage reasonable access to the public ways of the City for telecommunications purposes on a competitively neutral basis; G. Conserve the limited physical capacity of the public ways held in public trust by the City; H. Assure that the City's current and ongoing costs of granting and regulating private access to and use of the public ways are fully paid by the persons seeking such access and causing such costs; I. Secure fair and reasonable compensation to the City and the residents of the City for permitting private use of the public ways; J. Assure that all telecommunications carriers providing facilities or services within the City comply with the ordinances, rules and regulations of the City; K. Assure that the City can continue to fairly and reasonably protect the public health, safety and welfare; and L. Enable the City to discharge its public trust consistent with rapidly evolving federal and state regulatory policies, industry competition and technological development. 5 18 2: Overview A. Definitions AFFILIATE: A person who (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with another person. ANNUAL GROSS REVENUE: (Reserved) CABLE ACT: The Cable Communications Policy Act of 1984, 47 U.S.C. §532, et seq., as now and hereafter amended. 4 CABLE OPERATOR: A telecommunications carrier providing or offering to provide "cable service" within the City as that term is defined in the Cable Act. CABLE SERVICE: For the purpose of this chapter shall have the same meaning provided by the Cable Act. CITY: The City of Renton. CITY PROPERTY: All real property owned by the City, other than public streets and utility easements as those terms are defined herein, and all property held in a proprietary capacity by the City, which is not subject to the right -of -way licensing and franchising as provided in this chapter. CORPORATE AUTHORITIES: The Mayor and Councilmembers of the City. EXCESS CAPACITY: The volume or capacity in any existing or future duct, conduit, manhole, handhole or other utility facility within the public way that is or will be available for use for additional telecommunications facilities. FCC or FEDERAL COMMUNICATIONS COMMISSION: The Federal administrative agency, or lawful successor, authorized to regulate and oversee telecommunications carriers, services and providers on a national level. OTHER WAYS: The highways, streets, alleys, utility easements or other rights -of -way within the City, but under the jurisdiction and control of a governmental entity other than the City. 5 OVERHEAD FACILITIES: Utility poles, utility facilities and telecommunications facilities located above the surface of the ground, including the underground supports and foundations for such facilities. PERSON: Corporations, companies, associations, joint stock companies or associations, firms, partnerships, limited liability companies and individuals, including their lessors, trustees and receivers. PUBLIC STREET: Any highway, street, alley or other public right -of -way for motor vehicle travel under the jurisdiction and control of the City which has been acquired, established, dedicated or devoted to highway purposes not inconsistent with telecommunications facilities. PUBLIC WAY: All public streets and utility easements, as those terms are defined herein, now or hereafter owned by the City, but only to the extent of the City's right, title, interest or authority to grant a license or franchise to occupy and use such streets and easements for telecommunications facilities. STATE: The State of Washington. SURPLUS SPACE: That portion of the usable space on a utility pole which has the necessary clearance from other pole users, as required by the orders and regulations of the Washington Utilities Commission, to allow its use by a telecommunications carrier for a pole attachment. TELECOMMUNICATIONS CARRIER: Every person that directly or indirectly owns, controls, operates or manages plant, equipment or property within the City, used or to be 6 UTILITY FACILITIES: The plant, equipment and property, including but not limited to the poles, pipes, mains, conduits, ducts, cables, wires, plant and equipment located under, on or above the surface of the ground within the public ways of the City and used or to be used for the purpose of providing utility or telecommunications services. WUC or WASHINGTON UTILITIES COMMISSION: The State administrative agency, or lawful successor, authorized to regulate and oversee telecommunications carriers, services and providers in the State of Washington. B. Summary: 1. Registration: Except as otherwise provided herein, all telecommunications carriers and providers engaged in the business of transmitting, supplying or furnishing of telecommunications originating or terminating in the City shall register with the City pursuant to Section 5 -18 -3 of this chapter. 2. Telecommunications License: Except as otherwise provided herein, any telecommunications who desire to construct, install, operate, maintain, or otherwise locate telecommunications facilities in, under, over or across any public way of the City for the sole purpose of providing telecommunications service to persons and areas outside the City shall first obtain a license granting the use of such public ways from the City pursuant to Section 5- 18-4 of this chapter. 3. Telecommunications Franchise: Except as otherwise provided herein, any telecommunications carriers who desire to construct, install, operate, maintain or otherwise locate telecommunications facilities in, under, over or across any public way of the City, and to also provide telecommunications service to persons or areas in the City, shall first obtain a franchise granting the use of 8 such public ways from the City pursuant to Section 5 -18 -5 of this chapter. 4. Cable Television Franchise: Except as otherwise provided herein, any telecommunications carrier who desires to construct, install, operate, maintain or locate telecommunications facilities in any public way of the City for the purpose of providing cable service to persons in the City shall first obtain a cable franchise from the City as provided in Chapter 17 of this title. 5. Application to Existing Franchise Ordinances and Agreements: This chapter shall have no effect on any existing franchise ordinance or franchise agreement until: a. The expiration of said franchise ordinance or agreement; or b. An amendment to an unexpired franchise ordinance or franchise agreement, unless both parties agree to defer full compliance to a specific date not later than the present expiration date. 6. Penalties: Any person found guilty of violating, disobeying, omitting, neglecting or refusing to comply with any of the provisions of this chapter shall be fined not less than One Hundred Dollars ($100.00) nor more than Hundred Dollars for each offense. A separate and distinct offense shall be deemed committed each day on which a violation occurs or continues. 7. Other Remedies: Nothing in this ordinance shall be construed as limiting any judicial remedies that the City may have, at law or in equity, for enforcement of this chapter. 8. Severability: If any section, subsection, sentence, clause, phrase, or other portion of this chapter, or its application to any person, is, for any reason, declared invalid, in whole or in part by any court or agency of competent jurisdiction, said decision shall not affect the validity of the remaining portions hereof. 9 5 -18 -3: REGISTRATION OF TELECOMMUNICATIONS PROVIDERS AND CARRIERS A. Registration required: All telecommunications carriers and providers that offer or provide any telecommunications service for a fee directly to the public, either within the City, or outside the corporate limits from telecommunications facilities within the City, shall register with the City pursuant to this Section on forms to be provided by the City Clerk, which shall include the following: 1. The identity and legal status of the registrant, including any affiliates. 2. The name, address and telephone number of the officer, agent or employee responsible for the accuracy of the registration statement. 3. A description of registrant's existing or proposed telecommunications facilities within the City. 4. A description of the.telecommunications service that the registrant intends to offer or provide, or is currently offering or providing, to persons, firms, businesses or institutions within the City. 5. Information sufficient to determine whether the transmission, origination or receipt of the telecommunications services provided or to be provided by the registrant constitutes an occupation or privilege subject to any municipal telecommunications tax, utility message tax or other occupation tax imposed by the City. 6. Information sufficient to determine that the applicant has applied for and received any certificate of authority required by the Washington Utilities Commission to provide telecommunications services or facilities within the City. 7. Information sufficient to determine that the applicant has applied for and received any construction permit, operating license or other approvals required by the 10 Federal Communications Commission to provide telecommunications services or facilities within the City. 8. Such other information as the City Clerk may reasonably require. B. Registration Fee: Each application for registration as a telecommunications carrier or provider shall be accompanied by a fee of twenty -five dollars ($25.00). C. Purpose of Registration: The purpose of registration under this Section is to: 1. Provide the City with accurate and current information concerning the telecommunications carriers and providers who offer or provide telecommunications services within the City, or that own or operate telecommunications facilities within the City. 2. Assist the City in enforcement of this chapter. 3. Assist the City in the collection and enforcement of any municipal taxes, franchise fees, license fees or charges that may be due the City. 4. Assist the City in monitoring compliance with local, state and federal laws. 5 18 4: TELECOMMUNICATIONS LICENSE A. General: A telecommunications license shall be required of any telecommunications carrier who desires to occupy specific public ways of the City for the sole purpose of providing telecommunications services to persons or areas outside the City. B. License Application: Any person that desires a telecommunications license pursuant to this Section shall file an application with the City which shall include the following information: 1. The identity of the license applicant, including all affiliates of the applicant. 11 2. A description of the telecommunications services that are or will be offered or provided by licensee over its telecommunications facilities. 3. A description of the transmission medium that will be used by the licensee to offer or provide such telecommunications services. 4. Preliminary engineering plans, specifications and a network map of the facilities to be located within the City, all in sufficient detail to identify: a. The location and route requested for applicant's proposed telecommunications facilities. b. The location of all overhead and underground public utility, telecommunication, cable, water, sewer drainage and other facilities in the public way along the proposed route. c. The location(s), if any, for interconnection with the telecommunications facilities of other telecommunications carriers. d. The specific trees, structures, improvements, facilities and obstructions, if any, that applicant proposes to temporarily or permanently remove or relocate. 5. If applicant is proposing to install overhead facilities, evidence that surplus space is available for locating its telecommunications facilities on existing utility poles along the proposed route. 6. If applicant is proposing an underground installation in existing ducts or conduits within the public ways, information in sufficient detail to identify: a. The excess capacity currently available in such ducts or conduits before installation of applicant's telecommunications facilities. b. The excess capacity, if any, that will exist in such ducts or conduits after installation of applicant's telecommunications facilities. 12 7. If applicant is proposing an underground installation within new ducts or conduits to be constructed within the public ways: a. The location proposed for the new ducts or conduits. b. The excess capacity that will exist in such ducts or conduits after installation of applicant's telecommunications facilities. 8. A preliminary construction schedule and completion date. 9. A preliminary traffic control plan in accordance with the Manual on Uniform Traffic Control Devices. 10. Financial statements prepared in accordance with generally accepted accounting principles demonstrating the applicant's financial ability to construct, operate, maintain, relocate and remove the facilities. 11. Information in sufficient detail to establish the applicant's technical qualifications, experience and expertise regarding the telecommunications facilities and services described in the application. 12. Information to establish that the applicant has obtained all other governmental approvals and permits to construct and operate the facilities and to offer or provide the telecommunications services. 13. All fees, deposits or charges required pursuant to Section 5 -18 -7 of this chapter. 14. Such other and further information as may be required by the City. C. Determination by the City: Within 120 days after receiving a compete application under Section 5- 18 -4.B hereof, the corporate authorities shall issue a written determination granting or denying the application in whole or in part, applying the following standards. If the application is denied, the written determination shall include the reasons for denial. 13 1. The financial and technical ability of the applicant. 2. The legal ability of the applicant. 3. The capacity of the public ways to accommodate the applicant's proposed facilities. 4. The capacity of the public ways to accommodate additional utility and telecommunications facilities if the license is granted. 5. The damage or disruption, if any, of public or private facilities, improvements, service, travel or landscaping if the license is granted. 6. The public interest in minimizing the cost and disruption of construction within the public ways. 7. The service that applicant will provide to the community and region. 8. The effect, if any, on public health, safety and welfare if the license is granted. 9. The availability of alternate routes and /or locations for the proposed facilities. 10. Applicable federal and state telecommunications laws, regulations and policies. 11. Such other factors as may demonstrate that the grant to use the public ways will serve the community interest. D. Agreement: No license granted hereunder shall be effective until the applicant and the City have executed a written agreement setting forth the particular terms and provisions under which the license to occupy and use public ways of the City will be granted. E. Nonexclusive Grant: No license granted under this Section shall confer any exclusive right, privilege, license or franchise to occupy or use the public ways of the City for delivery of telecommunications services or any other purposes. F. Rights Granted: No license granted under this Section shall convey any right, title or interest in the 14 public ways, but shall be deemed a license only to use and occupy the public ways for the limited purposes and term stated in the grant. Further, no license shall be construed as any warranty of title. G. Term of Grant: Unless otherwise specified in a license agreement, a telecommunications license granted hereunder shall be in effect for a term of five (5) years. H. License Route: A telecommunications license granted under this Section shall be limited to a grant of specific public ways and defined portions thereof. I. Location of Facilities: Unless otherwise specified in a license agreement, all facilities shall be constructed, installed and located in accordance with the following terms and conditions: 1. Telecommunications facilities shall be installed within an existing underground duct or conduit whenever excess capacity exists within such utility facility. 2. A licensee with permission to install overhead facilities shall install its telecommunications facilities on pole attachments to existing utility poles only, and then only if surplus space is available. 3. Whenever any existing electric utilities, cable facilities or telecommunications facilities are located underground within a public way of the City, a licensee with permission to occupy the same public way must also locate its telecommunications facilities underground. 4. Whenever any new or existing electric utilities, cable facilities or telecommunications facilities are located or relocated underground within a public way of the City, a grantee that currently occupies the same public way shall relocate its facilities underground within a reasonable period of time, which shall not be later than the end of the grant term. Absent extraordinary circumstances or undue hardship as determined by the City, such relocation 15 shall be made concurrently to minimize the disruption of the public ways. 5. Whenever new telecommunications facilities will exhaust the capacity of a public street or utility easement to reasonably accommodate future telecommunications carriers or facilities, the grantee shall provide additional ducts, conduits, manholes and other facilities for nondiscriminatory access to future telecommunications carriers. J. Construction Permits: All licensees are required to obtain construction permits for telecommunications facilities as required in Section 5 -18 -8 of this chapter provided, however, that nothing in this Section shall prohibit the City and a licensee from agreeing to alternative plan review, permit and construction procedures in a license agreement, provided such alternative procedures provide substantially equivalent safeguards for responsible construction practices. K. Compensation to City: Each license granted under this Section is subject to the City's right, which is expressly reserved, to annually fix a fair and reasonable compensation to be paid for the property rights granted to the licensee; provided, nothing in this Section shall prohibit the City and a licensee from agreeing to the compensation to be paid. L. Service to City Users: A licensee may be permitted to offer or provide telecommunications services to persons or areas within the City upon submitting an application for approval pursuant to Section 5 -18 -5 hereof. M. Amendment of Grant: 1. A new license application and grant shall be required of any telecommunications carrier that desires to extend or locate its telecommunications facilities in public ways of the City which are not included in a license previously granted under this chapter. 16 2. If ordered by the City to locate or relocate its telecommunications facilities in public ways not included in a previously granted license, the City shall grant a license amendment without further application. N. Renewal Applications: A grantee that desires to renew its license under this Section shall, not more than 180 days nor less than 90 days before expiration of the current license, file an application with the City for renewal of its license which shall include the following information: 1. The information required pursuant to subsection 5- 18 -4.B. of this Section. 2. Any information required pursuant to the license agreement between the City and the grantee. 0. Renewal Determinations: Within 90 days after receiving a complete application under Section 5- 18 -4.N. hereof, the corporate authorities shall issue a written determination granting or denying the renewal application in whole or in part, applying the following standards. If the renewal application is denied, the written determination shall include the reasons for non renewal. 1. The financial and technical ability of the applicant. 2. The legal ability of the applicant. 3. The continuing capacity of the public ways to accommodate the applicant's existing facilities. 4. The applicant's compliance with the requirements of this chapter and the license agreement. 5. Applicable federal, state and local telecommunications laws, rules and policies. 6. Such other factors as may demonstrate that the continued grant to use the public ways will serve the community interest. P. Obligation to Cure as a Condition of Renewal: No license shall be renewed until any ongoing violations or defaults in the licensee's performance of the 17 license agreement, or of the requirements of this chapter, have been cured, or a plan detailing the corrective action to be taken by the grantee has been approved by the City. Section 5 -18 -5: TELECOMMUNICATIONS FRANCHISE A. General: A telecommunications franchise shall be required of any telecommunications carrier who desires to occupy public ways of the City and to provide telecommunications services to any person or area in the City. B. Franchise Application: Any person that desires a telecommunications franchise pursuant to this Section shall file an application with the City which shall include the following information: 1. The identity of the franchise applicant, including all affiliates of the applicant. 2. A description of the telecommunications services that are or will be offered or provided by the franchise applicant over its existing or proposed facilities. 3. A description of the transmission medium that will be used by the franchisee to offer or provide such telecommunications services. 4. Preliminary engineering plans, specifications and a network map of the facilities to be located within the City, all in sufficient detail to identify: a. The location and route requested for the applicant's proposed telecommunications facilities. b. The location of all overhead and underground public utility, telecommunication, cable, water, sewer drainage and other facilities in the public way along the proposed route. c. The location(s), if any, for interconnection with the telecommunications facilities of other telecommunications carriers. 18 d. The specific trees, structures, improvements, facilities and obstructions, if any, that applicant proposes to, temporarily or permanently remove or relocate. 5. If the applicant is proposing to install overhead facilities, evidence that surplus space is available for locating its telecommunications facilities on existing utility poles along the proposed route. 6. If the applicant is proposing an underground installation in existing ducts or conduits within the public ways, information in sufficient detail to identify: a. The excess capacity currently available in such ducts or conduits before installation of applicant's telecommunications facilities; b. The excess capacity, if any, that will exist in such ducts or conduits after installation of applicant's telecommunications facilities. 7. If the applicant is proposing an underground installation within new ducts or conduits to be constructed' within the public ways: a. The location proposed for the new ducts or conduits; b. The excess capacity that will exist in such ducts or conduits after installation of applicant's telecommunications facilities. 8. A preliminary construction schedule and completion dates. 9. A preliminary traffic control plan in accordance with the Manual on Uniform Traffic Control Devices. 10. Financial statements prepared in accordance with generally accepted accounting principles demonstrating the applicant's financial ability to construct, operate, maintain, relocate and remove the facilities. 11. Information in sufficient detail to establish the applicant's technical qualifications, experience and 19 expertise regarding the telecommunications facilities and services described in the application. 12. Information to establish that the applicant has obtained all other governmental approvals and permits to construct and operate the facilities and to offer or provide the telecommunications services. 13. Whether the applicant intends to provide cable service, video dialtone service or other video programming service, and sufficient information to determine whether such service is subject to cable franchising. 14. An accurate map showing the location of any existing telecommunications facilities in the City that applicant intends to use or lease. 15. A description of the services or facilities that the applicant will offer or make available to the City and other public, educational and governmental institutions. 16. A description of applicant's access and line extension policies. 17. The area or areas of the City the applicant desires to serve and a schedule for build -out to the entire franchise area. 18. All fees, deposits or charges required pursuant to Section 5 -18 -7 of this chapter. 19. Such other and further information as may be requested by the City. C. Determination by the City: Within 150 days after receiving a complete application under Section 5-18 5.B. hereof, the corporate authorities shall issue a written determination granting or denying the application in whole or in part, applying the following standards. If the application is denied, the written determination shall include the reasons for denial. 1. The financial and technical ability of the applicant. 2. The legal ability of the applicant. 20 3. The capacity of the public ways to accommodate the applicant's proposed facilities. 4. The capacity of the public ways to accommodate additional utility and telecommunications facilities if the franchise is granted. 5. The damage or disruption, if any, of public or private facilities, improvements, service, travel or landscaping if the franchise is granted. 6. The public interest in minimizing the cost and disruption of construction within the public ways. 7. The service that applicant will provide to the community and region. 8. The effect, if any, on public health, safety and welfare if the franchise requested is granted. 9. The availability of alternate routes and /or. locations for the proposed facilities. 10. Applicable federal and state telecommunications laws, regulations and policies. 11. Such other factors as may demonstrate that the grant to use the public ways will serve the community interest. D. Agreement: No franchise shall be granted hereunder unless the applicant and the City have executed a written agreement setting forth the particular terms and provisions under which the franchise to occupy and use public ways of the City will be granted. E. Nonexclusive Grant: No franchise granted under this Section shall confer any exclusive right, privilege, license or franchise to occupy or use the public ways of the City for delivery of telecommunications services or any other purposes. F. Term of Grant: Unless otherwise specified in a franchise agreement, a telecommunications franchise granted hereunder shall be valid for a term of ten (10) years. G. Rights Granted: No franchise granted under this Section shall convey any right, title or interest in 21 the public ways, but shall be deemed a franchise only to use and occupy the public ways for the limited purposes and term stated in the grant. Further, no franchise shall be construed as any warranty of title. H. Franchise Territory: A telecommunications franchise granted under this Section shall be limited to the specific geographic area of the City to be served by the franchise grantee, and the specific public ways necessary to serve such areas. I. Location of Facilities: Unless otherwise specified in a franchise agreement, all facilities shall be constructed, installed and located in accordance with the following terms and conditions: 1. Telecommunications facilities shall be installed within an existing underground duct or conduit whenever excess capacity exists within such utility facility. 2. A franchisee with permission to install overhead facilities shall install its telecommunications facilities on pole attachments to existing utility poles only, and then only if surplus space is available. 3. Whenever any existing electric utilities, cable facilities or telecommunications facilities are located or relocated underground within a public way of the City, a grantee that currently occupies the same public way shall relocate its facilities underground within a reasonable period of time, which shall not be later than the end of the grant term. Absent extraordinary circumstances or undue hardship as determined by the City, such relocation shall be made concurrently to minimize the disruption of the public ways. 4. Whenever new telecommunications facilities will exhaust the capacity of a public street or utility easement to reasonably accommodate future telecommunications carriers or facilities, the grantee shall provide additional 22 ducts, conduits, manholes and other facilities for nondiscriminatory access to future carriers. J. Construction Permits: All franchisees are required to obtain construction permits for telecommunications facilities as required in Section 5 -18 -8 of this chapter provided, however, that nothing in this Section shall prohibit the City and a franchisee from agreeing to alternative plan review, permit and construction procedures in a franchise agreement, provided such alternative procedures provide substantially equivalent safeguards for responsible construction practices. K. Compensation to City: Each franchise granted under this Section is subject to the City's right, which is expressly reserved, to annually fix a fair and reasonable compensation to be paid for the property rights granted to the franchisee; provided, nothing in this Section shall prohibit the City and a franchisee from agreeing to the compensation to be paid. L. Nondiscrimination: A franchisee shall make its telecommunications services available to any customer within its franchise area who shall request such service, without discrimination as to the terms, conditions, rates or charges for grantee's services; provided, however, that nothing in this Section shall prohibit a franchisee from making any reasonable classifications among differently situated customers. M. Service to the City: A franchisee shall make its telecommunications services available to the City at its most favorable rate for similarly situated users, unless otherwise provided in a license or franchise agreement. N. Amendment of Grant: 1. A new franchise application and grant shall be required of any telecommunications carrier that desires to extend its franchise territory or to locate its telecommunications facilities in public ways of the City 23 which are not included in a franchise previously granted under this chapter. 2. If ordered by the City to locate or relocate its telecommunications facilities in public ways not included in a previously granted franchise, the City shall grant a franchise amendment without further application. 0. Renewal Applications: A grantee that desires to renew its franchise under this Section shall, not more than 240 days nor less than 150 days before expiration of the current franchise, file an application with the City for renewal of its franchise which shall include the following information: 1. The information required pursuant to Section 5- 18 -5.B. of this Section. 2. Any information required pursuant to the franchise agreement between the City and the grantee. P. Renewal Determinations: Within 150 days after receiving a complete application under Section 5- 18 -5.0. hereof, the corporate authorities shall issue a written determination granting or denying the renewal application in whole or in part, applying the following standards. If the renewal application is denied, the written determination shall include the reasons for non renewal. 1. The financial and technical ability of the applicant. 2. The legal ability of the applicant. 3. The continuing capacity of the public ways to accommodate the applicant's existing facilities. 4. The applicant's compliance with the requirements of this chapter and the franchise agreement. 5. Applicable federal, state and local telecommunications laws, rules and policies. 6. Such other factors as may demonstrate that the continued grant to use the public ways will serve.the community interest. 24 Q. Obligation to Cure as a Condition of Renewal: No franchise shall be renewed until any ongoing violations or defaults in the grantee's performance of the franchise agreement, or of the requirements of this chapter, have been cured, or a plan detailing the corrective action to be taken by the grantee has been approved by the City. 5 -18 -6: CABLE FRANCHISE (Refer to Chapter 17) 5 -18 -7: FEES AND COMPENSATION A. Purpose: It is the purpose of this Section to provide for the payment and recovery of all direct and indirect costs and expenses of the City related to the enforcement and administration of this chapter. B. Application and Review Fee: 1. Any applicant for a license or franchise pursuant to Sections 4 or 5 of this chapter shall pay a fee of or percent of the estimated cost of applicant's proposed telecommunications facilities, as certified by the applicant's professional engineer, whichever is greater. 2. The application and review fee shall be deposited with the City as part of the application filed pursuant to Section 4 or Section 5 of this chapter. 3. An applicant whose license or franchise application has been withdrawn, abandoned or denied shall, within sixty (60) days of its application and review fee written request, be refunded the balance of its deposit under this section, less: a. and b. All ascertainable costs and expenses incurred by the City in connection with the application. C. Other City Costs: All license or franchise grantees shall,-within thirty (30) days after written demand therefor, reimburse the City for all direct and indirect 25 costs and expenses incurred by the City in connection with any modification, amendment, renewal or transfer of the license or franchise or any license or franchise agreement. D. Reserved Compensation for Public Ways: The City reserves its right to annually fix a fair and reasonable compensation to be paid for the property rights granted to a telecommunications license or franchise grantee. Nothing in this Section shall prohibit the City and a grantee from agreeing to the compensation to be paid for the granted property rights. E. Compensation for City Property: If the right is granted, by lease, license, franchise or other manner, to use and occupy City property for the installation of telecommunications facilities, the compensation to be paid shall be fixed by the City. F. Construction Permit Fee: Prior to issuance of a construction permit, the permittee shall pay a permit fee equal to dollars or percent of the estimated cost of constructing the telecommunications facilities, as certified by the applicant's engineer and approved by the City, whichever is greater. G. Annual Fees: Unless otherwise agreed in a license or franchise grant agreement, each license or franchise grantee shall pay an annual license fee to the City equal to as reimbursement for the City's costs in connection with reviewing, inspecting and supervising the use and occupancy of the public ways on behalf of the public and existing or future users. H. Cable Fees: Cable television franchises shall be subject to the franchise fees, payments and costs provided in Chapter 17 of this Title. I. Regulatory Fees and Compensation Not a Tax: The regulatory fees and costs provided for in this Section, and any compensation charged and paid for the public ways provided for in Section 5- 18 -7.D., are separate from, and 26 additional to, any and all federal, state, local and city taxes as may be levied, imposed or due from a telecommunications carrier or provider, its customers or subscribers, or on account of the lease, sale, delivery or transmission of telecommunications services. 5 -18 -8: CONDITIONS OF GRANT A. Location of Facilities: All facilities shall be constructed, installed and located in accordance with the following terms and conditions, unless otherwise specified in a license or franchise agreement: 1. A grantee shall install its telecommunications facilities within an existing underground duct or conduit whenever excess capacity exists within such utility facility. 2. A grantee with permission to install overhead facilities shall install its telecommunications facilities on pole attachments to existing utility poles only, and then only if surplus space is available. 3. Whenever any existing electric utilities, cable facilities or telecommunications facilities are located underground within a public way of the City, a grantee with permission to occupy the same public way must also locate its telecommunications facilities underground. 4. Whenever any new or existing electric utilities, cable facilities or telecommunications facilities are located or relocated underground within a public way of the City, a grantee that currently occupies the same public way shall relocate its facilities underground within a reasonable period of time, which shall not be later than the end of the grant term. Absent extraordinary circumstances or undue hardship as determined by the City, such relocation shall be made concurrently to minimize the disruption of the public ways. 27 5. Whenever new telecommunications facilities will exhaust the capacity of a public street or utility easement to reasonably accommodate future telecommunications carriers or facilities, the grantee shall provide additional ducts, conduits, manholes and other facilities for nondiscriminatory access to future carriers. B. Compliance with All license or franchise grantees shall, before commencing any construction in the public ways, comply with all regulations of C. Construction Permits: All license or franchise grantees are required to obtain construction permits for telecommunications facilities as required in Section 5 -18 -9 of this chapter. However, nothing in this Section shall prohibit the City and a grantee from agreeing to alternative plan review, permit and construction procedures in a license or franchise agreement, provided such alternative procedures provide substantially equivalent safeguards for responsible construction practices. D. Interference with the Public Ways: No license or franchise grantee may locate or maintain its telecommunications facilities so as to unreasonably interfere with the use of the public ways by the City, by the general public or by other persons authorized to use or be present in or upon the public ways. All such facilities shall be moved by the grantee, temporarily or permanently, as determined by the City. E. Damage to Property: No license or franchise grantee nor any person acting on a grantee's behalf shall take any action or permit any action to be done which may impair or damage any City property, public ways of the City, other ways or other property located in, on or adjacent thereto. F. Notice of Work: Unless otherwise provided in a license or franchise agreement, no license or franchise grantee, nor any person acting on the grantee's behalf, shall commence any non emergency work in or about the public 28 ways of the City or other ways without ten (10) working days advance notice to the City. G. Repair and Emergency Work: In the event of an unexpected repair or emergency, a grantee may commence such repair and emergency response work as required under the circumstances, provided the grantee shall notify the City as promptly as possible, before such repair or emergency work or as soon thereafter as possible if advance notice is not practicable. H. Maintenance of Facilities: Each license or franchise grantee shall maintain its facilities in good and safe condition and in a manner that complies with all applicable federal, state and local requirements. I. Relocation or Removal of Facilities: Within thirty (30) days following written notice from the City, a license or franchise grantee shall, at its own expense, temporarily or permanently remove, relocate, change or alter the position of any telecommunications facilities within the public ways whenever the corporate authorities shall have determined that such removal, relocation, change or alteration is reasonably necessary for: 1. The construction, repair, maintenance or installation of any City or other public improvement in or upon the public ways. 2. The operations of the City or other governmental entity in or upon the public ways. J. Removal of Unauthorized Facilities: Within thirty (30) days following written notice from the City, any grantee, telecommunications carrier, or other person that owns, controls or maintains any unauthorized telecommunications system, facility or related appurtenances within the public ways of the City shall, at its own expense, remove such facilities or appurtenances from the public ways of the City. A telecommunications system or facility is unauthorized and subject to removal in the following circumstances: 29 1. Upon expiration or termination of the grantee's telecommunications license or franchise. 2. Upon abandonment of a facility within the public ways of the City. 3. If the system or facility was constructed or installed without the prior grant of a telecommunications license or franchise. 4. If the system or facility was constructed or installed without the prior issuance of a required construction permit. 5. If the system or facility was constructed or installed at a location not permitted by the grantee's telecommunications license or franchise. K. Emergency Removal or Relocation of Facilities: The City retains the right and privilege to cut or move any telecommunications facilities located within the public ways of the City, as the City may determine to be necessary, appropriate or useful in response to any public health or safety emergency. L. Damage to Grantee's Facilities: Unless directly and proximately caused by the willful, intentional or malicious acts by the City, the City shall not be liable for any damage to or loss of any telecommunications facility within the public ways of the City as a result of or in connection with any public works, public improvements, construction, excavation, grading, filling, or work of any kind in the public ways by or on behalf of the City. M. Restoration of Public Ways, Other Ways and City Property: 1. When a- license or franchise grantee, or any person acting on its behalf, does any work in or affecting any public ways, other ways or City property, it shall, at its own expense, promptly remove any obstructions therefrom and restore such ways or property to as good a condition as existed before the work was undertaken, unless otherwise directed by the City. 30 2. If weather or other conditions do not permit the complete restoration required by this Section, the grantee shall temporarily restore the affected ways or property. Such temporary restoration shall be at the licensee's sole expense and the licensee shall promptly undertake and complete the required permanent restoration when the weather or other conditions no longer prevent such permanent restoration. 3. A grantee or other person acting in its behalf shall use suitable barricades, flags, flagmen, lights, flares and other measures as required for the safety of all members of the general public and to prevent injury or damage to any person, vehicle or property by reason of such work in or affecting such ways or property. N. Facilities Maps: Each license or franchise grantee shall provide the City with an accurate map or maps certifying the location of all telecommunications facilities within the public ways. Each grantee shall provide updated maps annually. 0. Duty to Provide Information: Within ten (10) days of a written request from the City, each license or franchise grantee shall furnish the City with information sufficient to demonstrate: 1. That grantee has complied with all requirements of this chapter. 2. That all municipal sales, message and /or telecommunications taxes due the City in with the telecommunications services and facilities provided by the grantee have been properly collected and paid by the grantee. 3. All books, records, maps and other document's, maintained by the grantee with respect to its facilities within the public ways, shall be made available for inspection by the City at reasonable times and intervals. 31 P. Leased Capacity: A license or franchise grantee shall have the right, without prior City approval, to offer or provide capacity or bandwidth to its customers; provided: 1. Grantee shall furnish the City with a copy of any such lease or agreement. 2. The customer or lessee has complied, to the extent applicable, with the requirements of this chapter. Q. Grantee Insurance: Unless otherwise provided in a license or franchise agreement, each grantee shall, as a condition of the grant, secure and maintain the following liability insurance policies insuring both the grantee and the City, and its elected and appointed officers, officials, agents and employees as co- insureds: 1. Comprehensive general liability insurance with limits not less than: a. Five Million Dollars ($5,000,000) for bodily injury or death to each person; b. Five Million Dollars ($5,000,000) for property damage resulting from any one accident; and c. Five Million Dollars ($5,000,000) for all other types of liability. 2. Automobile liability for owned, non -owned and hired vehicles with a limit of Three Million Dollars ($3,000,000) for each person and Three Million Dollars ($3,000,000) for each accident. 3. Worker's compensation within statutory limits and employer's liability insurance with limits of not less than One Million Dollars ($1,000,000). 4. Comprehensive form premises- operations, explosions and collapse hazard, underground hazard and products completed hazard with limits of not less than Three Million Dollars ($3,000,000). 5. The liability insurance policies required by this Section shall be maintained by the grantee throughout the term of the telecommunications license or franchise, and such other period of time during which the grantee is 32 operating without a franchise or license hereunder, or is engaged in the removal of its telecommunications facilities. Each such insurance policy shall contain the following endorsement: "It is hereby understood and agreed that this policy may not be cancelled nor the intention not to renew be stated under 90 days after receipt by the City, by registered mail, of a written notice addressed to the City Clerk of such intent to cancel or not to renew." 6. Within sixty (60) days after receipt by the City of said notice, and in no event later than thirty (30) days prior to said cancellation, the grantee shall obtain and furnish to the City replacement insurance policies meeting the requirements of this Section. R. General Indemnification: Each license or franchise agreement shall include, to the extent permitted by law, grantee's express undertaking to defend, indemnify and hold the City and its officers, employees, agents and representative harmless from and against any and all damages, losses and expenses, including reasonable attorney's fees and costs of suit or defense, arising out of, resulting from or alleged to arise out of or result from the negligent, careless or wrongful acts, omissions, failures to act or misconduct of the grantee or its affiliates, officers, employees, agents, contractors or subcontractors in the construction, operation, maintenance, repair or removal of its telecommunications facilities, and in providing or offering telecommunications services over the facilities or network, whether such acts or omissions are authorized, allowed or prohibited by this chapter or by a grant agreement made or entered into pursuant to this chapter. S. Performance and Construction Surety: Before a license or franchise granted pursuant to this chapter is effective, and as necessary thereafter, the grantee shall provide and deposit such monies, bonds, letters of credit or 33 other instruments in form and substance acceptable to the City as may be required by this chapter or by an applicable license or franchise agreement. T. Security Fund: Each grantee shall establish a permanent security fund with the City by depositing the amount of $50,000 with the City in cash, an unconditional letter of credit, or other instrument acceptable to the City, which fund shall be maintained at the sole expense of grantee so long as any of the grantee's telecommunications facilities are located within the public ways of the City. 1. The fund shall serve as security for the full and complete performance of this chapter, including any costs, expenses, damages or loss the City pays or incurs because of any failure attributable to the grantee to comply with the codes, ordinances, rules, regulations or permits of the City. 2. Before any sums are withdrawn from the security fund, the City shall given written notice to the grantee: a. Describing the act, default or failure to be remedied, or the damages, cost or expenses which the City has incurred by reason of grantee's act or default; b. Providing a reasonable opportunity for grantee to first remedy the existing or ongoing default or failure, if applicable; c. Providing a reasonable opportunity for grantee to pay any monies due the City before the City withdraws the amount thereof from the security fund, if applicable; d. That the grantee will be given an opportunity to review the act, default or failure described in the notice with the City or his designee. 3. Grantees shall replenish the security fund within fourteen (14) days after written notice from the City that there is a deficiency in the amount of the fund. 34 U. Construction and Completion Bond: Unless otherwise provided in a license or franchise agreement, a performance bond written by a corporate surety acceptable to the City equal to at least 100% of the estimated cost of constructing grantee's telecommunications facilities within the public ways of the City shall be deposited before construction is commenced. 1. The construction bond shall remain in force until sixty (60) days after substantial completion of the work, as determined by the City, including restoration of public ways and other property affected by the construction. 2. The construction bond shall guarantee, to the satisfaction of the City: a. Timely completion of construction; b. Construction in compliance with applicable plans, permits, technical codes and standards; c. Proper location of the facilities as specified by the City; d. Restoration of the public ways and other property affected by the construction; e. The submission of "as-built" drawings after completion of the work as required by this chapter; and f. Timely payment and satisfaction of all claims, demands or liens for labor, material or services provided in connection with the work. V. Coordination of Construction Activities: All grantees are required to cooperate with the City and with each other. 1. By February 1 of each year, grantees shall provide the City with a schedule of their proposed construction activities in, around or that may affect the public ways. 2. Each grantee shall meet with the City, other grantees and users of the public ways annually or as 35 determined by the City to schedule and coordinate construction in the public ways. 3. All construction locations, activities and schedules shall be coordinated, as ordered by the City, to minimize public inconvenience, disruption or damages. W. Assignments or Transfers of Grant: Ownership or control of a telecommunications system, license or franchise may not, directly or indirectly, be transferred, assigned or disposed of by sale, lease, merger, consolidation or other act of the grantee, by operation of law or otherwise, without the prior consent of the City, which consent shall not be unreasonably withheld or delayed, as expressed by ordinance and then only on such reasonable conditions as may be prescribed therein. 1. No grant shall be assigned or transferred in any manner within twelve (12) months after the initial'grant of the license or franchise, unless otherwise provided in a license or franchise agreement. 2. Absent extraordinary and unforeseeable circumstances, no grant, system or integral part of a system shall be assigned or transferred before construction'of the telecommunications system has been completed. 3. Grantee and the proposed assignee or transferee of the grant or system shall provide and certify the following information to the City not less than one hundred and fifty (150) days prior to the proposed date of transfer: a. Complete information setting forth the nature, terms and condition of the proposed transfer or assignment; b. All information required of a telecommunications license or franchise applicant pursuant to Sections 4 or 5 of this chapter with respect to the proposed transferee or assignee; and c. Any other information reasonably required by the City. 36 4. No transfer shall be approved unless the assignee or transferee has the legal, technical, financial and other requisite qualifications to own, hold and operate the telecommunications system pursuant to this chapter. 5. Unless otherwise provided in a license or franchise agreement, the grantee shall reimburse the City for all direct and indirect fees, costs, and expenses reasonably incurred by the City in considering a request to transfer or assign a telecommunications license or franchise. 6. Any transfer or assignment of a telecommunications grant, system or integral part of a system without prior approval of the City under this Section or pursuant to a license or franchise agreement shall be void and is cause for revocation of the grant. X. Transactions Affecting Control of Grant: Any transactions which singularly or collectively result in a change of ten percent (10 or more of the ownership or working control of the grantee, of the ownership or working control of a telecommunications license or franchise, of the ownership or working control of affiliated entities having ownership or working control of the grantee or of a telecommunications system, or of control of the capacity or bandwidth of grantee's telecommunications system, facilities or substantial parts thereof, shall be considered an assignment or transfer requiring City approval pursuant to Section 5- 18 -8.W. hereof. Transactions between affiliated entities are not exempt from City approval. Y. Revocation or Termination of Grant: A license or franchise granted by the City to use or occupy public ways of the City may be revoked for the following reasons: 1. Construction or operation in the City or in the public ways of the City without a license or franchise grant of authorization. 2. Construction or operation at an unauthorized location. 37 3. Unauthorized substantial transfer of control of the grantee. 4. Unauthorized assignment of a license or franchise. 5. Unauthorized sale, assignment or transfer of grantee's franchise or license assets, or a substantial interest therein. 6. Misrepresentation or lack of candor by or on behalf of a grantee in any application to the City. 7. Abandonment of telecommunications facilities in the public ways. 8. Failure to relocate or remove facilities as required in this chapter. 9. Failure to pay taxes, compensation, fees or costs when and as due the City. 10. Insolvency or bankruptcy of the grantee. 11. Violation of material provisions of this chapter. 12. Violation of the material terms of a license or franchise agreement. Z. Notice and Duty to Cure: In the event that the City believes that grounds exist for revocation of a license or franchise, it shall give the grantee written notice of the apparent violation or non compliance, providing a short and concise statement of the nature and general facts of the violation or noncompliance, and providing the grantee a reasonable period of time not exceeding thirty (30) days to furnish evidence: 1. That corrective action has been, or is being actively and expeditiously pursued, to remedy the violation or noncompliance. 2. That rebuts the alleged violation or noncompliance. 3. That it would be in the public interest to impose some penalty or sanction less than revocation. 38 AA. Hearing: In the event that a grantee fails to provide evidence reasonably satisfactory to the City as provided in Section 5- 18 -8.Z. hereof, the City shall refer the apparent violation or non compliance to the corporate authorities. The corporate authorities shall provide the grantee with notice and a reasonable opportunity to be heard concerning the matter. BB. Standards for Revocation or Lesser Sanctions: If persuaded that the grantee has violated or failed to comply with material provisions of this chapter, or of a franchise or license agreement, the corporate authorities shall determine whether to revoke the license or franchise, or to establish some lesser sanctions and cure, considering the nature, circumstances, extent and gravity of the violation as reflected by one -or more of the following factors: 1. Whether the misconduct was egregious. 2. Whether substantial harm resulted. 3. Whether the violation was intentional. 4. Whether there is a history of prior violations of the same or other requirements. 5. Whether there is a history of overall compliance. 6. Whether the violation was voluntarily disclosed, admitted or cured. 5 -18 -9: CONSTRUCTION STANDARDS A. General: No person shall commence or continue with the construction, installation or operation of telecommunications facilities within the City except as provided in this Section. B. Construction Codes: Telecommunications facilities shall be constructed, installed, operated and maintained in accordance with all applicable federal, state and local 39 codes, rules and regulations including the National Electrical Safety Code. C. Construction Permits: No person shall construct or install any telecommunications facilities within the City without first obtaining a construction permit therefor, provided, however: 1. No permit shall be issued for the construction or installation of telecommunications facilities within the City unless the telecommunications carrier has filed a registration statement with the City pursuant to Section 5 -18 -3 of this chapter. 2. No permit shall be issued for the construction or installation of telecommunications facilities in the public ways unless the telecommunications carrier has applied for and received a license or franchise pursuant to Sections 4, 5 or 6 of this chapter. 3. No permit shall be issued for the construction or installation of telecommunications facilities without payment of the construction permit fee established in Section 5- 18 -7.F. of this chapter. D. Applications: Applications for permits to construction telecommunications facilities shall be submitted upon forms to be provided by the City and shall be accompanied by drawings, plans and specifications in sufficient detail to demonstrate: 1. That the facilities will be constructed in accordance with all applicable codes, rule and regulations. 2. The location and route of all facilities to be installed on existing utility poles. 3. The location and route of all facilities to be located under the surface of the ground, including the line and grade proposed for the burial at all points along the route which are within the public ways. 4. The location of all existing underground utilities, conduits, ducts, pipes, mains and installations 40 which are within the public ways along the underground route proposed by the applicant. 5. The location of all other facilities to be constructed in the City, but not within the public ways. 6. The construction methods to be employed for protection of existing structures, fixtures, and facilities within or adjacent to the public ways. 7. The location, dimension and types of all trees within or adjacent to the public ways along the route proposed by the applicant, together with a landscape plan for protecting, trimming, removing, replacing and restoring any trees or areas to be disturbed during construction. E. Engineer's Certification: All permit applications shall be accompanied by the certification of a registered professional engineer that the drawings, plans and specifications submitted with the application comply with applicable technical codes, rules and regulations. F. Traffic Control Plan: All permit applications which involve work on, in, under, across or along any public ways shall be accompanied by a traffic control plan demonstrating the protective measures and devices that will be employed, consistent with Uniform Manual of Traffic Control Devices, to prevent injury or damage to persons or property and to minimize disruptions to efficient pedestrian and vehicular traffic. G. Issuance of Permit: Within forty -five (45) days after submission of all plans and documents required of the applicant and payment of the permit fees required by this chapter, the City, if satisfied that the application, plans and document comply with all requirements of this chapter, shall issue a permit authorizing construction of the facilities, subject to such further conditions, restrictions or regulations affecting the time, place and manner of performing the work as may be deemed necessary or appropriate. 41 H. Construction Schedule: The permittee shall submit a written construction schedule to the City ten (10) working days before commencing any work in or about the public ways. The permittee shall further notify the City not less than two working days in advance of any excavation or work in the public ways. I. Compliance with Permit: All construction practices and activities shall be in accordance with the permit and approved final plans and specifications for the facilities. City representatives shall be provided access to the work and such further information as they may require to ensure compliance with such requirements. J. Display of Permit: The permittee shall maintain a copy of the construction permit and approved plans at the construction site, which shall be displayed and made available for inspection by the City at all times when construction work is occurring. K. Survey of Underground Facilities: If the construction permit specifies the location of facilities by depth, line, grade, proximity to other facilities or other standard, the permittee shall cause the location of such facilities to be verified by a registered Washington land surveyor. The permittee shall relocate any facilities which are not located in compliance with permit requirements. L. Non complying Work: Upon order of the City, all work which does not comply with the permit, the approved plans and specifications for the work, or the requirements of this chapter, shall be removed. M. Completion of Construction: The permittee shall promptly complete all construction activities so as to minimize disruption of the City ways and other public and private property. All construction work authorized by a permit within City ways, including restoration, must be completed within 120 days of the date of issuance. N. As -Built Drawings: Within sixty (60) days after completion of construction, the permittee shall furnish the 42 City with two complete sets of plans, drawn to scale and certified to the City as accurately depicting the location of all telecommunications facilities constructed pursuant to the permit. O. Restoration of Improvements: Upon completion of any construction work, the permittee shall promptly repair any and all public ways and provide property improvements, fixtures, structures and facilities in the public ways or otherwise damaged during the course of construction, restoring the same as nearly as practicable to its condition before the start of construction. P. Landscape Restoration: 1. All trees, landscaping and grounds removed, damaged or disturbed as a result of the construction, installation, maintenance, repair or replacement of telecommunications facilities, whether such work is done pursuant to a franchise, license or permit, shall be replaced or restored as nearly as may be practicable, to the condition existing prior to performance of work. 2. All restoration work within the public ways shall be done in accordance with landscape plans approved by the City. Q. Construction Surety: Prior to issuance of a construction permit, the permittee shall provide a performance bond, as provided in Section 5- 18 -8.U. of this chapter. R. Exceptions: Unless otherwise provided in a license or franchise agreement, all telecommunications carriers are subject to the requirements of this Section 5- 18-9. S. Responsibility of Owner: The owner of the facilities to be constructed and, if different, the license or franchise grantee, are responsible for performance of and compliance with all provisions of this Section. 43 FRANCHISING REFRANCHISING COMMUNITY NEEDS 5,0210 ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS et Becky Upton City Clerk City of Port Angeles PO Box 1150 Port Angeles WA 98362 Dear Becky: Enclosed are two copies of the contract for services. Once again we apologize for the error and any inconvenience this may have caused you. As always, please feel free to contact us if you have any questions or require additional information Sincerely, Cable Communications Consultants A 3 -H on F' ur Vice President /Director LH /sw Enclosure OMMUNICATIONS CONSULTANTS February 14, 1997 F E B 1 81997 L PORT ANGELES CITY CLERK 504 East Main Street, Auburn, Washington 98002 (206)833 -8380 1 -800- 222 -9697 FAX: (206)833 -8430 Cable Communications Consultants 1996 ANNUAL REPORT PREPARED FOR THE CITY OF PORT ANGELES February 12 ,1997 Consultants to Local Government Specializing in Cable Television: Franchising Community Needs Assessments Refranchising Ordinance Preparation Access Franchise Administration Evaluation Negotiation 504 East Main Street Auburn WA 98002 (206) 833.8380 1- 800 222 -9697 FAX (206) 833 -8430 FRANCHISING REFRANCHISING COMMUNITY NEEDS ,5,R ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Becky Upton City Clerk City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed are two copies of our annual report for 1996. If you have any questions or require additional information, please do not hesitate to contact our office. It has always been a pleasure to serve the City of Port Angeles and we look forward to a continued working relationship. Sincerely, -H C Cable Communications Consultants Vice resident /Director LAH /smj Enclosures MMUNICATIONS CONSULTANTS /6 q7 beL 1 February 12, 1997 504 East Main Street, Auburn, Washington 98002 (206)833 -8380 1 -800- 222 -9697 FAX: (206)833 -8430 @EOUNT FEB 13 1991 CITY MT,' City of Port Angeles 1996 Annual Report NATIONAL Legislative 1996, for a change, was a year when the Congress had more important items on its agenda than inserting anymore monkey wrenches in the not so well oiled machinery of cities regulation of cable television franchises. While Senator John McClain (R) Arizona, an avowed deregulator, will become the new chairperson of the Senate Telecommunications Subcommittees, it appears that the major issues in this field to be considered in the new session will be encryption, copyright and privacy. The cable operators trade association, NCTA, has said that they will have no major lobbying efforts in 1997. Perhaps. Judicial While quiet may have prevailed on the Congressional level, as usual the courts at all levels were deeply immersed in areas of local governments authority, or lack of same, as well as broader issues affecting the cable industry. As far as the cable providers are concerned 1997 should turn out to be a happy new year for them with the Supreme Court apparently poised to rule the "must carry" rule unconstitutional. This is the regulation that mandated that cable operators carry all locally originated stations regardless of size. A concomitant result will probably be a decision affecting the retransmission consent wherein stations reimbursed the cable operator for the privilege of having its signal carried over a cable system. A result of this anticipated ruling expected to be made by June 30, 1997 will undoubtedly be a further juggling of channel lineups to yet further confuse bewildered subscribers. 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report Another case being heard by the 7th District Circuit court is that of a small Kentucky town, Sturgis, who refused to grant a long term franchise to its incumbent operator because the city claimed the operator's proposal was insufficient to meet the community's cable related needs and interests. The implications of this to local governments in their next renewal process is obvious. The "hot button" issue for cities in 1996 was right -of -way management in view of other cable or telephone providers appearing on the scene. This principle is now being tested in a lawsuit brought by TCI against Troy, N.Y. The city checked TCI from laying additional fiber optic cable claiming that TCI planned to use it for other communications purposes and to thus avoid paying a franchise fee and other considerations. TCI is charging abuse of the city's rights -of -way authority. Stay tuned. Another pending case of interest to local regulators is one while applicable only to California at present, raises the old chestnut that franchise fees should cover only the cost of regulation. Of a similar vein, although not strictly a legal matter yet is a proposal in Florida to lump all fees, taxes, etc. imposed on cable operators by cities and counties in one package capped out 1 Naturally we will be following all of these matters closely in this new year. Technology Probably the most dramatic technical breakthrough in 1996 was, in a sense, not a technical advance, but an announcement from the FCC that it would approve (finally) standards for High Definition Television (HDTV). This will provide much more clear and sharp images on the television screen. The networks say, but don't count on it, that they will be broadcasting -2- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report "some" HDTV signals in 1998 to new sets equipped to accept this new technology. Other estimates say that HDTV (or in the new cable jargon, just "DTV will be received by only 15 to 20% of subscribers by the year 2001. While press releases continue to be issued by the cable operator's research and development laboratories, digital compression, that is a systems whereby a single channel of 6 mgh can be altered to carry a number of channels, perhaps up to six, there has been no further practical breakthrough in this revolutionary concept. Tests continue. Costs increase. The cable industry, perhaps a bit belatedly, is reacting positively to access to the Internet via cable. While giant TCI is still cautious in its approach and is only test marketing modem usage, other operators are dipping deeper into the waters. Times Warner has 400,000 homes available for modems in Ohio and New York. Adelphia has 250,000 in Florida. Cablevision, is offering modems in selected markets in New York and Connecticut for $44.95 a month plus $150.00 installation. General While municipalities were still struggling with interpretation of telecommunication rules, the forthcoming reduction of basic rate changes to an annual basis by the cable operators, and the vexatious questions of rights of -way management, 1996 was, for the cable industry itself, a year no progress and belt tightening. While there was a modest increase nationally in the number of subscribers from 62,956,160 to 64,054,160 for the year, the last six months of the year, ominously, showed no increase at all. This trend was not due to the long anticipated and long not forthcoming competition from telephone companies, but more to a general malaise with the current subscriber -3- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report population. While alternate suppliers, largely direct broadcast systems (DBS), made some inroads, on the whole, they did not enjoy a banner year either. Because of the heavy subsidization of the (DBS) installation price at present, analysts are wondering how soon it will be before these prices rise to market costs and further slow its growth. Once again the "threat" to the cable industry by Telcos a "threat" existing largely in the eye of cable lobbyists failed to materialize. Indeed it would appear that the Baby Bills are moving away from interest in cable and are concentrating their resources on entering the long distance market. The only appearance telephone companies have made into cable is by buying existing cable systems. Hardly the stuff from which competition is made. In summary, although facing no new Federal legislation, 1997 will be a difficult year for local government. Cities will be caught in crossfire as attacks on its rights -of -way management will come from all sides. The issues of master telecommunications local legislation is up in the air as questions of too early commitment, right -of -way reimbursement and most favored nation equity remain largely unresolved. -4- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report REGIONAL An important issue to be closely watched in the region in 1997 is the legislative attempt in Olympia by US West to diminish the authority of the Washington Utilities and Transportation Commission to regulate rates new entrants would pay to interconnect with US West's facilities. Of even greater impact to local government is draft legislation proposed by the Washington State Cable Communications Association to apply sales tax to cable operators and convert count and city taxation to a system wherein only the State would assess taxes. While this proposal does not yet address the question of franchise fees, the entire issue of payment for rights -of -way in under scrutiny at virtually every legislative and judicial level. -5- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report LOCAL We have discussed the impact of cable on the national and regional basis. In addition, there have been a number of issues that have had an impact on the local cable operation during 1996. Franchise Fees Although the City of Port Angeles is not a rate regulatory entity, Northland Cable still uses some of the aspects of Federal Rate Regulations in setting its rates. Due to this and all of the uncertainty concerning rate regulation, it is still extremely difficult to estimate the franchise fees that the City of Port Angeles may collect for the upcoming year. Regardless of the challenge presented by these facts, we feel confident that we are in a position to present the City with the most accurate estimate available. We estimate that the final franchise fees to be collected in 1996 will be $117,000 and the estimated payment to be received from the operator in 1997 will be $129,000. As always, and especially in this coming year, we will continue to monitor the franchise fees collected by the City and keep staff advised of any discrepancies. Proof of Performance As we have discussed with the City previously, the cable operator is required by FCC rules to execute Proof of Performance testing at least two times a year. We met with the operator at the end of the year to review the reports and determine that they continue to comply with any new standards. We have determined the cable operator to be in compliance as expected. -6- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report We have attached those portions of the reports that may be of greatest value to you, keeping in mind that much of the data collected is complicated and not of great interest to most. These portions are attached as Appendix "A" for your review. Should anyone within the City be interested, we would be glad to meet and discuss this information in more detail. Senior Citizen /Disabled Person Discounts Discounts for individuals that meet certain age or disability guidelines and that also meet Washington State HUD Housing low income standards now are receiving discounts on the basic services they receive from Northland. It is one of our functions this year to handle the certification process for the City and to continue with the ongoing monitoring of the individuals receiving the discounts. As a part of this year's report we thought that the City might be interested in looking at the current list of those persons receiving the discount. Some of these individuals were taken from a list already in place by Northland and others were handled as original applicants through our office. There are now a total of 227 subscribers receiving the discounted basic rate. The list starts on the following page. -7- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report SERVICE REQUESTS Below we have presented a breakdown of the service calls received by Northland for a typical 30 -day period. These figures were obtained from logs maintained by the Operator. SERVICE CALL DIAGNOSIS Reason for Call of Calls Trunk /Distribution 3 Bad Fittings 13 Ei Drop (subscriber feeder) 18 Customer Education 4 Customer Equipment (i.e. VCR, T.V.) 10 No Problem Discovered 5 Total 53 -8- 3 -H Cable Communications Consultants CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS Name Date Name Date Adams, Leah, L 217 6/22/96 Cox, Tony A 14 3/11/96 Adams, Martha 1 1/26/96 Crowder,Estelle, C 150 3/20/96 Aggergaad, Mary E 84 3/12/96 Curse, Elbert, R 213 6/24/96 Allison, Martha 85 3/8/96 Dailidenas, Mary 25 3/11/96 Adams, Wallace 173 3/11/96 Davidson, Dorothy 34 3/11/96 Anderson, Clara, E 165 3/24/96 Davidson, Virginia 162 3/27/96 Anderson, Elizabeth, D 185 5/5/96 Davis, Zoraj. 182 4/24/96 Anding, Hazel, M 59 3/8/96 Day, Margurette 71 3/11/96 Anton, Charles 100 3/12/96 Deckedach, John 9 2/22/96 Auman, Ina, F 137 3/19/96 Denies, A. Marjorie 92 3/9/96 Ausec, Della, P. 132 3/14/96 Delaney, Velma 104 3/13/96 Austin, Pete 83 3/12/96 Delo, Catherine 39 3/11/96 Avery, Lonse,D 171 4/3/96 Drilling, Emily 145 3/20/96 Baker, Audry 224 7/3/96 Doerge, Evelyn 146 3/20/96 Baker, Patricia A 48 3/8/96 Douglas, Mrs. B. C. 46 3/8/96 Bartels, Marjorie, J 153 3/13/96 Duncan, Alvin, L. 190 5/17/96 Beam, Frances, E. 61 2/10/96 Dunden, Nancy 206 6/22/96 Beckett, Margaret, H. 202 6/22/96 Edris, Eugne 30 3/10/96 Beding, Gwen, Michelle 232 9/4/96 Elders, Ira 78 3/11/96 Bendixen, Clifford 216 6/25/96 Erickson, Donna Joan 18 3/11/96 Berry, Phyllis, M 65 3/9/96 Fearguson, Nova, L. 151 3/18/96 Bessey, Doris M. 89 3/11/96 Flores, Abraham 234 9/12/96 Betts, Miriam Winona 21 3/11/96 Frazier, Mardell 194 6/24/96 Binder, Leota 112 1/13/96 Gabeau, Monica 221 7/8/96 Blood, Frances, A. 120 3/13/96 Gallacci, Angela 188 5/9/96 Blundeau, Virginia 138 3/18/96 Gallagher, Rachel 215 6/24/96 Bonotto, Arline 231 8/22/96 Gollocci, Angelo or Emily 110 3/13/96 Boos, Jane 160 3/26/96 Gourley, Robert 141 3/8/96 Bowes, Myrtle, A. 105 3/11/96 Grahm, Robert, W. 115 3/13/96 Bowlby, James, F. 154 3/22/96 Gra11, Arabella 87 3/12/96 Box Catherine G. 88 3/11/96 Gnm, Gerry 63 3/10/96 Brandland, Orville 15 3/11/96 Hale, Lela 19 3/8/96 Browder, Lilyan, M. 139 3/19/96 Hall, Bonnie 6 2/8/96 Bruce, May 67 3/8/96 Hamilton, Ceil 158 3/19/96 Buettner, Bea 208 6/21/96 Hanssen,Gerald 000 12/17/96 Cagney, Jackie 95 3/8/96 Hash, Doris 191 4/11/96 Caldwell, Sarah, Ellen 184 5/1/96 Hathaway, Missy 226 8/6/96 Camponni, Emma 22 3/10/96 Hefley,E.C. 142 3/9/96 Cargo, Patricia, E. 225 7/26/96 Hendrix, Ella, M 116 3/14/96 Carpenter, George 2 2/7/96 Henderson, Andy Margie 17 3/11/96 Carpenter, Marjorie 163 3/29/96 Hines, Jim 217 6/25/96' Camveau, Edna, F. 235 9/3/96 Hollander, 140 3/18/96 Chavis, Frances,! 79 3/11/96 Houk, JessieS 4 2/1/96 Chrysler,Gage 180 4/12/96 Howell, Clara, K. 172 4/2/96 Cipriano, Vincent M. 238 11/05/96 Huff, Laura 152 3/20/9 Clark, Jessie, L 121 3/14/96 Isenberger, Helen 147 3/21/96 Clubertson,F.M 168 4/5/96 Jepson, A.R. 200 6/20/96 Cochran, Valera Jirikowic, Winifred, M 136 3/20/96 Cofer, Frances 192 5/26/96 Johnson, Frances 207 5/9/96 Cogbum, Analayne 167 3/27/96 Johnson Walter M. 42 3/9/96 Conklin, Annie 26 3/11/96 Jones, Helen, M 128 3/8/96 Conrad, Lela M. 37 3/8/96 Jones, Sally 41 3/9/96 Cotton, Rosa, L 222 7/3/96 Jones, Vera,F. 159 3/26/96 J Name CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS Date Name Date Kasakan, Rachel 12 3/8/96 Pettigrew, Arlene, J. 117 3/13/96 Keend, Arlene J 38 3/8/96 Pingel, Calvin 64 3/9/96 Keller, Marilyn 27 3/8/96 Pmord, Lila, L 75 3/11/96 Keneally, Patrick, F 131 3/14/96 Porter, Elsie M. 000 12/23/96 Kienholz, Harriet, E 125 3/16/96 Pnngle, Norman D. 57 3/8/96 Kiiski, Virginia, L. 108 3/12/96 Pratt, Mavis, D. 101 3/12/96 Kiser, Frank, E. 156 3/23/96 Prowley, James 212 6/21/96 Klemmer, Michael S. 44 3/8/96 Puffer, Nita 99 3/13/96 Koch, Loyd O. 80 3/12/96 Reed, Margeret A. 54 3/11/96 Konopaski, Frances 69 3/8/96 Reed,Mildred 167 4/3/96 Kushman, Helen E. 29 3/8/96 Rhoads, Virginia M. 45 3/9/96 LaBelle, Dolly 189 5/12/96 Rice, Helen 76 3/11/96 LaRue, Albert 235 9/24/96 Robertson, J.B. 114 3/12/96 Lankford, Mary, B 193 5/24/96 Rogers, Anna 195 6/13/96 Larue,Evan 166 3/8/96 Rogeers, Edith 203 6/21/96 Lelo, Thomas 230 7/18/96 Rosen, Hattie 52 3/8/96 Loell, Tom 181 4/23/96 Ross, Harry, A. 118 3/13/96 Logan, Mildred, K 111 3/13/96 Ross, Ray, E. 143 3/19/96 Lundberg, Vera 50 3/9/96 Rupp, Lois, G. 194 6/17/96 Lucero, Frank, S. 211 6/24/96 Rudolph, Jean 68 3/8/96 Ludke, Olga 109 3/12/96 Russo, Frances 198 6/22/96 Machenheimer, James 16 3/11/96 Rutherford, Samuel W. 7 2/12/96 Mallary, Louise, K 199 6/22/96 Schaefer,Patncia, L 127 3/9/96 Mangano, Phyllis J. 51 3/9/96 Schott, Arnold 119 3/13/96 Marks, Annabelle 2 3/9/96 Schmidt, Fred, H. 122 3/11/96 Mantn, Gina 96 4/4/96 Schott, Ethel, E 187 5/9/96 Marty, Phyllis 24 3/11/96 Scott, Bernell 93 3/9/96 Mason, Bernice L. 86 3/11/96 Settles, Laura, M. 224 7/15/96 Malvey, Helena 107 3/15/96 Sherwin, Maxine 82 3/11/96 Malvin, Zella 103 3/12/96 Simpson, Evelyn V. 28 3/9/96 Mathews, Belvin 123 3/13/96 Smally, Cheryl 122 3/11/96 Maxey, Sharon Rose 96 3/11/96 Snider, Frank 10 3/9/96 McAllister, Mary 214 6/26/96 Snow, Verne, E 106 3/11/96 McAlpin, Theresa 35 3/11/96 Stanley, William L. 90 3/11/96 McClanahan 134 3/17/96 Stanton, Gaitha, M. 74 3/12/96 McCoy, Thelma 40 3/11/96 Stark, Cynthia 166 4/3/96 McElravy 77 3/18/96 Stevens, Loretta A. 33 3/11/96 McManus 164 3/27/96 Stewart, Lois D. 56 3/9/96 Meszaros, Lanette 205 6/21/96 Storrs, Ethel 43 3/9/96 Moseley, Henery 201 6/21/96 Stossel, Jennie 5 2/2/96 Mudd, Carl, J 135 3/8/96 Sweagle, Gwen, M. 62 3/9/96 Nelson, Avaline C. 94 3/11/96 Swmption, Mike 223 7/3/96 Nielsen, Carmen 8 2/12/96 Taggart, Floyd and Billie 121 3/9/96 Oel, Guy 97 3/11/96 Thomas, Alice 53 3/8/96 Olson, Dorothy R 32 3/11/96 Tones, Joseph, D. 149 3/13/96 Parker, Esther, V. 194 6/7/96 Townsend, Mildred 204 6/22/96 Pavlak, Alfred E 72 3/10/96 Tnllingham, Jean 91 3 /11/96 Pazan, Andrew 216 6/24/96 Tuttle, Elmer 130 3/15/96 Pelky, Nance 136 3/18/96 Urry, Clifford 169 4/4/96 Penny, Rachel 209 6/21/96 Vancise, Teresa 31 3/11/96 Perdew, Clifford 3 1/30/96 Vinney, Sarah 170 4/2/96 Perint, Margaret, A. 98 3/8/96 Virgima,Alice 161 3/29/96 Peters, Glen 70 3/10/96 Waldgroup, Elsie 157 3/26/96 CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS Name Date Name Date Walker, John 227 7/22/96 Waller, Louise 73 3/11/96 Weller, Barbara 11 2/27/96 Wheeler,Phyllis,I 144 3/18/96 Williams, Cecil 174 3/29/96 Williams, Delons 210 6/42/96 Williams, Elizabeth, L 229 7/23/96 Williams, Mrs. Thomas, J. 102 3/19/96 Williams, Phyllis 36 3/9/96 Winters, Lorraine 233 9/9/96 Witter, Dorothy M. 58 3/8/96 Wilson, Andrew J 13 2/28/96 Woolery Irene M. 81 3/12/96 Wozniak, Casey, A. 133 3/19/96 Wrobel, Alvin, J. 155 3/22/96 Wyman, Kay 49 3/9/96 1 I I O .44., T „CtottAtildtru PORT_96 Model 3SR Operator J_J_JEROME Date 08/16/96 Time 17 06 26 Descnption Page 1 Location Location Type Test Pnt Type Test Pnt Comp Area AC Voltage Chan Label 2 CBUT 3 NCN 4 KOMO 5 KING 6 CHEK 7 KIRO 8 CHAN 9 KCTS 10 CKVU 11 KSTW 12 KVOS 13 KCPQ 14 HBO 15 SHOW 16 CMAX 17 CSPN 18 WTBS 19 QVC 20 TLC 21 CITY 22 HN 23 FAM 24 CNBC 25 TNT 26 ESPN 18TH &MCDONALD FieldTest Undefined 00 #2LHURD 60 Video (dBmV) 11 1 11 3 121 134 127 144 145 153 152 146 15 1 152 11 7 126 13 1 13.2 139 14 0 14 1 14.4 145 150 155 156 159 AutoTest Report Senal 5023129 File L_HURD_ #2 AmpID 8AM27 &88232 Power Cfg IN Feeder Maker Cfg 4 Trunk Term. YES Voltage Setting HI DC Voltage (reg) 17 0 Audio (dBmV) -3 8 -3 3 -2 7 -2 0 -1 7 -0 5 -0 1 00 04 -0 2 02 03 -2 7 -2.3 -1.8 -1 9 -1 3 -1 1 -1 1 -0 8 -0 5 -0 2 06 00 07 Delta V/A (dB) 149 146 148 154 14.4 149 146 153 148 148 14 9 149 144 149 149 15 1 152 151 152 152 150 152 14.9 156 15.2 C/N (dB) Reverse Pad: Forward Pad Rev Equalizer Fwd Equalizer. Temp DC Voltage (unreg) Hum Cal Date 04/23/96 DOS File 21HURD 000 00 00 0.0 4.0 62 1 F 32.0 Mod .\/•4QV�ETK PcmftAltiAric Model 3SR Operator J_J_JEROME Date 08/16/96 Time 17 06 26 Descnption LIMIT CHECK Min Video Camer Level Max Delta Video Level Min Delta V/A Max Delta VIA Max Delta Adjacent Chan. Min Camer to Noise Max Hum Conclusion Reviewed PORT_96 AutoTest Report Chan Label Video Audio Delta V/A (dBmV) (dBmV) (dB) 27 CNN 15 6 0.1 15 5 28 A &E 15 3 0 2 15 1 29 DISC 15 1 -1 4 16 5 30 MNBC 13 4 -1 8 15 2 31 TNN 14 2 -1 0 15 2 32 TRAV 14 8 -1 1 15 9 33 USA 14 6 -0 4 15 0 34 PSNW 153 01 152 35 TCM 157 02 155 36 CMT 156 00 156 37 TOON 15 2 0 0 15 2 38 LIFE 156 00 156 39 AMC 156 02 154 40 2SPN 15 2 0 3 14 9 41 NICK 159 06 153 42 DISN 15.6 0 0 15 6 98 NWNC 12 8 -2 5 15 3 99 BOX 12 4 -3 0 15 4 Limit 0 0 dBmV 120 dB 100 dB 170 dB 30 dB 460 dB 30% Serial 5023129 File L_HURD_ #2 Location 18TH &MCDONALD C/N Hum (dB) Actual Ch 2 11.1 Ch 26 and 2, Delta 4 8 Ch 6 Deka V/A 14 4 Ch 29 Delta V/A 16 5 Ch 30, Ch 29, Delta Video 1 7 No data No data Date Cal Date 04/23/96 DOS File 2LHURD 000 Area #2LHURD Mod Pass Pass Pass Pass Pass Pass Pass PASS Page 2 WAVETEK !Ref 0 dB PORT_96 Sweep Graph 1 dBldiv 155.25 24 MHz/Div Area: Port Angeles Location: 18th /McDonald Max -Min GD 145.25 MHz 277.26 MHz Q 132.01 MHz +1.8 dB +1.0 dB -0.5 dB +1.5 dB Operator: JJJ File: #18WWS DOS File: #18WWS.SWP Description: Last trunk amp that feeds 18th McDonald street. Date: 07/09/96 Time: 14:53 _t Stealth! 397.26 I I I I I I I I 1 1 I 1 1 I 1 I I I I \e'V.VETSK Model 3SR Operator J_J_JEROME Date 08/16/96 Time 17 12 38 Description Page 1 PORT 96 AutoTest Report Serial 5023129 File L_HURD_ #1 Location 10TH &N AmpID 8AM27 &88232 Reverse Pad. 0.0 Location Type FieldTest Power Cfg IN Forward Pad. 0 0 Test Pnt Type Undefined Feeder Maker Cfg 4 Rev Equalizer 0.0 Test Pnt Comp 0 0 Trunk Term: YES Fwd Equalizer. 4 0 Area #1IHURD Voltage Setting HI Temp 62 1 F AC Voltage 60 DC Voltage (reg)* 17 0 DC Voltage (unreg) 32.0 Chan Label Video Audio Delta V/A C/N Hum Mod (dBmV) (dBmV) (dB) (dB) 2 CBUT 11 1 -3 0 14 1 3 NCN 11 3 -2 8 14 1 4 KOMO 13 2 -2 1 15 3 5 KING 13 8 -1 1 14 9 6 CHEK 13 9 -0 6 14 5 7 KIRO 15 5 0.4 15 1 8 CHAN 157 04 153 9 KCTS 15 8 0.5 15 3 10 CKVU 16 1 1 4 14 7 11 KSTW 154 14 140 12 KVOS 16 3 1.5 14.8 13 KCPQ 16.2 1 5 14 7_ 14 HBO 13 9 -1 0 14.9 15 SHOW 14 1 -0 4 14 5 16 CMAX 14 8 -0 4 15.2 17 CSPN 14 8 -0 4 15 2 18 WTBS 15 2 0 1 15 1 19 QVC 156 02 154 20 TLC 15 5 0 2 15 3 21 CITY 15 2 0 0 15.2 22 HN 15 1 0 0 15 1 23 FAM 17.0 2 0 15 0 24 CNBC 17.1 2 0 15 1 25 TNT 17 2 1.6 15 6 26 ESPN 16 8 1 7 15.1 Cal Date 04 /23/96 DOS File L_HURD_ #.000 I 'N's/�VeTeK s cq(0/ 4raRe Model 3SR Operator J J_JEROME Date 08/16/96 Time 17 12 38 Description LIMIT CHECK Min Video Carner Level Max Delta Video Level Min Delta V/A Max Delta V/A Max Delta Adjacent Chan Min Camer to Noise. Max Hum Conclusion Reviewed PORT 96 AutoTest Report Limit 0 0 dBmV 120 dB 100 dB 170 dB 30 dB 460 dB 30% Serial# 5023129 File L_HURD_ #1 Location 10TH &N Chan Label Video Audio Delta V/A (dBmV) (dBmV) (dB) 27 CNN 17 1 1 4 15 7 28 A &E 16 7 0 6 16.1 29 DISC 16 5 1 0 15 5 30 MNBC 16 3 0 9 15 4 31 TNN 167 08 159 32 TRAV 16 7 0 8 15.9 33 USA 15 9 0 8 15 1 34 PSNW 16 7 1 7 15 0 35 TCM 17.0 1 1 15 9 36 CMT 169 15 154 37 TOON 16 9 1 3 15 6 38 LIFE 171 14 157 39 AMC 17 3 1 8 15 5 40 2SPN 16 9 1 8 15 1 41 NICK 17 5 2 3 15.2 42 DISN 17 7 2 2 15 5 98 NWNC 14 3 -0 8 15.1 99 BOX 14 5 -1 1 15 6 C/N (dB) Date Hum Actual Ch 2 11 1 Ch 42 and 2, Delta 6 6 Ch 11 Delta VIA 14 0 Ch 28 Delta V/A 16 1 Ch 4, Ch 3, Delta Video 1 9 No data No data eteA teAtn/g Fee Cal Date. 04 /23/96 DOS File L_HURD_# 000 Area #11HURD Mod Pass Pass Pass Pass Pass Pass Pass PASS Page 2 1 \b4VE 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 IRef O dB PORT_96 Area: Port Angeles Location: 10th /Nst Sweep Graph 1 dB /div Max -Min 0 145.25 MHz 277.26 MHz Q 132.01 MHz +1.7 dB +0.4 dB -0.4 dB +0.7 dB Operator: JJJ File: #16WWS DOS File: #16WWS.SWP Description: Last trunk amp that feeds 10th Nst Date: 07/09/96 Time: 11:42 fitcia(fAVA4Re Stealth! 397.26 1 0121'97 10:38 $12064575901 DATE 11 -1-96 11 -198 11 -1-98 11-4-96 11 4-98 11 -5-98 11-5-98 11 -5-98 11.896 11.896 11 -8-98 114-96 11 -7.88 11 -8 -96 114-C6 114-96 11 -1196 11 -11-96 11 -1246 11 -1346 11-13-98 11 -1448 11- 14.96 11 -14-96 11 -1598 11 -15-96 11 -15-96 11 -18-98 11-18-96 11 -16-98 11 -19-88 11-20-96 11-2046 11 -2046 11 -22.88 11-22 -80 11 -2596 11-2748 11 -4-86 114-86 11 -5-98 119-86 11 -746 11 -1198 11 -1148 11 -1398 11 -14-98 11 -18 -96 11-22-96 11-28-96 11-27-98 NAME W. Donscomb R. Henke YMCA Aft T. Wood M. McCartney T. Holtman T_ tusk P. Boroughs R. Briones, Sr. E. Gilson H. Hardman M. Burgess M. Cochran PA Fire Dept. P. Schauvveker Peninsula Colege P. Alcafaras J. Brooks G. Teliefscn R, Hoham L. Childers E. Richardson R. Patton V. Davidson P. Coughlan J, Cummings J. Lyons B. Fbdshvm T. Neudorfer M. Brown R. Elmer S. Gibe,t E. Richardson C. Houston V. Davidson M. Creubel R_ Spencer C.Toliver A. Francis M. Degnan Zaks M. McCartney H. Smith T. Zimmer Uptown Motel D. Capon F. Gabriel B. Grande V. Cox A McCully PORT ANGELES CITY TROUBLE CALLS NOVE."."BER 1996 ADDRESS 381? McGill 3922 Nygren Pt. 302 S. Francis 1322 E. et 710 Canine 1508 W. et 126 Orcas 1727W. 321 E.12 819 W. 13" 835 W. 5 425 E. Front 13161x11.5 231 W. 11 102 E.5 1515 W.tf' 1502 W. Blvd. 2513 S. Oak 118 S. Chambers #2 721 E. 9' 520 S. Peabody 1130 Water 220% W. e' 1323 McDonald #17 118 5. Chambers #k3 4012 Newell Rd. #D2 1537 W. 1 e 1715 S. E 1721 S. E 210 Downed Pl. 232'% W. Sled. 731 S_,alder St. 1232 E. 4th 220Y2 W. 8 811 W_ 13 113 S. Chambers #3 315 W. 15th 609 W.12"' CUSTOMER ED_ TROUBLE CALLS 1430 W. a 331 W. 4 #t8 2215 S. Chase #49 125 W. Front 1508 W. 6* 403 W. 9 1125 E. 5' 101 E. 2"d 808 S. Cherry 1411 Eckard PL 505!4 E. 2 814 W. 4 1323 McDonald #B NORTHLAND CABLE Z002 RESULTS S Needed new TCLE Needed new Bad cable fittings at TV, replaced sprier""" Installed JV-A trapy' Replaced WS tar Raised replaced bad drop, g- bloorg fittings Replaced drop. g-block, fittingsr" Replaced Showtime nee Replaced Sho ivtime Ref Replaced drop.' Replaced charnel i trap/ Replaced tap fittings on drill Replaced bad fittings at g -bbcIC Not home, possible loose fitting (neveFresch'd) Replaced bad Shoodtime'1e R.epiaced bad g-block linings/ Repaired cut .500 cablt� Replaced drop No problem found, customer says problem intermittent (has not cakd back) Replaced drop''' Replaced g-bbck fittings Replaced Showtime HBO hirers Replaced Mitag on drop; j(imper, filter; bad fitting behind Reining raised torn down drop Replaced UB trap Removed old trap that was biocicng chs. 17 Replaced 3.vaay Mime Repaired cut drop Repaired cut drop'' Replaced Cnibtg at spittae- Neighbor was bootlegging off their service, Roced'" Replaced twist on fitting bad fitting by filter;" r Cinemax filer' No problem found, customer nevIr called back Ground installed, signals go installed ground wins' No problem found, customer will cal back (hasr't)r Replaced I trap removed midspan, replaces rerouted drop, instated g -block un due No one home, signal good outside a'V probiem 04c problem found, described TV problem Pfozainnted TV outside, customer never called back jt ad, Don hooked up VCR for them came off back of set, canceled at the door me, signal good outside blem rammed TV VCR SCR needed programming, canceled at the door blem is inside, customer wilt check set blem problem found. TV problem 5,a/6 FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Dear Becky: 3 11HI Cable communications Consultants Becky Upton City Clerk City of Port Angeles PO Box 1150 Port Angeles WA 98362 Enclosed is a rough draft of a Telecommunications Master Ordinance that you may wish to review. Please remember this is a very rough first draft of a document that will probably have many changes made to it. After you have had time to read it and get any other input you need from other staff, please call us and let us know so we can meet and discuss this further. Sincerely, 3.H Lon Hurd Vice President /Director LH /sw Enclosure COM UNICATIONS CONSULTANTS &p 0 (o October 3, 1996 I OCT 41996 PORT ANG r ;;TN CLERK 504 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX: (206)833 -8430 Port Angeles Telecommunications Master TABLE OF CONTENTS Section Page 1. Definitions 3 -6 2. Terms of Franchise 6 -8 3. Application 8 4. Hearing 8, 9 5. Acceptance 9 6. Police Powers 9 7. Rules and Regulations by the City 9, 10 8. Construction Standards 10 9. Construction Notification 10 10. Undergrounding and Landscaping 11 11. Construction in Right -of -Way 11 12. Safety Requirements 11, 12 13. Building Moving 12 14. Tree Trimming 12, 13 15. Franchise Fee 13 16. Telecommunications System Evaluation 13, 14 17. Periodic Meetings 14 18. Record Inspection 14, 15 19. Non Discrimination 15 20. Transfer of Ownership 15, 16 21. Removal Abandonment of Property of Franchisee 16, 17 22. Indemnity Hold Harmless 17 23. Insurance 18 1 10/2/96 Port Angeles Telecommunications Master TABLE OF CONTENTS Section Paae 24. Performance Bond 18 25. Franchising Costs 19 26. Inconsistency 19 27. Severability 19 2 10/2/96 Port Angeles Telecommunications Master 1 THE CITY COUNCIL OF THE CITY OF PORT ANGELES DO ORDAIN AS FOLLOWS: 2 Section 1: Definitions. 3 (a) "The Act means the Cable Television Consumer Protection and Competition 4 Act of 1992, and any subsequent amendments. 5 (b) "Addressability" means the ability of a system allowing a franchisee to authorize 6 by remote control customer terminals to receive, change or to cancel any or all 7 specified programming. 8 (c) "Affiliate" means a condition of being united, being in close connection, allied, 9 or attached as a member or branch. 1 0 (d) "Applicant" means any person or entity that applies for a franchise. 1 1 (e) "Channel" means a single path or section of the spectrum which carries a 1 2 television signal. 1 3 (f) "City" means the City of Port Angeles, a municipal corporation of the State of 14 Washington. 1 5 (g) "Council" means the present governing body of the City or any future board 1 6 constituting the legislative body of the City. 17 (h) "Dwelling units" means residential living facilities as distinguished from 1 8 temporary lodging facilities such as hotel and motel rooms and dormitories, and 1 9 includes single family residential units and individual apartments, condominium 2 0 units, mobile homes within mobile home parks, and other multiple family residential 21 units. 2 2 (i) "FCC" means the Federal Communications Commission, a regulatory agency of 2 3 the United States government. 2 4 (j) "Facilities" means antennas, receivers, towers, wires, lines, conduits, cables, 2 5 vaults, duct runs, and all necessary or convenient facilities and appurtenances 2 6 thereto, whether the same be located over or under ground. 3 10/2/96 Port Angeles Telecommunications Master 1 (k) "Fiber Optic Telecommunication System" means a facility and terrestrial network 2 that uses light waves to provide dedicated, digital one -way and /or two switched 3 transmission services for voice, graphic, data, video and other information signals. 4 (I) "Franchise" shall mean the initial authorization, or renewal thereof, issued by 5 the franchising authority, whether such authorization is designated as a franchise, 6 permit, license, resolution, contract, certificate or otherwise, which authorizes 7 construction and operation of the telecommunications system for the purpose of 8 offering telecommunications service or other service to subscribers. 9 (m) "Franchise Area" means any, every and all of the roads, streets, avenues, 1 0 alleys, highways and unrestricted utility easements of the City as now laid out, 1 1 platted, dedicated or improved; and any, every and all roads, streets, avenues, 1 2 alleys and highways that may thereafter be laid out, platted, dedicated or improved 1 3 within the present limits of the City and as such limits may be hereafter extended. 14 (n) "Franchisee" means the person, firm or corporation to whom or which a 1 5 franchise, as herein above defined, is granted by the Council under this Ordinance 1 6 and the lawful successor, transferee or assignee of said person, firm or corporation 1 7 subject to such conditions as may be defined in City ordinance. 1 8 (o) "Gross revenues" means any and all receipts and revenues received directly or 1 9 indirectly from all sources other than transactions related to real property receipts by 2 0 a franchisee not including any taxes on services furnished by a franchisee, imposed 2 1 on any subscriber or used by any governmental unit, agency or instrumentality and 2 2 collected by a franchisee for such entity provided also that net uncollectible debts 2 3 are not considered as revenue in this definition. 2 4 (p) "Headend" means the electronic equipment located at the start of a 2 5 telecommunications system, usually including antennas, preamplifiers, frequency 2 6 converters, demodulators and related equipment. 4 10/2/96 Port Angeles Telecommunications Master 1 (q) "Hubbing Service" means the aggregation and /or disaggregation of customer 2 services to and /or from customer locations. 3 (r) "Office" means the person or entity designated by the City as being responsible 4 for the administration of a franchise for the City. 5 (s) "Operator" means the person, firm or corporation to whom a franchise is granted 6 pursuant to the provisions of this Ordinance. 7 (t) "Property of Franchisee" means all property owned, installed or used by a 8 franchisee in the conduct of its business in the City under the authority of a franchise 9 granted pursuant to this Ordinance. 1 0 (u) "Proposal" means the response, by an individual or organization, to a request 1 1 by the City regarding the provision of telecommunications services; or an unsolicited 12 plan submitted by an individual or organization seeking to provide 1 3 telecommunications services in the City. 1 4 (v) "Public Place" as used in this Ordinance means an area generally visible to 1 5 public view and includes alleys, bridges, buildings, driveways, parking lots, parks, 1 6 plazas, sidewalks and streets open to the general public, including those that 1 7 serve food or drink or provide entertainment, and the doorways and entrances to 1 8 buildings or dwellings and the grounds enclosing them. 1 9 (w) "Public Way" means the surface of, and the space above and below, any public 2 0 street, highway, freeway, bridge, land path, alley, court, boulevard, sidewalk, 2 1 parkway, way, lane, drive, circle or other public right -of -way, including, but not 2 2 limited to, public utility easements, dedicated utility strips or rights -of -way dedicated 2 3 for compatible uses and any temporary or permanent fixtures or improvements 2 4 located thereon now or hereafter held by the City in the service area which shall 2 5 entitle the City and a franchisee to the use thereof for the purpose of installing, 2 6 operating, repairing and maintaining the telecommunications system. 5 10/2/96 Port Angeles Telecommunications Master 1 Public way shall also mean any easement now or hereafter held by the City 2 within the service area for the purpose of public travel, or for utility or public service 3 use dedicated for compatible uses, and shall include other easements or rights -of- 4 way as shall within their proper use and meaning entitle the City and a franchisee to 5 the use thereof for the purpose of installing or transmitting franchisee's 6 telecommunications service or other service over poles, wires, cables, conductors, 7 ducts, conduits, vaults, manholes, amplifiers, appurtenances, attachments and other 8 property as may be ordinarily necessary and pertinent to the telecommunications 9 system. 1 0 (x) "Subscriber" means a person or entity or user of the telecommunications system 1 1 who lawfully receives telecommunications services or other service therefrom with 1 2 franchisee's express permission. 13 (y) "Telecommunications Services" means the transmission and reception of 1 4 signals by electromagnetic means. 1 5 (z) "Telecommunications System" means a facility, consisting of a set of closed 16 transmission paths and associated signal generation, reception, and control 17 equipment that is designed to provide telecommunications service and other service 1 8 to subscribers. 19 Section 2: Terms of Franchise. 20 (a) AUTHORITY TO GRANT FRANCHISES OR LICENSES FOR 21 TELECOMMUNICATIONS SERVICES: It shall be unlawful to engage in or 2 2 commence construction, operation, or maintenance of a telecommunications system 2 3 without a franchise issued under this Ordinance. The Council may, by ordinance, 2 4 award a non exclusive franchise to construct, operate and maintain a 2 5 telecommunications system which complies with the terms and conditions of this 2 6 Ordinance. 6 10/2/96 Port Angeles Telecommunications Master 1 Any franchise granted pursuant to this Ordinance shall be non exclusive and 2 shall not preclude the City from granting other or further franchises or permits or 3 preclude the City from using any roads, rights -of -way, streets, or other public 4 properties or affect its jurisdiction over them or any part of them, or limit the full 5 power of the City to make such changes, as the City shall deem necessary, 6 including the dedication, establishment, maintenance, and improvement of all new 7 rights -of -way and thoroughfares and other public properties. However, any such 8 changes shall not materially or substantially impair the rights granted a franchisee 9 pursuant to this Ordinance. All franchises granted subsequent to the effective date 1 0 of this Master Telecommunications Ordinance shall be granted consistent with the 1 1 terms and conditions of this Ordinance. 1 2 (b) INCORPORATION BY REFERENCE: The provisions of this Ordinance shall be 1 3 incorporated by reference in any franchise ordinances approved hereunder. The 14 provisions of any proposal submitted and accepted by the City shall be incorporated 1 5 by reference in the applicable franchise. However, in the event of any conflict 1 6 between the proposal, this Ordinance and the franchise, the franchise shall be the 1 7 prevailing document. 18 (c) NATURE AND EXTENT OF THE FRANCHISE: Any franchise granted 19 hereunder by the City shall authorize a franchisee, subject to the provisions herein 2 0 contained and subject to City regulation and franchising authority.k 2 1 (1) To engage in the business of operating and providing telecommunications 2 2 service and the distribution and sale of such service to subscribers within the 2 3 City; 2 4 (2) To erect, install, construct, repair, replace, reconstruct, maintain and retain 2 5 in, on, over, under, upon, across and along any street, such amplifiers and 2 6 appliances, lines, cables, conductors, vaults, manholes, pedestals, attachments, 7 10/2/96 Port Angeles Telecommunications Master 1 supporting structures, and other property as may be necessary and appurtenant 2 to the telecommunications system; and, in addition, so to use, operate and 3 provide similar facilities, or properties rented or leased from other persons, firms 4 or corporations, including but not limited to any public utility or other franchisee 5 franchised or permitted to do business in the City. No privilege or exemption 6 shall be granted or conferred upon a franchisee by any franchise except those 7 specifically prescribed therein, and any use of any street shall be consistent 8 with any prior lawful occupancy of the street or any subsequent improvement or 9 installation therein. 1 0 (d) TERM OF FRANCHISE: The City shall have the right to grant a franchise for a 1 1 period of time most appropriate to the circumstances of the particular grant. 1 2 Section 3: Application. 1 3 An applicant for a new or renewal franchise to construct, operate, and maintain a 1 4 telecommunications system within the City shall file an application in a form prescribed 1 5 by the City, accompanied by a non refundable filing fee in the amount to be determined 1 6 by the City. 1 7 Section 4: Hearina. 1 8 Prior to the granting of a franchise, the City Council shall conduct a public hearing to 1 9 determine the following: 2 0 (a) That the public will be benefited by the granting of a franchise to the Applicant; 21 (b) That the Applicant has requisite financial and technical resources and 2 2 capabilities to build, operate and maintain a telecommunications system in the area; 2 3 (c) That the Applicant has no conflicting interests, either financial or commercial, 2 4 which will be contrary to the interests of the City; 2 5 (d) That the Applicant will comply with all terms and conditions placed upon a 2 6 franchisee by this Ordinance; 8 10/2/96 Port Angeles Telecommunications Master 1 (e) That the Applicant is capable of complying with all relevant Federal, State, and 2 local regulations pertaining to the construction, operation and maintenance of the 3 facilities and systems incorporated in its application for a franchise; 4 (f) The capacity of public rights -of -way to accommodate the telecommunications 5 system; 6 (g) The present and future use of the public rights -of -way to be used by the 7 telecommunications system; and 8 (h) The potential disruption to existing users of the public rights -of -way to be used 9 by the telecommunications system and the resultant inconvenience which may 1 0 occur to the public. 11 Section 5: Acceptance. 1 2 Within sixty (60) days after the effective date of the Ordinance awarding a franchise, 1 3 or within such extended period of time as the Council in its discretion may authorize, a 1 4 franchisee shall file with the City Clerk its written acceptance of the franchise, in a form 1 5 satisfactory to the City Attorney, together with the bond and insurance policies required 1 6 by Section 23: Insurance and Section 24: Performance Bond herein. 17 Section 6: Police Powers. 1 8 In accepting any franchise, a franchisee acknowledges that its rights hereunder are 1 9 subject to the legitimate rights of the police power of the City to adopt and enforce 2 0 general ordinances necessary to protect the safety and welfare of the public and it 2 1 agrees to comply with all applicable general laws enacted by the City pursuant to such 2 2 power so long as such regulations do not materially increase the burden or impair the 2 3 rights of the franchise hereunder. 2 4 Section 7: Rules and Reaulations by the City. 2 5 (a) In addition to the inherent powers of the City to regulate and control any 2 6 franchise it issues, the authority granted to it by the Act, and those powers expressly 9 10/2/96 Port Angeles Telecommunications Master 1 reserved by the City, or agreed to and provided for in a franchise, the right and 2 power is hereby reserved by the City to promulgate such additional regulations as it 3 may find necessary in the exercise of its lawful powers. 4 (b) The City Council reserves the right to delegate its authority for franchise 5 administration to a designated agent. 6 Section 8: Construction Standards. 7 All facilities constructed under this Ordinance shall be placed and maintained at 8 such places and positions in or upon such streets, avenues, alleys and public places as 9 shall not interfere with the passage of traffic and the use of adjoining property, and shall 1 0 conform at the minimum, to the following: 11 (1) Applicable City, County, State and National /Federal Codes and 1 2 Ordinances; 1 3 (2) Applicable Utility Joint Attachment Practices; 1 4 (3) The National Electric Safety Code; ANSI C2; 1 5 (4) Local Utility Code Requirements; 1 6 (5) Local Rights -of -Way Procedures; 1 7 (a) Construction: A franchisee shall submit an application for permit to perform 1 8 work in the City's rights -of -way. Permits to perform work in the City's rights -of -way 1 9 shall be available on the basis of the most favorable terms and conditions of any 2 0 other franchisee or utility. No work, other than emergency repairs shall commence 21 without such a permit. Emergency repairs may be made immediately with 2 2 notification given to the City no later than the next business day. 2 3 (b) Preventive Maintenance: A comprehensive routine preventive maintenance 2 4 program shall be developed, effected, and maintained to ensure continued top 2 5 quality telecommunications operating standards. 26 10 10/2/96 Port Angeles Telecommunications Master 1 Section 9: Construction Notification. 2 Upon application for each construction permit a franchisee will submit to City its plan 3 for advance notification for the proposed construction project. In the event that an 4 emergency situation arises which precludes such advance notification, a franchisee 5 shall subsequently inform the City of the nature of the extraordinary event and the action 6 taken. 7 Section 10: Underaroundina and Landscanina. 8 In those areas and portions of the City where the transmission or distribution 9 facilities of public utilities and other telecommunications providers are underground or 10 hereafter may be placed underground, then a franchisee shall likewise construct, 1 1 operate and maintain all of its transmission and distribution facilities in the same area 1 2 underground. All activities shall be conducted in coordination with other utilities and 1 3 other telecommunications but not necessarily in the same trench. Amplifiers and 1 4 associated equipment in a franchisee's transmission and distribution lines may be in 1 5 appropriate housing upon the surface of the ground. 1 6 Where undergrounding is required as a result of a City street improvement project, 1 7 the City shall provide trenching for underground installation of cable. 18 Section 11: Construction in Riaht- of -Way. 19 Whenever, in the sole opinion of the City, any of a franchisee's facilities or 2 0 equipment need to be relocated or altered due to a construction or repair project by the 2 1 City in a public way, a franchisee shall move or relocate said facilities or equipment 2 2 within thirty (30) days from receiving written notice from the City. However, in the event 2 3 such relocation is required due to emergency repairs deemed necessary by the City, 2 4 such relocation or moving shall be accomplished within twenty -four (24) hours. Any 2 5 relocation or alteration of a franchisee's facilities or equipment required under this 2 6 section shall be at the sole expense of a franchisee. 11 10/2/96 Port Angeles Telecommunications Master 1 Section 12: Safety Reauirements. 2 (a) A franchisee, in accordance with applicable National, State, and Local safety 3 requirements shall, at all times, employ ordinary care and shall install and maintain 4 and use commonly accepted methods and devices for preventing failures and 5 accidents which are likely to cause damage, injury, or nuisance to the public. 6 (b) All structures and all lines, equipment and connections in, over, under, and 7 upon the streets, sidewalks, alleys, and public ways or places of a franchise area, 8 wherever situated or located, shall at all times be kept and and maintained in a 9 safe, suitable condition, and in good order and repair. 10 (c) The City reserves the general right to see that the system of a franchisee is 11 constructed and maintained in a safe condition. If a violation of the National 12 Electrical Safety Code or other applicable regulation is found to exist by the City, the 13 City will, after discussions with a franchisee, establish a reasonable time for a 14 franchisee to make necessary repairs. If the repairs are not made within the 15 established time frame, the City may make the repairs itself or have them made and 16 collect all reasonable costs thereof from a franchisee. 17 Section 13: Buildina Moving. 18 Whenever any person shall have obtained permission from the City to use any 19 street for the purpose of moving any building, a franchisee, upon seven (7) days written 20 notice from the City, shall raise or remove, at the expense of the permittee desiring to 21 move the building, any of a franchisee's wires which may obstruct the removal of such 22 building; provided, that the moving of such building shall be done in accordance with 23 regulations and general ordinances of the City. Where more than one street is available 24 for the moving of such building, the building shall be moved on such street as shall 25 cause the least interference. In such event, the City shall be responsible for determining 26 the path of least interference. It is further provided that the person or persons moving 12 10/2/96 Port Angeles Telecommunications Master 1 such building shall indemnify and save harmless said franchisee of and from any and all 2 damages or claims of whatsoever kind or nature caused directly or indirectly for such 3 temporary arrangement of the lines and poles of a franchisee. 4 Section 14: Tree Trimmina. 5 Upon approval of the Director of Public Works, a franchisee shall have the authority 6 to trim trees upon and overhanging streets, public ways and public places in the 7 Franchise Area so as to prevent the branches of such trees from coming into contact 8 with a franchisee's wires and cables, and if necessary, to clear a microwave or other 9 transmissions path. A franchisee shall be responsible for debris removal from such 10 activities. Failure to remove debris after a reasonable time shall result in the debris 11 being removed by the City and the costs involved charged to the franchisee. 12 Section 15: Franchise Fee. 13 Subject to Federal and State law, the City may require a franchisee to pay to the 14 City quarterly, on or before the thirtieth (30th) day of each January, April, July and 15 October, a sum equal to five percent (5 or greater of gross revenues as defined 16 herein for the preceding three months. Such remittances shall be accompanied by 17 forms furnished by the City to report detailed information as to the sources of such 18 income. Nothing in this Section shall limit the Operator's obligation to pay applicable 19 local, State, or Federal taxes 20 Section 16: Telecommunications System Evaluation. 21 In addition to periodic meetings, the City may require reasonable evaluation 22 sessions at any time during the term of a franchise. 23 It is intended that such evaluations cover a franchisee's performance under and 24 compliance with the terms of a franchise. 25 During an evaluation session, a franchisee shall fully cooperate with the City and 26 shall provide without cost such reasonable information and documents as the City may 13 10/2/96 Port Angeles Telecommunications Master 1 request to perform evaluations. 2 If the City has concerns because of uncorrected reoccurring problems with the 3 franchisee's Telecommunications system it may retain an independent consultant to 4 conduct an analysis of the Telecommunications system and its performance and submit 5 a report of such analysis to the City. The City shall take into consideration any efforts 6 taken to correct such deficiencies. 7 The report prepared by the consultant in response to the City's request for a system 8 evaluation shall include: 9 (a) A description of the technical problem in telecommunications system 10 performance which precipitated the special tests; 11 (b) What telecommunications system components were tested; 12 (c) The equipment used and procedures employed in testing; 13 (d) The method, if any, by which specific performance problems may be resolved; 14 (e) Any other information pertinent to said tests and analyses which may be 15 required by the City, or determined when the test is performed. 16 If the tests indicate that the system is not in compliance with FCC standards or the 17 requirements of the Franchise, a franchisee shall reimburse the City for any costs 18 involved in conducting such tests, such as consultant fees or other expenses. 19 Section 17: Periodic Meetinas. 20 Upon request, a franchisee shall meet with designated City officials and /or 21 designated representative(s) to review the performance of a franchisee for the 22 preceding period. The subjects may include, but are not limited to, those items covered 23 in the periodic reports and performance tests. 24 Section 18: Record Inspection. 25 Subject to statutory and constitutional limits and two working days' advance notice, 26 the City reserves the right to inspect the records of a franchisee necessary for the 14 10/2/96 Port Angeles Telecommunications Master 1 enforcement of a franchise and verification of the accuracy of franchise fee payments at 2 any time during normal business hours provided that the City shall maintain the 3 confidentiality of any trade secrets or other proprietary information in the possession of a 4 franchisee. Such documents shall include such information as financial records, 5 subscriber records within the context of Section 631 of the Act and plans pertaining to a 6 franchisee's operation in the City. 7 Section 19: Non Discrimination. 8 A franchisee shall not, as to rates, charges, service facilities, rules, regulations or in 9 any other respect, make or grant any preferences or advantage to any person nor 10 subject any person to any prejudice or disadvantage; provided, that nothing in this 11 Ordinance shall be deemed to prohibit the establishment of a graduated scale of 12 charges and classified rate schedules to which any customer coming within such 1 3 classification would be entitled, and provided further that connection and /or service 14 charges may be waived or modified during promotional campaigns of a franchisee. 15 Section 20: Transfer of Ownership. 16 A franchisee's right, title, or interest in the Franchise shall not be sold, transferred, 17 assigned, or otherwise encumbered, other than to an Affiliate, without the prior consent 18 of the Franchising Authority, such consent not to be unreasonably withheld. No such 19 consent shall be required, however, for a transfer in trust, by other hypothecation, or by 20 assignment of any rights, title, or interest of the franchisee in the Franchise or 21 Telecommunications System in order to secure indebtedness. Approval shall not be 22 required for mortgaging purposes provided that the collateral does not specifically affect 2 3 the assets of this franchise, or if the said transfer is from a franchisee to another person 24 or entity controlling, controlled by, or under common control with a franchisee. 25 In any transfer of a franchise requiring City approval, the applicant must show 26 technical ability, financial capability, legal and general qualifications as determined by 15 10/2/96 Port Angeles Telecommunications Master 1 the City. Applicant must agree to comply with all provisions of the franchise. Costs 2 associated with the transfer process shall be reimbursed to the City. 3 An assignment of a franchise shall be deemed to occur if there is an actual change 4 in control or where ownership of fifty percent (50 or more of the beneficial interests, 5 singly or collectively, are obtained by other parties. The word "control" as used herein is 6 not limited to majority stock ownership only, but includes actual working control in 7 whatever manner exercised. 8 Regardless of the circumstances, a franchisee shall promptly notify the City prior 9 to any proposed change, transfer, or acquisition by any other party of a franchisee's 1 0 company. In the event that the City adopts a resolution denying its consent and such 1 1 change, transfer or acquisition of control has been effected, the City may cancel the 12 franchise. 13 Section 21: Removal Abandonment of Property of Franchisee. 14 The City may direct a franchisee to temporarily disconnect or bypass any equipment 1 5 of a franchisee in order to complete street construction or modification, install and 1 6 remove underground utilities, or for other reasons of public safety and efficient operation 1 7 of the City. Such removal, relocation or other requirement shall be at the sole expense 1 8 of a franchisee. 19 In the event that the use of any part of the Telecommunications system is 2 0 discontinued for any reason for a continuous period of twelve (12) months, or in the 2 1 event such system or property has been installed in any street or public place without 2 2 complying with the requirements of the Franchise or other City ordinances or the 2 3 Franchise has been terminated, cancelled or has expired, a franchisee shall promptly, 2 4 upon being given ten (10) days' notice, remove within ninety (90) days from the streets 2 5 or public places all such property and poles of such system other than any which the 2 6 City may permit to be abandoned in place. In the event of such removal, a franchisee 16 10/2/96 Port Angeles Telecommunications Master 1 shall promptly restore the street or other areas in accordance with local regulations and 2 standards from which such property has been removed to a condition similar to that 3 existing before such removal and satisfactory to the City. Such approval shall not be 4 unduly withheld. 5 Any property of a franchisee remaining in place ninety (90) days after the 6 termination or expiration of the franchise shall be considered permanently abandoned. 7 The City may extend such time not to exceed an additional ninety (90) days. 8 Any property of a franchisee to be abandoned in place shall be abandoned in such 9 manner as the City shall prescribe. Upon permanent abandonment of the property of a 1 0 franchisee in place, the property shall become that of the City, and a franchisee shall 1 1 submit to the City Clerk an instrument in writing, to be approved by the City Attorney, 1 2 transferring to the City the ownership of such property. None of the foregoing affects or 1 3 limits franchisee's rights to compensation for an involuntary abandonment of its property 1 4 under State, or Federal law. In the event the City and a franchisee are unable to agree 1 5 as to whether an abandonment is voluntary for the purposes of this section either party 1 6 may invoke arbitration to resolve such question. 17 Section 22: Indemnity Hold Harmless. 1 8 A franchisee will indemnify and hold harmless the City from any and all liabilities, 1 9 fees, costs and damages, except in the case of judicially determined gross negligence 2 0 and /or willful misconduct of the City, whether to person or property, or expense of any 2 1 type or nature which may occur to the City by reason of the construction, operation, 2 2 maintenance, repair and alteration of a franchisee's facilities or any other actions of a 2 3 franchisee in the City. In any case in which suit or action is instituted against the City by 2 4 reason of damage or injury caused by a franchisee, the City shall cause written notice 2 5 thereof to be given to a franchisee and a franchisee thereupon shall have the duty to 2 6 appear and defend any such suit or action, without cost or expense to the City. 17 10/2/96 Port Angeles Telecommunications Master 1 Section 23: Insurance. 2 A franchisee shall, concurrently with the filing of an acceptance of award of any 3 franchise granted hereunder, furnish to the City and file with the City Clerk and at all 4 times during the existence of any franchise granted hereunder, maintain in full force and 5 effect, at its own cost and expense, a general comprehensive liability insurance policy, 6 for the purpose of protecting the City and all persons against liability for Toss or damage, 7 for personal injury, death and property damage, and errors or omissions, occasioned by 8 the operations of a franchisee under such franchise, such policy to provide minimum 9 limits of one million dollars ($1,000,000.00) for both personal injury and /or property 10 damage. 1 1 The policies mentioned in the foregoing paragraph shall name the City as additional 1 2 insured and shall contain a provision that a written notice of cancellation or reduction in 1 3 coverage of said policy shall be delivered to the City thirty (30) days in advance of the 14 effective date thereof. If such insurance is provided by a policy which also covers a 1 5 franchisee or any other entity or person other than those above named, then such policy 1 6 shall contain the standard cross liability endorsement. 17 Section 24: Performance Bond. 1 8 A franchisee shall promptly repair or cause to be repaired any damage to City 1 9 property caused by a franchisee or any agent of a franchisee. A franchisee shall comply 2 0 with all present and future ordinances and regulations regarding excavation or 21 construction and, if deemed necessary by the City, shall be required to post a 2 2 performance bond or other surety acceptable to the City in an amount specified by the 2 3 City in favor of the City warranting that all restoration work will be done promptly and in a 2 4 workmanlike manner and that penalties, if any, after final adjudication are paid to the 2 5 City within ninety (90) days of such finding. 26 18 10/2/96 Port Angeles Telecommunications Master 1 Section 25: Franchisina Costs 2 A franchisee shall pay to the City upon acceptance of any franchise granted 3 hereunder, the City's out -of- pocket costs associated with the franchising process. The 4 City shall provide the franchisee an itemization of its anticipated costs. Payment is due 5 within thirty (30) days of receipt of appropriate invoice from the City. 6 Section 26: Preemption. 7 If any portion of this Ordinance should be inconsistent or conflict with any rule or 8 regulation now or hereafter adopted by the FCC or other Federal or State law, then to 9 the extent of the inconsistency or conflict, the rule or regulation of the FCC or other 1 0 Federal or State law shall control for so long, but only for so long, as such rule, 1 1 regulation, or law shall remain in effect; provided the remaining provisions of this 1 2 Ordinance shall not be effected thereby. 13 Section 27: Severability. 1 4 Each section, subsection or other portion of this Ordinance shall be severable and 1 5 the invalidity of any section, subsection, or other portion shall not invalidate the 16 remainder. 17 19 10/2/96 Cable Communications Consultants 1996 ANNUAL REPORT PREPARED FOR THE CITY OF PORT ANGELES February 12 ,1997 .5, .1/e) Consultants to Local Government Specializing in Cable Television: Franchising Community Needs Assessments Refranchising Ordinance Preparation Access Franchise Administration Evaluation Negotiation 504 East Main Street Auburn WA 98002 (206) 833 -8380 1 -800- 222 -9697 FAX (206) 833 -8430 City of Port Angeles 1996 Annual Report NATIONAL Legislative 1996, for a change, was a year when the Congress had more important items on its agenda than inserting anymore monkey wrenches in the not so well oiled machinery of cities regulation of cable television franchises. While Senator John McClain (R) Arizona, an avowed deregulator, will become the new chairperson of the Senate Telecommunications Subcommittees, it appears that the major issues in this field to be considered in the new session will be encryption, copyright and privacy. The cable operators trade association, NCTA, has said that they will have no major lobbying efforts in 1997. Perhaps. Tudicial While quiet may have prevailed on the Congressional level, as usual the courts at all levels were deeply immersed in areas of local governments authority, or lack of same, as well as broader issues affecting the cable industry. As far as the cable providers are concerned 1997 should turn out to be a happy new year for them with the Supreme Court apparently poised to rule the "must carry" rule unconstitutional. This is the regulation that mandated that cable operators carry all locally originated stations regardless of size. A concomitant result will probably be a decision affecting the retransmission consent wherein stations reimbursed the cable operator for the privilege of having its signal carried over a cable system. A result of this anticipated ruling expected to be made by June 30, 1997 will undoubtedly be a further juggling of channel lineups to yet further confuse bewildered subscribers. 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report Another case being heard by the 7th District Circuit court is that of a small Kentucky town, Sturgis, who refused to grant a long term franchise to its incumbent operator because the city claimed the operator's proposal was insufficient to meet the community's cable related needs and interests. The implications of this to local governments in their next renewal process is obvious. The "hot button" issue for cities in 1996 was right -of -way management in view of other cable or telephone providers appearing on the scene. This principle is now being tested in a lawsuit brought by TCI against Troy, N.Y. The city checked TCI from laying additional fiber optic cable claiming that TCI planned to use it for other communications purposes and to thus avoid paying a franchise fee and other considerations. TCI is charging abuse of the city's rights -of -way authority. Stay tuned. Another pending case of interest to local regulators is one while applicable only to California at present, raises the old chestnut that franchise fees should cover only the cost of regulation. Of a similar vein, although not strictly a legal matter yet is a proposal in Florida to lump all fees, taxes, etc. imposed on cable operators by cities and counties in one package capped out 1 Naturally we will be following all of these matters closely in this new year. Technology Probably the most dramatic technical breakthrough in 1996 was, in a sense, not a technical advance, but an announcement from the FCC that it would approve (finally) standards for High Definition Television (HDTV). This will provide much more clear and sharp images on the television screen. The networks say, but don't count on it, that they will be broadcasting -2- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report "some" HDTV signals in 1998 to new sets equipped to accept this new technology. Other estimates say that HDTV (or in the new cable jargon, just "DTV will be received by only 15 to 20% of subscribers by the year 2001. While press releases continue to be issued by the cable operator's research and development laboratories, digital compression, that is a systems whereby a single channel of 6 mgh can be altered to carry a number of channels, perhaps up to six, there has been no further practical breakthrough in this revolutionary concept. Tests continue. Costs increase. The cable industry, perhaps a bit belatedly, is reacting positively to access to the Internet via cable. While giant TCI is still cautious in its approach and is only test marketing modem usage, other operators are dipping deeper into the waters. Times Warner has 400,000 homes available for modems in Ohio and New York. Adelphia has 250,000 in Florida. Cablevision, is offering modems in selected markets in New York and Connecticut for $44.95 a month plus $150.00 installation. General While municipalities were still struggling with interpretation of telecommunication rules, the forthcoming reduction of basic rate changes to an annual basis by the cable operators, and the vexatious questions of rights of -way management, 1996 was, for the cable industry itself, a year no progress and belt tightening. While there was a modest increase nationally in the number of subscribers from 62,956,160 to 64,054,160 for the year, the last six months of the year, ominously, showed no increase at all. This trend was not due to the long anticipated and long not forthcoming competition from telephone companies, but more to a general malaise with the current subscriber -3- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report population. While alternate suppliers, largely direct broadcast systems (DBS), made some inroads, on the whole, they did not enjoy a banner year either. Because of the heavy subsidization of the (DBS) installation price at present, analysts are wondering how soon it will be before these prices rise to market costs and further slow its growth. Once again the "threat" to the cable industry by Telcos a "threat" existing largely in the eye of cable lobbyists failed to materialize. Indeed it would appear that the Baby Bills are moving away from interest in cable and are concentrating their resources on entering the long distance market. The only appearance telephone companies have made into cable is by buying existing cable systems. Hardly the stuff from which competition is made. In summary, although facing no new Federal legislation, 1997 will be a difficult year for local government. Cities will be caught in crossfire as attacks on its rights -of -way management will come from all sides. The issues of master telecommunications local legislation is up in the air as questions of too early commitment, right -of -way reimbursement and most favored nation equity remain largely unresolved. -4- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report REGIONAL An important issue to be closely watched in the region in 1997 is the legislative attempt in Olympia by US West to diminish the authority of the Washington Utilities and Transportation Commission to regulate rates new entrants would pay to interconnect with US West's facilities. Of even greater impact to local government is draft legislation proposed by the Washington State Cable Communications Association to apply sales tax to cable operators and convert count and city taxation to a system wherein only the State would assess taxes. While this proposal does not yet address the question of franchise fees, the entire issue of payment for rights -of -way in under scrutiny at virtually every legislative and judicial level. -5- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report LOCAL We have discussed the impact of cable on the national and regional basis. In addition, there have been a number of issues that have had an impact on the local cable operation during 1996. Franchise Fees Although the City of Port Angeles is not a rate regulatory entity, Northland Cable still uses some of the aspects of Federal Rate Regulations in setting its rates. Due to this and all of the uncertainty concerning rate regulation, it is still extremely difficult to estimate the franchise fees that the City of Port Angeles may collect for the upcoming year. Regardless of the challenge presented by these facts, we feel confident that we are in a position to present the City with the most accurate estimate available. We estimate that the final franchise fees to be collected in 1996 will be $117,000 and the estimated payment to be received from the operator in 1997 will be $129,000. As always, and especially in this coming year, we will continue to monitor the franchise fees collected by the City and keep staff advised of any discrepancies. Proof of Performance As we have discussed with the City previously, the cable operator is required by FCC rules to execute Proof of Performance testing at least two times a year. We met with the operator at the end of the year to review the reports and determine that they continue to comply with any new standards. We have determined the cable operator to be in compliance as expected. -6- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report We have attached those portions of the reports that may be of greatest value to you, keeping in mind that much of the data collected is complicated and not of great interest to most. These portions are attached as Appendix "A" for your review. Should anyone within the City be interested, we would be glad to meet and discuss this information in more detail. Senior Citizen /Disabled Person Discounts Discounts for individuals that meet certain age or disability guidelines and that also meet Washington State HUD Housing low income standards now are receiving discounts on the basic services they receive from Northland. It is one of our functions this year to handle the certification process for the City and to continue with the ongoing monitoring of the individuals receiving the discounts. As a part of this year's report we thought that the City might be interested in looking at the current list of those persons receiving the discount. Some of these individuals were taken from a list already in place by Northland and others were handled as original applicants through our office. There are now a total of 227 subscribers receiving the discounted basic rate. The list starts on the following page. -7- 3 -H Cable Communications Consultants City of Port Angeles 1996 Annual Report SERVICE REQUESTS Below we have presented a breakdown of the service calls received by Northland for a typical 30 -day period. These figures were obtained from logs maintained by the Operator. SERVICE CALL DIAGNOSIS Reason for Call of Calls Trunk /Distribution 3 Bad Fittings 13 Drop (subscriber feeder) 18 Customer Education 4 Customer Equipment (i.e. VCR, T.V.) 10 8 No Problem Discovered 5 Total 53 -8- 3 -H Cable Communications Consultants CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS Name Date Name Date Adams, Leah, L. 217 6/22/96 Cox, Tony A. 14 3/11/96 Adams, Martha 1 1/26/96 Crowder,Estelle, C 150 3/20/96 Aggergaad, Mary E. 84 3/12/96 Curse, Elbert, R. 213 624/96 Allison, Martha 85 3/8/96 Dailidenas, Mary 25 3/11/96 Adams, Wallace 173 3/11/96 Davidson, Dorothy 34 3/11/96 Anderson, Clara, E 165 3/24/96 Davidson, Virginia 162 3/27/96 Anderson, Elizabeth, D. 185 5/5/96 Davis, Zoraj. 182 4/24/96 Anding, Hazel, M. 59 3/8/96 Day, Margurette 71 3/11/96 Anton, Charles 100 3/12/96 Deckedach, John 9 2/22/96 Auman, Ina, F. 137 3/19/96 Deines, A. Marjorie 92 3/9/96 Ausec, Della, P. 132 3/14/96 Delaney, Velma 104 3/13/96 Austin, Pete 83 3/12/96 Delo, Catherine 39 3/11/96 Avery, Lonse,D. 171 4/3/96 billing, Emily 145. 3/20/96 Baker, Audry 224 7/3/96 Doerge, Evelyn 146 3/20/96 Baker, Patncia A. 48 3/8/96 Douglas, Mrs. B. C. 46 3/8/96 Bartels, Marione, J. 153 3/13/96 Duncan, Alvin, L. 190 5/17/96 Beam, Frances, E. 61 2/10/96 Dunden, Nancy 206 6/22/96 Beckett, Margaret, H. 202 6/22/96 Edris, Eugne 30 3/10/96 Beding, Gwen, Michelle 232 9/4/96 Elders, Ira 78 3/11/96 Bendixen, Clifford 216 6/25/96 Enckson, Donna Joan 18 3/11/96 Berry, Phyllis, M. 65 3/9/96 Fearguson, Nova, L. 151 3/18/96 Bessey, Doris M. 89 3/11/96 Flores, Abraham 234 9/12/96 Betts, Minam Winona 21 3/11/96 Frazier, Mardell 194 6/24/96 Binder, Leota 112 1/13/96 Gabeau, Monica 221 7/8/96 Blood, Frances, A. 120 3/13/96 Gallacci, Angela 188 5/9/96 Blundeau, Virginia 138 3/18/96 Gallagher, Rachel 215 624/96 Bonotto, Arline 231 822/96 Gollocci, Angelo or Emily 110 3/13/96 Boos, Jane 160 3/26/96 Gourley, Robert 141 3/8/96 Bowes, Myrtle, A 105 3/11/96 Grahm, Robert, W. 115 3/13/96 Bowlby, James, F. 154 3/22/96 Grall, Arabella 87 3/12/96 Box Catherine G. 88 3/11/96 Grim, Gerry 63 3/I0/96 Brandland, Orville 15 3/11/96 Hale, Lela 19 3/8/96 Browder, Lilyan, M. 139 3/19/96 Hall, Bonnie 6 2/8/96 Bruce, May 67 3/8/96 Hamilton, Ceil 158 3/19/96 Buettner. Bea 208 6/21/96 Hanssen,Gerald 000 12/17/96 Cagney, Jackie 95 3/8/96 Hash, Doris 191 4/11/96 Caldwell, Sarah, Ellen 184 5/1/96 Hathaway, Missy 226 8/6/96 Camponni, Emma 22 3/10/96 Hefley,E.C. 142 3/9/96 Cargo, Patncia, E. 225 7/26/96 Hendnx, Ella, M. 116 3/14/96 Carpenter, George 2 2/7/96 Henderson, Andy Margie 17 3/11/96 Carpenter, Marjorie 163 3/29/96 Hines, Jim 217 6/25/96' Camveau, Edna, F. 235 9/3/96 Hollander, 140 3/18/96 Chavis, Frances,l 79 3/11/96 Houk, JessieS. 4 2/1/96 Chrysler,Gage 180 4/12/96 Howell, Clara, K. 172 4/2/96 Cipriano, Vincent M. 238 11/05/96 Huff, Laura 152 3/20/9 Clark, Jessie, L. 121 3/14/96 Isenberger, Helen 147 3/21/96 Clubertson,F.M. 168 4/5/96 Jepson, A.R. 200 6/20/96 Cochran, Valera lirikowic, Winifred, M. 136 3/20/96 Cofer, Frances 192 5/26/96 Johnson, Frances 207 5/9/96 Cogbum, Analayne 167 3/27/96 Johnson Walter M. 42 3/9/96 Conklin, Annie 26 3/11/96 Jones, Helen, M. 128 3/8/96 Conrad. Lela M. 37 3/8/96 Jones, Sally 41 3/9/96 Cotton. Rosa, L. 222 7/3/96 Jones, Vera,F. 159 3/26/96 CITY OF PORT ANGELES SENIOR CITIZEN/DISABLED DISCOUNT APPLICANTS Name Date Name Date Kasakan, Rachel 12 3/8/96 Pettigrew, Arlene, J. 117 3/13/96 Keend, Arlene J. 38 3/8/96 Pingel, Calvin 64 3/9/96 Keller, Marilyn 27 3/8/96 Pinord, Lila, L. 75 3/11/96 Keneally, Patrick, F 131 3/14/96 Porter, Elsie M. 000 12/23/96 Kienholz, Harriet, E 125 3/16/96 Pnngle, Norman D. 57 3/8/96 Kiiski, Virginia, L. 108 3/12/96 Pratt, Mavis, D. 101 3/12/96 Kiser, Frank, E. 156 3/23/96 Prowley, James 212 6/21/96 Klemmer, Michael S. 44 3/8/96 Puffer, Nita 99 3/13/96 Koch, Loyd 0. 80 3/12/96 Reed, Margeret A. 54 3/11/96 Konopaski, Frances 69 3/8/96 Reed,Mildred 167 4/3/96 Kushman, Helen E. 29 3/8/96 Rhoads, Virginia M. 45 3/9/96 LaBelle, Dolly 189 5/12/96 Rice, Helen 76 3/11/96 LaRue, Albert 235 9/24/96 Robertson, J.B. 114 3/12/96 Lankford, Mary, B. 193 5/24/96 Rogers, Anna 195 6/13/96 Larue,Evan 166 3/8/96 Rogeers, Edith 203 6/21/96 Lelo, Thomas 230 7/18/96 Rosen, Hattie 52 3/8/96 Loell, Tom 181 4/23/96 Ross, Harry, A. 118 3/13/96 Logan, Mildred, K. 111 3/13/96 Ross, Ray, E. 143 3/19/96 Lundberg, Vera 50 3/9/96 Rupp, Lois, G. 194 6/17/96 Lucero, Frank, S 211 6/24/96 Rudolph, Jean 68 3/8/96 Ludke, Olga 109 3/12/96 Russo, Frances 198 6/22/96 Machenheimer, James 16 3/11/96 Rutherford, Samuel W. 7 2/12/96 Mallary, Louise, K. 199 6/22/96 Schaefer,Patncia, L 127 3/9/96 Mangano. Phyllis J. 51 3/9/96 Schott, Arnold 119 3/13/96 Marks, Annabelle 2 3/9/96 Schmidt, Fred, H. 122 3/11/96 Mantn, Gina 96 4/4/96 Schott, Ethel, E 187 5/9/96 Marty, Phyllis 24 3/11/96 Scott, Bernell 93 3/9/96 Mason, Bernice L. 86 3/11/96 Settles, Laura, M. 224 7/15/96 Malvey, Helena 107 3/15/96 Sherwin, Maxine 82 3/11/96 Malvin, Zella 103 3/12/96 Simpson, Evelyn V. 28 3/9/96 Mathews, Belvin 123 3/13/96 Smally, Cheryl 122 3/11/96 Maxey, Sharon Rose 96 3/11/96 Snider, Frank 10 3/9/96 McAllister, Mary 214 6/26/96 Snow, Verne, E. 106 3/11/96 McAlpin, Theresa 35 3/11/96 Stanley, William L. 90 3/11/96 McClanahan 134 3/17/96 Stanton, Gaitha, M. 74 3/12/96 McCoy, Thelma 40 3/11/96 Stark, Cynthia 166 4/3/96 McElravy 77 3/18/96 Stevens, Loretta A. 33 3/11/96 McManus 164 3/27/96 Stewart, Lois D. 56 3/9/96 Meszaros, Lanette 205 6/21/96 Storrs, Ethel 43 3/9/96 Moseley. Henry 201 6/21/96 Stossel, Jennie 5 2/2/96 Mudd, Carl, J. 135 3/8/96 Sweagle, Gwen, M. 62 3/9/96 Nelson, Avahne C. 94 3/11/96 Swmption, Mike 223 7/3/96 Nielsen, Carmen 8 2/12/96 Taggart, Floyd and Billie 121 3/9/96 Oel, Guy 97 3/11/96 Thomas, Alice 53 3/8/96 Olson, Dorothy R. 32 3/11/96 Torres, Joseph, D. 149 3/13/96 Parker, Esther, V. 194 6/7/96 Townsend, Mildred 204 6/22/96 Pavlak, Alfred E. 72 3/10/96 Trillingham, Jean 91 3 /11/96 Pazan, Andrew 216 6/24/96 Tuttle, Elmer 130 3/15/96 Pelky, Nance 136 3/18/96 Urry, Clifford 169 4/4/96 Penny, Rachel 209 6/21/96 Vancise, Teresa 31 3/11/96 Perdew, Clifford 3 1/30/96 Vinney, Sarah 170 4/2/96 Pennt, Margaret, A. 98 3/8/96 Virginia,Alice 161 3/29/96 Peters, Glen 70 3/10/96 Waldgroup, Elsie 157 3/26/96 CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS Name Date Name Walker, John 227 7/22/96 Waller, Louise 73 3/11/96 Weller, Barbara 11 2/27/96 Wheeler,Phyllis,I 144 3/18/96 Williams, Cecil 174 3/29/96 Williams, Delons 210 6/42/96 Williams, Elizabeth, L. 229 7/23/96 Williams, Mrs. Thomas, J. 102 3/19/96 Williams, Phyllis 36 3/9/96 Winters, Lorraine 233 9/9/96 Witter, Dorothy M. 58 3/8/96 Wilson, Andrew J. 13 2/28/96 Woolery Irene M. 81 3/12/96 Wozniak, Casey, A. 133 3/19/96 Wrobel, Alvin, J. 155 3/22/96 Wyman, Kay 49 3/9/96 Date w.4V>ET,EK StedI tf kriaRe Page 1 Chan Label 2 CBUT 3 NCN 4 KOMO 5 KING 6 CHEK 7 KIRO 8 CHAN 9 KCTS 10 CKVU 11 KSTW 12 KVOS 13 KCPQ 14 HBO 15 SHOW 16 CMAX 17 CSPN 18 WTBS 19 QVC 20 TLC 21 CITY 22 HN 23 FAM 24 CNBC 25 TNT 26 ESPN PORT 96 Model 3SR Operator J J JEROME Date* 08/16/96 Time 17:06 26 Descnption Location 18TH&MCDONALD Location Type FieldTest Test Pnt Type. Undefined Test Pnt Comp 0.0 Area #2LHURD AC Voltage 60 Video (dBmV) 11 1 11.3 12 1 134 12.7 144 14.5 15.3 152 146 15 1 15.2 11.7 12.6 13 1 132 13.9 140 14 1 14.4 14.5 15.0 155 15.6 15.9 AutoTest Report Audio (dBmV) -3 8 -3 3 -2 7 -2.0 -1 7 -0.5 -01 0.0 0.4 -0 2 0.2 0.3 -2 7 -2.3 -1 8 -1.9 -1.3 -1 1 -1 1 -0 8 -0 5 -0.2 0.6 0.0 07 Serial 5023129 File: L HURD #2 AmpID: 8AM27&8B232 Power Cfg IN Feeder Maker Cfg: 4 Trunk Term: YES Voltage Setting: HI DC Voltage (reg): 17.0 Delta V/A (dB) 14.9 146 14.8 15.4 144 14.9 14.6 15.3 14.8 14.8 14.9 14.9 144 14.9 14.9 15.1 15.2 15 1 152 15.2 15.0 15.2 14.9 15.6 15.2 C/N (dB) Reverse Pad: Forward Pad Rev Equalizer Fwd Equalizer. Temp DC Voltage (unreg) 0.0 0.0 0.0 4.0 62.1 F 32.0 Hum Mod teaCfAti✓ ere Cal Date 04 /23/96 DOS File: 2LHURD.000 W VETaK �tegtfA414ac Reviewed PORT 96 Model 3SR Operator J_J_JEROME Date 08/16/96 Time 17 0626 Descnption LIMIT CHECK Min Video Camer Level Max Delta Video Level: Min Delta V/A Max Delta V/A Max Delta Adjacent Chan. Min Camer to Noise Max Hum Conclusion AutoTest Report Limit 0 0 dBmV 120 dB 10.0 dB 170 dB 3.0 dB 46.0 dB 3.0 Sena/ 5023129 File: L_HURD #2 Location: 18TH& M C DONAL D Chan Label Video Audio Delta V/A (dBmV) (dBmV) (dB) 27 CNN 15 6 0 1 15.5 28 A &E 15.3 0.2 15.1 29 DISC 151 -14 16.5 30 MNBC 13 4 -1 8 15.2 31 TNN 14.2 -1.0 15.2 32 TRAV 14 8 -1 1 15.9 33 USA 14 6 -0 4 15.0 34 PSNW 15 3 0 1 15.2 35 TCM 15.7 0 2 15.5 36 CMT 15 6 0 0 15.6 37 TOON 15.2 0 0 15.2 38 LIFE 15 6 0 0 15.6 39 AMC 15 6 0.2 15.4 40 2SPN 15.2 0 3 14.9 41 NICK 15 9 0 6 15.3 42 DISN 15 6 0.0 15.6 98 NWNC 12.8 -2 5 15.3 99 BOX 12 4 -3 0 15.4 CM (dB) Date: Hum Actual Ch 2= 111 Ch 26 and 2, Delta 4 8 Ch 6 Delta V/A 14.4 Ch 29 Delta V/A 16.5 Ch 30, Ch 29, Delta Video 1.7 No data No data Cal Date 04/23/96 DOS File 2LHURD.000 Area #2LHURD Mod _OteAttAVArre Pass Pass Pass Pass Pass Pass Pass PASS Page 2 WAVETEK „StctittAVIARc 1Ref 0 dB PORT 96 77 ,7 7\7" [:sA X Area: Port Angeles Location: 18th/McDonald Sweep Graph 1 dBldiv \s\\ N \N \N \\s, 155.25 24 MHz/Div Max-Min 145.25 MHz 277.26 MHz 132.01 MHz +1.8 dB +1.0 dB -0.5 dB +1.5 dB Operator: JJJ Date: 07/09/96 File: #18VVWS Time: 14:53 DOS File: #18WWS.SWP Description: Last trunk amp that feeds 18th McDonald street. .044(tAk4Arte Stealth! 397.261 N .(AVETTK Page 1 Stottlli/aRe PORT 96 Model 3SR Operator: J J_JEROME Date* 08/16/96 Time 17 12.38 Descnption: Location* 10TH&N Location Type. FieldTest Test Pnt Type: Undefined Test Pnt Comp 0 0 Area #1IHURD AC Voltage: 60 AutoTest Report Serial 5023129 File: L HURD #1 AmpID: 8AM2788B232 Power Cfg: IN Feeder Maker Cfg: 4 Trunk Term. YES Voltage Setting' HI DC Voltage (reg). 17 0 Chan Label Video Audio Delta VIA (dBmV) (dBmV) (dB) 2 CBUT 11 1 -3 0 14.1 3 NCN 11.3 -2.8 14.1 4 KOMO 13.2 -2.1 15.3 5 KING 13 8 -1 1 14 9 6 CHEK 13.9 -0.6 14.5 7 KIRO 15.5 0.4 15 1 8 CHAN 15 7 0 4 15.3 9 KCTS 15 8 0 5 15.3 10 CKVU 16.1 1.4 14 7 11 KSTW 15 4 1.4 14.0 12 KVOS 16 3 1 5 14.8 13 KCPQ 16.2 1.5 14.7 14 HBO 13.9 -1 0 14.9 15 SHOW 14.1 -0 4 14.5 16 CMAX 14 8 -0.4 15.2 17 CSPN 14.8 -0.4 15.2 18 WTBS 15.2 01 15.1 19 QVC 156 02 154 20 TLC 15 5 0 2 15.3 21 CITY 15 2 0 0 15.2 22 HN 15 1 0 0 15.1 23 FAM 17.0 2 0 15.0 24 CNBC 17.1 2.0 15.1 25 TNT 17.2 1.6 15.6 26 ESPN 16.8 1.7 15.1 C/N (dB) Reverse Pad. Forward Pad: Rev Equalizer: Fwd Equalizer: Temp: DC Voltage (unreg): Hum 0.0 00 0.0 4.0 62.1 F 32.0 Mod (`A) Cal Date: 04/23/96 DOS File: L HURD #.000 Model 3SR Operator J_J_JEROME Date 08/16/96 Time 17 12:38 Descnption LIMIT CHECK Min Video Camer Level: Max Delta Video Level Min Delta V/A Max Delta V/A Max Delta Adjacent Chan Min Camer to Noise Max Hum Conclusion Reviewed PORT 96 AutoTest Report Limit 0.0 dBmV 12.0 dB 10.0 dB 17.0 dB 30 dB 46.0 dB 3.0 Senal 5023129 File: L HURD #1 Location: 10TH&N Chan Label Video Audio Delta V/A (dBmV) (dBmV) (dB) 27 CNN 17.1 1 4 15.7 28 A &E 16.7 0 6 16.1 29 DISC 16 5 1 0 15.5 30 MNBC 16 3 0 9 15 4 31 TNN 16 7 0.8 15.9 32 TRAV 16 7 0 8 15.9 33 USA 15 9 0 8 15.1 34 PSNW 16 7 1.7 15,0 35 TCM 17.0 1 1 15.9 36 CMT 16 9 1 5 15 4 37 TOON 16.9 13 15.6 38 LIFE 17.1 1.4 15 7 39 AMC 17.3 1 8 15.5 40 2SPN 16 9 1.8 15 1 41 NICK 17 5 2 3 15.2 42 DISN 17 7 2.2 15 5 98 NWNC 14 3 -0.8 15.1 99 BOX 14 5 -1 1 15 6 CM Hum (dB) Actual Ch 2 11.1 Ch 42 and 2, Delta 6.6 Ch 11 Delta VIA 14.0 Ch 28 Delta V/A 16.1 Ch 4, Ch 3, Delta Video 1.9 No data No data Date Cal Date. 04/23/96 DOS File: L_HURD_ #.000 Area: #11HURD Mod Pass Pass Pass Pass Pass Pass Pass PASS Page 2 WAVETEK _StcAttAilaric 1Ref 0 dB PORT_96 55.25 Area: Port Angeles Location: 10th/Nst Sweep Graph 1 dB/div t I Operator: JJJ File: #16WWS DOS File: #16WWS.SWP Description: Last trunk amp that feeds 10th Nst 1 <c\ ‘z‘ s' ,;M ft x ‘‘s :•;mi, A N N 1\s\- :‘,S s 1 24 MHz/Div Max-Min +1.7 dB 145.25 MHz +0.4 dB GB 277.26 MHz -0.4 dB A 132.01 MHz +0.7 dB Date: 07/09/96 Time: 11:42 _OteAffAUAR6 Stealth! 397.261 01'21 '97 10:38 V12064575901 NORTHLAND CABLE X002 !SATE NAME 11 -1-98 W. Dunscomb 11 -1 -98 R. Henke 11 -1-98 YMCA 11-4-98 A. Ffi1 114-90 T. Wood 11 -6 -98 M. McCartney 11 -5-98 T. Heenan 11 -5-96 T_ Risk 11 -6-98 P. Boroughs 114-98 R. &ions, Sr. 114-96 E. Gilson 11 -6-98 H. Horstman 11 -748 M. Burgess 114-96 M. Cochran 11.8 -C6 PA Fire Dept. 11428 P. Schauweker 11 -1148 Peninsula College 11 -11-98 P.A1cafaras 11 -12-98 J. Brooks 11 -1346 G. Tellefson 11 -13-08 R. Iloham 11 -14-98 L. Childers 11-14-96 E. Richardson 11 -14-98 R. Patton 11 -1528 V. Davidson 11 -15-96 P. Coughlan 11 -15-96 J. Cummings 11 -18-98 J. Lyons 11 -18-06 B. Fbdsttmn 11 -1828 T. Neudorfer 11 -19-98 M. Brown 1120 -96 R. Spier 1120 -98 S. Gibert 11 -20-86 E. Richardson 11 -22.96 C. Houston 1122 -98 V. Davidson 11-25-06 M. Creubel 11-2748 R.. Spencer 11 .4-98 C. Tolliver 11446 A. Francis 11-548 M. Degnan 11 -8-98 Zaks 11 -748 M. McCartney 1111 -96 H. Smith 11 -1148 T. Zimmer 11 -13-88 Uptown Motet 11-14-98 D. Capaan 11 -18 -98 F. Gabriel 1122.88 B. Grande 11-28-98 V. Cox 11-27-98 A IthcCuly PORT ANfGELES CITY TROUBLE CALLS NOVEt:BER 1998 ADDRESS 381? MCtait 3922 Nygren Pl. 302 S. Francis 1322 E. 8'' 710 Carokne 1508 W_8c' 126 Orcas 1727 W.12°' 321 E.12 819 W. 13' 835 W. 55 425 E. Front 1318W. 6th 231 W.11'" 102E.5' 1515 W. eft 1502 W. Bwd. 2513 S_ Oak 118 5. Chambers #2 721 E. 9 570 S. Peabody 1130 Water 220% W. 8'" 1323 McDonakt 8E17 118 5. Chambers #3 4012 Newel Rd. 002 1537 W.1IP 1715 S. E 1721 S. E 210 Dogwood Pl. 232Y: W. Bled. 731 S. Alder St. 1232 E. 4 220' eh oil W_ 13 th 118 S. Chambers W3 315 W. 15 809 W_ 12* CUSTOMER ED_ TROUBLE CALLS 1430 W. 5°' 331 W. 4 08 2215 S. Chase 849 125 W. Front 1508 w_ 8°1 403 W. 8' 1125 E. 5'' 101 E. 2n 808 S. Cherry 1411 Eckard PL 505% E. 2" 814 W. 4 1323 McDonald 08 RESULTS Needed new TCLE Needed new TCLIE Bad cable fittings at TV, replaced spices Instaled JV-A tray- Replaced V/8 trap Raised replaced had drop, g -bbeii 1 fittings Replaced drop. g- ikrok, 8 fittings' Replaced Shoe ime fifer✓ Replaced Shorvtime SRA Replaced drop.. Repbced channel 1 trap' Replaced tap fittings on droll Replaced bad fittings at g-bbek Not home, possible loose 8rtting(neeerresch'd) Replaced bad Showtime lik Repraced bad g-b ock fittings/ Repaired cut .500 cables Replaced drop-' No problem found, customer says problem intermittent (has not called back) Replaced drop'" Replaced g-block fittings Replaced Showtime HBO Oars Replaced feting on met, frker; bad fitting behind Rehuog raised torn down drop/ Replaced UB trap Removed old trap that was biocicng chs. 17 13 Replaced 3-rmay fir tinge" Repaired cut drop Repaired cut droir Replaced fitting at sprites Neighbor was bootlegging off their service, toted' Replaced twist on frttingfr bad fitting by liter- rutted Cinemax filter' No problem found, customer never cared bac1( Ground installed, signals goad Installed ground vine No problem found, customer eel cat beck (hosa'tr' Replaced 1 trap removed midspan, replace rerouted drop, installed g.bbck neuni No one home, signal good outsides' dV problem' v1Pe problem found, described TV problem Pitimaned TV outside, customer never called back )ead, Don hooked up 2"" VCR for them came off back of set, canceled at the door signal good outside re ar ,Pr6�rammed TV VCR .-VCR needed programming, canceled at the door bblem is inside, customer wil check set Meru problem found, TV problem 1 PORT .4 N 1 11 11111./ 0 E P June 4, 1996 Memorandum TO: Members of the Utility Advisory Committee FROM: Becky J. Upton, City Clerk SUBJECT: Status Reports from 3 -H Cable Communications Consultants Attached for your information are two reports from the City's consultant, 3 -H Cable Communications Consultants: Telecommunications Act of 1996 Impact on Franchising Authority Year -to -date listing of those residents certified by 3 -H for Senior Citizen /Disabled Discounts from Northland Cable Television. As you may recall, the Utility Advisory Committee received a report previously concerning the method of certifying customers for the Northland discount, as set forth in the City's franchise ordinance. Since that time, 3 -H has been doing the certification on behalf of the City. The certification is then forwarded directly to Northland Cable. Attachments TO: Jeff Pomeranz FROM: 3 -H Cable Communications Consultants /MHO SUBJECT: Telecommunications Act Impact on the Franchising Authority DATE: April 25, 1996 With the passing of the new Telecommunications Act of 1996, we wanted to review the possible effects it would have on the City of Port Angeles. Probably the first and most important fact about this most recent piece of legislation is that its impact upon local government will be far more measured than the two previous congressional bills regarding cable television. The 1984 Cable Act spoke primarily to a city's rights and restrictions in the franchising and refranchising arena. The Act of 1992 restored, under a plethora of complicated restrictions, some rate regulation powers that had little impact on the City of Port Angeles. The Act of 1996 has different motivations and means. The over riding philosophy of this law is to encourage competition among many potential cable signal (or its equivalent) providers and thus to let a free enterprise system achieve benefits in both product quality and pricing. Therefore the Bill's major intent is to break down previous market restrictions on local telephone companies from entering the cabler's territory, and vice versa for the cable industry. In doing so the Congress also almost got into areas of cross ownership, more liberal interpretation of effective competition, indecency, and a far more liberal view of the criteria of a "small" cable operator. The intent to provide direct competition to your present cable operator will not, in our judgement, be felt in your community for several years. While legal barriers to the local telephone companies (the "Baby Bells are removed, the fact remains that a telephone company or any other similar business still faces -2- Telecommunications Legislation Review April 24, 1996 enormous expense in building a new infrastructure (particularly with fiber optics) to offset the already constructed system of a cable operator. Unlike in other theoretical models of free market economy, the product, i.e. programming, already virtually owned by the existing cable operators, will be the same as presently provided. Thus the only arena in which competitors can do battle is in price. This will be very costly for the newcomer given the advantage Northland has having largely already paid for its system. The flip side of this, that is cable entering the telephone market, is equally tricky. Even though it may seem apparent that dual use can be made of cable wire already in place, this easy assessment does not take into consideration that the telephone companies have a tremendous advantage in the ownership and knowledge of switching technology that is lacking for a cable operator. There are, of course, endless permutations of both the science and the economics of how the marketplace may be made more open. Phrases such as "telephony Open Video Systems (OVS), Video Dial Tone (VDT) and the like are freely bruited about, and whose purpose is to transform a cable operator into a quasi telephone company and Telcos into cable providers. This is to say nothing of direct reception of satellite signals (DBS) and Microwave Distribution Systems (MMDS) lurking in the background. Although the technology for these latter two methods has been around for sometime, they have yet to become any more than a blip on the cable industry's radar screen of their marketplace. While we do not expect any near term change in the complexion of your residents' method of television reception, the City government will continue to be asked by data transmission companies for permission to use its rights of way to transverse the City to provide end use information outside of the City limits. If it 3 -H Cable Communications Consultants has not already been done, we would recommend that a communication Ordinance be drawn up so as to establish guidelines for such usage and to obtain "pass over" income and revenues on a "most favored nation" basis if reception points are established within the City itself. The new Act will still allow a local government to require a separate authorization (franchise, permit, or whatever) from a cable operator to offer telephone or data services. In summary, the major thrust of the Telecommunications Act of 1996 will not be felt in your community until near the end of the century. It will take that long for the telephone and cable industry to shake themselves down and to determine who does what to whom. We have been following these developments as they have transpired and will continue to do so on your behalf. Let us know if you have any questions or would like more information. -3- Telecommunications Legislation Review April 24, 1996 3 -11 Cable Communications Consultants CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS May 22nd 1996 Name Date Name Date Adams, Martha 1 1/26/96 Delo, Catherine 39 3/11/96 Aggergaad, Mary E. 84 3/12/96 Dilling, Emily 145 3/20/96 Allison, Martha 85 3/8/96 Doerge, Evelyn 146 3/20/96 Adams, Wallace 173 3/11/96 Douglas, Mrs. B. C. 46 3/8/96 Anderson, Clara, E 165 3/24/96 Anderson, Elizabeth, D. 185 5/5/96 Edris, Eugne 30 3/10/96 Anding, Hazel, M. 59 3/8/96 Elders, Ira 78 3/11/96 Anton, Charles 100 3/12/96 Enckson, Donna Joan 18 3/11/96 Auman, Ina, F. 137 3/19/96 Fearguson, Nova, L. 151 3/18/96 Ausec, Della, P. 132 3/14/96 Austin, Pete 83 3/12/96 Gallacci, Angela 188 5/9/96 Avery, Lorise,D. 171 4/3/96 Gollocci, Angelo or Emily 110 3/13/96 Gourley, Robert 141 3/8/96 Baker, Patricia A. 48 3/8/96 Grahm, Robert, W. 115 3/13/96 Bartels, Marjorie, J. 153 3/13/96 Gra11, Arabella 87 3/12/96 Beam, Frances, E. 61 2/10/96 Grim, Gerry 63 3/10/96 Berry, Phyllis, M. 65 3/9/96 Bessey, Doris M. 89 3/11/96 Hale, Lela 19 3/8/96 Betts, Miriam Winona 21 3/11/96 Hall, Bonnie 6 2/8/96 Binder, Leota 112 1/13/96 Hamilton, Ceil 158 3/19/96 Blood, Frances, A. 120 3/13/96 Hefley,E.C. 142 3/9/96 Blundeau, Virginia 138 3/18/96 Hendrix, Ella, M. 116 3/14/96 Boos, Jane 160 3/26/96 Henderson, Andy Margie 17 3/11/96 Bowes, Myrtle, A. 105 3/11/96 Hollander, 140 3/18/96 Bowlby, James, F. 154 3/22/96 Houk, JessieS. 4 2/1/96 Box Cathenne G. 88 3/11/96 Howell, Clara, K. 172 4/2/96 Brandland, Orville 15 3/11/96 Huff, Laura 152 3/20/96 Browder, Lilyan, M. 139 3/19/96 Bruce, May 67 3/8/96 Isenberger, Helen 147 3/21/96 Cagney, Jackie 95 3/8/96 Jirikowic, Winifred, M. 136 3/20/96 Caldwell, Sarah, Ellen 184 5/1/96 Johnson Walter M. 42 3/9/96 Camporini, Emma 22 3/10/96 Jones, Helen, M 128 3/8/96 Carpenter, George 2 2/7/96 Jones, Sally 41 3/9/96 Carpenter, Marjorie 163 3/29/96 Jones, Vera,F. 159 3/26/96 Chavis, Frances,I. 79 3/11/96 Chrysler,Gage 180 4/12/96 Kasakan, Rachel 12 3/8/96 Clark, Jessie, L. 121 3/14/96 Keend, Arlene J. 38 3/8/96 Clubertson,F.M. 168 4/5/96 Keller, Marilyn 27 3/8/96 Cogburn, Analayne 167 3/27/96 Keneally, Patrick, F 131 3/14/96 Conklin, Annie 26 3/11/96 Kienholz, Harriet, E 125 3/16/96 Conrad, Lela M. 37 3/8/96 Kiiski, Virginia, L. 108 3/12/96 Cox, Tony A. 14 3/11/96 Kiser, Frank, E. 156 3/23/96 Crowder,Estelle, C 150 3/20/96 Klemmer, Michael S 44 3/8/96 Koch, Loyd O. 80 3/12/96 Dailidenas, Mary 25 3/11/96 Konopaski, Frances 69 3/8/96 Davidson, Dorothy 34 3/11/96 Kushman, Helen E. 29 3/8/96 Davidson, Virginia 162 3/27/96 Davis, Zora,j. 182 4/24/96 LaBelle, Dolly 189 5/12/96 Day, Margurette 71 3/11/96 Larue,Evan 166 3/8/96 Deckedach, John 9 2/22/96 Loell, Tom 181 4/23/96 Deines, A. Marjorie 92 3/9/96 Logan, Mildred, K. 111 3/13/96 Delaney, Velma 104 3/13/96 Lundberg, Vera 50 3/9/96 CITY OF PORT ANGELES SENIOR CITIZEN /DISABLED DISCOUNT APPLICANTS May22nd 1996 Name Date Name Date Ludke, Olga 109 3/12/96 Scott, Bernell 93 3/9/96 Sherwin, Maxine 82 3/11/96 Machenheimer, James 16 3/11/96 Simpson, Evelyn V. 28 3/9/96 Mangano, Phyllis J. 51 3/9/96 Smally, Cheryl 122 3/11/96 Marks, Annabelle 2 3/9/96 Studer, Frank 10 3/9/96 Maritn, Gina 168 4/4/96 Snow, Verne, E. 106 3/11/96 Marty, Phyllis 24 3/11/96 Stanley, William L. 90 3/11/96 Mason, Bemice L. 86 3/11/96 Stanton, Gaitha, M. 74 3/12/96 Malvey, Helena 107 3/15/96 Stark, Cynthia 166 4/3/96 Malvin, Zella 103 3/12/96 Stevens, Loretta A. 33 3/11/96 Mathews, Belvin 123 3/13/96 Stewart, Lois D. 56 3/9/96 Maxey, Sharon Rose 96 3/11/96 Storrs, Ethel 43 3/9/96 McAlpin, Theresa 35 3/11/96 Stossel. Jennie 5 2/2/96 McClanahan 134 3/17/96 Sweagle, Gwen, M. 62 3/9/96 McCoy, Thelma 40 3/11/96 McElravy 77 3/18/96 Taggart, Floyd and Billie 121 3/9/96 McManus 164 3/27/96 Thomas, Alice 53 3/8/96 Mudd, Carl, J. 135 3/8/96 Torres, Joseph, D. 149 3/13/96 Tnllingham, Jean 91 3 /11/96 Nelson, Avaline C. 94 3/11/96 Tuttle, Elmer 130 3/15/96 Nielsen, Carmen 8 2/12/96 Urry, Clifford 169 4/4/96 Oel, Guy 97 3/11/96 Olson, Dorothy R. 32 3/11/96 Vancise, Teresa 31 3/11/96 Vinney, Sarah 170 4/2/96 Pavlak, Alfred E. 72 3/10/96 Virginia,Ahce 161 3/29/96 Pelky, Nance 136 3/18/96 Perdew, Clifford 3 1/30/96 Waldgroup, Elsie 157 3/26/96 Perint, Margaret, A. 98 3/8/96 Waller, Louise 73 3/11/96 Peters, Glen 70 3/10/96 Weller, Barbara 11 2/27/96 Pettigrew, Arlene, J. 117 3/13/96 Wheeler,Phyllis,I 144 3/18/96 Pingel, Calvin 64 3/9/96 Williams, Cecil 174 3/29/96 Pinord, Lila, L. 75 3/11/96 Williams, Mrs. Thomas, J. 102 3/19/96 Pringle, Norman D. 57 3/8/96 Williams, Phyllis 36 3/9/96 Pratt, Mavis, D. 101 3/12/96 Witter, Dorothy M. 58 3/8/96 Puffer, Nita 99 3/13/96 Wilson, Andrew J. 13 2/28/96 Woolery Irene M 81 3/12/96 Reed, Margeret A. 54 3/11/96 Wozniak, Casey, A. 133 3/19/96 Reed,Mildred 167 4/3/96 Wrobel, Alvin, J. 155 3/22/96 Rhoads, Virginia M. 45 3/9/96 Wyman, Kay 49 3/9/96 Rice, Helen 76 3/11/96 Robertson, J.B. 114 3/12/96 Rosen, Hattie 52 3/8/96 Ross, Harry, A. 118 3/13/96 Ross, Ray, E. 143 3/19/96 Rudolph, Jean 68 3/8/96 Rutherford, Samuel W. 7 2/12/96 Schaefer,Patncia, L 127 3/9/96 Schott, Arnold 119 3/13/96 Schmidt, Fred, H. 122 3/11/96 Schott, Ethel, E 187 5/9/96 Scoles, Edgon, T. 186 4/10/96 FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Becky Upton City Clerk PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed as requested is the City's signed copy of our contract for consulting services for 1996. We appreciate the opportunity to be of service yet again to the City of Port Angeles. Sincerel 3 -H OM d NICATIONS CONSULTANTS Lon Hurd Vice President /Director LH /sb Cable Communications Consultants March 28, 1996 504 East Main Street, Auburn, Washington 98002 (206)833 -8380 1 -800- 222 -9697 FAX: (206)833 -8430 CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1996, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scone of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparently excessive rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi -annual basis as required by the City's cable franchise ordinance. Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Government and Educational Access Channels. Consultant shall advise the City regarding the use of access channels provided for the purpose of government and educational broadcasting. Consultant shall, upon request, furnish information with respect to channel availability, program content, operating regulations, and technical needs. Consultant shall be available to review equipment requirements and assist in procurement of necessary items to sustain the level of broadcasting quality appropriate to the City. F. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and 5.210 make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance G Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. H. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 199,gand shall expire on the 31st day of December 199X Cp. B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to five percent (5 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance 2 V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: CONSULTANT: Approve to form: City Attorney ATTEST: City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 u ic. ion 3 -H Cab By onsultants C Rio ,A. Hu d, b /ice Pr- sident/Director March 26, 1996 Lon A. Hurd Vice President /Director 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 CITY OF PORT ANGELES 321 E FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (360) 457 -0411 Re: 1996 Cable Television Consultant Services Agreement Dear Lon: Thank you for the 1995 Annual Report and the 1996 Cable Television Consultant Services Agreement. The agreement was approved by both the Utility Advisory Committee and the City Council. Enclosed for your signature are both copies of the agreement. Once signed, please return a fully executed copy to me for the City's file. As always, we thank you for your ongoing assistance. Best regards! Sincerely yours, Becky J. Upon, CMC City Clerk March 14, 1996 CITY OF PORT ANGELES 321 E FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (360) 457 -0411 TO: Manager Pomeranz, Mayor Ostrowski and City Council FROM: Becky J. Upton, City Clerk'' SUBJECT: 1995 Annual Report and 1996 Cable Television Consultant Services Agreement 3 -H Cable Communications Consultants ISSUE: Should the City enter into the attached contract with 3 -H Cable Communications Consultants for 1996? BACKGROUND /ANALYSIS: Attached is a proposed contract to continue cable television consulting services for 1996. Also attached for your review is the 1995 Annual Report just submitted by 3 -H Cable Communications. 3 -H Cable Communications has been providing consulting services to the City for a number of years. They are responsible for providing the following: Report any excessive rates; Advise the City regarding the use of government and education access channels; Conduct technical inspection and evaluation of the franchisee's system; Analyze whether the correct franchise fee amount is being paid; Report on compliance with the franchise requirements; Handle customer complaints received by the City; Keep City advised on changes in federal laws and regulations affecting cable TV franchises and rates; and Monitor the proof -of- performance testing that Northland is required to do under federal legislation. The fee provision for this contract remains at five percent of the franchise fee paid by Northland Cable to the City. In 1995, 3 -H Cable was paid a total of $5,475. The projected 1996 fee amount is approximately the same as 1995. SUMMARY /RECOMMENDATION: Based on the provision of services to the City as set forth above, it is recommended that the City Council approve and authorize the Mayor to sign the contract with 3 -H Cable Communications Consultants for 1996. This matter was reviewed by the Utility Advisory Committee at its meeting of March 11, 1996, at which time it was recommended for approval by the City Council. Attachments 5, ,2/D FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS a Dear Becky: Cable Communications Consultants Becky Upton City Clerk Port Angeles City Hall P.O. Box 1150 Port Angeles, WA 98362 February 12, 1996 jp@ROW1, 1 FEB ,3 IS CITY CLERK Enclosed are two copies of our annual report for 1995. If you have any questions or require additional information, please do not hesitate to contact our office. We have also included for your review two copies of a Contract for Consulting Services for the year 1996. It has always been a pleasure to serve the City of Port Angeles and we look forward to a continued working relationship. Sincerely, 41 Hurd Bf E COMMUNICATIONS CONSULTANTS Vice President /Director LAH /sb Enclosures 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX: (206)833 -8430 5, 02/0 March 7, 1996 Memorandum TO: Chairman Michalczik and Utility Advisory Committee FROM: Becky J. Upton, City Clerkial-' SUBJECT: 1995 Annual Report and 1996 Cable Television Consultant Services Agreement 3 -H Cable Communications Consultants ISSUE: Should the City enter into the attached contract with 3 -H Cable Communications Consultants for 1996? BACKGROUND /ANALYSIS: Attached is a proposed contract to continue cable television consulting services for 1996. Also attached for your review is the 1995 Annual Report just submitted by 3 -H Cable Communications. 3 -H Cable Communications has been providing consulting services to the City for a number of years. They are responsible for providing the following: Report any excessive rates; Advise the City regarding the use of government and education access channels; Conduct technical inspection and evaluation of the franchisee's system; Analyze whether the correct franchise fee amount is being paid; Report on compliance with the franchise requirements; Handle customer complaints received by the City; Keep City advised on changes in federal laws and regulations affecting cable TV franchises and rates; and Monitor the proof -of- performance testing that Northland is required to do under federal legislation. The fee provision for this contract remains at five percent of the franchise fee paid by Northland Cable to the City. In 1995, 3 -H Cable was paid a total of $5,475. The projected 1996 fee amount is approximately the same as 1995. RECOMMENDATION: It is recommended that the Utility Advisory Committee forward a recommendation to the City Council that the contract with 3 -11 Cable Communications Consultants for 1996 be approved. Attachments 5:210 Cable Communications Consultants J> 504 EAST MAIN STREET AUBURN WA tINEOTTE0b (206) 833 -8380 FAX: (206) 833 -8430 Sold To: JAN 19 '1996 Date White Copy: Return with Payment Jeff Pomeranz City Manager City of Port Angeles PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 THANK YOU! Lon Hurd Contract for Consulting Services With 3 -H Cable Communications Consultants January 18, 1996 P.O. No. Salesperson TERMS: NET 30 DAYS 1.5% PER MONTH AFTER 30 DAYS ITEM AMOUNT Franchise fee paid to the City by Northland Cable Television for 7/1/95 to 12/31/95 $55,599.71 x 5% Contract 5% of 5% franchise fee $2,779.98 TOTAL AMOUNT DUE $2,779.98 STATEMENT Canary Copy For Customer Pink Copy For File ,i FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS 311 Cable Communications Consultants Becky Upton City Clerk City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed are copies of the franchise fee forms being sent to the cable operator for the last period's franchise fee payment to the City of Port Angeles. The copies are sent to you just to let you know we are sending them to Northland, you need not do anything with the forms. As usual we will be reviewing the returned forms for accuracy and if we find any discrepancies we will meet with Northland to see that they are corrected. Sincerely, 3 -H C. •le Communications Consultants on Hurd Vice President/ Director LH /sb December 15, 1995 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX (206)833 -8430 P erator Address Revenue Source Northland Cable Television 725 East First Port Angeles, WA 98362 Installation Additional Outlets Extraordinary Installation FM Installation Bulk Installation Disconnect Other Installation (VCR Reconnection. etc.) Total Installation Income Revenue Source Basic Cable 'fir I Tier II Premium Premium Premium Premium Addt'1 Outlet Rate Pay Per View FM Service Bulk (Equivalents) Converter/Remote Cable Guide Total Monthly Subs. Income Local Advertising National gross) Shopping Services Rent L.O. Income Mailing Inserts Total Non Subscriber Income 1 Franchise Fee Payment Worksheet Units Unit Price Months in Gross Revenue (each/mo.) Period X X rr /r/r::�r' r.�r. Units (avg. Unit Price Months in of Period) (each /mo.) Period X frnJr�r. F j ,,::,,ir:rr' r 'r' r ?r{ f ,rr r rf r r r Ai.,....,...../.,,,,,,,,x,,,,,,,..-....:.::::,,,,,...A.0. /,f a r fr 30,A, I�jjfr:' /;r''r {/fo f•{ fm i f!r.:. %r r.r. r`/ ;.'.f %ri i `r, r /.i: /..0: ::r{ •r. :R r r r .:;rr j f' /N f rr ft's f i f r% f ///!i, 4, A 9r'r� f fl:% �r/ i r 11} f r�r FF `i :•;•fxrr ..r.r {:rf, .f....:r�c,. rirr. r..:'�iff:• /fir�:�rr Gross Revenue X Jurisdiction Port Angeles Period Ttily 1-December 1 1, 1995 Gross Revenue Fee Franchise YTD YTD Fee 5 5 5 5 5 5 5 5 Gross Revenue Fee Franchise YTD Fee 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 YTD 5� 2t Operator Address Revenue Source Alarm Other Total Interactive Income Less Bad Debts Plus Bad Debt Recovery Net Bad Debts Total Other Income TOTAL REVENUES Adjustments TOTAL DUE CITY Explanatory Notes: *Adjustments (specify): Northland Cable Television 725 East First Port Angeles, WA 98362 Units (avg. Unit Price Months in of Period) (each /mo.) Period X Send original to franchisor Copy to: 3 -H Cable Communications Consultants 504 East Main Street Auburn, WA 98002 Franchise Fee Payment Worksheet Gross Revenue Gross Revenue Fee Franchise YTD Instructions: Fill out complete form. If a particular income item is not pertinent to your franchise please draw a line through the appropriate boxes. Areas left blank will be assumed to be inadvertent omissions and the form will be returned for completion. Unit average of period is applicable only to those items for which a monthly (or portion thereof) rate is charged. Specify when "other" category is used. Prior period totals must equal YTD total. If promotional discount lowers normal average during period please indicate. If rates increased or lowered during period indicate starting dates. Multi- family installation income spread over a period of a contract will be reported when earned. Authorized by: Title: Date: Jurisdiction Port Angeles Period_ July 1- December 31, 1995 YTD Fee 5 5 5 5 5 5 5 5 5 5 FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Cable Communications Consultants 1) Dan Withers General Manager Northland Cable 725 East First Port Angeles, WA 98101 Dear Dan: December 8, 1995 As usual at this time of year we are preparing to report to the City of Port Angeles on the progress of Northland for the year of 1995. Please provide us with the following information per your franchise agreement for Port Angeles. Miles of Cable Number of Homes Passed by Cable Number of Basic Subscribers Number of Premium Subscribers Number of Installations Number of Disconnections Current Copies of Bonds and Insurance Copy of Service Call Logs for the Month of November Thank you very much for your help. We look forward to your continued cooperation throughout the coming year. Sincerely Vice President /Director LAH /sb mmunications Consultants 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1 -800- 222 -9697 FAX (206)833 -8430 Cable Communications Consultants 504 EAST MAIN STREET AUBURN WASHINGTON 98002 (206) 833 -8380 FAX: (206) 833 -8430 August 2, 1995 Sold To: Date BUDCcT :ODE /I/ 4156 DE ?1,`D APPRQ ,.i_ SATE: ��D3 -9 white Copy Return with Payment Jeff Pomeranz City Manager PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 THANK YOU! Lon Hurd AUG 03 1995 City of Port Angeles P.O. No. Salesperson ITEM AMOUNT Contract for Consulting Services With 3 -H Cable Communications Consultants Contract 5% of 5% franchise fee $2,696.66 J R E C E I V E D STATEMENT TERMS: NET 30 DAYS L5% PER MONTH AFTER 30 DAYS Franchise fee paid to the City by Northland Cable Television for 1/1/95- 6/30/95 $53,933.31 x 5% TOTAL AMOUNT DUE $2,696.66 !2 3 Canary Copy: For Customer Pink Copy: For File 5. /U July 25, 1995 Mr. Bill Myers 1946 Westview Drive Port Angeles, WA 98362 Re: 1994 -95 Annual Report 3 -H Cable Communications Consultants Dear Bill: Sincerely yours, /5tiO-L Becky J. Up ton, CMC City Clerk Attachment CITY OF PORT ANGELES 5.Q/o 321 E FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (360) 457 -0411 As you may recall, the City has had a contract for a number of years with 3 -H Cable Communications Consultants to provide cable television consulting services. 3 -H recently submitted their contract to the City for the year, 1995, and, at the same time, submitted their annual report. Because this contract was submitted at such a late date, staff felt it appropriate to take the contract consideration directly to the City Council. However, because of your past support in providing expertise toward the review of the annual report and the associated technical inspections, evaluations, etc., it would be appreciated if you would review the annual report and advise us as to whether, in your opinion, the City's best interests have been protected in terms of cable television services. Also, because you presently serve as the Chair of the Utility Advisory Committee, your input is especially valuable. I have attached the packet information which was submitted to the City Council at its meeting of July 18, 1995. Although this review will be conducted after the fact, the City Council was advised that your input would be sought. Please contact me if I can provide any information, and thank you for your efforts on our behalf! 6. arc) FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Becky Upton City Clerk City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed is the signed copy of our contract for cable television administrative services as you requested. We look forward to another year of working with the City of Port Angeles. Your understanding of our mid -year report for last year is accurate. Please rest assured that we fully intend to submit a 1995 annual report to the City. Sincerely, LAH /sb Enclosure Cable Communications Consultants 3 -H 1 E C MUNICATIONS CONSULTANTS V'ce !'re ident /Director July 24, 1995 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX: (206)833 -8430 5.cQ/D CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1995, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City"). CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scope of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparently excessive rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance. Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Government and Educational Access Channels. Consultant shall advise the City regarding the use of access channels provided for the purpose of government and educational broadcasting. Consultant shall, upon request, furnish information with respect to channel availability, program content, operating regulations, and technical needs. Consultant shall be available to review equipment requirements and assist in procurement of necessary items to sustain the level of broadcasting quality appropriate to the City. F. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. G. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. H. Ownershin Renorts/Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1995 and shall expire on the 31st day of December 1995. B. Termination bv_ the Citt. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting_Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to five percent (5 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Eayment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi -annual payments and the Consultant's fee determined on that basis. Invoices for such semi -annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. £uccessors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. 2 V. Indenendent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breh. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: 3 CITY: CONSULTANT: Approved as to form: _%..e //14A, City Attorr* A 1 I EST: qapt4 V IS, 199 City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 3 -H Cable C By City of Port Angeles cations Consultants Ai, Vice President/Director JIA July 19, 1995 Lon A. Hurd Vice President/Director 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 Re: 1995 Cable Television Consultant Services Agreement Dear Lon: At its meeting of July 18, 1995, the City Council approved the Cable Television Consultant Services Agreement with 3 -H Cable Communications Consultants for the period, January 1, 1995 December 31, 1995. Enclosed for your signature are two copies of the agreement. Please return one signed copy to my attention at your earliest convenience. With regard to the annual report you submitted, I noted that the report was representative of the years, 1994 1995. I have concluded that you referenced 1995 because the report was written mid -year and that you fully plan to submit another report at the end of 1995. Thank you for your ongoing support and assistance! Sincerely yours, Becky J. Upton, CMC City Clerk Enclosures CITY OF PORT ANGELES 5.210 321 E FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (360) 457 -0411 TO: Manager Pomeranz, Mayor Sargent and City Council FROM: Becky J. Upton, City Clerk 0" SUBJECT: Cable Television Consultant Contract for 1995 ISSUE: Should the City Council enter into the attached contract with 3 -H Cable Communications Consultants? BACKGROUND /ANALYSIS: Attached is a proposed contract to continue cable television consulting services for 1995. Also attached for your review is the 1994 -1995 Annual Report just submitted by 3 -H Cable Communications. As you may recall, 3 -H has been providing consulting services to the City for a number of years. They are responsible for providing the following: Report any excessive rates; Advise the City regarding the use of government and education access channels; Conduct technical inspection and evaluation of the franchisee's system; Analyze whether the correct franchise fee amount is being paid; Report on compliance with the franchise requirements; Handle customer complaints received by the City; Keep City advised on changes in federal laws and regulations affecting cable TV franchises and rates; and Monitor the proof -of- performance testing that Northland is required to do under federal legislation. The fee provision for this contract remains the same as that of last year, which is five percent of the franchise fee paid by Northland Cable to the City. In 1994, 3 -H Cable was paid a total of $5,099.36. The projected 1995 fee amount is the same as 1994. RECOMMENDATION: It is recommended that the City Council authorize the Mayor to execute the attached contract with 3 -H Cable Communications Consultants for 1995 consulting services. Attachments Memorandum .210 502 EAST MAIN STREET 0 AUBURN WASHINGTON 98002 0 (206) 833-8380 0 FAX: (206) 833-8430 Date July 18, 1994 P.O. No. Jeff Pomeranz City Manager Salesperson PORT ANGELES CITY HALL P.O. Box 1150 TERMS: NET 30 DAYS 1.5% PER Port Angeles, WA 98362 MONTH AFTER 30 DAYS Sold r Franchise fee paid to the City by Northland Cable Television for 1/1/94 thru 6/30/94 $50,995.20 x5% Contract 5% of 5% franchise fee $2,549.76 Cable Communications Consultants t WNte Caper %him with Payment Lon Hurd ITEM Contract for Consulting Services With 3-H Cable Communications Consultants TOTAL AMOUNT DUE $2,549.76 STATEMENT AMOUNT Canary Copy: For Customer Pink Copy: For File 5, 02Z Cable Communications Consultants 4 sarml i 502 EAST MAIN STREET AUBURN WASHINGTON 98002 (206) 833 -8380 FAX: (206) 833 -8430 Sold To: RECEIVED JAN 19 1995 i;t<ty of roil Angeles White Copy: Return with Payment Jeff Pomeranz City Manager PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 J-011) Contract for Consulting Services With 3 -H Cable Communications Consultants Date P.O. No. Salesperson January 18, 1995 TERMS: NET 30 DAYS 1.5% PER MONTH AFTER 30 DAYS ITEM AMOUNT Franchise fee paid to the City by Northland Cable Television for 7/1/94-12/31/94 $50,991.96 x5% Contract 5% of 5% franchise fee $2,549.60 TOTAL AMOUNT DUE $2,549.60 5.240 STATEMENT Canary Copy: For Customer Pink Copy For File FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS a Cable Communications Consultants Becky Upton City Clerk City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed are two copies of our 1995 contract. If you have any questions or require additional information, please do not hesitate to contact our office. Sincerely, 3 B OM ,j NICATIONS CONSULTANTS on A. Hurd Vice President /Director LAH /sb Enclosures July 7, 1995 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1- 800 222 -9697 FAX: (206)833 -8430 M E M O R A N D U M TO: Clients FROM: 3 -H Cable Communications Consultants SUBJECT: Cable Television Rate Regulation Changes DATE: February 24,1994 You may have already heard that the FCC has once more changed rate regulation procedures. Although we are informed that the complete text of the ruling will not be released for some thirty days, the thrust of this new rework of the regulations will be to reduce the per channel benchmark allowable rate by seven percent. Since your franchisee (as is practically everyone) is over the benchmark now, this will have the practical effect of a flat seven percent reduction in, at least, future rates. How all this will be implemented is still not disclosed (e.g. refunds, prospective lower rates, etc.). Still also in limbo is the status of franchising authorities which are in various stages of rate regulation certification. In a previous action last week the FCC for the third time has extended the rate freeze —this time until May 15, 1994. In a parallel action the FCC has canceled its previously scheduled work shop in Seattle. Our Firm will attempt to attend a session in Boston or New York so as to have the earliest information available. In the meantime we will keep you informed of new developments. 5, aicJ O F PORT l 4fQ February 25, 1994 Mr. Lon Hurd Vice President /Director 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 Re: 1994 Cable Television Consultant Services Agreement Dear Lon: Sincerely yours, Becky J. UOton City Clerk Attachment CITY OF PORT ANGELES 5, 2/ 321 EAST FIFTH ST, PO BOX 1150 PORT ANGELES WASHINGTON 98362 PHONE (206) 457 -0411 At its meeting of February 15, 1994, the Port Angeles City Council approved the agreement with 3 -H Cable Communications Consultants for 1994. A fully executed copy of the agreement is attached for your records. On another matter, Craig Knutson informed me that you have helped other cities develop policies /protocols having to do with their government education channels. I think it is timely for our Advisory Committee to address the adoption of policies /protocols, particularly in view of the fact that several requests to use Channel 21 are now being made. It would be helpful to me, as staff, to have some direction as to what types of organizations can/cannot access the channel. Any help you can give me would be appreciated! Thank you for your assistance. CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1994, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City"). CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scone of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Comnliance WitiLthe Cable Television Consumer Protection and Competition Act of 1992. Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparently excessive rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance. Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Government and Educational Access Channels. Consultant shall advise the City regarding the use of access channels provided for the purpose of government and educational broadcasting. Consultant shall, upon request, furnish information with respect to channel availability, program content, operating regulations, and technical needs. Consultant shall be available to review equipment requirements and assist in procurement of necessary items to sustain the level of broadcasting quality appropriate to the City. F. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and S.Z1 make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. G Current 1.4H. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. H. lNQwslet r. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. I. Ownership of Reports/Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1994 and shall expire on the 31st day of December 1994. B Termination bv_the Cit.. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to five percent (5%) of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi -annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or 2 obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Indenendent Contactor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Mbiver of Breh. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. A "1"l'EST: All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: CONSULTANT: Approv as to form: City Atto y City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 3 -H Cabl By Consultants By Loh-A./Our., Vi e President/Director City of Port Angeles „,ri„,, fc,,,..24 U FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Jeff Pomeranz City Manager City of Port Angeles PO Box 1150 Port Angeles, WA 98362 Dear Jeff: Enclosed is our 1994 Cable Television Consultant Services Agreement. You will note that the terms and conditions for the coming year are the same as were included in the 1993 contract. It has been a pleasure serving you this past year, and we hope we may have the opportunity to continue to be of service to the City of Port Angeles. Sincerely, Cable Communications Consultants ABLE COMMUNICATIONS CONSULTANTS Lon A. Hurd Vice President /Director j1E(€]E11 JAN 6 1994 CITY OF PORT ANGELES CITY CLERK January 4, 1994 502 East Main Street, Aubum, Washington 98002 (206)833 -8380 1-800- 222 -9697 FAX: (206)833 -8430 CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1994, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FORTH, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scone of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Rye orts. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparent violations of City approved rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance. Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. F. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. G. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. H. Ownershin of Renorts/Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1994 and shall expire on the 31st day of December 1994. B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to five percent (5 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi -annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Indenendent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and 2 employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 3 CONSULTANT: 3 -H Cable Communications Consultants 502 East Main Street Auburn, WA 98002 Approved as to form: 3 -H Cable Communications Consultants By City Attorney Lon A. Hurd, Vice President/Director A 1'1'EST: City of Port Angeles By RECEIVED f 1 JAN 1 1994 C able Communications Consultants J City of Port Angele 502 EAST MAIN STREET AUBURN WASHINGTON 98002 (206) 833 -8380 FAX: (206) 833 -8430 Sold To: Jeff Pomeranz City Manager PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 THANK YOU! Lon Hurd White Copy: Return with Payment Date P.O. No. Salesperson ITEM AMOUNT Contract for Consulting Services With 3 -H Cable Communications Consultants January 14, 1994 TERMS: NET 30 DAYS 1.5% PER MONTH AFTER 30 DAYS Franchise fee paid to the City by Northland Cable Television for 7/1/93 thru 12/31/93 $45,787.55 x5% Contract 5% of 5% franchise fee $2,289.38 TOTAL AMOUNT DUE $2,289.38 r, BUDGET CODE: L' DEP DIV APPROVAL'. STATEMENT Canary Copy: For Customer Pink Copy For File For Certification There undoubtedly has been a hyper inflation of cable rates in the past few years beyond any reconciliation with the Consumer Price Index (CPI). Absent competition (which always seems around the corner but never turning it) local regulation may be the only way to get a handle on it. A franchising authority would be derelict in its responsibilities to its residents if it did not avail itself of this opportunity given it by Washington. Certification itself is a simple enough process costing virtually nothing. There may be something fishy going on when subscriber's overall rates in the community have decreased very little, if at all. In communities served by two or more cable operators why is there such a variance between identical services such as converter charges? In communities where one cable operator serves various cities why are rates identical or almost so (if this is so) when one is aware of varying franchise costs (e.g. fees, PEG Access, I- Nets)? If a cable company's calculations are correct and above board, why does it seem to object to an examination of its cost setting process (the guilty flee when no man pursueth syndrome)? S. a/0 le- &42 Against Certification It isn't nearly as simple as just filling out the 328 Certification forms. The procedures (resolutions adopting the FCC regulations and assurance of due process in public hearings) are easy enough until a local government gets to the point (30 days after notification of its certification filing) when it informs the operator that it has adopted the necessary resolutions. Then some of you may remember the old "I Love Lucy" show when the candy keeps coming down the endless belt and no one can stop it; the system is turned on. The cable operator submits its justification and the meter for the city starts ticking. At this point there is no turning back. A thorough review (i.e. audit) of a cable operator's cost justification is going to be expensive. One city of which we know has appropriated $35,000 for this task. A larger city's existing accounting /auditing department will expend considerable time analyzing the pure arithmetical calculations. That will probably not be enough, however, to do a complete analysis. There must be some person qualified to know the cable business. How long should it really take for an installation? What is the actual cost of access equipment? What does a remote converter cost? All of these questions, and dozens more, should be examined. Counting upon a relatively easy evaluation because you believe the operator is using the comparatively simpler bench mark rather than cost -of- service calculation may be misleading. Even though the bench marks for program costs are submitted, this method will not include the more complicated computation for the ratios for equipment and installation used to receive the basic service tier. Additionally there are the external pass through costs which may be the trickiest of all to handle. The city's credibility with its residents could be at risk under certain circumstances. Imagine one or another of these scenarios: One; City "A devoting insufficient resources to the evaluation, approves the basic rates as submitted. City "B with a similar submission, disapproves and orders a roll back. What will a confused citizenry do? Two: A city approves basic rates based upon the data submitted. A complaint is made by a resident to the FCC on expanded basic charges. The FCC, although not obligated to use the precise computation formula but presumably using the same logic, disapproves the program service rates, or vice versa. Into what position is the city put having approved basic rates? The public hearing subsequent to the franchising authority's denial of submitted rates may be difficult. Not only will the cable operator use this as a forum seeking reversal of the decision, interested residents may be on hand in the event of approval. This is a complex matter, and, as city officials will know, partisans looking only after their own cable charges may not easily understand or relate to the city's position. Prepared by: 3 -H Cable Communications Consultants October 18, 1993 CHART I and Rate Approva steps Authority Certification an Fran chising A FC C 4,. Au 1 ority C Operator 4- 1. submission to F 34 days). assumes 1• approval t FCC (Agency 2. T pr Disapproval by 3, onsibility)' lion. I regulatory resp e l a tion inters of r egulatio n 4 Notification fission• erequired. less mo retim price. 5. Basic rate 3Qdays)un a nd P A once o f t v ailabili t y v 1 6. o f bask tier a vailabil it y 7. Notice Su bscribeT\ A DisaPpr Cons ultants Communications July 1,1993 Prepared by: 3'H Cable C ART 11 tion Process Disapproval Bas Rate Regina FCC 44 M be either cost -of- service or s ubmission rt. Rate to Franchising Authority. uted. Authority if warrant benchmark comp 2. Subscriber input to Franchising utic refunds• written denial decision. ords peIIding g, Rate request disapproved. maintain records 5 public notice of a Operator tom rates or issue refunds. 6, Notification to Cable OP to Cable Operator to roll back 6, Notification s e ry ine for non compliance. 7, Monetary peal. g, Cable Operator may app 9. FCC notification of decision. Cable Operator 0 0 Interested Persons Public Notice i 4— A 0 0- Approval Disapprov ,r ble Communications Consultants Prepared by: 3 -H Ca July 1, AR III premium or pPV) Program Service (all other than_basic not including Rate Regulation CII 0 r 0 0 FCC 1 1 1 /0 0 C Operato Authority files andlor Franchising C. endorsement from 1. S it h FC complaint may s eek 2. Subscriber Authority. Cable Operator. from F of complaint t FCC of complaint 3. Notificationerro OdFcanbhsing Authority. 4. Pro cedural Subscriber an sz r3 Operator to respon Cab 4p complaint. FCC denies complaint. 5. FC C n otice a to responds to comp 6, Cable Op erator r it may order complaint valid g If FCC finds or refund. scribers. roll back 9. implementation to Sub ons Con sultants July 1, 1993 'gage ft of Satellite Cost Per Pre-Reg Post-Reg qv of Basic of Satellite Cost Per Pre-Reg Post-Reg °Jo Channels Channels Channel Rate Rate Difference Channels Channels Channel Rate Rate Difference Channels T CI An 16 4 $0.65 $0.64 $11.03 0 $10.42 -5.5% 17 17 $0.58 $11.14 $9.81 -12.0% Des Moines 16 4 $10.5 $10.26 -2.3% 17 17 $0.56 $10.61 $9.58 -10.0% 'Enumclaw 16 4 $0.66 1.03 $10.54 -4A% -.09% $0.57 $10.61 $917 17 17 $0.58 $11.14 $9.91 -11.0% f ederal $9.81 'Way 16 10.61 $9.77 4 $0.66 $1050 $10.49 17 17 ubur $058 1 Kent 16 4 $0.65 $10.50 $10.39 4.0% 17 17 0.67 11.39 10.70 Kisap County 15 3 $0.67 $10.00 $1 $10.02 -0.2% 16 16 Lake f orest Pk. 16 4 $0.65 $10.50 $10.39 -1.0% 17 17 $0.57 Benton 16 4 $0.65 $11.13 $10.42 -6.4% 17 17 $0.58 $11.04 -11.0% Tukwila 16 $11.13 $10.44 -6.2% 17 17 1.04 'V 1 C 0 1V 11.13 Bellevue 15 2 $0.79 $12.00 $11.83 11.13 16 16 $0.70 $12.39 federal Way 15 2 $017 $12.00 $1157 -3.6% 17 17 $0.72 $12.39 $12.29 -.8% 0 Kirkland 16 2 $0.78 $12.00 $12.49 -4.0% 15 15 $0.69 $12.39 $10.40 -16.0% Lake forest Pk.. 15 2 $0.79 $12.00 $11.83 -1.4% 16 16 $0.70 $12.39 -10.0% Mercer Island 15 2 $0.79 $12.00 $11.83 -t4% 16 16 $0.70 $12.39 $11.13 -10.0% Redmond 15 2 $0.79 $12.00 $11.83 -t4% 16 16 $0.70 $12.39 $11.13 400% NOR-II-IL AN 12 12 $0.73 D $5.95 $720 +21.0% Kits ap County 17 5 $0.76 $14.25 $12.90 -9.1% -Port Angeles 17 3 $0.76 $14.25 $13.00 -8.8% 10 10 so.n 7 F ALCON Kitsap County 27* 18 $0.71 $9.95 $19.12 +92.0% $19.95 .Kitsap County 8 0 $1.81 $14.50 $14.50 0.0% 15 15 $0.65 $9.75 $9.75 0.0% N ORTI1ST AR *Number of channels on tier changed as of 9/1193, eight channels were added. **Additional services available on an ala carte basis. Expanded 1aMc 4#2 Cost P Rate Satellite er Pre-Reg Post-Reg Channels Channel Rate Differenc 7 $0.68 $4.75 $4.75 0% $22.45 Prepared b 341 Cable Communications Consultants Notes: NIC No Charge Charge Per 15 Minutes Basic/Limited/Economy Service (old rate) Expanded/Satellite Value Package (old rate) -X FM Outlet (old rate) Additional T.V. Outlet (old rate) Standard Converter (old rate) Addressable Converter /with Prem. (old rate) Addressable Converter /(w /o) Prem. (old rate) Remote Control (old rate) Addressable Remote Control (old rate) Installation (first time) (old rate) Installation (reconnect) (old rate) Install Add. Outlet (at time of install) (old rate) Install Add. Outlet (separate) (old rate) )f Service Call (customer caused) (old rate) Late Payment Fee (old rate) 7)/1 /1 A a,() Des Auburn Moines Enumclaw $10.42 $10.26 $10.54 (511.03) (510.50) ($11.03) $9.81 $9.58 $9.91 ($11.14) (510.61) (511.14) N/C N/C N/C (N/C) (N /C) (N/C) N/C N/C N/C (N/C) (N /C) (N /C) $0.57 $0.53 $0.59 (52.10) (53.00) (52.10) $1.08 $1.02 $1.11 (N/C) (N /C) (N/C) $1.08 $1.02 $1.11 (52.10) (53.00) (52.10) $0.09 $0.0S $0.10 ($3.15) (53.00) (53.15) $0.09 $0.08 $0.10 (53.15) ($3.00) (53.15) $40.52 $38.60 $40.53 00.00) (560 00) ($60.00) $20.26 $19.30 $20.27 040.00) (540.00) (540.00) $6.75* $6.43* $6.76* ($20.00) (520.00) (520.00) $20.26 $19.30 $20.27 (540.00) ($40.00) $20.26 $20.26 $20.27 ($40.00) (540 00) ($40.00) $5.00 $5.00 $5.00 ($5.00) (55.00) ($5.00) Federal Lk Forest Way Kent Park Renton Tukwila $10.49 $10.39 $10.39 $10.42 ($10.50) ($10.50) (510.50) ($11.13) $9.87 $9.77 $9.77 $9.81 ($10.61) ($10.61) ($10.61) (511.04) NIC N/C N/C N/C (N /C) (N /C) (N /C) (N /C) N/C N/C N/C N/C (N/C) (N /c) (N/c) (N/C) $0.60 $0.56 $0.62 $0.60 ($2.00) (52.00) (52.00) ($2.00) $1.12 $1.06 $1.13 $1.08 (N/C) (N/C) (N/C) (N /C) $1.12 $1.06 $1.13 $1.08 ($2.00) ($2.00) (N/C) ($2.00) $0.09 $0.09 $0.10 $0.10 ($3.00) (53.00) (53.00) (53.00) $0.09 $0.09 $0.09 $0.10 (53.00) (53.15) (53.00) (53.00) $4039 $40.52 $51.83 $49.56 ($60.00) ($60.00) (560.00) (560,00) $20.30 $20.26 $25.91 $24.78 ($40.00) ($40.00) ($40.00) (540.00) $6.77* $6.75* $8.49* $8.26* ($20.00) (520.00) (520.00) (520.00) $20.30 $20.26 $25.91 $24.78 ($40.00) ($40.00) ($40.00) (540 00) $20.30 $20.26 $8.64* $8.26* ($40.00) ($40.00) ($40.00) (540.00) $5.00 $5.00 $5.00 $5.00 (55.00) ($5.00) ($5.00) ($5.00) otthlami Port Angeles $10.44 $13.00 ($11.13) ($14.25) $9.82 $7.20 (511.04) (55.95) N/C 1 1 1S_ _Nie (N /C) (52.50) N/C N/C (N /C) ($2.75) $0.60 ($2 00) For Sale $1.11 Only. (N/C) Northland $1.11 Does Not (52.00) Rent $0.14 Converters (53.00) or Remote $0.14 Controls. (53.00) $52.58 $50.00 (560.00) (550.00) $26.29 $40.00 ($40.00) ($40.00) $8.76* $30.00 ($20.00) ($30.00) $26.24 $30.00 ($40.00) ($30 00) $8.76* N/C ($40.00) (530.00) $5.00 $2.00 ($5.00) (51 50) Viacom Federal Lk Forest Mercer Bellevue Way Kirkland Park Island Redmond $11.83 $11.57 $12.49 $11.83 $11.83 $11.83 ($12.00) ($12.00) (512.00) (512.00) (512.00) (312.00) $11.13 $12.29 $10.40 $11.13 $11.13 $11.13 ($12.39) (512.39) (512.39) (512.39) (512.39) (512.39) N/C N/C N/C N/C N/C N/C (53.75) ($3.75) ($3.75) (53.75) (53.75) N/C N/C N/C NIC ($3.75) ($3.75) ($3.75) (53.75) ($3.75) (53.75) $0.34 $0.87 $0.34 $0.34 $0.34 $0.34 (51.00) (51.00) (51.00) (51.00) ($1.00) ($L00) $3.40 $2.00 $3.40 $3.40 $3.40 $3.40 (N /C) (N /C) (N/C) (N /C) (N /C) (N/C) $3.40 $2.00 $3.40 $3.40 $3.40 $3.40 (N/C) (N /C) (N/C) (N/C) (N /C) (N /C) $0.25 $0.16 $0.25 $0.25 $0.25 $0.25 ($2.00) (N /C) ($2.00) ($2.00) ($2.00) (52.00) $0.25 $0.16 $0.25 $0.25 $0.25 $0.25 (N/c) (N/c) (N/C) (N /C) (TUC) (N /C) $30.38 $36.26 $30.38 $30.38 $30.38 $30.38 ($39.95) ($39.95) ($39.95) (539.95) (539.95) ($39.95) $13.87 $16.38 $13.87 $13.87 $13.87 $13.87 ($39.95) (539.95) ($39.95) (539.95) ($39.95) ($39.95) $22.16 $26.32 $22.16 $22.16 $22.16 $22.16 (524.95) (524.95) (524.95) ($24.95) ($24 95) ($24.95) $12.66 $14.62 $12.66 $12.66 $12.66 $12.66 (524.95) (524.95) (524.95) (524.95) (524.95) ($24 95) $12.66 $14.62 $12.66 $12.66 $12.66 $12.66 ($24.95) (524.95) ($24.95) ($24.95) (524.95) (524.95) $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 ($5.00) ($5.00) (55.00) ($5 00) ($5.00) (55.00) Prepared by: 3 -H Cable Communications Consultants, September 1, 1993 amble 1irms Push to Short-Circuit '92 Law Sta Reporter Of THE WALL. STREET JOURNAL By MARK ROBICHAUX NEW YORK The cable law that takes effect next week grants broad new powers over rate regulation to local governments. But dozens of cable -TV systems are trying to sidestep the law by urging local officials to forgo exercising their new authority. The systems, mostly operators in small markets, have mounted a campaign to convince local officials that the 1992 Cable u Act is too complicated to understand, too costly to enforce, and, ultimately, more o expensive for consumers. Instead of bow- s ing to the re- regulation of the new law, which sets up a framework of rules to determine cable -TV rates, the cable execu- tives hope to persuade authorities in smaller markets to sign contracts that basically would continue the practice of setting rates through negotiations between the company and a municipality. That difficult for federal regula- tors to monitor. Regulators and critics say many of the offers made by cable operators are laced with overreaching claims about possible consequences if the rules are adopted, such as threats that service could be dis- rupted. Moreover, it isn't clear whether the local contracts that cable officials are pushing are enforceable, or even legal. Fighting the Law "The cable industry lost this fight over- whelmingly in the House and the Senate," says James Quello, acting Federal Com- munications Commission chairman. Now, he complains, many cable operators "have an economic stake in discrediting that law.'' The cable campaign "is beyond chutz- pah, it's evasion," says Barry Orton, a University of Wisconsin professor of tele- communications who advises local govern- ments. Noting that cable systems essen- tially are pushing towns to give up the new regulatory authority the cable act other- wise grants them, he adds: "Small local governments don't have the wherewithal to figure out when they're being duped." Cable executives counter that they are lsimply offering an attractive option to small towns that can't cope with the thicket of new rules. They add that some towns eagerly accepted the cable offers and, in some cases, initiated the talks. In addition, cable officials point out that towns that don't like how the arrangements work out can adopt the new authority later. The Cable Act of 1992imposes new local regulatory powers over an industry that was largely freed of most rate restrictions back in 1987. The FCC, in setting out hundreds of detailed rules to enforce the new law, established guidelines that call for an average 10% rate reduction and estimated savings of $1 billion. But to exercise the new powers, locp1 'THESE OFFERS ARE A HOLLOW ARGUMENT and it's being orchestrated in many parts of the country, usually in areas that have never really spent a lot of time studying cable regulation? William Squadron, vice president of the National Association of Telecommunication Officers and Advisers governments must formally certify with the FCC that they will be responsible for enforcing the law. If they don't certify, as cable systems hope, the FCC itself would have to monitor such systems. That would result in a far lower level of scrutiny and enforcement by an agency based in Washington, and busy with hundreds of other regulatory duties. In trying to persuade local authorities' to forgo FCC certification, cable systems have offered incentives such as improved service, advance payments to municipali- ties, and temporary rate freezes. Some operators have gone so far as to prepare draft ordinances ready for adoption. "These offers are a hollow argument," asserts William Squadron, vice president of the National Association of Telecommu- nication Officers and Advisers, a group of 4,000 local regulatory authorities. "And it's being orchestrated in many parts of the country, usually in areas that have never really spent a lot of time studying cable regulation." Brandishing the Stick At times, the cable claims contain dire predictions about the consequences of the new law. For example, in a bid to woo officials in Alachua County, Fla., local operator James Cable Partners, besides holding out the carrot of a rate freeze until Oct. 1, 1994, also brandished a stick, insist- ing that the new law would "require" increases in cable rates to offset reduc- tions in charges for converter boxes and additional outlets. That is blatantly false, the FCC says. "To even imply that the government is requiring companies to raise rates is as wrong as hell," Mr. Quello, the FCC chair- man, fumes. "It certainly seems to contra- dict the intent of the law and Congress." The James Cable pitch didn't work in Alachua County, which declined the com- pany's offer last week. But about 50 towns served by James Cable already have signed the company's agreement so far. William James, an owner, says his company is merely giving municipalities an alternative to the new cable law. He further contends the new FCC restrictions will force a rate increase of about $2 a month for more than 70% of his almost 80,000 subscribers in 148 systems. The nation's biggest cable operators, which run systems in many of the largest markets, aren't pushing the "don't cer- tify" option as hard. Big city governments have more resources and aren't as eager to give up the new law's authority. But the antiregulatory pitch, as plied by smaller operators, has appeal in smaller markets, where local governments are ill- equipped to handle a regulatory fight. A Texas Town's Experience The town of Decatur, Texas, accepted James Cable's offer. Brett Shannon, city secretary, notes the city has no legal staff and receives only $12,000 a year in cable franchise fees. That could be eaten up quickly if the city clashed with the com- pany over a rate increase and had to hire consultants to help its case, he says. In the small city of Atoka, Okla., how- ever, City Manager Martha Yates turned down the James Cable offer. She didn't appreciate James Cable's proposed ordi- nance saying an act of Congress "does not serve the public interest." She says, "They tried to make it look attractive and push us into doing it quickly, but we want to do what's best for our citizens." Another cable operator, Marcus Cable Partners L.P., wanted to impress upon local authorities just how onerous the new FCC rules are. So it mailed copies of the FCC's 500 -page rate regulation manual to many towns it serves. In an accompanying letter, Marcus says the law is "a hodge- podge of rules, requirements, edicts and dictates and is, in a word, ludicrous." Marcus also warned its locales that if they embrace the new FCC rules, the company may stop making capital im- provements, cease a "high level of serv- ice," and lay off workers and close small offices. The cable firm further warned of "some significant disruptions in our cable service to the community." But Marcus has a bag of goodies for towns that don't certify: Over the next two years the cable firm would eliminate charges for additional outlets, reduce equipment rental charges, and freeze in- stallation fees. Some experts say such promises, for the most part, simply fall in line with the cable law. 41!7 t M E M O R A N D U M TO: Clients "A" List FROM: 3 Cable Communications Consultants SUBJECT: Cable Programing Service Rate Complaint Form DATE: August 31, 1993 Please let us have your questions. ,c /D This is another in a continuing series of memoranda to keep you fully apprised of matters that affect your City as a result of the Federal Communications Commission (FCC) rulings implementing the Cable Act of 1992. Our memorandum of August 30, 1993 discussed potential City involvement in basic cable rate regulation using FCC Form 328. The form FCC 329 attached, is to be used by a franchising authority or subscriber who wishes to register a complaint regarding expanded basic (what the FCC calls "Programing Services rates. Unlike basic rates, which, at the option of local government may be regulated by the City, the FCC retains to itself the authority to regulate rates for the next tier(s) of programs over and above basic. The flow diagram appended sketches out the process involved, and the instructions on the reverse of the form are pretty much self explanatory. Please keep in mind that these forms will be available through the cable company which is responsible for supplying them upon a request by a subscriber. Please note item 12 which could involve the City in giving assistance in filling out the form and in providing an accompanying statement. There is bound to be a lot of confusion in this procedure, much of which is not spelled out by the FCC. For starters, one correctly filled out (italics are ours) form would suffice for the entire franchise area. Whether the FCC will accept the first one and hold the rest in abeyance is anybody's guess. Our emphasis on correctness in the form is because the FCC has made it quite clear that it will disallow any form that varies from it's (to an average subscriber) complicated steps and timetable. Another open -ended question is when the FCC will get around to doing anything about the probably thousands of Form 329's they will receive. Please note that while the FCC says it will require the cable operator to respond in 30 days, it sets no deadline at all for itself (nor does it for an appeal by a cable operator of a decision by a franchising authority regarding basic rates). All of this goes into effect September 1, 1993 and you may expect numerous calls. Note also that, except for subsequent rate increases, the deadline for filing this form (unlike form 328 which is open ended) is February 28, 1994. redenn Con mkafon Commission Washington, D. C. 20554 1. Complainant's Name Mailing Address Oty Daytime Telephone No. (Include area code): 2. Local Franchising Authority's Name Mailing Address City 3. Cable Company's Name Mailing Address Oty Cable Company's FCC Community Unit Identifier (if known): Date prior complaint filed: Month Date Date you received FCC notification that the prior complaintwas defective FCC 329 CABLE PROGRAMMING SERVICE RATE COMPLAINT FORM (Carefully read instructions on reverse before fIlr'mg out form) State ZiP Code rate Month Date ZIP Code State ZIP Code 4. Indicate whether fhb is the first time you have filed this complaint with the FCC or whether you are filing a corrected complaint to cure a defect in a prior complaint. CHECK ONE. First time complaint Corrected complain S. If you are filing a corrected complaint to cure a defect in a prior complaint, indicate the date the prior complaint was filed with the FCC and the date you received notification from the FCC that the prior complaint was defective. Year Year 6. indicate whether you are chailenginic the reasonableness of: (1) a rate concerning cable programming service or associated equipment in effect on September 1, 1993; or (2) a rate increase. (See the Instructions for different filing deadlines depending on which type of complaint you are filing.) CHECK ONE. E Rate in effect on September 1, 1993 Rate increase 7. If you are a subscriber challenging the reasonableness of a rate increase, indicate the date you first received a bill from the cable operator reflecting the rate increase about which you are complaining. Month L)ate 'Year 0. indicate the current monthly rate for the cable programming service or associated equipment and, If you are challenging the reasonableness of a rate increase, the most recent rate in effect immediately prior to the rate increase. M onth Year Current Monthly Rate: Previous Monthly Rate S Month Y ear 3040OS45 tapirs 03/31/91 For FCC Use Only 9. In the tables below, describe the cable programming service to whit'. the complaint is addressed and, if applicable, how it has changed. If this space is insufficient, include any additional comments on a separate page attached to this form. Lid channels by name included in the service: Signature Date 1 1 Lid dharme is by name deleted from the service (if any): Ust channels by name added to the service M anv)t 1 1 1 1 10. If you are a subscriber, you must attach a copy of your current bill reflecting the rate or rate Increase about which you are complaining. NOTE: Failure to attach a copy of your current nt bill reflecting the rate or rate increase may result in dismissal of your complaint. i have attachd a copy of my current bill. Yee ❑No 11. Optional: if you are a subscriber challenging the reasonableness of a rate increase, attach a copy of a previous bill of available) reflecting the rate immediately prior to the rate increase. i have attached a copy of my previous bill. Yee ❑No 12. f certify that i am sending a copy of this complaint, Including all attachments, to the cable company and the local franchising authority at* the addresses fated above via fast lass mail, postage prepaid, at the same time I am sending a copy of this complaint to the FCC. NOTE: Failure to satisfy this requirement may result in tflsrnissal of your complaint. The able company will not be required to respond unless you send a copy of the complaint to the cable company by marl. Yes ONo Date sent: Month bate Gear 13. 1 believe that the cable company's rate for the cable programmner service or associated equipment described above Is unreasonable because 11 violates the FCC's rate regulations. (CHECK BOX) 14.1 certify that, to the best of my knowledge, the information supplied on this form is true and correct. WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRISONMENT N.S. CODE TI1u /g, SECTION TOO1! E 1. This FCC form is to be used by subscribers, franchising authorities, and other relevant state or local govemment entitles seeking to file a complaint with the FCC challenging the reasonableness of a cable company's rates for cable programming service or for installation or rental of equipment used to receive cable programming service. 2. The term "cable programming service" includes all video programming provided by a cable company except: (1) programming provided on the basic service tier; or (2) programming provided on a pay per channel or pay per program basis. See Question 9. 3. The "basic service tier" is the tier that includes over-the-air television broadcast signals and public, educational and governmental access channels. Under federal law, in most instances, your local franchising authority rather than the FCC regulates rates for the basic service tier or associated equipment. Therefore, if you believe that your rate for the basic service tier or associated equipment is unreasonable, you should contact your local franchising authority to determine if it is authorized to regulate basic service tier rates. 4. Under federal law, video programming provided on a pay-per-channel or pay- per program basis (for example, a premium movie channel such as 1180 or a pay per -view sports event) is not subject to rate regulation by either the FCC or your local franchising authority. 5. If you are concerned about your rates for cable programming service or associated equipment, then you may fill out this form and submit it to the FCC. The FCC will examine the reasonableness of your cable programming service rate according to a specific formula. If the rate the cable company currently is charging you for the cable programming service is greater than the rate produced by the FCC's formula, the cable company's rate will be presumed unreasonable. In these circumstances, unless the cable company can provide cost information to justify the reasonableness of its rate, the FCC may order a refund and/or a prospective rate reduction for the cable programming service at issue. 6. Please note the following time limitations for filing a complaint If you are challenging the reasonableness of a rate increase for cable programming service or associated equipment, your complaint must be actually received by the FCC within 45 days from the date you receive a bill from your cable company reflecting the rate increase. (Note: a reduction in number of channels may constitute an effective rate increase even though the existing rate for the cable programming service remains unchanged.) The only exception to the 45 day time limitation concerns cable programming service and associated equipment rates in effect when the FCC's rules become effective that is, September 1, 1993. You may challenge the reasonableness of such rates, but you must file your complaint within 180 days from September 1, 1993 that is, by February 28 19,4. After February 28, 1994, you may only file complaints about rate increases and you must follow the general 45-day filing requirement described above. Cate -filed complaints will be dismissed with no opportunity to reftle. 7. In addition to the cable company's name and mailing address, you should provide the cable company's "FCC Community Unit Identifier." (The FCC Community Unit identifier is a number assigned to each cable system by the FCC for administrative purposes.) Also, you must provide the name and mailing address of the local franchising authority. (The local franchising authority is the local municipal, county or other government organization that regulates cable television in your community.) FCC rules require the cable company to fumish all this information to you on your monthly bill. If this information does not appear either on the front or back of your monthly bill, contact your cable company, your local franchising authority, or your local govemment to obtain the necessary information before filling out this fom1. 8. You must indicate whether you are challenging the reasonableness of: (1) a rate conceming cable programming service or associated equipment in effect on September 1, 1993; or (2) a rate increase. Except for a limited opportunity to challenge existing rates in effect on September 1, 1993, complaints may be filed only in the event of a rate increase. FCC 329 INSTRUCTIONS epae053v96 9. If you are a subscriber, you must attach a copy of your monthly cable bill reflecting the rate or rate increase about which you are complaining. if you are challenging the reasonableness of a rate concerning cable programming service or associated equipment in effect on September 1, 1993, the bill should reflect that rate. if you are challenging the reasonableness of a rate increase, the bill should reflect the increased rate. (If you are challenging the reasonableness of a rate increase and have a previous bill which reflects the rate immediately prior to the increase, please attach a copy of the previous bill note, however, that this is optional.) 10. You must check the box stating your belief that the cable programming service rate is tmreasonabie. The FCC staff will apply the formula mentioned in paragraph 5 to determine whether the cable company's rate is presumed reasonable or not you do not need to make this calculation. 11. You must fill in all information required by this fora. 12. You may contact your local franchising authority for assistance in filling out this form. In addition, you may attach a statement from your local franchising authority describing its views on the reasonableness of the cable programming service rate in question. This is not a requirement. If you do attach such a statement, you should also mall a copy of it to the cable company. 13. You must sign and date this form. 14. Copies must be mailed, including all attachments, to the following: Original. Federal Communications Commistsion Attn: Cable Programming Service Rate Complaint, P.O. Box 1B958 Washington, D.C. 20036; the cable company (at the address fisted on your complaint); and the local irand:l:ing authority (at the address listed on your complaint). Please be sure to send all copies to the correct address. If you do not, we may not be able to process your complaint. 15. NOTE If you do not mail a copy of this form, induding all attachments, to the cable company at the same time you mail your complaint to the FCC, the cable company will not be required to respond and your complaint may be dismissed. 16. if your complaint meets the requirements listed above, the FCC will require the able company to respond to your complaint within thirty days and provide a justification for the reasonableness of your rate. The cable company must provide you with a copy of its response to the FCC..1 17. The FCC staff will examine your complaint and the cable company's response and then rule on the reasonableness of the cable programming service rate. This ruling will be in writing, and you will receive a copy by mail. If the FCC staff determines that the rate in question Is unreasonable, it may order refunds and/or prospective rate reductions. If it determines that the rate in question is reasonable, the FCC staff will deny the complaint. FCC NOTICE TO INDIVIDUALS REQUIRED BY THE PRIVACY ACT AND THE PAPERWORK REDUCTION ACT The solicitation of personal information in this tone is authorized by the Communiatices Act of 1934, as amended. The Commission will use the information provided in this form to determine the reasonableness of a cable company's rates. In reaching that deremhmatwn, or for law enforcement PurPoses, d may become necessary to Meg personal information contained in this tone to another government agency. All information provided in this form will be available for public hxpection. Your response Is required to obtain the requested relief. Public reporting burden for this collection of information is estimated to average 1 hour, incuding the time for reviewing instructions, searching existing data source, gadterirrg and maintaining the data needed, and completing and reviewing the collection of Information. Send commene regarding this burden estimate or any other aspen of this collection of information, including suggestions for reducing the burden, to the Federal Communications Commission, Records Management Dnision, AMD.PIRS, Washington, D. C. 20554, and to she Office of Management and gadget, P Redaction Project (3060-0349), Washington, D. C. 20503. THE FOREGOING NOTICE LS REQUIRED BY THE PRIVACY ACT OF 1974, P.I.93.579, DECEMBER 31, 1975, 5 U.S.C. 322aXeXE) AND THE PAPERWORK REDUCTION ACT OF 1950, P.L. 96311, DECEMBER 11, 1990, 44 U.S.C. 3307. O 4 0) C t 0 C v 3. Rate Regulation of Cable Programming Service r i 1111 III0•82 5 1. Subscriber and/or franchising authority files complaint with FCC (Form 329) and notifies cable operator of complaint 2. Denial by FCC due to procedural error 3. FCC notice to cable operator to respond 4. Cable operator responds to complaint 5. FCC denies complaint; OR 6. FCC finds complaint valid; may order rate roll back or refund 7. Implementation to subscribers 6 it 4 0 Subscriber J Key Approval ED.€00,.. Disapproval NI Notification/ submission TO: FROM: SUBJECT: DATE: M E M O R A N D U M 7:=5 Fnesal 3 I la 5�. a.. r i Clients 3 -1 Cable Communications Consultants Cable Television Basic Rate /Equipment /Installation Regulation August 30, 1993 Enclosed is a copy of the Federal Communications Commission (FCC) Form 328, Certification of Franchising Authority to Regulate Basic Cable Service Rates. Our previous bulletins to you have outlined the steps to be taken to enable your City to be certified if you so elect. To reiterate the process we are attaching a diagram flow chart of the process. In terms of procedure, please note that the certification may be filed anytime after September 1, 1993. Be certain that the form is sent to the FCC registered mail return receipt requested. Also make certain that the cable operator(s) are sent a copy via the same mail process simultaneously with the submission to the FCC. Please send us a copy of the completed form for our files. Additional instructions are on the back of the form itself. Within 30 days your franchisee(s) must send you FCC Form 393 indicating the methodology and computation it has used to arrive at the rates for which it is requesting approval. The City then has 30 days to approve or deny the proffered rates. You may, however, ask for a 90 day extension if needed (120 days if Cost of Service is submitted). Note that the City must also pass resolutions regarding the acceptance of the FCC policies and also of public hearings. At your City's request our Firm will make a limited initial review of the methodology and reasonableness of the cable operator's submission for your guidance. There will be no charge to you for this preliminary assessment. If the City desires a more comprehensive evaluation, assuming the cable operator uses the benchmark system of computation, this service will be available to you at our standard rate for this project. There are several points to be considered. First, once this certification is sent to the FCC, the wheels will be set in motion and there is no way of stopping them. Local government must act within the time limits established. If the submitted basic rates are approved by you, then the only time again your City will be called upon to analyze basic rate structure is when the cable operator is seeking subsequent rate hikes. Please keep in mind that this process is complex and will present a considerable work load both on the cable operator and upon the Franchising Authority. Note further that Form 328 submission by local government is only for basic rate regulation as defined by the FCC; complaints on programing service rates (e.g. another tier of channels) may be made by a Franchising Authority or by any subscriber to the FCC using Form 329. This subject will be reviewed for you in a subsequent memorandum. There will be undoubtedly many questions raised by this procedure. Please do not hesitate to let us know them. The Community Unit Identifier(s) for your franchise(s) follows: Port Angeles— WA0134 Your operator's legal name is Northland Cable Television Inc.. Federal C ications Comn Washingon..0. C. 20554 FCC 328 CERTIFICATION OF FRANCHISING AUTHORITY TO REGULATE BASIC CABLE SERVICE RATES AND INITIAL FINDING OF LACK OF EFFECTIVE COMPETITION 1 Name of Franchising Authority Mailing Address City Telephone No. (include area code): Person to contact with respect to this form: State ZIP Code 2. a. Name (s) and address(es) of cable system(s) and associated FCC community unit identifiers within your jurisdiction. (Attach additional sheets if necessary.) Cable System's Name Mailing Address City State ZIP Code Cable System's FCC Community Unit Identifier: Cable System's Name Mailing Address City Cable System's FCC Community Unit Identifier: 2. b. Name (s) of system(s) and associated community unit identifier(s) you claim are subject to regulation and with respect to which you are filing this certification. (Attach additional sheets if necessary.) Name of System Name of System State ZIP Code Community Unit Identifier Community Unit Identifier 2. c. Have you served a copy of this form on all parties Yes JJ No listed in 2.b.? Return the original and one copy of this certification form (as indicated in Instructions), along with any attachments, to: Federal Communications Commission Attn: Cable Franchising Authority Certification P.O. Box 18539 Washington, D. C. 20036 For FCC Use Only 3. Will your franchising authority adopt (within 120 days of certification) and administer regulations with respect to basic cable service that are consistent with the regulations adopted by the FCC pursuant to 47 U.S.C. Section 543(b)? 4. With respect to the franchising authority's regulations referred Title Date to in Question 3, Signature a. Does your franchising authority have the legal authority to adopt them? b. Does your franchising authority have the personnel to administer them? S. Do the procedural laws and regulations applicable to rate regulation proceedings by your franchising authority provide a reasonable opportunity for consideration of the views of interested parties? Approved by OMB 30600550 Expires 05/31/96 Yes ❑No Ekes Do Ekes EINo Yes ENo Yes EJNo 6. The Commission presumes that the cable system(s) listed in 2.b. is (are) not subject to effective competition. Based on the definition below, do you have reason to believe that this presumption is correct? (Effective competition means that (a) fewer than 30 percent of the households in the franchise area subscribe to the cable service of a cable system; (b) the franchise area is (i) served by at least two unaffiliated multichannel video programming distributors each of which offers comparable video programming to at least 50 percent of the households in the franchise area; and (ii) the number of households subscribing to programming services offered by multichannel video programming distributors other than the largest multichannel video programming distributor exceeds 15 percent of the households in the franchise area; or (c) a multichannel video programming distributor operated by the franchising authority for that franchise area offers video programming to at least 50 percent of the households in that franchise area.) WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND /OR IMPRISONMENT (U.S. CODE TITLE 18, SECTION 1001). FCC 328 August 1993 Federal Communications Commission Washington, D C 20554 1. The Cable Television Consumer Prctectton and Competition Act, enacted in October 1992, change the manner in which cable television systems that are not subject to effective competition are regulated. In general, rates for the biz r service tier (the tier required as a condition of access to all other '.ideo services and containing, among other services, local broadcast station signals and public, educational, and public access chanrels) and associated equipment will be subject to regulation by local or state govemments "franchising authorities'). Rates for cable programming services and associated equipment (all services except basic and pay channels) will be subject to regulation by the FCC. Rates for pay channels (channels for which there is a spec= c per channel or per program charge) are not regulated. 2. Only cable systems that are not subject to effective competition may be regulated. Effective competition means that (a) fewer than 30 percent of the households in the frannise area subscribe to the cable service of a cable system; (b) the francuse area is (t) served by at least two unaffiliated multichannel video programming distributors each of which offers comparable video programming to at (east 50 percent of the households in the franchise a-ea; and (ii) the' number of households subscribing to programnming services offered by multichannel video programming distrbutors other than the largest multichannel video programming disnbutor exceeds 15 percent of the households in the franchise area. or (c) a multichannel video programming distributor operated by tie franchising authority for that franchise area offers video programming to at least 50 percent of the households in that franchise area. 3. In order to regulate basic service tie- rates, a franchising authority must be certified by the FCC. In oroer to be certified, a franchising authority must complete this form An original and one copy of the completed form and all attachments must be returned to the FCC by registered mail, return receipt requested, to the FCC at the address on the form. 4. A copy of the form must be served on me cable operator by first -class mail on or before the date the form is sent or delivered to the FCC. 5. The franchising authority's certification will become effective 30 days after the date Stamped 20_the postal rotum rer?upt unless otherwise notified by the Commission by that sate. The franchising authority cannot begin to regulate rates, however, until it has actually adopted the required regulations (see below) ac until it has notified the cable operator that it has been certified and that it has adopted the required regulations. 6. In order to be certified, franchising authorities must answer "yes" to Questions 3, 4, and 5, which are exp!ained as follows: 7. Question 3. The franchising authorm must adopt rate regulations consistent with the Commission's regulations for basic cable service. To fulfill this requirement for certification, the franchising authority may simply adopt a regulation indicating that it will follow the regulations established by the FCC. The franchising authority has 120 da.s to adopt these regulations after the time it is certified. The franchising authority may not, however, begin to regulate cable rates until after it has adopted these regulations and until it has notified the cable operator that it has been certified and has adopted the required regulations. 8. Question 4(a): The franchising authorin's "legal authority" to regulate basic service must come from state law. jn some states only the is ate government mayrgulate cable ''o s, In those states, the state govemment should file this certifica_ an. Provisions in franchise agreements that prohibit rate regulation: are void, and do not prevent a franchising authority from regulating the basic service tier and associated equipment. INSTRUCTIONS FOR FCC 328 FRANCHISING AUTHORITY CERTIFICATION Approved by OMB 3060-0550 Expires 05/31/96 Question 4(b): The franchising authority must have a sufficient number of personnel to undertake rate regulation. A franchise authority unable to answer "yes" to questions 4(a) or 4(b) may wish to review the FCC's Report and Order in Docket 92 -266, FCC 93 -177 (released May 3, 1993) for further information on the establishment of altemative federal regulatory procedures. 9. Question 5: Franchising authorities must have procedural regulations allowing for public participation in rate regulation proceedings. If a franchising authority does not have these regulations already in place, it must adopt them within 120 days of certification and before it may undertake rate regulation. 10. Question 6: Most cable systems are Dot subject to effective competition, as defined by the Cable Act. (The definition is included above and on the form.) The franchising authority may presume that the cable system in its jurisdiction is not subject to effective competition. For purposes of applying -the definition of effective competition (see Item 2 above), "multichannel video programming distributors" include a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, a television receive-only satellite program distributor, a video dialtone service, and a satellite master antenna television system. A multichannel video programming distributor's services will be deemed "offered" when they are both technically and actually available. Service is "technically available' when the multichannel distributor is physically able to deliver the service to a household wishing to subscribe, with only minimal additional investment by the distributor. A service is "actually available" if subscribers in the franchise area are reasonably aware through marketing efforts that the service is available. Subscribership of those multichannel video programming distributors offering service to at (east 50 percent of the households in a franchise area will be aggregated to determine whether at least 15 percent of the households in the franchise area are served by competitors. A multichannel video programming distributor must offer at least 12 channels of programming, at least one channel of which is nonbroadcast, to be found to offer "comparable" video programming. 11. This certification form must be signed by a govemment official with authority to act on behalf of the franchising authority. FCC NOTICE TO INDIVIDUALS REQUIRED BY THE PRIVACY ACT AND THE PAPERWORK REDUCTION ACT The solicitation of personal mforniatron in this form is authorized by the Communications Act of 1934, as amended. The Commission will use the information provided in this form to determine if the franchise authority should be authorized to regulate cable rates. In reaching that determination, or for law enforcement purposes, it may necessary to refer personal information contained in this form to another govemmem agency All information provided in this form will be available for public inspection Your response is required to obtain the requested authority. Public reporting burden for this collection of information is estimated to average 30 minutes, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Federal Communications Commission, Records Management Division, AMD -PIRS, Washington, D. C. 20554, and to the Office of Management and Budget, Paperwork Reduction Project (3060-0550), Washington, D. C 20503. THE FOREGOING NOTICE 1S REQUIRED BY THE PRIVACY ACT OF 1974, P.L 93 -579, DECEMBER 31, 1975, 5 US C. 522a(e)(3) AND THE PAPERWORK REDUCTION ACT OF 1980, P.L 96-511, DECEMBER 11, 1980, 44 U.S.C. 3507. 1. Franchising Authority Certification and Rate Approval Franchising Authority 4 5 II A Y II 7 lib 2 oK FCC 3 1 lb 1. Certification to FCC (Form 328) 2. Tacit approval (30 days) 3. Disapproval by FCC (Agency assumes regulatory responsibility) 4. Notification of intention to regulate 5. Basic rate submission (Form 393) 6. Approval (30 days) unless more time required 7. Notice of basic tier availability price K Approval E ■=0.- Disapproval Y NO Notification/submission Subscriber 1 August 17, 1993 AWC ASSOCIATION OF WASHINGTON CITIES TO: Mayors, City Managers, City Clerks FROM: Stan Finkelstein, Executive Director RE: Cable television rate regulation Cooperation for Better Communities a2 Vgala: 0 3 11993 I, J of lfi .t 1076 S. Franklin St. Olympia, WA 98501 (2061753.4137 The Federal Communications Commission (FCC) has published the form that franchising authorities (cities that have a franchise agreement with a cable company) must use to announce their intention to regulate cable television rates. To receive authority to regulate cable rates, as authorized by the Cable Television Consumer Protection and Competition Act of 1992, you need only fill out the enclosed FCC Form 328 and return it to the FCC by registered mail. While the 1992 Cable Act made a number of changes to existing federal law, the two areas of new regulatory powers for existing franchising authorities are rate regulation and the newly developed customer service standards. This memo and the enclosures will provide an overview of these two areas. For further information, please contact Curt Payola of AWC at (206) 753 -4137 or the National Association of Telecommunications Officers and Advisors (NATOA) at (202) 626 -3160. We've enclosed a recent NATOA letter regarding rate regulation for your information. Getting Certified to Regulate Local Cable Television Rates The FCC has just announced a new date, September 1, 1993, on which franchising authorities may mail in FCC Form 328 to become certified as rate regulators. The franchising authority becomes certified 30 days after the receipt of the form by the FCC. However, a copy of your letter to the FCC should be sent to your cable company as notice that you intend to regulate cable rates. Passage of the Cable Act was, in part, a response to increasing cable television rates since deregulation in the 1980s. In order to stave off further rate increases prior to re- regulation, the FCC ordered a "rate freeze" that became effective in April 1993 and which will end on November 15, 1993. The September 1 date for franchising authorities to apply for certification, along with the 30- day approval period, is meant to allow franchising authorities time to lock in the current rates in your community. These rates then will be compared by the cable operator, upon your request, to national "benchmark" rates for basic cable service (not pay -per -view or premium channels) and equipment rental fees. By applying for rate regulation certification on September 1 or shortly thereafter, your city can lock in the current basic cable service and equipment rates for your cable operator to measure against the FCC's national standards because you will receive certification 30 days after application, well in 1992 Cable Television Act August 17, 1993 Page 2 advance of the November 15 ending date for the freeze. You must, however, officially notify your cable operator of your intent to regulate rates prior to November 15 (and adopt an ordinance parallelling the FCC's regulations within 120 days), or the rates you will be regulating may be new, higher rates announced by your cable operator after November 15. While a franchising authority can apply for certification at any time in the future, your opportunity to lock in current, probably lower, rates will be lost if you apply for certification later than early October. According to NATOA, the process of regulating basic cable service and equipment rates will be neither time consuming nor difficult because the burden of proving the fairness of rates, and of filing the necessary forms, is on the cable operator, not the city. The feeling of NATOA leadership, as expressed at their recent national workshop on cable issues, is that anyone who can read a city budget or a balance sheet has the expertise to adequately review the federal forms filed by a cable operator. If questions arise, they suggested contacting neighboring cities or NATOA for assistance. Regulating "Baseline" Customer Service Standards The FCC's new customer service standards for cable operators became enforceable on July 1, 1993, and may be invoked by any franchising authority at any time upon giving 90 days written notice. A sample notification letter is enclosed for your use. The new standards, which are outlined in the enclosed FCC regulations, cover office hours and telephone availability; installations, outages, and service calls; and communications, billings, and refunds. These standards do not preempt your current franchise agreement provisions regarding customer service standards, nor do they preempt local consumer protection laws. They also do not prevent franchising authorities from negotiating more stringent standards in future franchise agreements. They are considered "baseline" standards that may be exceeded by local laws and through agreements with cable operators. Resources In addition to contacting Curt at AWC with your questions regarding cable television regulation and the new Cable Act, consider purchasing the Local Officials Guide to the 1992 Cable Act published by the National League of Cities (NLC). We've enclosed a pre publication order form. Also, as stated above, the National Association of Telecommunications Officers and Advisors, an NLC affiliate organization, is available to help answer your questions, at 1301 Pennsylvania Avenue, NW, Washington, D.C. 20004; (206) 626 -3160 or FAX (202) 626 -3043. SSF /CP enclosures Federal Communications Commission Washington, D. C. 20554 CERTIFICATION OF FRANCHISING AUTHORITY TO REGULATE BASIC CABLE SERVICE RATES AND INITIAL FINDING OF LACK OF EFFECTIVE COMPETITION 1 Name of Franchising Authority Mailing Address City Telephone No. (include area code): Person to contact with respect to this form: 2. a. Name (s) and address(es) of cable system(s) and associated FCC community unit identifiers within your jurisdiction. (Attach additional sheets if necessary.) Cable System's Name Mailing Address City State ZIP Code Cable System's FCC Community Unit Identifier: Cable System's Name Mailing Address City Cable System's FCC Community Unit Identifier: Name of System Name of System State ZIP Code State ZIP Code 2. b. Name (s) of system(s) and associated community unit identifier(s) you claim are subject to regulation and with respect to which you are filing this certification. (Attach additional sheets if necessary.) Community Unit Identifier Community Unit Identifier 2. c. Have you served a copy of this form on all parties Yes 0 No listed in 2.b.? FCC 328 Return the original and one copy of this certification form (as indicated in Instructions), along with any attachments, to: Federal Communications Commission Attn: Cable Franchising Authority Certification P.O. Box 18539 Washington, D. C. 20036 For FCC Use Only 3. Will your franchising authority adopt (within 120 days of certification) and administer regulations with respect to basic cable service that are consistent with the regulations adopted by the FCC pursuant to 47 U.S.C. Section 543(b)? Approved by OMB 30600550 Expires 05/31/96 0 Yes Ei No 4. With respect to the franchising authority's regulations referred to in Question 3, a. Does your franchising authority have the legal authority to adopt them? b. Does your franchising authority have the personnel to administer them? 5. Do the procedural laws and regulations applicable to rate regulation proceedings by your franchising authority provide a reasonable opportunity for consideration of the views of interested parties? Signature Title Date 0 Yes O No ❑Yes ONo EJ Yes EJ El Yes 1::::1 No 6. The Commission presumes that the cable system(s) listed in 2.b. is (are) not subject to effective competition. Based on the definition below, do you have reason to believe that this presumption is correct? (Effective competition means that (a) fewer than 30 percent of the households in the franchise area subscribe to the cable service of a cable system; (b) the franchise area is (i) served by at least two unaffiliated multichannel video programming distributors each of which offers comparable video programming to at least 50 percent of the households in the franchise area; and (ii) the number of households subscribing to programming services offered by multichannel video programming distributors other than the largest multichannel video programming distributor exceeds 15 percent of the households in the franchise area; or (c) a multichannel video programming distributor operated by the franchising authority for that franchise area offers video programming to at least 50 percent of the households in that franchise area.) WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND /OR IMPRISONMENT (U.S. CODE TITLE 18, SECTION 1001). FCC 328 August 1993 Federal Communications Commission Washington, D C 20554 1 The Cable Television Consumer Protection and Competition Act, enacted in October 1992, changes the manner in which cable television systems that are not subject to effective competition are regulated. In general, rates for the basic service tier (the tier required as a condition of access to all other video services and containing, among other services, local broadcast station signals and public, educational, and public access channels) and associated equipment will be subject to regulation by local or state governments "franchising authorities Rates for cable programming services and associated equipment (all services except basic and pay channels) will be subject to regulation by the FCC. Rates for pay channels (channels for which there is a specific per channel or per program charge) are not regulated. 2. Only cable systems that are not subject to effective competition may be regulated. Effective competition means that (a) fewer than 30 percent of the households in the franchise area subscribe to the cable service of a cable system; (b) the franchise area is (i) served by at (east two unaffiliated multichannel video programming distributors each of which offers comparable video programming to at least 50 percent of the households in the franchise area; and (ii) the number of households subscribing to programming services offered by multichannel video programming distributors other than the largest multichannel video programming distributor exceeds 15 percent of the households in the franchise area; or (c) a multichannel video programming distributor operated by the franchising authority for that franchise area offers video programming to at (east 50 percent of the households in that franchise area. 3. In order to regulate basic service tier rates, a franchising authority must be certified by the FCC. In order to be certified, a franchising authority must complete this form. An original and one copy of the completed form and all attachments must be returned to the FCC by registered mail, return receipt requested, to the FCC at the address on the form. 4. A copy of the form must be served on the cable operator by first-class mail on or before the date the form is sent or delivered to the FCC. 5. The franchising authority's certification will become effective 30 days >after_he -date 5tamoed Qa,th postal retum receipt unless otherwise notified by the Commission by that date. The franchising authority cannot begin to regulate rates, however, until it has actually adopted the required regulations (see below) Ansi until it has notified the cable operator that it has been certified and that it has adopted the required regulations. 6. In order to be certified, franchising authorities must answer "yes" to Questions 3, 4, and 5, which are explained as follows: 7. Question 3: The franchising authority must adopt rate regulations consistent with the Commission's regulations for basic cable service. To fulfill this requirement for certification, the franchising authority may simply adopt a regulation indicating that it will follow the regulations established by the FCC. The franchising authority has 120 days to adopt these regulations after the time it is certified. The franchising authority may not, however, begin to regulate cable rates until after it has adopted these regulations and until it has notified the cable operator that it has been certified and has adopted the required regulations. 8. Question 4(a): The franchising authority's "legal authority" to regulate basic service must come from state law. In some states. only he ,State government may regulate cable rates, In those states, the state government should file this certification. Provisions in franchise agreements that prohibit rate regulation are void, and do not prevent a franchising authority from regulating the basic service tier and associated equipment. INSTRUCTIONS FOR FCC 328 FRANCHISING AUTHORITY CERTIFICATION Approved by OMB 3060-0550 Expires 05/31/96 Question 4(b): The franchising authority must have a sufficient number of personnel to undertake rate regulation. A franchise authority unable to answer "yes" to questions 4(a) or 4(b) may wish to review the FCC's Report and Order it .Docket 92 -266, FCC 93 -177 (released May 3, 1993) for further Information on the establishment of altemative federal regulatory procedures. 9. Question 5: Franchising authorities must have procedural regulations allowing for public participation in rate regulation proceedings. If a franchising authority does not have these regulations already in place, it must adopt them within 120 days of certification and before it may undertake rate regulation. 10. Question 6: Most cable systems are no/ subject to effective competition, as defined by the Cable Act. (The definition is included above and on the form.) The franchising authority may presume that the cable system in its jurisdiction is not subject to effective competition. For purposes of applying the definition of effective competition (see Item 2 above), "multichannel video programming distributors" include a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, a television receive -only satellite program distributor, a video dialtone service, and a satellite master antenna television system. A multichannel video programming distributor's services will be deemed "offered" when they are both technically and actually available. Service is "technically available" when the multichannel distributor is physically able to deliver the service to a household wishing to subscribe, with only minimal additional investment by the distributor. A service is "actually available" if subscribers in the franchise area are reasonably aware through marketing efforts that the service is available. Subscribership of those multichannel video programming distributors offering service to at least 50 percent of the households in a franchise area will be aggregated to determine whether at least 15 percent of the households in the franchise area are served by competitors. A multichannel video programming distributor must offer at least 12 channels of programming, at least one channel of which is nonbroadcast, to be found to offer "comparable" video programming. 11. This certification form must be signed by a govemment official with authority to act on behalf of the franchising authority. FCC NOTICE TO INDIVIDUALS REQUIRED BY THE PRIVACY ACT AND THE PAPERWORK REDUCTION ACT The solicitation of personal information in this form is authorized by the Communications Act of 1934, as amended The Commission will use the information provided in the form to determine if the franchise authority should be authorized to regulate cable rates. In reaching that determination, or for law enforcement purposes, it may become necessary to refer personal information contained in this form to another govemment agency. All information provided in the form will be available for public inspection. Your response is required to obtain the requested authority. Public reporting burden for this collection of information is estimated to average 30 minutes, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Federal Communications Commission, Records Management Division, AMD-PIRS, Washington, D C 20554, and to the Office of Management and Budget, Paperwork Reduction Protect (3060-0550), Washington, D. C. 20503. THE FOREGOING NOTICE I5 REQUIRED BY THE PRIVACY ACT OF 1974, P.L 93 -S79, DECEMBER 31, 1975, 5 U.S.C. 522a(e)(3) AND THE PAPERWORK REDUCTION ACT OF 1980, P.L. 96-511, DECEMBER 11, 1980, 44 U.S.C. 3507. August 13, 1993 The National Association of Telecommunications Officers and Advisors An affiliate of the National League of Cities RE: Action Alert On Cable Regulation; Changes Effective September 1 Dear NATOA /NLC Cable Seminar Participant: 1301 Pennsylvania Avenue, N.W. Washington, D.C. 20004 (202) 626 -3160 FAX (202) 626 -3043 On behalf of the National Association of Telecommunications Officers and Advisors NATOA), I would like to thank you for your recent attendance at the NATOA /National League of Cities seminar on the new era in cable television regulation. We hope that your participation provided you with the tools you will need to exercise your new rights under the 1992 Cable Act, and to protect cable subscribers and local government interests in your community. The best way to stay abreast of all of the late breaking developments in cable television regulation is to be a member of NATOA. NATOA members represent some of the most informed local government officials in the country. If you're not a member, we urge you to join in order to benefit from the same information. We are also writing to alert you to a recent change in the effective date of cable rate regulation adopted in the last several weeks by the Federal Communications Commission (FCC), and to a misleading campaign being waged by the cable television industry. The FCC has advanced the effective date of cable rate regulation by one month. from October 1 to September 1. 1993. Thus, beginning on September 1, franchising authorities may file with the FCC Form 328 (a copy is enclosed) which will enable local governments to regulate basic cable rates on a local level. Also on September 1, franchising authorities may initiate the process by which the FCC will address non -basic cable rates. At the same time, the FCC has maintained the November 15, 1993 date of expiration for the federal cable rate "freeze However, the FCC has also preempted local notice requirements for rate and service charges, so you may expect that many subscribers in your community will face sudden changes in cable rates and service packaging beginning September 1st. As these changes are underway, you should be alerted that the cable television industry, in many regions of the country, is embarking on an organized campaign to discourage local governments from filing for FCC certification to regulate basic cable rates. Many false and misleading claims and arguments are being put forth by the industry. At NATOA, we are urging all local governments: DO NOT BE MISLED BY THE CABLE INDUSTRY'S CONTINUED CAMPAIGN AGAINST RATE REGULATION: THE ONLY WAY LOCAL GOVERNMENTS CAN ADEOUATELY PROTECT SUBSCRIBERS IS BY BECOMING CERTIFIED TO REGULATE RATES 5.2t0 August 13, 1993 Cable Seminar Participants Page 2 Without rate regulation certification, your community will be without adequate tools to prevent unwarranted increased in basic cable rates after the rate freeze expires on November 15th, and may be unable to adequately respond to both citizens and the FCC on complaints regarding non- basic cable rates in your community. The types of "informal" understandings or "side agreements" being urged by the cable industry are unenforceable, as the FCC has publicly stated. Despite cable company assertions to the contrary, the certification process is simple and painless, the regulation process is not difficult to understand or implement, and the primary burden of compliance with federal standards remains on the operator -not the franchising authority. NATOA intends to send continuing alerts to our members on these subjects and to provide copies of FCC certification forms, sample local rules, advice on implementation, and other materials designed to enable local governments to promptly and fairly fulfill their regulatory responsibilities under the Cable Act. If you are not already a NATOA member, we urge you to consider membership at this time in order to receive timely, detailed, and accurate information on implementing the Cable Act. A membership brochure is enclosed. If you have any questions, please feel free to call our Washington, DC office at the National League of Cities at 202/626- 3160. Again, I would like to thank you for your attendance at our seminars, and I hope this information is useful to you as you face decisions in cable matters. Sincerely, David C. Olson NATOA President Enclosure (NATOA membership brochure and FCC Form 328) ORDER Now FOR PRE PUBLICATION SAYINGS A COMPREHENSIVE GUIDEBOOK PLUS FREE SUPPLEMENTS ON 1993 FCC RULES LOCAL OFFIcIAL5 GU /DE TO THE 7992 CABLE Acr t•---63- 4466 A (ter years of controversy and negotiations, the Cable Television Consumer Protection and Competition Act of 1992 has become law. This complex new legislation restores to local governments significant tools to help them control cable rates, encourage competition, and help consumers cope with the monopolistic cable marketplace. The law will change the way cities and counties franchise and regulate cable systems. To help local officials understand and comply with the 1992 Cable Act, the National League of Cities (NLC) and the National Association of Telecommunications Officers and Advisors (NATOA) are preparing a comprehensive notebook guide on the major provisions on the law and on its legal Implications for local governments. Scheduled for release in February, 1993, this definitive book will provide practical suggestions on how to deal with new requirements relating to: Franchise Fees Rate Regulation Effective Competition Franchise Renewals Customer Service Standards Signal Quality Must Carry Provisions Municipal Ownership Programming Access Leased /PEG Access Monetary Damage Immunity Subscriber Privacy And More! The law firm of Arnold Porter, which has extensive experience in cable franchising and which assisted NLC and NATOA in the complex negotiations that led to passage of the final bill, will be a major contributor to the guidebook. The Local Officials Guide to the 1992 Cable Act will include a section section analysis of the legislation, pages of detailed practical and legal guidance, and a comprehensive, up -to -date copy of the Federal Communications Act. The guidebook will be published in a handy, 3 -ring binder, and all guidebook purchasers will receive, free of charge, special supplements explaining FCC rulemakings that will be published during 1993. The Local Officials Guide to the 1992 Cable Act will be available In late February. Order your copy today to lock in $15 savings on special pre publication prices and to insure that your community has comprehensive, up -to -date information on the new law. Simply fill out the order form below and return it, with your payment, to NLC. CI YES, please send me copy(ies) of the Local Officials Guide to the 1992 Cable Act and the free supplements on FCC rulemakings as they are issued. Pre publication price for NLC and NATOA members: $75; Pre publication price for non- Name members: $95. (Note: In Fobr+ 1993, JUNE prices will increase to S90 and 5110.) Title Organization Addres City State Zip Q My payment is enclosed. (please make checks payable to: National League of Cities.) 0 Please bill me (P.O.* ORI)EiZ FORM Order Subtotal Shipping and handling 5.00 Total Retum this form, with your payment, to: Publications Sates National League of Cities 1301 Pennsylvania Avenue, N.W. Washington, D.C. 20004 -1763 Phone Orders: (202) 626 -3150 Fax Orders: (202) 626 -3043 ARNOLD PORTER E X H I B I T S FCC RULE ON RATE REGULATION 1. Adopted by the FCC on April 1, 1993. 2. Text released by the FCC on May 3, 1993. '3. Published in the Federal Register on May 21, 1993 (58 Fed. Req. 29553). NOTE: Effect date of rules stayed until October 1, 93 (see Order dated June 15, 1993, at Exhi Cho... of 6L, FCC 4' Sepft.i for l Salo Operator Files Rates EARLIEST DATE DUE November* 1 1 City Decides Case, Or Issues Order Saying More Time Needed Must Issue 30 Days After Filing 1 City Decides Case Or Allows Rates To Take Effect Subject to Refund 120 Days After 1st Order For Cost of Service; 90 Days For Benchmark 1 Written Decision 1 Appeal SUMMARY OF BASIC SERVICE REGULATORY PROCESS File Certification EARLIEST DATE a'Otober..1. S, Seo..6er I I Certification Effective Automatic, 30 days after filing: EARLIEST DATE October S. City Adopts Regulations Before or within 120 days of certification Notice to Operator Give after regs adopted, cert. effective; EARLIEST DATE October)( a4tViSsat 6y Fc• ARNOLD 8c PORTER EXHIBIT 3 FCC RULE ON CONSUMER PROTECTION AND CUSTOMER SERVICE 1. Adopted by the FCC on March 11, 1993. 2. Text released by the FCC on April 7, 1993 (subsection designations corrected on April 15, 1993). 3. Published in the Federal geaister on April 19, 1993 (58 Fed. Le g g. 21107) 5,Zto In the Matter of Implementation of Section 8 of the MM Docket No. 92 -263 Cable Television Consumer Protection and Competition Act of 1992 Consumer Protection and Customer Service By the Chief, Mass Media Bureau: Before the FEDERAL COM U ICATICNS a 4ISSIC Washington, D.C. 20554 ERRA'RM Released: April 15, 1993 The Report Order in the above- captioned proceeding, released on April 7, 1993, is corrected to change the subsection designations of Section 76.309 of the Commission's Rules, 47 C.F.R. §76.309. For ease of reference, a corrected Appendix B, containing the text of the new rule section, is attached. FEDERAL COMMUNICATIONS COMMISSION APPENDIX B CORRECTED Title 47 CFR, Part 76 (Cable Television Service), Subpart H (General Operating Requirements) is amended as follows: 1. The authority citation for Part 76 is revised to read as follows: AUTHORITY: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 U.S.C. Secs. 152, 153, 154, 301, 303, 307, 308, 309; Secs. 612, 614 -615, 623, 632 as amended, 106 Stat. 1460; 47 V.S.C. Secs. 532, 533, 535, 543, 552. 2. Section 76.309 will be added to the Commission's Rules and will read as follows: Section 76.309 Customer Service Obligations (a) A cable franchise authority may enforce the customer service standards set forth in paragraph (c) of this section against cable operators. The franchise authority must provide affected cable operators ninety (90) days written notice of•its intent to enforce the standards. (b) Nothing in this rule should be construed to prevent or prohibit: (1) A franchising authority and a cable operator from agreeing to customer service requirements that exceed the standards set forth in paragraph (c) of this section; (2) A franchising authority from enforcing, through the end of the franchise term, pre existing customer service requirements that exceed the standards set forth in paragraph (c) of this section and are contained in current franchise agreements; (3) Any State or any franchising authority from enacting or enforcing any consumer protection law, to the extent not specifically preempted herein; or (4) The establishment or enforcement of any State or municipal law or regulation concerning customer service that imposes customer service requirements that exceed, or address matters not addressed by, the standards set forth in paragraph (c) of this section. (c) Effective July 1, 1993, a,cable operator shall be subject to the following customer service standards: (1) Cable system office hours and telephone availability (i) The cable operator will maintain a local, toll -free or collect call telephone access line which will be available to its subscribers 24 hours a day, seven days a week. (A) Trained company representatives will be available to respond to.customer'telephone inquiries during normal business hours. (B) After normal business hours, the access line may be answered by a service or an automated response system, including an answering machine. Inquiries received after normal business hours must'be "'responded to by a trained company representative on the next business day. (ii) Under normal operating conditions, telephone answer time by a customer representative, including wait time, shall not exceed thirty (30) seconds the connection is made. If the call needs to be transferred, '.transfer time shall not exceed thirty (3Q),seconds. These standards shall be met no less than ninety (90) 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. (iv) Under normal operating conditions, the customer will receive a busy signal less, than three (3) percent of the time. (V)•Customer service center and bill payment locations will be open at least during normal business hours and will be conveniently located. (2) Installations, outages and service calls- Under normal operating conditions, each of•the following four standards will be met no less than ninety five (95) percent of the time measured on a quarterly basis: (i) installations will be performed within seven (7) business days,after an'order has been placed. "Standard" installations are those that ate located up to 125 feet from the existing distribution system. 2 (ii) Excluding conditions beyond the control of the operator, the cable operator will begin working on "service interruptions" promptly and in no event later than 24 hours after the interruption becomes known. The cable Operator must begin actions to correct other service problems the next business day after notification of the service problem. (iii) The "appointment window" alternatives for installations, service calls, and other installation activities will be either a specific time or, at maximum, a four -h ur time block during normal business hours. (The operator may Schedule service calls and other installation activities outside!of normal business hours for the express convenience of the customer.) (iv) An operator may not cancel an appointment with a customer after the close of business on the business day prior to the scheduled appointment. (v) If a cable operator representative is an appointment with a customer and will not be appointment as scheduled, the customer will be appointment will be rescheduled, as necessary, convenient for the customer. (i) Notifications to subscribers- running late for able to keep the contacted. The at a time which is (3) Communications between cable operators and cable subscribers- (A) The cable operator shall provide written information on each of the following areas at the time of installation of service, at least annually to all subscribers, and at any time upon request: (1) Products and services offered; (2) Prices and options for programming services and conditions of subscription to programming and other services; (3) Installation and service maintenance policies; (4) Instructions on how to use the cable service; (5) Channel positions o'f programming carried on the system; and, (6) Billing and complaint procedures, including the address and telephone number of the local franchise authority's cable office. 3 (B) Customers will be notified of any changes in rates, programming services or channel positions as soon as possible through announcements on the cable system and in writing. Notice must be given to subscribers a minimum of thirty (30) days in advance of such changes if the change is within the control of the cable operator. In addition, the cable operator shall notify subscribers thirty (30) days in advance of any significant changes in the other information required by the preceding paragraph. (ii) Billing (A) Bills will be clear, concise and understandable. Bills must be fully itemized, with itemizations including, but not limited to, basic and premium service charges and equipment charges. Bills will also clearly delineate all activity during the billing period, including optional charges, rebates and credits. (B) In case of a billing dispute, the cable operator must respond to a written complaint from a subscriber within thirty (30) days. (iii) Refunds- Refund checks will be issued promptly, but no later than either- (A) The customer's next billing cycle following resolution of the request or thirty (30) days, whichever is earlier, or (B) The return of the equipment supplied by the cable operator if service is terminated. (iv) Credits- Credits for service will be issued no later than the customer's next billing cycle following the determination that a credit is warranted. (4) Definitions (i) Normal Business Hours- The term "normal business hours" means those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and /or some weekend hours. (ii) Normal Operating Conditions- The term "normal operating conditions" means those service conditions which are within the control of the cable operator. Those conditions which are nat. within the control of the cable operator 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, 4 special promotions, pay per -view events, rate increases, regular peak or seasonal demand periods, and maintenance or upgrade of the cable system. (iii) Service Interruption- The term "service interruption" means the loss of picture or sound on one or more cable channels. 5 APP=NDIX C Parts 0 and 76 of Chapter I of Title 47 of the Code of Federal Regulations are amended as follows: Part 0 COMMISSION ORGANIZATION 1. The authority citation for Part 0 continues to read as follows: Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155. 2. Section 0.61 is amended by adding paragraphs (j) through (m) to read as follows: MASS MEDIA BUREAU £J Functions of the Bureau. (j) After Commission assumption of jurisdiction to regulate cable television rates for basic service and associated equipment, acts upon cable operator requests for approval of existing or increased rates. (k) Reviews appeals of local franchise authorities rate making decisions involving rates for the basic service tier and associated equipment, except when such appeals raise novel or unusual issues. (1) Acts upon complaints involving cable programming service rates except for final action on complaints raising novel or unusual issues. (m) Evaluates certification requests filed by cable system franchising authorities pursuant to Subpart N, Part 76 of this chapter. (n) Periodically reviews and, when appropriate, revises standard forms used in administering; (1) The Commission's complaint process regarding cable programming service rates; (2) The certification process for local franchising authorities wishipg to regulate rates, and (3) The substantive rate regulation standards prescribed by the Commission. 3. Section 0.455 is amended by adding paragraphs (a)(11) and (12) to read as follows: 1 0.45 Ot'.^er locat at w h records may be inspecte d (11) All complaints against cable television operators filed under §S 76.950 and 76.951 of this chapter, all documents filed in connection therewith, and all communications related thereto, unless the cable operator has submitted a request pursuant to S 0.459 that such information not be made routinely available for public inspection. (12) All cable operator requests for approval of existing or increased cable television rates for basic service and associated equipment over which the Commission has assumed jurisdiction pursuant to 47 C.F.R. 76.913, and 76.943, all documents filed in connection therewith, and all communications related thereto, unless the cable operator has submitted a request pursuant to S 0.459 that such information not be made routinely available for public inspection. Part 76 CABLE TELEVISION SERVICE 4. The authority citation for Part 76 is revised to read as follows: AUTHORITY: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 U.S.C. Secs. 152, 153, 154, 301, 303, 307, 308, 309, 532, 533, 535, 542, 543, 552 as amended, 106 Stat. 1460. 5. Section 76.5 is revised by removing paragraph (gg). 6. Section 76.10 is removed. 7. Section 76.33 is removed. 8. Section 76.900 is removed and redesignated as Section 76.986. 9. Sections 76.803 through 76.999 are reserved. 10. Section 76.1090 is removed and renumbered as Section 76.900. 11. 'Subpart N is added to read as follows: Subpart N Cable Rate Regulation Sec. 76.900 Temporary freeze of cable rates. 2 .r 1.+..... y...��..r -1- al... &K.. A ...a MY,s, 76.9C1 Definitions. 76.905 Standards for identification of cable systems subject to effective competition. 76.906 Presumption of no effective competition. 76.910 Franchising authority certification. 76.911 Petition for reconsideration of certification. 76.912 Joint certification. 76.913 Assumption of jurisdiction by the Commission. 76.914 Revocation of certification. 76.915 Change in status of cable operator. 76.916 Petition for recertification. 76.920 Composition of the basic tier. 76.921 Buy- through of other tiers prohibited. 76.922 Rates for the basic service tier and cable programming services tiers. 76.923 Rates for equipment and installation used to receive the basic service tier. 76.924 Cost accounting and cost allocation requirements. 76.925 Costs of franchise requirements. 76.930 Initiation of review of basic cable service and equipment rates. 76.931 Notification of basic tier availability. 76.932 Notification of proposed rate increase. 76.933 Franchising authority review of basic cable rates and equipment costs. 76.934 Small system review. 76.935 Participation of interested parties. 76.936 Written decision. 76.937 Burden of proof. 76.938 Proprietary information. 76.940 Prospective rate reduction. 76.941 Rate prescription. 76.942 Refunds. 76.943 Fines. 76.944 Commission review of franchising authority decisions on rates for the basic service tier and associated equipment. 76.945 Procedures for Commission review of basic service rates. 76.950 Complaints regarding cable programming service rates. 76.951 Standard complaint form; other filing requirements. 76.952 Information to be provided by cable operator on monthly subscriber bills. 76.953 Limitation on filing a complaint. 76.954 Initial review of complaint; minimum showing requirement; dismissal of defective complaints. 76.955 Additional opportunity to file corrected complaint. 76.956 Cable operator response. 76.957 Commission adjudication of the complaint. 76.960 Prospective rate reductions. 76.961 Refunds. 76.962 Implementation and certification of compliance. 76.963 Forfeiture. 76.964 Advance written notification of rate increases. 3 •Yi11111141111 r. +rly∎ f. 76.970 76.971 76.975 76.977 76.980 76.981 76.982 76.983 76.984 76.985 Commercial leased access rates. Commercial leased access terms and conditions. Commercial leased access dispute resolution. Minority and educational programming used in lieu of deregulated commercial leased access capacity. Charges for customer changes. Negative option billing. Continuation of rate agreements. Discrimination. Geographically uniform rate structure. Subscriber bill itemization. Subpart N Cable Rate Regulation 5 76.,9(?^ Temperary freeze of cable rates. (a) The average monthly subscriber bill for services provided by cable operators subject to regulation under Section 623 of the Communications Act shall not increase above the average monthly subscriber bill determined under rates in effect on April 5, 1993, for a period of,120 days. (b) The average monthly subscriber bill shall be calculated by determining for a monthly billing cycle the sum of all billed monthly charges for all cable services subject to regulation under Section 623 of the Communications Act and dividing that sum by the number of subscribers receiving any of those services. The average monthly subscriber bill determined under rates in effect on April 5, 1993, shall be calculated based on customer charges for the most recent monthly billing cycle ending prior to April 5, 1993. 5 76,901 Definitions. (a) 'Basic service. The basic service tier shall, at a minimum, include all signals of domestic television broadcast stations provided to any subscriber (except a signal secondarily transmitted by'satellite carrier beyond the local service area of such station, regardless of how such signal is ultimately received by the cable system) any public, educational, and governmental programming required by the franchise to be carried on the basic tier, and any additional video programming signals a service added to the basic tier by the cable operator. (b) Cable orogramminQ service. Cable programming service includes any video programming provided over a cable system, regardless of service tier, including installation or rental of equipment used for the receipt of such video programming, other than: (1) Video programming carried on the basic service tier as defined in this section; 4 1W -41,60,1MOMPIMie• rt vynP. 5 (2) Video programming offered on a pay -per- channel or pay -per- program .oasis; or (3) A combination of multiple channels of pay per channel or pay per- program video programming offered on a multiplexed or time shifted basis so long as the combined service: (i) Consists of commonly- identified video programming; and (ii) Is not bundled with any regulated tier of service. (c) SmAll system. A small system is a cable television system that serves fewer than 1,000 subscribers. The service area of a small system shall be determined by the number of subscribers that are served by a system's principal headend, including any other headends or microwave receive sites that are technically integrated to the system's principal headend. 5 76.905 Standards for identification of cable systems subiect to AL€IArr ivp camr titlofl. (a) Only the rates of cable systems that are not subject-to effective competition may be regulated. (b) A cable system is subject to effective competition when any one of the following conditions is met: (1) Fewer than 30 percent of the households in its franchise area subscribe to the cable service of a cable system. (2) The franchise area is: (i) Served by at least two unaffiliated multichannel video programming distributors each of which offers comparable programming to at least 50 percent of the households in the franchise area; and (ii) The number of households subscribing to multichannel video programming other than the largest multichannel video programming distributor exceeds 15 percent of the households in the franchise area. (3) A multichannel video programming distributor, operated by the franchising authority for that franchise area, offers video programming to at least 50 percent of the households in the franchise area. (c) Each separately billed or billable customer will count as a household subscribing to or being offered video programming services, with the exception of multiple dwelling buildings billed as a single customer. Individual units of multiple dwelling buildings will count as separate households. (d) A multichannel video program distributor, for purposes of this section, is an entity such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, a television receive -only satellite program distributor, a video dialtone service provider, or a satellite master antenna television service provider that makes available' for purchase, by subscribers or customers, multiple channels of video programming. (e) Service of a multichannel video programming distributor will be deemed offered: (1) When the multichannel video programming distributor is physically able to deliver service to potential subscribers, with the addition of no or only minimal additional investment by the distributor, in order for an individual subscriber to receive service; and (2) When no regulatory, technical or other impediments to households taking service exist, and potential subscribers in the franchise area are reasonably aware that they may purchase the services of the multichannel video programming distributor. (f) For purposes of determining the number of households subscribing to the services of a multichannel video programming distributor other than the largest multichannel video programming distributor, under para. (b)(2)(ii) of this section, the number of subscribers of all multichannel video programming distributors that offer service to at least 50 percent of the households in the franchise area will be aggregated. (g) In order to offer comparable programming within the meaning of para. (b)(2)(i) of this section, a competing multichannel video programming distributor must offer at least 12 channels of video programming, including at least one channel of nonbroadcast service programming. 5 76.906 Presumption of no effective competition. In the absence of a demonstration to the contrary, cable systems are presumed not to be subject to effective competition. 5 76,910 Franchisina authority certification. (a) A franchising authority must be certified by the Commission in order to regulate the basic service tier and associated equipment of a cable system within its jurisdiction. (b) To be certified, the franchising authority must file with the Commission a written certification that: 6 r y *pork.% i+r.lZ' f!rpoweiviers4 -.a.. (1) The franchising authority will adopt and administer regulations with respect to the rates for the basic service tier that are consistent with the regulations prescribed by the Commission for regulation of the basic service tier; (2) The franchising authority has the legal authority to adopt, and the personnel to administer, such regulations; (3) Procedural laws and regulations applicable to rate regulation proceedings by such authority provide a reasonable opportunity for consideration of the views of interested parties; .and (4) The cable system in question is not subject to effective competition. Unless a franchising authority has actual knowledge to the contrary, the franchising authority may rely on the presumption in S 76.906 that the cable operator is not subject to effective competition. (c) The written certification described in para. (b) of this section shall be made by filing the FCC form designated for that purpose. The form must be filed by a. (1) Registered mail, return receipt requested, or (2) Hand delivery to the Commission and a date stamped copy obtained. The date on the return receipt or on the date stamped copy is the date filed. (d) A copy of the certification form described in para. (c) of this section must be served on the cable operator before or on the same day it is filed with the Commission. (e) Unless the Commission notifies the franchising authority otherwise, the certification will become effective 30 days after the date filed, provided, however, that the franchising authority may not regulate the rates of a cable system unless it: (1) Adopts regulations: (i) Consistent with the Commission's regulations governing the basic tier; and (ii) Providing a reasonable opportunity for consideration of the views of interested parties, within 120 days of the effective date of certification; and (2) Notifies the cable operator that the authority has been certified and has adopted the regulations required by paragraph (e) (1) of this section. 7 4 ..;ra..A63.4,., *.s.Y4r4Wallnege.4660^4,111.4-;1a ....•y, (f) if the Commission denies a franchising authority's certification, the Commission will notify the franchising authority of any revisions or modifications necessary to obtain approval. 's ''6.911 petition for reconsideration of certification. (a) A cable operator (or other interested party) may challenge a franchising authority's certification by filing a petition for reconsideration. The petition may allege either of the following: (1) The cable operator is not subject to rate regulation because effective competition exists as defined in 76.905. (2) The franchising authority does not meet the certification standards set forth in 47 U.S.C. 543(a)(3). (b) (1) The cable operator bears the burden of rebutting the presumption that effective competition does not exist with evidence that effective competition, as defined in S 76.905, exists in the franchise area. (2) For purposes of paragraph (a)(1) of this section, if the evidence establishing effective competition is not otherwise available, cable operators may request from a competitor information regarding the competitor's reach and number of subscribers. A competitor must respond to such request within 15 days. Such responses may be limited to numerical totals. (c) Stay of rate regulation. (1) The filing of a petition for reconsideration pursuant to paragraph (a) (1) of this section will automatically stay the imposition of rate regulation pending the outcome of the reconsideration proceeding. (2) A petitioner filing pursuant to paragraph (a)(2) of this section may request a stay of rate regulation. (3) In any case in which a stay of rate regulation has been granted, if the petition for reconsideration is denied, the cable operator may be required to refund any rates or portion of rates above the permitted tier charge which were collected from the date the petition was filed. (d) The filing of a petition for reconsideration alleging the presence of effective competition based on frivolous grounds is prohibited, and may be subject to forfeitures. (e) If the Commission upholds a challenge to a certification filed pursuant to paragraph (a) (2) of this section, the Commission will notify the franchising authority of the revisions necessary to secure approval and provide the authority an opportunity to amend its 8 •w .Arrr 'w- .vF =s- W.+ 4Iwwe s 3�r*tr�- �r..ysi►�-ti� certification however necessary to secure approval. provided, ,wyver, that pending approval of certification, the Commission will assume jurisdiction over basic cable service rates in that franchise area. 7C.912 Jolt_ certification. (a) Franchising authorities may apply for joint certification and may engage in joint regulation, including, but not limited to, joint hearings, data collection, and ratemaking. Franchising authorities jointly certified to regulate their cable system(s) may make independent rate decisions. (b) Franchising authorities may apply for joint certification regardless of whether the authorities are served by the same cable system or by different cable systems and regardless of whether the rates in each franchising area are uniform. 5 76.913 Assumption of jurisdiction by the Commission. (a)' Upon denial or revocation of the franchising authority's certification, the Commission will regulate rates for cable services and associated equipment of a cable system not subject to effective competition, as defined in S 76.905, in a franchise area. Such regulation by the Commission will continue until the franchising authority has obtained certification or recertification. (b) A franchising authority unable to meet certification standards may petition the Commission to regulate the rates for basic cable service and associated equipment of its franchisee when: (1) The franchising authority lacks the resources to administer rate regulation; provided. however, that the request must be accompanied by a demonstration that franchise fees are insufficient to fund any additional activities required to administer basic service rate regulation; or (2) The franchising authority lacks the legal authority to regulate basic service rates; provided. however, that the authority must submit with its request a statement detailing the nature of the legal infirmity. (c) The Commission will regulate basic service rates pursuant to this Section until the franchising authority qualifies to exercise jurisdiction pursuant to S 76.916. S 76. 914 Revocation of certification. (a) A franchising authority's certification shall be revoked if: (1) After the franchising authority has been given a reasonable opportunity to comment, it is determined that state and local laws 9 and regulations do not conform to the Commission's rate regulations governing cable rates, S5 76.922 through 76.925. (2) After being given an opportunity to cure the defect, a franchising authority fails to fulfill one of the three conditions for certification, set forth in 47 U.S.C. S 543(a) (3), or any of the provisions of S§ 76.910(b). (b) In all cases of revocation, the Commission will assume jurisdiction over basic service rates until an authority becomes recertified. The Commission will also notify the franchising authority regarding the corrective action that may be taken. (c) A petition for revocation must be served on the franchising authority and contain a statement that service was made. The franchising authority may file an opposition within 30 days of filing of the petition. A reply may be filed within 15 days of filing of the opposition. (d) While a petition for revocation is pending, and absent grant of a stay, the franchising authority may continue to regulate the basic service rates of its franchisees. s 76.515 Chanae in status of cable operator. (a) A cable operator that becomes subject to effective competition, may petition the franchising authority for change in its regulatory status. The operator bears the burden of proving the existence of effective competition. Oppositions may be filed within 15 days of public notice of the filing of the petition, and must be served on the operator. Cable operators may reply within 7 days of filing of oppositions. (b) Franchising authority decisions on petitions for change in status must be made within 30 days after the pleading cycle set forth in paragraph (a) of this section closes. Franchising authorities must notify the Commission within ten days of any decision changing status. Unless the Commission receives an opposition to such change in status, the decision will become final 30 days after adoption by the franchising authority. (c) After an initial determination of the franchising authority that effective competition exists becomes final, the franchising authority will then cease regulating basic cable service rates, and the Commission's regulatory authority over cable programming services for the system in the franchise area will also cease. (d) A cable operator and a franchising authority may submit a joint statement that effective competition exists. The joint statement must stipulate which of the three statutory tests for effective competition has been met and explain how the test has been satisfied. These joint statements will become final decisions within 10 -4. 4.9 �s�.. -.n Y�. 30 days of filing with the Commission, unless challenged by an interested party. (e) Cable operators denied a change in status by a franchising authority may seek review of that finding at the Commission by filing a petition for revocation. (f) In cases where a local franchising authority has not been certified to regulate rates, a cable operator may petition the Commission for change in its regulatory status. The time periods in paragraph (a) of this section will apply to oppositions and replies concerning these petitions. 76.916 Petition for recertification. (a) After its request for certification has been denied or its existing certification has been revoked, a franchising authority wishing to assume jurisdiction to regulate basic service and associated equipment rates must file a "Petition for Recertification" accompanied by a copy of the earlier decision denying or revoking certification. (b) The petition must: (1) Meet the requirements set forth in 47 U.S.C. S 5431a) (3); (2) State that the cable system is not subject to effective competition; and (3) Contain a clear showing, supported by either objectively verifiable data such as a state statute, or by affidavit, that the reasons for the earlier denial or revocation no longer pertain. (c) The petition must be served on the cable operator and on any interested party that participated in the proceeding denying :r revoking the original certification. (d) Oppositions may be filed within 15 days after the petition is filed, and must be served on the petitioner. Replies may be filed within seven days of filing of oppositions, and must be served on the opposing party(ies). 76.920 Composition of the basic tier,. Every subscriber of a cable system must subscribe to the basic tier in order to subscribe to any other tier of video programming or to purchase any other video programming. 76.921 Buy through of other tiers 2rohibited. (a) No cable system operator may require the subscription to any tier other than the basic service tier as a condition of subscription 11 to video programming offered on a per channel or per program charge basis. A cable operator may, however, require the subscription to one or more tiers of cable programming services as a condition of access to one or more tiers of cable programming services. (b) A cable operator may not discriminate between subscribers to the basic service tier and other subscribers with regard to the rates charged for video programming offered on a per channel or per program charge basis. (c) Prior to October 5, 2002, the provisions of paragraph (a) of this section shall not apply to any cable system that lacks the capacity to offer basic service and all programming distributed on a per channel or per program basis without also providing other intermediate tiers of service: (1) By controlling subscriber access to nonbasic channels of service through addressable equipment electronically controlled from a central control point or (2) Through the installation, noninstallation, or removal of frequency filters (traps) at the premises of subscribers without other alteration in system configuration or design and without causing degradation in the technical quality of service provided. (d) Any retiering of channels or services that is not undertaken in order to accomplish legitimate regulatory, technical, or- customer service objectives and that is intended to frustrate or has the effect of frustrating compliance with paragraphs (a) through (c) of this Section is prohibited. 'g.922 Rates for the basic service tier and cable oroarammina services Tiers. (a) pasic and cable Drogramming serace tier rates. Basic service tier and cable programming service rates shall be subject to regulation by the Commission and by state and local authorities, as is appropriate, in order to assure that they are in compliance with the requirements of 47 U.S.C. 543. Rates that are demonstrated, in accordance with these rules, not to exceed the "Initial Permitted Per Channel Charge" or the "Subsequent Permitted Per Channel Charge" as described below, or the equipment charges as specified in 76.923, will be accepted as in compliance. The maximum monthly charge per subscriber for a tier of regulated programming services offered by a cable system shall consist of a permitted per channel charge multiplied by the number of channels on the tier, plus a charge for franchise fees. The maximum monthly charges for regulated programming services shall not include any charges for equipment or installations. Charges for equipment and installations are to be calculated separately pursuant to S 76.923 of these rules. 12 r•w•Ma#01#.w.,. o•Ygawfr -:a° Oa (b) _.,ilia: permitted per channel charge. (1) The permitted per channel charge on the initial date of regulation shall be, at the election of the cable operator, either: (1) a charge determined pursuant to a cost -of- service proceeding; or (2) the charge specified in subsection (i) (ii) or (iii) below, as applicable: (i) if the operator's per channel charge for regulated programming services and equipment in effect on the date of initial regulation is equal to or below the benchmark per channel charge, as adjusted forward for inflation from September 30., 1992 to the date of initial regulation, then the permitted per channel charge shall be the per channel charge in effect on the date of initial regulation, adjusted for equipment. (ii) if (1) the operator's per channel charge for regulated programming services and equipment in effect on the date of initial regulation is above the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992 to the date of initial regulation, and (2) the operator's per channel charge for regulated programming services and equipment in effect on September 30, i-992 was above the benchmark per channel charge, then the permitted per channel charge is nine tenths of the per channel charge in effect on September 30, 1992, but no lower than the benchmark per channel charge, additionally adjusted for inflation from September 30, 1992 to the initial date of regulation, for equipment, and for any changes in the number of channels offered on all regulated tiers. (iii) if (1) the operator's per channel charge for regulated programming services and equipment in effect on the date of initial regulation is above the benchmark per channel charge, as adjusted forward for inflation from September 30, 1992 until the initial date of regulation, and (2) the operator's per channel charge for regulated programming services and equipment in effect on September 30, 1992 was below the benchmark per channel charge, then the permitted per channel charge is the benchmark rate per channel adjusted for inflation from September 30, 1992 to the initial date of regulation, for equipment, and for any changes in the number of channels offered on all regulated tiers. (2) For purposes of this section, the initial date of regulation for the basic service tier shall be the date on which local notice is given pursuant to S 76.910 of our rules, that the provision of the basic service tier is subject to regulation. For a cable programming services tier, the initial date of regulation shall be the first date on which a complaint on the appropriate form is filed with the Commission concerning rates charged for the cable programming services tier. 13 (d) price cap requirements (3) For purposes of this section, rates in effect on the initial date of regulation or on September 30, 1992 shall be the rates charged to subscribers for service received on that date. (c) Subsequel permitted Der channel charge. After the initial date of regulation, the permitted per channel charge for regulated programming services shall be, at the election of the cable operator, either: (1) a per channel rate determined pursuant to a cost -of- service showing, or (2) the prior permitted per channel charge previously approved by a regulatory authority, adjusted for inflation and external costs in accordance with the price cap requirements set forth in subsection (d) below. (1) .Inflation adjustments. Permitted per channel charges for regulated programming services may be adjusted periodically on account of inflation. Adjustments to permitted per channel charges on account of inflation shall be based on changes in the Gross National Product Price Index published by the Bureau of Economic Analysis of the United States Department of Commerce. (2) External costs. Permitted per channel charges for regulated programming services may also be adjusted for changes in external costs measured on a per channel per subscriber basis. To the extent external cost increases are greater or less than the GNP -PI for the relevant period, the per channel charge will be adjusted accordingly. Per channel charges may not be increased if external costs increase at a rate less than inflation. Permitted per channel charges also shall be decreased on account of external costs to the extent such costs decrease from previous levels. (i) Categories. External Costs shall consist of costs in the following categories: (1) state and local taxes applicable to provision of cable television service; (2) franchise fees; (3) costs of complying with franchise requirements, including costs of providing public, educational, and governmental access channels as required by the franchising authority; (4) retransmission consent fees; and (5) programming costs. (ii) The permitted per channel charge for a tier of regulated programming services shall be adjusted on account of programming costs and retransmission consent fees only for programming or broadcast signals offered on that tier. (iii) The permitted per channel charge shall not be adjusted for costs of retransmission consent fees or changes in those fees incurred prior to October 6, 1994. (iv) The starting date for adjustments on account of external costs for a tier of regulated programming service shall be the initial date of regulation of the tier or 180 days from the effective date of 14 1 r.' !'IPaMRi'tiw's...! these rules, if the initial date of regulation occurs on or after 180 days from the effective date of these rules. (v) Changes in franchise fees shall not result in an adjustment to permitted per channel charges, but rather shall be calculated separately as part of the maximum monthly charge per subscriber for a tier of regulated programming service. (vi) Adjustments to permitted per channel charges on account of increases in costs of programming obtained from affiliated programmers, as defined in 76.901 of the rules, shall be the lesser of actual increases or the previous permitted rate level increased by the amount of inflation. (vii) Adjustments to permitted per channel charges on account of increases in costs of programming shall be further adjusted to reflect any revenues received by the operator from the programmer. 5 769,3 Ras,,gs for equipment and installation used to receive t.hg basic service t_er. (a) Scope. The equipment regulated under this section consists of all equipment in a subscriber's home that is used to receive the basic service tier, regardless of whether such equipment is additionally used to receive other tiers of regulated programming service and /or unregulated service. Such equipment shall include, but is not limited to: (1) converter boxes; (2) remote control units; (3) connections for additional television receivers; and (4) other cable home wiring. Subscriber charges for such equipment shall not exceed charges based on actual costs in accordance with the requirements set forth below. (b) Unbundlina. A cable operator shall establish rates for remote control units, converter boxes, other customer equipment, installation, and additional connections separate from rates for basic tier service. In addition, the rates for such equipment and installations shall be unbundled one from the other. (c) Equipment basket. A cable operator shall establish an Equipment Basket, which will include all costs associated with providing customer equipment and installation under this section. (1) Equipment Basket costs shall be limited to the direct and indirect material and labor costs of providing, leasing, installing, repairing, and servicing customer equipment, as determined in accordance with the cost accounting and cost allocation requirements of S 76.924. The Equipment Basket shall not include general 15 administrative overhead including general marketing expenses. The Equipment Basket shall include a reasonable profit. (d) Houry servi ^A charge. A cable operator shall establish charges for equipment and installation using the Hourly Service Charge (HSC) methodology. The HSC shall equal the operator's annual Equipment Basket costs, excluding the purchase cost of customer equipment, divided by the total person hours involved in installing, repairing, and servicing customer equipment during the same period. The HSC is calculated according to the following formula: HSC EB CE H where, EB annual Equipment Basket Costs; CE annual purchase cost of all customer equipment; and H person hours involved in installing and repairing equipment per year. The purchase cost of customer equipment shall include the cable operator's invoice price plus all other costs incurred with respect to the equipment until the time it is provided to the customer. (e) Installation charges. Installation charges shall be either: (i) the HSC multiplied by the actual time spent on each individual installation; or (ii) the HSC multiplied by the average time spent on a specific type of installation. (f) Remote charges. Monthly charges for rental of a remote control unit shall consist of the average annual unit purchase cost of the type of remote leased, including acquisition price and incidental costs such as sales tax, financing and storage up to the time it is provided to the customer, added to the product of the HSC times the average number of hours annually repairing or servicing a remote, divided by 12 to determine the monthly lease rate for a remote according to the following formula: Monthly Charge UCE (HSC x HR) 12 Where, HR average hours repair per year; and UCE average annual unit cost of remote. Separate charges shall be established for each significantly different type of remote control unit. (g) Other equipment charges. The monthly charges for rental of converter boxes and other customer equipment shall be calculated in the same manner as for remote control units. Separate charges shall be established for each significantly different type of converter box 16 and each significantly different type of other customer equipment. (h) Additional connection charges. The costs of installation and monthly use of additional connections shall be recovered as charges associated with the installation and equipment cost categories, and at rate levels determined by the actual cost methodology presented in the foregoing subsections (e), (f), and (g). An operator may recover additional programming costs and the costs of signal boosters on the customers premises, if any, associated with the additional connection as a separate monthly unbundled charge for additional connections. (i) Charges for equipment sold. A cable operator may sell customer premises equipment to a subscriber. The equipment price shall recover the operator's cost of the equipment, including costs associated with storing and preparing the equipment for sale up the time it is sold to the customer, plus a reasonable profit. An operator may sell service contracts for the maintenance and repair of equipment sold to subscribers. The charge for a service contract shall, be the HSC times the estimated average number of hours for maintenance and repair over the life of the equipment. (j) Promotions. A cable operator may offer equipment or installation at charges below those determined under subsections (e) (g), above, as long as those offerings are reasonable in scope in relation to the operator's overall offerings in the Equipment Basket and not unreasonably discriminatory. Operators may not recover the cost of a promotional offering by increasing charges for other Equipment Basket elements, or by increasing programming service rates above the maximum monthly charge per subscriber prescribed by these rules. As part of a general cost -of- service showing, an operator may include the cost of promotions in its general system overhead costs. (k) Franchise tees. Equipment charges may include a properly allocated portion of franchise fees. 4;.22.4 Cost accounting and cost allocation requirements. (a) Applicability. The requirements of this section are applicable to cable operators for which the basic service tier is regulated by local franchising authorities or the Commission, or, with respect to a cable programming services tier, for which a complaint has been filed with the Commission. The requirements cf this section are applicable for purposes of rate adjustments on account of external costs and for cost -of- service showings. (b) Generally accepted accounting principles. Cable operators shall maintain their accounts in accordance with generally accepted accounting principles, except as otherwise directed by the Commission. 17 (c) Accounts rgguired. Cable operators shall maintain accounts in a manner that will enable identification of appropriate costs and application of the Commission's cost assignment 'and allocation procedures, to cost categories necessary for rate adjustments due to changes in external costs and for cost -of- service showings. Suc categories 'shall be sufficiently detailed and supported to permit verification and audit against the company's accounting records. (d) pccountina level. Except to the extent indicated below, cable operators shall aggregate expenses and revenues at either the franchise, system, regional, or company level in a manner consistent with practices of the operator as of April 3, 1992. However, in all events, cable operators shall identify at the franchise level their costs of franchise requirements, franchise fees, local taxes, and local programming. (e) Cagt allocation requirements. (1) For purposes of establishing expenses at the franchise level, cable operators shall allocate expenses and revenues aggregated at higher levels to the franchise level based on the ratio of the total number of subscribers served at the franchise level to the total number of subscribers served at the higher level. (2) Except to the extent indicated below, all categories of costs allocated to, or identified at, the franchise level shall be allocated to the basic service tier based on the ratio of channels in the basic tier to the total number of channels offered in the franchise area, including nonregulated and leased commercial access channels. These costs shall be allocated to each tier of cable programming services based on the ratio of channels in that tier to the total number of channels offered in the franchise area. (3) Costs of programming and retransmission consent fees, however, shall be allocated only to the tier on which the programming or broadcast signal at issue is offered. (4) Costs of franchise fees shall be allocated among equipment and installations, program service tiers and subscribers in a manner that is most consistent with the methodology of assessment of franchise fees by local authorities. (5) Costs of public, educational, and governmental access channels carried on the basic tier shall be directly assigned to the basic tier where possible. (f) 'Common costs. Expenses which cannot be assigned to any single expense or service category shall be described as common costs. Common costs shall be allocated to expense categories as follows: 18 (1) wherever possible, common costs are to be allocated to service cost categories based on direct analysis of the origin of the costs themselves. (2) when direct analysis is not possible, common costs shall, if possible, be allocated to service cost categories based on an indirect, cost causative linkage to other costs directly assigned or allocated to the service cost category. (3) When neither direct nor indirect measures of cost allocation can be found, common costs shall be allocated to each service cost category based on the ratio of all costs directly assigned and attributed to a service cost category over total costs directly assignable and attributable. (g) Unrelated expenses and revenues. Cable operators shall exclude from cost categories used to develop rates for the provision of regulated cable service, equipment, and leased commercial access, any direct or indirect expenses and revenues not related to the provision of such services. Common costs of providing regulated cable service, equipment, and leased commercial access and unrelated activities shall be allocated between them in accordance with subsection (f) (h) Bart time channels. In situations where a single channel. is divided on a part -time basis and is used to deliver service associated with different tiers or with pay per channel or pay per view service, a reasonable and documented allocation of that channel between services shall be required along with the associated revenues and costs. C 76.925 Costs of franchise requirements. (a) The costs of satisfying franchise requirements to support public, educational, and governmental channels shall consist of the sum of: (1) all per channel costs for the number of channels used to meet franchise requirements for public, educational, and governmental channels; (2) any direct costs of meeting such franchise requirements; and (3) a reasonable allocation of general and administrative overhead. (b) The costs of satisfying any other requirement under the franchise shall consist of the direct and indirect costs including a reasonable allocation of general and administrative overhead. 76.930 T.nitiation of eview of basic cable service @nc} eauiomer, ratet: (a) A cable operator shall file its schedule of rates for the basic service tier and associated equipment with a franchising authority within 30 days of receiving written notification from the franchising authority that the franchising authority has been 19 certified by the Commission to regulate rates for the basic service tier. Notifica-ion of basic tier availability. A cable operator shall provide written notification to subscribers cf the availability of basic tier service by September 19, 1993, or three billing cycles from June 21, 1993, and to new subscribers at the time of installation. This notification shall include the following information: (1) That basic tier service is available; (2) The cost per month for basic tier service; (3) A list of all services included in the basic service tier. .s 76.932 Notification of or000sed rate in .jeagg. A cable operator shall provide written notice to a subscriber of any increase in the price to be charged for the basic service tier or associated equipment at least 30 days before any proposed increase is effective. The notice should include the name and address of the local franchising authority. 5 76.933 Franchising autk ity_review of boric cable rates and gc:iicment costa. (a) After a cable operator has submitted for review its existing rates for the basic service tier and associated equipment costs, or a proposed increase in these rates (including increases in the baseline channel change that results from reductions in the number of channels in a tier), the existing rates will remain in effect or the proposed rates will become effective after 30 days from the date of submission; provided, howeve, that the franchising authority may toll this 30 -day deadline for an additional time by issuing a brief written order as described in paragraph (b) within 30 days of the rate submission explaining that it needs additional time to review the rates. (b) If the franchising authority is unable to determine, based upon the material submitted by the cable operator, that the existing or proposed rates are within the Commission's permitted basic service tier charge or actual cost of equipment as defined in 76.922 and 76.923, or if a cable operator has submitted a cost -of- service showing pursuant to 76.937(c) and 76.924, seeking to justify a rate above the Commission's basic service tier charge as defined in 76.922 and 76.923, the franchising authority may toll the 30 -day deadline in paragraph (a) of this section to request and /or consider additional information or to consider the comments from interested parties as follows: 20 (1) For an additional 90 days in cases not involving cost-of- service showings; or (2) For an additional 150 days in cases involving cost -of- service showings. (c) a franchising authority has availed itself of the additional 90 or 150 days permitted in paragraph (b) of this section, and has taken no action within these additional time periods, then the proposed rates will go into effect at the end of the 90 or 150 day periods, or existing rates will remain in effect at such times, subject to refunds if the franchising authority subsequently issues a written decision disapproving any portion of such rates, provided, however, that in order to order refunds, a franchising authority must have issued a brief written order to the cable operator by the end of the 90 or 150 -day period permitted in paragraph (b) of this section directing the operator to keep an accurate account of all amounts received by reason of the rate in issue and on whose behalf such amounts were paid. 5 76.934 Snail systems. A franchising authority that has been certified, pursuant to,§ 76.910 to regulate rates for basic service and associated'equipment may permit a small system as defined in section 76.901 to certify that the small system's rates for basic service and associated equipment comply with S 76.922, the Commission's substantive rate regulations. 5 76.935 Particioatial of interested parties. In order to regulate basic tier rates or associated equipment costs, a franchising authority must have procedural laws or regulations applicable to rate regulation proceedings that provide a reasonable opportunity for consideration of the views of interested parties. Such rules must take into account the 30, 120, or 180 -day time periods that franchising authorities have to review rates under S 76.933. 6 76.936 Written decision. (a) A franchising authority must issue a written decision in a ratemaking proceeding whenever it disapproves an initial rate for the basic service tier or associated equipment in whole or in part, disapproves a request for a rate increase in whole or in part, or approves a request for an increase in whole or in part over the objections of interested parties. A franchising authority is not required to issue a written decision that approves an unopposed existing or proposed rate for the basic service tier or associated equipment. 21 (b) Public notice must be given of any written decision required in paragraph (a), including releasing the text of any written decision to the public. 6 /g.9 Burden of proof.. (a) A cable operator has the burden of proving that its existing or proposed rates for basic service and associated equipment comply with 47 U.S.C. 543, and 76.922 and 76.923. (b) For an existing or a proposed rate for basic tier service or associated equipment that is within the permitted tier charge and actual cost of equipment as set forth in 76.922 and 76.923, the cable operator must submit the appropriate FCC form. (c) For an existing or a proposed rate for basic tier service that exceeds the permitted tier charge as set forth in 76.922 and 76.923, the cable operator must submit a cost -of- service showing to justify the proposed rate. 6 76.938 Proorietary information. A franchising authority may require the production of proprietary information to make a rate determination and in such cases must apply procedures analogous to those set forth in 0.459 regarding requests for confidentiality. 6 76.940 Prospective ratg_reduction. A franchising authority may order a cable operator to implement a reduction in basic service tier or associated equipment rates where necessary to bring rates into compliance with the standards set forth in 76.922 and 76.923. 76.941 Rate prescription. A franchising authority may prescribe a reasonable rate for the basic service tier or associated equipment after it determines that a proposed rate is unreasonable. 76.942 Refunds (a) A franchising authority may order a cable operator to refund to subscribers that portion of previously paid rates determined to be in excess of the permitted tier charge or above the actual cost of equipment, unless the operator has submitted a cost -of- service showing which justifies the rate charged as reasonable. Before ordering a cable operator to refund previously paid rates to subscribers, a franchising authority must give the operator notice and opportunity to comment. 22 (b) An operator's liability for refunds is limited to a one -year period, except that, an operator that fails to comply with a valid rate order issued by a franchising authority or the Commission shall ::e ::atle for refunds commencing from the effective date of such order until such time as it complies with such order. (c) The refund period shall run as follows: (1) From the date the operator implements a prospective rate reduction back in time to June 21, 1993, or one year, whichever is shorter. (2) From the date a franchising authority issues an accounting order pursuant to 76.933(c), and ending on the date the operator implements a prospective rate reduction ordered by a franchising authority or one year, whichever is shorter. (d) The cable operator, in its discretion, may implement a refund in the following manner: (1) By returning overcharges to those subscribers who actually paid the overcharges, either through direct payment or as a specifically identified credit to those subscribers' bills; or (2) By means of a prospective percentage reduction in the rates for the basic service tier or associated equipment to cover the cumulative overcharge. This shall be reflected as a specifically identified, one -time credit on prospective bills to the class of subscribers that currently subscribe to the cable system. (e) Refunds shall include interest computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments. 4 76.943 Fines. (a) A franchising authority may impose fines or monetary forfeitures on a cable operator that does not comply with a rate decision or refund order directed specifically at the cable operator, provided the franchising authority has such power under state or local laws. (b) A cable operator shall not be subject to forfeiture because its rate for basic service or equipment is determined to be unreasonable. 4 76.944 Commissiop review of franchising authority decisions on Fates for the baste service tier and associated ea.pmecl. (a) The Commission shall be the sole forum for appeals of decisions by franchising authorities on rates for the basic service tier or associated equipment involving whether or not a franchising 23 authority has acted consistently with the Cable Act or 76.922 and 76.923. Appeals of ratemaking decisions by franchising authorities that do not depend upon determining whether a franchising authority has acted consistently with the Cable Act or 76.922 and 76.923, may be heard in state or local courts. (b) Any participant at the franchising authority level in a ratemaking proceeding may file an appeal of the franchising authority's decision with the Commission within 30 days of release of the text of the franchising authority's decision as computed under 1.4(b) of this chapter. Oppositions may be filed within 15 days after the appeal is filed, and must be served on the party(ies) appealing the rate decision. Replies may be filed 7 days after the last day for oppositions and shall be served on the parties to the proceeding. 4 76.945 Pronedures for Commission review o (panic servj.ce rates. (a) Upon assumption of rate regulation authority, the Commission will notify the cable operator and require the cable operator to file its basic rate schedule with the Commission within 30 days, with a copy t� the local franchising authority. (b) Basic service and equipment rate schedule filings for existing rates or proposed rate increases (including increases in the baseline channel change that results from reductions in the number of channels in a tier) must use the appropriate FCC forms. Cable operators with existing or proposed rates above the permitted tier rate must submit a cost -of- service showing sufficient to support a finding that the rates are reasonable. (c) Filings proposing annual adjustments or rates within the rate regulation standards in 76.922 and 76.923, must be made 30 days prior to the proposed effective date and can become effective on the proposed effective date unless the Commission issues an order deferring the effective date or denying the rate proposal. Petitions opposing such filings must be filed within 15 days of public notice of the filing by the cable operator and be accompanied by a certificate that service was made on the cable operator and the local franchising authority. The cable operator may file an opposition within five days of filing of the petition, certifying to service on both the petitioner and the local franchising authority. (d) Filings proposing a rate not within the rate regulation standards of 76.922 and 76.923, must be made 90 days before the requested effective date. Petitions opposing such filings must be filed ,within 30 days of public notice of the filing, and be accompanied by a certificate that service was made on the cable operator and the local franchising authority. The cable operator may file an opposition within 10 days of the filing of the petition, and certifying that service was made on the petitioner and the local franchising authority. 24 6 76.953 CcTolaints recardina cable oraarammina service rates. Any s franchising authority, or other relevant state or lccal government entity may file with the Commission a complaint challenging, the reasonableness of a cable operator's rate for cable prograr.^ing service, or the reasonableness of a cable operator's charges for installation or rental of equipment used for the receipt of cable programming service. 6 76.951 Standard complaint forjn; other filing requiremen (a) Any complaint regarding a cable operator's rate for cable programming service or associated equipment must be filed using standard complaint form, FCC 329. The cable operator must provide a copy of the standard complaint form to any subscriber upon request. (b) The following information must be provided on the standard complaint form: (1) The complainant's name, mailing address, and daytime telephone number; (2) The name, mailing address, and FCC community unit identifier of the relevant cable operator (Note: pursuant to 76.952, the cable operator must provide its FCC community unit identifier on monthly bills to subscribers); (3) The name and address of the relevant franchising authority (Note: pursuant to S 76.952, the cable operator must provide this information on monthly bills to subscribers); (4) An indication whether the complainant is challenging the reasonableness of: (i) A rate concerning cable programming service or associated equipment in effect on June 21, 1993; or (ii) A rate increase for cable programming service or associated equipment; (5) For subscriber complaints regarding a rate increase, the date the complainant first received a bill from the cable operator reflecting the increased rate; (6) A description of the cable programming service or associated equipment involved and, if applicable, how the service or associated equipment has changed; (7) The current rate for the cable programming service or associated equipment at issue and, if the complainant is challenging the reasonableness of a rate increase, the most recent rate for the 25 service cr associated equipment immediately prior to the rate increase; (E) An indication whether the complainant is filing: a complaint regarding this specific rate for the first time; or (ill a corrected complaint regarding this specific rate to cure a defect in a prior complaint that was dismissed without prejudice; (9) If the complainant is filing a corrected complaint, an indication of the date the complainant filed the prior complaint and the date the complainant received notification from the Commission that the prior complaint was defective; (10) A certification that a copy of the complaint, including all attachments, is being served contemporaneously via first class mail on the cable operator and, if the complainant is a subscriber, on the relevant franchising authority; (11) An allegation that the rate in question is unreasonable because it violates the Commission's rate regulations; and (12) A certification that, to the best of the complainant's knowledge, the information provided on the form is true and correct. (c) The complainant must attach to the standard complaint form a copy of the most recent bill reflecting the disputed rate or rate increase. (d) A complaining subscriber may, but is not required to, attach to the standard complaint form a statement from the relevant franchising authority presenting its views on the reasonableness of the rate in question. C 76.952 Information to be provided by nahlp operator on mc+ thly subscriber bills. All cable operators must provide the following information to subscribers on monthly bills: (a) The name and mailing address of the relevant franchising authority; and (b) The FCC community unit identifier for the cable system. 76.953 Limitation on filing a complaint. (a) Comolai..t regarding a rate in effect on June 21. 1993,. Notwithstanding paragraph (b) of this section, a complaint regarding 26 a rate for cable programming service or associated equipment in effect on June 21, 1993 must be filed by December 20, 1993. (b) recardina a rate increase,. Except as provided in paragrapn (a) of this section, a complaint alleging an unreasonable rate for cable programming service or associated equipment may be filed against a cable operator only in the event of a rate increase. A complaint regarding a rate increase for cable programming service or associated equipment must be filed with the Commission within 45 days from the date the complainant receives a bill from the cable operator that reflects the increased rate. (c) Late -filed complaints will be dismissed with prejudice. 5 76.954 _Initial review of complaint; minimum showing requirementL dismissal of defective comolainta. (a) The Commission will conduct an initial review of a complaint to determine if it meets the minimum showing required to allow the complaint to go forward. The minimum showing shall be satisfied if the complaint is filed using the standard complaint form described in 76.951 and includes all information and attachments require4by that form. A complainant will not be required, as part of the minimum showing, to provide the underlying information and calculations necessary to judge the cable programming service rate in question against the Commission's rate standards. (b) A complaint that does not meet the minimum showing requirement described in para. (a) of this section will be considered defective. A defective complaint will be dismissed without prejudice to filing a corrected complaint as provided by 76.955. The Commission will notify the complainant by mail of the dismissal. The filing of a complaint on the applicable form, but which is otherwise defective, will toll the limitation period established by 76.953. 4 ''5.955 Additional opportunity_toe corrected complaint,. (a) If the Commission dismisses an initial complaint without prejudice pursuant to 76.954, the complainant shall have one additional opportunity to cure the defect and file a corrected complaint. (b) For a complaint filed on the applicable form but is otherwise defective, the complainant must cure the defect and file a corrected complaint with the Commission within 30 days from the date of the Commission's dismissal notice. Failure to cure the defect and file a corrected complaint within this time period will result in dismissal of the complaint with prejudice. 27 (a) Unless the Commission notifies a cable operator to the Contrary, the cable operator must file with the Commission a response to a complaint filed on the applicable form, within 30 days of the date of Service of the complain!. The response shall indicate when service occurred. Service by mail is complete upon mailing. %re y 1.47(f). The response shall include the information required by the appropriate FCC form. The cable operator must serve i..s response on tie complainant (and, if the complainant is a subscriber, ...he relevant franchising authority) via first class mail. (b) The burden shall be on the cable operator to prove that the service rate or equipment charge in question is not unreasonable. The cable operator may :.•arty its burden in the following manner: (1) For a service rate at or below the permitted level, by providing information and calculations that demonstrate that thc rate in question falls at or below the permitted level; For a service rate that exceeds the permitted ]evel; (i) By providing proof that the cable system has reduced thc rate for the cable programming service at issue to a level at or below the permitted level; or (ii) By providing detailed cost based information that demonstrates that the rate in question is reasonable despite thc fact that it exceeds the permitted level. (3) For a charge for equipment installation or rental, by providing information that demonstrates that the charge is based on the cable operator's actual cost. (c) In addition to responding to the merits of a complaint, the Cable operator may also move for dismissal of the complaint for failure to meet the minimum showing requirement. Any such motion for dismissal must state with particularity the reasons the cable operator believes the complaint is defective and shall not relieve the cable operator of its obligation to respond to the merits of the complaint. (d) A cable operator may file a consolidated response to multiple complaints regarding the identical rate or rate increase. A consolidated response must be filed within 30 days from the date of service of the first complaint received, unless the Commission notifies the cable operator to the contrary. A cable operator may amend a Consolidated response to address new issues raised by complaints received after the cable operator's initial response. (e) A cable operator that fails to file and serve a response to a valid complaint may be deemed in default. If the Commission deems 28 a cable operator in default, the Commission may enter an order against the cable operator finding the rate to be unreasonable and mandating appropriate relief. (f) A cable operator need not respond to any complaint that is: (1) Not filed on the applicable form; or (2) That the Commission has determined is defective And has so notified the cable operator. 4 76.957 Commission ad 'iudication of the complaint. The Commission will consider the complaint and the cable operator's response and then determine by written decision whether the rate for the cable programming service or associated equipment is unreasonable or not. If it determines that the rate in question is unreasonable, the Commission will grant the complaint and may order appropriate relief, including, but not limited to, prospective rate reductions and refunds. If it determines that the rate in question is reasonable, the Commission will deny the complaint. 6 76,960 Pros_cective rate reductions. Upon a finding that a rate for cable programming service or associated equipment is unreasonable, the Commission may order the cable operator to implement a prospective rate reduction to the class of customers subscribing to the cable programming service at issue. The Commission's decision regarding a prospective rate reduction shall remain binding on the cable operator for one year unless the Commission specifies otherwise. 4 76:961 Refunds. 29 (a) Upon a finding that a rate for cable programming service cr associated equipment is unreasonable, the Commission may order the cable operator to refund to subscribers that portion of previously paid rates which is deemed unreasonable. (b) The cumulative refund due subscribers shall be calculated from the date a valid complaint is filed until the date a cable operator implements a prospective rate reduction as ordered by the Commission pursuant to §76.960. (c) The cable operator, in its discretion, may implement a refund in the following manner: (i) By returning overcharges to those subscribers who actually paid the overcharges, either through direct payment or as a specifically identified, one -time credit to those subscribers' bills; or (.i) By -ears of a prospective percentage reduction in the unreasonable cable programming service rate or equipment charge to c:.ver the c::- .ulat :ve overcharge. This shall be reflected as a specifically :tenti_`ied, one -time credit on prospective bills to the class of subscribers that currently subscribe to the cable prcgram ing.service or associated equipment at issue. (d) Refunds shall include interest computed at applicable rates published by the Internal Revenue Service for tax refunds and additional tax payments. Interest shall accrue from the date a valid complaint is filed until the refund issues. 76.967 '_molementation and certification of rprtpliance. (a) Implementation. A cable operator must implement remedial requirements, including prospective rate reductions and refunds, within 60 days from the date the Commission releases an order mandating a remedy. (b) Certification of compliance. A cable operator must certify to the Commission its compliance with any Commission order mandating remedial requirements. Such certification shall: (1) Be filed with the Commission within 90 days from the date the Commission releases an order mandating a remedy; (2) Reference the applicable Commission order; (3) State that the cable operator has complied fully with all provisions of the Commission's order; (4) Include a description of the precise measures the cable operator has taken to implement the remedies ordered by the Commission; and (5) Be signed by an authorized representative of the cable operator. s 6.963 Forfeiture. (a) If any cable operator willfully fails to comply with the terms of any Commission order, including an order mandating remedial requirements •after a finding of unreasonable cable programming service or equipment rates, or any Commission rule, the Commission may, in addition to other remedies, impose a forfeiture pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. S 503(b) (b) A cable operator shall not be subject to forfeiture because its rate for cable programming service or equipment is determined to be unreasonable. 30 5 76. 364 Advance written notification of rate increases. add.it:cn to the requirement of Section 76.309(c) (3) (i) (B) advance notification to customers of any changes in rates, pr :;ram -:ng services cr channel positions, a cable operator shalt gave the relevant franchising authority a minimum of 30 days advance written notification of any changes in rates for cable programming service or associated equipment. 4 76.970 Commercial leased access rates. (a) Cable operators shall designate channel capacity for commercial use by persons unaffiliated with the operator in accordance with the requirement of 47 U.S.C. 532. (b) The maximum commercial leased access rates that a cable operator may charge is the highest implicit net fee charged any nonaffiliated programmer (excluding leased access programmers) within the same program category. (c) The implicit fee charged an unaffiliated programmer shall be calculated by determining the monthly price per subscriber that-the operator pays to carry the programming of nonaffiliated providers and deducting the monthly price subscribers pay to view the programming of the nonaffiliated provider. This difference is multiplied by the percentage of subscribers able to receive the nonaffiliated provider's programming. The implicit fee for a contracted service may not include fees, stated or implied, for services other than the provision of channel capacity (e.g., billing and collection, marketing, or studio services). (d) For each of the three program categories as defined in para. (f) of this section, the highest implicit net fee charged any nonaffiliated provider in each category shall be the maximum monthly leased access rate per subscriber that the operator could charge a commercial leased access programmer in that category. The highest implicit net fee shall be based on contracts in effect in the previous calendar year. Maximum rates for shorter periods can be calculated by prorating the monthly maximum rate. (e) Upon request, a schedule of commercial leased access rates shall be provided to prospective leased access programmers. Operators shall maintain, for Commission inspection, sufficient supporting documentation to justify the scheduled rates, including supporting contracts, calculations of the net implicit fees, and justifications for all adjustments. (f) For purposes of para. (b) of this section there are three program categories: (1) Programming for which a per -event or per channel charge is made; 31 (2) Prcaram:ring more than fifty percent of the capacity of which :s used to sell products directly to customers; and ;3) Al: other p _ogranrn ng. 9 Co sealed access terms and conditions. (a) The cable operator and unaffiliated commercial leased access user may negotiate channel placement and tier access fc: leased programming, taking into account: (i) The nature of the service (pay or general distribution channel, complete channel or individual program); (ii) The relationship between the charge imposed and the desirability of the channel; and (iii) The need to provide competition in program delivery and to afford users a genuine outlet for their programming. (2) Where demand for commercial leased access capacity exceeds available supply, each lessee will be allowed to lease up to one channel's capacity. (b) Cable operators may not apply programming production standards to leased access that are any higher than those applied to public, educational and governmental access channels. (c) Cable operators are required to provide unaffiliated leased access users the minimal level of technical support necessary for users to present their material on the air, and may not unreasonably refuse .to cooperate with a leased access user in order to prevent that provider from obtaining channel capacity, uovide_clboweveL, that leased access providers must reimburse operators for the reasonable cost of any technical support that operators actually provide. (d) Cable operators may require reasonable security deposits or other assurances from users who are unable to prepay in full for access to leased commercial channels. (e) Cable operators may not set terms and conditions for commercial leased access use based on content, excels,: (1) To the limited extent necessary to establish a reasonable price for the commercial use of designated channel capacity by an unaffiliated person; or (2) To comply with 47 U.S.C. 532(h), (j) and 76.701. (f) (1) A cable operator shall provide billing and collection services for commercial leased access cable users, unless the 32 operator demonstrates the existence cf third party bluing and collection services which in terms of cost and accessibility, offer leased access users an alternative substantially equivalent to that :fferet comparable non- leased programmers. (2) =f an operator can make the showing required in Para. (f)(I) cf this section, It must, to the extent technically feasible, make availacle data necessary to enable a third party to bill and collect for the leased access user. 6 76.975 Comm,eroial l easgid access disout.P esolution. (a) Any person aggrieved by the failure or refusal of a cable operator to make commercial channel capacity available in accordance with the provisions of Title VI of the Communications Act may bring an action in the district court of the United States for the Judicial district in which the cable system is located to compel that such capacity be made available. (b) Any person aggrieved by the failure or refusal of a cable cperatcr to make commercial channel capacity available or to charge rates for such capacity in accordance with the provisions of Title VI of the Communications Act, or our implementing regulations, 76.970 and 76.971, may file a petition for relief with the Commission. (c) A petition must contain a concise statement of the facts constituting a violation of the statute or the Commission's Rules, the specific statute(s) or rule(s) violated, and certify that the petition was served on the cable operator. (d) A petition must be filed within 60 days of the alleged violation. (e) The cable operator or other respondent will have 30 days from the filing of the petition in which to file a response. If a leased access rate is disputed, the response must show that the rate charged is not higher than the highest implicit fee the operator charges for a comparable category of service, and submit the affidavit of a responsible company official in support. If, after a response is submitted, the staff finds a prima facie violation of our rules, the staff may require a respondent to produce additional information, or specify other procedures necessary for resolution of the proceeding. (f) The Commission, after consideration of the pleadings, may grant' the relief requested, in whole or in part, including, but not limited to ordering refunds, injunctive measures, or forfeitures pursuant 47 U.S.C. 503, denying the petition, or issuing a ruling on the petition or dispute. 33 (g) To be afforded relief, the petitioner must show by clear and convincing evidence that the cable operator has violated the C :r.n :ss.on's leased access provisions in 47 U.S.C. 532 or 54 76.970 and 76.971, or otherwise acted unreasonably or in bad fain :n fa :ling cr' re =usir.g to make capacity available or to charge lawful rates for such capacity to an unaffiliated leased access programmer. (h) Durinc the pendency of a dispute, a party seeking to lease channel capacity for commercial purposes, shall comply with the rates, terms and conditions prescribed by the cable operator, subject to refund or other appropriate remedy. 5 76.977 Minnri'v and educational orogrammina used in lieu of dereoulated co=ercial leased access capacity,. (a) A cable operator required by this section to designate channel capacity for commercial use pursuant to 47 U.S.C. S 532, may use any such channel capacity for the provision of programming from a qualified minority programming source or from any qualified educational programming source, whether or not such source is affiliated with cable operator. The channel capacity used to provide programming from a qualified minority programming source or from any qualified educational programming source pursuant to this Section may not exceed 33 percent of the channel capacity designated pursuant to 47 U.S.C. 532. (b) For purposes of this section, a qualified minority programming source is a programming source that devotes substantially all of its prcgramming to coverage of minority viewpoints, or programming directed at members of minority groups, and which is over 50 percent minority owned. (c) For purposes of this section, a qualified educational programming source is a programming source that devotes substantially all of its programming to educational or instructional programming that promotes public understanding of mathematics, the sciences, the humanities, or the arts and has a documented annual expenditure on programming exceeding $15 million. The annual expenditure cn programming means all annual costs incurred by the programming source to produce or acquire programs which are scheduled to be televised, and specifically excludes marketing, promotion, satellite transmission and operational costs, and general administrative costs. (d) For purposes of paragraphs (b) and (c) of this section, "substantially all" means that 90% or more of the programming offered must be devoted to minority or educational purposes, as defined in paragraphs (b) and (c) of this section, respectively. (e) For purposes of subsection (b), "minority" is defined as in 47 U.S.C. 309(i) (3) (c) (ii) to include Blacks, Hispanics, American Indians, Alaska Natives, Asians and Pacific Islanders. 34 Charces for custore,,r chap.ges. (a) This Section shall govern charges for any changes in service tiers cr equipment provided to the subscriber that are initiated at the request of a subscriber after initial service installation. (b) The charge for customer changes in service tiers effected solely by coded entry on a computer terminal or by other similarly simple methods shall be a nominal amount, not exceeding actual costs, as defined in subsection (c) below. (c) The charge for customer changes in service tiers or equipment that involve more than coded entry on a computer or other similarly simple method shall be based on actual cost. The actual cost charge shall be either the HSC, as defined in Section 76.923 of the rules, multiplied by the number of person hours needed to implement the change, or the HSC multiplied by the average number of person hours involved in implementing customer changes. (d) A cable operator operator may establish a higher charge for changes effected solely by coded entry on a computer terminal or by other similarly simple methods, subject to approval by _the franchising authority, for a subscriber changing service tiers more than two times in a twelve month period, except for such changes ordered in response to a change in price or channel line -up. If a cable system adopts such an increased charge, the cable system must notify all subscribers in writing that they may be subject to such a charge for changing service tiers more than the specified number of times in any twelve month period. (e) Downgrade charges that are the same as, or lower than, upgrade charges are evidence of the reasonableness of such downgrade charges. (f) For 30 days after notice of retiering or rate increases, a customer may obtain changes in service tiers at no additional charge. 4 76.921 Necatj.ve option billing. A cable operator shall not charge a subscriber for any service or equipment that the subscriber has not affirmatively requested by name. This provision, however, shall not preclude the addition or deletion of a-specific program from a service offering, the addition or deletion of specific channels from an existing tier of service, or the restructuring or division of existing tiers of service that do not result in a fundamental change in the nature of an existing service or tier of service provided that such change is otherwise consistent with applicable regulations. A subscriber's failure to refuse a cable operator's proposal to provide such service or equipment is not an affirmative request for service or equipment. A subscriber's affirmative request for service or equipment may be made orally or in writing. 35 ti 7 6.992 Csnt .nua *_:or. of rate aoreemenrg. 'u::ng the term of an agreement executed before July 1, 1990, by a franchising authority and a cable operator providing for the regulation• of basic cable service rates, where there was not effective c= Toetition under Commission rules in effect on that date, the franch:. :ng authority may regulate basic cable rates without following Section 623 of the 1992 Cable Act or 76.910 through 76.942. A franchising authority regulating basic cable rates pursuant to such a rate agreement is not required to file for certification during the remaining term of the agreement but shall notify the Commission of its intent to continue regulating basic cable rates. 4 76.983 Discrimination. (a) No Federal agency, state, or local franchising authority may prohibit a cable operator from offering reasonable discounts to senior citizens or to economically disadvantaged groups. (1) Such discounts must be offered equally to all subscribers in the franchise area who qualify as members of these categories, or any reasonable subcategory thereof. (2) For purposes of this section, members of economically disadvantaged groups are those individuals who receive federal, state or local welfare assistance. (b) Nothing herein shall preclude any Federal agency, state, or local franchising authority from requiring and regulating the reception of cable service by hearing impaired individuals. 76.4 Geogrnhically uniform rate structure. (a) The rates charged by cable operators subject to 76.922 and 76.923 shall be provided pursuant to a rate structure that is uniform throughout each franchise area in which cable service is provided. (b) This section does not prohibit the establishment by cable operators of reasonable categories of service and customers with separate rates and terms and conditions of service, within a franchise area. 76,985 Subscriber bill itemization. (a). Cable operators may identify as a separate line item of each regular subscriber bill the following: (1) The amount of the total bill assessed as a franchise fee and the identity of the franchising authority to which the fee is paid. 36 (2) The amount of the total bill assessed to satisfy any requirements imposed on the cable operator by the franchise agreement to support puc::c, educational, or governmental channels or the use of sucn channels. (3) The amount of any other fee, tax, assessment, or charge of any k:nd imposed by any governmental authority on the transaction between he operator and the subscriber. In order for a governmental fee cr assessment to be separately identified under this subsection, it must be directly imposed by a governmental body on a transaction between a subscriber and an operator. (b) The charge identified on the subscriber bill as the total charge for cable service should include all fees and costs itemized pursuant to this Section. (c) Local franchising authorities may adopt regulations consistent with this section. 37 VIA CERTIFIED MAIL [Cable Operator] [Address] Dear Enclosure DRAFT FORILQF NOTICE TO CABLE OPERATOR UNDER FCC RULES ON CUSTOMER SERVICE [Date] On April 7, 1993, the Federal Communications Commission released a Report and Order adopting a new rule (47 C.F.R. 76.309) implementing Section 8 of the Cable Television Consumer Protection and Competition Act of 1992; that section governs the establishment, implementation and enforcement of customer service standards for cable operators nationwide. A copy of the new rule is enclosed. Paragraph (c) of the new rule establishes federal customer service standards "federal standards Paragraph (a) of the new rule provides that a franchising authority may enforce the federal standards, but in order to do so, the franchising authority must provide affected cable operators 90 days' written notice of its intent to enforce the standards. This letter constitutes the City of 's notice of its intent to enforce the federal standards. The City intends to begin enforcing the federal standards on 1993. Paragraph (b) of the new rule reserves to franchising authorities, among other things, rights to establish and /or enforce state and local customer service requirements that exceed or are not covered by the federal standards. The City of reserves and intends to exercise all rights reserved to franchising authorities. Sincerely, 5. 2i O PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 1919 M STREET N.W. WASHINGTON, D.C. 20554 News media ntorrnaoon 202 /632.5050. Recorded listing of releases and texts 202/632 -0002. [The following questions and answers were prepared by the FCC's Rate Workshop] staff for use at the May 13, 1993 Cable CABLE TELEVISION RATE REGULATION QUESTIONS AND ANSWERS Implementation Schedule 1. Question: When do the rules become effective? When may franchise authorities begin to file their certification forms? When may consumers begin to file cable programming service complaints, and how will those forms be disseminated to the public? When do you anticipate OMB approval for the forms? 33122 May 13, 1993 1,0-4 a +e b cv- Answer: The rules become effective June 21, 1993 and the Commission will accept certification forms and cable programming service complain: forms filed on or after June 21. We expect the necessary Office of Management and Budget forms approval by June 21. The Commission will publish the forms as soon as we receive OMB approval and make them available to the public on request. We will also ask consumer groups and organizations representing local regulators to assist in disseminating the forms. Complaint forms will also be available from local franchise authorities and cable operators. 2. Ouestion: When must an operator submit its initial rate justification filings and what must it submit? A wer: For basic rates, after the franchise authority has notified the operator that the authority has been certified and has adopted the necessary regulations, the operator has 30 days to submit its rate schedule, including Form 393. For cable programming service rates, the cable operator need not make any submission to the FCC until a complaint is filed and then the operator has 30 days to respond by submitting its Form 393. Effect Cc petitiop 3. Ouestion: What actions may franchise authorities (or the FCC) take where effective competition is present but rates 1 nevertheless remain high? Answer: Cable service and equipment rates may only be regulated under the 1992 Cable Act if the cable system is not subject to effective competition. If a cable system is subject to effective competition, its rates may not be regulated regardless of their level. 4. Ouestion: What formula is to be used in determining the penetration rate for purposes of determining whether the cable operator is subject to effective competition within a franchise area? How are the residents of multiple dwelling buildings that are charged a bulk discount rate treated within this formula? Answer: For purposes of applying the 30 percent threshold in the first effective competition test, the penetration rate, or the measurement of subscribership, will be based on that of the particular system in question, and not an aggregation of all cable systems or competitors in the franchise area. Measuring the appropriate penetration rates for the second effective competition standard is a two -part process. For purposes of applying the 15 percent threshold, the subscribership of alternative multichannel distributors will be calculated on a cumulative basis; however, only those multichannel distributors that offer programming to at least 50 percent of the households in the franchise area will be included in the 15 percent cumulative measurement. Each separately billed or billable customer of a multichannel distributor will count as one household, with the exception that each residence of a multiple dwelling unit will also count as a separate household. Non residential units, such as individual hotel rooms, will not be counted. Pranchife Authority Certj.figation and Local Reculatioti 5. Ouestion: What happens if a franchise authority takes longer than 30 days to submit a certification form to the FCC? Answer: There is no 30 -day deadline by which a franchise authority must file for certification. The franchise authority may file its certification request on June 21 or at any time thereafter. The certification will become effective 30 days after it is filed unless the FCC notifies the franchise authority of a defect in its certification request. The franchise authority has 120 days from the time its certification is effective to adopt the required regulations (i.e., rate regulations that are consistent with FCC standards, and procedural regulations that permit interested parties an opportunity to participate), if it has not already done so. The franchise authority may undertake basic rate regulation once it has adopted these regulations and has notified the cable operator 2 that it has been certified and has adopted the necessary regulations. 6. Question: If a franchise authority regulates several cable operators, is it required to file for certification for all of them now? Answer: Each franchise authority will file a signle certification form. A franchise authority, however, may stagger notification to cable systems as it decides to regulate their rates. Thus, an authority has the discretion to implement regulations in a fashion permitting it to manage its resources. 7. Question: May a single government entity be certified to act on behalf of several cities, and must each city include an independent certification form along with the entity's form? Answer: One regulatory entity with the necessary legal authority may be certified on behalf of several cities, whether or not the cities are served by the same cable system. Each city need not file an independent certification form; rather, the entity should file one form, with each city's community unit identifier numbers included. 8. Ouestion: Is the certification form required to have official documentation from the Mayor, City Council, or other city official? Answer: The form must be signed by an official with authority to sign other types of official agreements on behalf of the franchising authority. 9. Ouestior: In its request for certification, the franchise authority must represent that regulations will be adopted consistent with the FCC's regulations. Who will determine when those regulations are actually in place? mower: Once it has been certified and has adopted the necessary regulations, the franchise authority must so notify the cable operator. The cable operator will then have the opportunity to challenge the franchise authority's certification on any relevant ground, including that the authority has not adopted the necessary regulations, by filing a petition for reconsideration or revocation with the FCC. 10. Ouestion: What limitations are there in the remedies available to a franchise authority for addressing unreasonable basic cable rates? May a franchise authority order a rate rollback in excess of 10 percent? Answer: In addition to disallowing a proposed rate schedule, a franchise authority may prescribe a specific rate whenever it 3 determines that a proposed rate is unreasonable. If the system operator has submitted a rate schedule based on the benchmark formula and calculations, the franchise authority may not prescribe a rate any lower than that permitted in the Commission's benchmark rate tables or more than 10 percent less than the operator's September 30, 1992 per channel rate, whichever is higher. (This may be a reduction of more than 10 percent from the operator's current rate, if the operator has raised its rates since September 30, 1992.) If the operator has submitted a cost -of- service showing, that showing supercedes the benchmark /rollback provisions. Accordingly, the franchise authority may prescribe whatever rate it finds justified by the cost -of- service showing, even if that rate is below the system's benchmark and more than 10 percent below the system's September 30, 1992 rate. A franchise authority may also order a cable operator to refund to subscribers that portion of previously paid rates determined to be unreasonable. However, the operator's liability for refunds is generally limited to a one -year period, and in any event cannot co back beyond June 21, 1993, the effective date of our rules. Franchise authorities may not impose fines or monetary forfeitures simply because an operator's rate for basic service or equipment is determined to be unreasonable. 11. Question: Once a franchise authority has been certified to regulate rates for the basic service tier, must the franchise authority hold formal hearings before reducing rates that exceed the Commission's reasonable rate standards or considering a cost- of-service showing? mower: No. A franchise authority is not required by the Commission's rules to hold formal oral hearings before applying any of the remedies detailed above, including ordering a prospective rate reduction or considering a cost -of- service showing. However, a franchise authority must provide a reasonable opportunity for interested parties, including the cable operator, to participate before the franchise authority orders a prospective rate reduction. 12. Ouestior4: May a franchise authority hire an outside consultant to evaluate a cable operator's coat -of- service showing in order to expedite the review process? Answer Yes. However, if the franchise authority is going to rely on the consultant's analysis as the basis for the franchise authority's decision, then it must formally adopt the consultant's findings as its own. 13. Ouestiori: If a franchise authority determines that a cable 4 operator's cost -of- service showing does not justify the proposed rate, may a franchise authority immediately lower the rates for the basic service tier to the Commission's reasonable rate standard? Answer: Yes. Upon finding that a cable operator's actual costs do nct justify the proposed rate, the franchise authority may immediately reduce the rates to the level justified by the evidence which may be the Commission's reasonable rate standard, a lower level, or some other rate. If a cable operator has sought to justify a rate in excess of the permitted level based upon its actual costs, a franchise authority should be able to prescribe a reasonable rate based upon these costs, even if it is below the Commission's reasonable rate level. However, a franchise authority may not order a rate reduction first, and then evaluate the operator's cost -of- service showing. If such a showing is submitted, the franchise authority must first reach a decision that the operator's costs do not support the proposed rate before ordering any reductions. 14. Ouestion: if a cable operator reduces its rates for the basic service tier to the maximum permitted under the Commission's reasonable rate standards after June 21, 1993, but prior to the date of initial regulation by a franchise authority, may a franchise authority order refunds based on the basic rates charged between June 21, 1993 and the date the operator lowered its rates? Answer: Yes. A franchise authority may order refunds for that portion of rates paid by subscribers for the basic service tier for the period between June 21, 1993 and the date the operator lowered its rates or for one year, whichever is shorter. General Rate Structure and Definition Issues 15. Question: What is the definition of a channel in establishing per "channel" rates? Answer: A channel is a unit of cable service identified and selected by a channel number or similar designation. Channels are not excluded from consideration based on their contents and may include, for example, directory and menu channels. Given the averaging process involved, no distinctions are made between high or low cost or high or low value channels. Total regulated channels include all channels on the basic service tier and cable programming services tiers. The distribution of several programming services combined on a single channel does not increase the number of channels on the system. 16. Question: What is the definition of "satellite channels" as that term is used for benchmark table calculations? 5 Answer: A satellite channel is any cable program service or "superstation" delivered on a communications satellite that is not a premium service (pay- channel or pay per -view channel). If a cable systems picks up a satellite channel via a microwave or fiber optic feed, the channel remains a satellite channel if it is available by satellite unless it could be picked up directly over the -air in the cable community. 17. Question: What is a "superstation" that need not be carried on the basic tier? Answer: Any non -local broadcast signal secondarily transmitted by satellite need not be carried on the basic tier, including "superstations" that meet this description. In applying this rule, the Commission will look to the manner in which the signal is transmitted, and not how it is received. Thus, a signal initially transmitted by satellite, but received via microwave, need not be carried on the basic tier. 18. Question: Does the Commission's rate structure favor or permit consolidation of tiers? Answer: The Commission's regulatory framework for cable service rates permits consolidation of cable service tiers. However, the same substantive rate standards govern both the basic and any cable programming services tiers. Thus, the regulatory framework for rate regulation of cable service is tier neutral in that it does not seek to encourage or discourage consolidation of tiers. 19. ouestion: May a cable operator and a local television station agree, pursuant to a retransmission consent agreement, to offer the signal on an a la carte basis? Answer: No. The 1992 Cable Act requires the signal of any local television broadcast station (except superstations) that is provided to any subscriber of the cable system to be carried on the basic tier regardless of whether that station has elected must -carry or retransmission consent. Therefore, the Act prohibits offering a local broadcast signal on an a la carte basis or on any tier other than the basic tier. 20. Ouestion: The Commission stated that it will not regulate collective offerings of otherwise exempt pay per channel or pay per -view services under certain conditions. Will the Commission refrain from regulating such collective offerings in all instances or will it examine such offerings on a case -by -case basis? An§wer: Collective offerings of otherwise exempt pay per channel or pay per -view services will be examined on a case -by -case basis when it receives a complaint, to ensure that consumers are not disadvantaged and that cable operators are not making such 6 collective offerings merely to evade rate regulation. The Commission has stated that it will not regulate such collective offerings if the cable operator satisfies two prerequisites. First, the price for the combined package must not exceed the sum of the individual charges for each component service. Second, the cable operator must continue to provide the component parts of the package to subscribers separately, in addition to providing the collective offering. The Commission emphasized that this second condition is satisfied only when the per channel offering provides consumers with a "realistic service choice." Thus, a cable operator may not avoid rate regulation simply by announcing that previously tiered services are now available a la carte unless such services are genuinely available separately; nor may it escape regulation in circumstances where the per channel rate for the a la carte service is so high that as a practical matter consumers will not avail themselves of the a la carte option. 21. ouestior.: Is there an obligation for a cable operator to give advance notice to subscribers of a rate reduction? Answer: Yes, under the FCC's customer service standards which become effective on July 1, 1993, a cable operator is required to give subscribers at least 30 days written notice of rate changes. 22. ouestion: May a cable television system continue to include a separate line item in its customer bill for copyright fees? Answer: Copyright fees are no different from all other obligations of cable operators to pay those who supply them with goods and services, and do not appear to be included within the provisions of Section 622(c) of the 1992 Cable Act expressly permitting itemization of certain governmentally imposed costs. However, if no other law, such as a regulation of a local franchise authority, prohibits the itemization of copyright fees, our rules do not prohibit such itemization. Any itemization, however, must be consistent with the rules regarding the format of subscribers' cable bills. 23. Ouestion: What is the latest date under the Freeze Order by which a cable operator may rearrange services among tiers or change rates (without increasing the average monthly subscriber bill) to come into compliance with the rate regulations, before it begins to incur liability? Answer: The effective date of our rate regulations is June 21, 1993. Liability for refunds for basic service rates initially subject to regulation generally may extend back to June 21, 1993, or one year, whichever is less. Refund liability for cable programming service rates extends back to the date a complaint is filed. The earliest date a complaint can be filed, and thus the 7 earliest date refund liability for a cable programming service tier could accrue, is June 21, 1993. However, for purposes of applying the benchmark formula, local authorities will look to the operator's basic rates in effect as of the date the operator submitted its initial rate schedule, and the FCC will look to the operator's cable programming service rates in effect on the date the operator's response was filed. Rate Calculttiong 24. Ouestion: How often can cable operators file rate increases? mower: Absent a showing of special circumstances justifying an earlier increase, cable operators should file rate increases for the basic service tier no more than once per year. The Report and Order permits cable operators to adjust cable service rates annually for inflation based on changes in the Gross National Producer Price Index (GNP -PI). This index reflects general changes in the cost of doing business. Rate adjustments based on increases in most categories of external costs, other than franchise fees, are also tied to changes in the GNP -PI: rate increases based on changes in external costs are permitted only to the extent increases in external costs have exceeded inflation, and permitted per channel charges must be adjusted downward to the extent external costs have increased less than inflation. Filings for rate increases based on changes in external costs may be filed at the same time that rate increases are sought for any inflation adjustment. In addition, a request for a rate increase for the basic service tier may not be submitted until after the franchising authority has reached a decision about the reasonableness of the operator's current rates. 25. Ouestion: Where a system offers multiple tiers of cable programming, is a separate Form 393 to be completed for each separate tier or can the tiers be reviewed as an aggregate? Is the answer the same if tiers are purchased on a buy- through basis? Answer: The permitted per channel rate as determined in accordance with Form 393 is applied separately to each tier when it becomes subject to regulation, whether or not it is purchased on a buy- through basis. Rates cannot be averaged across tiers for purposes of determining whether the rates for a tier are equal to, or below, the permitted per channel rate calculated pursuant to Form 393 for the tier. It is the rate for each tier individually that is compared to the permitted per channel charge calculated in accordance with Form 393 for the tier, rather than aggregate rates of several or all tiers. With this understanding, if a cable operator receives a complaint about the 8 rates for more than one cable programming service tier, it may submit a single Form 393 when responding to the complaint since the form enables an operator to perform calculations for each tier. 26. Question:'If a cable system serves multiple franchise areas and it has an identical channel lineup, identical rate structure and identical franchise fees in each area, may it file a single set of rate worksheets on a system -wide basis? Answer: When finding the benchmark rate on the benchmark table (or applying the benchmark table) cable operators must use the number of subscribers on the system as a whole. In calculating the weighted average rate per channel across all tiers for a particular community unit, the weighting is generally to be done using the number of subscriber to the cable community unit in a particular franchise area. However, a common calculation could be used where all the relevant factors (including initial rates, channel lineups, franchise fees) are identical. The Report and Order does not preclude franchise authorities from agreeing to allow the operator to use a common calculation. 27. Ouestion: Are cable operators with current rates for the basic service tier below the maximum permitted levels allowed to increase rates either before or after regulation to the maximum permitted rate? what can the cable operator do if it has priced its basic tier artificially low in order to attract subscribers. Answer: Under the Commission's Ereeze Order, cable operators are able to retier and reconfigure their services in anticipation of regulation, but may not generally raise rates during the freeze period. After the freeze expires, but before the basic service tier becomes subject to regulation, the basic service tier is unregulated. The operator's provision of the basic service tier becomes subject to regulation on the date it is notified by the local franchise authority that it is subject to regulation. A below benchmark, per channel rate for a tier in effect on the initial date of regulation of the tier, as determined in accordance with Form 393, is the permitted per channel rate for the tier. Once an operator receives this notification, it may not raised its basic service rates even if that rate is below the benchmark without prior approval of the local franchise authority. 28. Ouestion: If the benchmark formula rather than the benchmark tables are used to calculate a benchmark rate, should the actual number of subscribers be entered in the formula or the number of subscribers as reflected in the benchmark table that is closest to its actual number of system subscribers? Answer: When using the benchmark formula instead of the tables, 9 the actual number of subscribers to the system should be used. 29. Ouestion Concerning retransmission consent fees, what is the definition of "new and additional fees" beyond those already in effect on October 6, 1994? May fees that are agreed to in 1993 but that are not effective until after October 6, 1994 be passed through after October 6, 1994? Would it be permissible to pass through fees if a broadcaster and a cable operator agree in 1993 to a fee schedule that includes fees that are low or nonexistent in the first year of the agreement, but are higher in the second and third years? Answer: As used in the Report and Order, para. 247, new and additional retransmission consent fees beyond those in effect on October 6, 1994 refers to the amount by which retransmission consent fees actually paid after October 6, 1994 exceeds the amount of such fees paid prior to that date, measured on an annual basis. This is true regardless of the date of the contract. The Commission will monitor the impact of retransmission fees on subscriber rates. If cable operators and broadca seek to establish agreements that could significantly adversely affect subscribers for the period after October 6, 1994, in contrast to the first year of retransmission consent, the Commission can take steps to modify or eliminate external treatment for retransmission consent fees. 30. Ouestion: May cable operators include in any cost -of- service showing retransmission consent fees incurred prior to October 6, 1994? A wer: Rates determined pursuant to a cost -of- service showing will be based on permissible costs regardless of whether such costs are accorded external treatment for purposes of administration of the price cap on cable service rates. The extent to which costs incurred by cable operators can be recovered from subscribers pursuant to a cost -of- service showing will be governed by cost -of- service standards. The Commission will consider what cost -of- service standards to adopt in the Second Further Notice of Proposed Rulemaking. The Second Further Notice of Proposed Rulemaking will not propose a disallowance of any retransmission consent fees, including those incurred prior to October 6, 1994. 31. Ouestion: May any portion of franchise fees attributable to unregulated services be passed through to customers? wet: The entire amount of franchise fees may be passed I through to subscribers. Eauivment_R.tes 32. Ouestion: Small cable television systems have never had the 10 need to compile data that would indicate such factors as accumulated depreciation for equipment, deferred taxes for tools, average number of hours per installation, etc. How can these operators fill out Part III of FCC Form 393? Answer: The Commission's cost accounting rules require that cable operators maintain their accounts in accordance with generally accepted accounting principles and in a manner that will enable identification of appropriate costs and application of the Commission's cost assignment and allocation procedures. Under the Commission's requirements implementing rate regulation of equipment based on actual cost, cable operators must present the cost information specified in Part III of FCC Form 393. The Commission believes that cable operators will have sufficient information to comply with equipment rate regulation requirements. To the extent a cable operator has not previously maintained accounts in a manner consistent with our rules, and it does not have fully developed cost data, it must indicate in Part III to FCC Form 393 that the operator is using estimates, where necessary•, in calculating equipment and installation rates and provide a justification that the estimates are reasonable. 33. Question: How often can rates change for equipment? A&lswer: As for other rate increases, cable operators may file rate increases for equipment charges annually. 34. Question: The Hourly Service Charge (HSC) is based in part on a system's annual capital costs. Annual capital costs, however, decline as equipment in place ages, while the cost of maintaining equipment increases. Thus, the FCC•s formula for calculating the HSC would appear to reduce the allowable HSC as the actual maintenance costs rise. Is this correct? Answer: The HSC is based on a system's annual capital costs for installing, maintaining, and repairing customer equipment. The capital cost of customer equipment is not recovered through the HSC, but through the lease of that type of equipment. To determine the HSC, an operator must add annual capital costs and expenses for installation and maintenance of customer equipment. If an operator's annual capital costs decline because of aging equipment, the operator's expenses, such as labor, might increase because it takes more time to maintain such equipment. Therefore, the HSC would not necessarily decline. Further, the annual capital costs would probably decline only if there were no growth in the business and /or no replacement of equipment. 35. Ouestion: Are subscriber drops to be on FCC Form 393 Part III, Schedule C? Answer: No. The Report and Order explains point for cable home wiring in single unit 11 included to be included that the demarcation dwellings is 12 inches outside of where the cable wire enters the outside wall of the subscriber's premises. For multi dwelling units, the demarcation point is 12 inches outside of where the cable enters the outside wall of the sub: riber's individual dwelling unit. all Report and Order at n. 666. Therefore, subscriber drops are considered network equipment and may not be included as customer equipment in Part III, Schedule C. Subscriber drops, however, are often installed at the time of service installation. In that instance, the time it takes to install a subscriber drop may be included in the actual or average time it takes for that type of service installation. Thus, although the cost of the actual equipment will not be recovered in an equipment charge, the cost of installing a drop at the time of service installation may be recovered j.n the installation charge. FCC 12 F 5• RJBJC NOTICE FEDERAL COMMUNICATIONS COMMISSION 1919 M STREET N.W. WASHINGTON, D.C. 20554 News media information 202/632 -5050. Recorded listing of releases and texts 202/632 -0002. CABLE TELEVISION RATE REGULATION QUESTIONS AND ANSWERS On May 3, 1993, the Commission released a lengthy Report and Order containing rules, forms and procedures for implementing the rate regulation provisions of the Cable Television Consumer Protection and Competition Act of 1992 "the Cable Act As has been previously announced, the Commission's staff will present a workshop on the details of these regulations in the Commission's Meeting Room, Room 856, on May 13, 1993 at 2 p.m. In the interim, the following questions and_answers_address a number of the more basic issues relating to the rate regulation rules. 1. Ouestion: What does the Cable Act provide regarding cable rates? 2. Question: How are rates going to be regulated and who is going to undertake the regulation? 33044 May 7, 1993 Answer: It authorizes the regulation of basic cable and cable programming services rates for every cable system that is not subject to "effective competition." Because only a relatively few systems are subject to effective competition, rates will be regulated in most situations. Answer: Monthly rates for cable service will be regulated by either the local franchise authority or the FCC, depending on the tier of service involved. The "basic" service tier will be regulated by the local franchise authority which, if it asserts its jurisdiction, will approve rates in advance. The rates for tiers of "cable programming" service will be reviewed by the FCC, but only in response to subscriber complaints. Pay per -view and pay -per- channel offerings are not covered by the Cable Act, and their rates are not regulated. 3. Ouestion: What specific services are included in the "basic" and "cable programming" service tiers? Answer: The basic tier includes all of the broadcast signals (other than satellite "superstations that the cable system distributes, as well as the public, educational and governmental access channels that are required by the local franchise authority and any other services that the cable system at its discretion chooses to include on this tier. The cable programming service 1 c4 Leer (or tiers) includes all programming services that are not on the basic tier and that are not pay per channel or pay per -view services. 4. Ouestion: How does a franchise authority regulate the basic service tier? Answer: The franchise authority is generally the city or county government where the system is located but in some states a state commission is responsible for rate regulation. In order for a franchise authority to assume responsibility for basic service rates it must be certified by the FCC as qualified to undertake this regulation that it has the necessary legal authority, adequate personnel, and regulations consistent with the law and FCC regulations. If the franchise authority can demonstrate that it is unable to undertake this regulation and /or its certification is rejected, then the FCC must also assume responsibility for basic tier regulation. 5. Ouestion: How does the FCC's regulation of the cable programming service tier take place? Answer: The FCC's authority to regulate cable programming service rates is triggered by the filing of a subscriber complaint. Systems are not required to obtain advance approval of rates changes relating to this tier of service. 6. Ouestion: How do subscribers complain about cable programming service rates? Answer: Complaints must be filed on an FCC approved complaint form. This form is not yet available for use because it must be cleared for use under the Paperwork Reduction Act. Complaints cannot be accepted until the form is available; complaints that are not on the proper form will not be accepted. The form requires only very simple information regarding the locale and identity of the system and the rates paid. It does not require the subscriber to do any of the calculations required to determine the reasonableness of the rate. Complaints with respect to existing rates will be accepted for 180 days after the effective date of the rules. Complaints regarding subsequent price increases must be filed within 45 days of the receipt of a bill containing a rate increase. The required complaint form will be available directly from cable system operators and the FCC. 7. Question: When will regulation of rates begin? Answer: The process has already commenced but several transitional steps must be completed before the full impact of the new law is felt: On April 5, 1993, cable systems were ordered to stop all rate increases for a period of 120 days; On May 3, 1993, the FCC released a comprehensive set of rules to govern the rate regulation process; On June 21, 1993, the rules will become effective; After the rules become effective, franchise authorities can seek certification to begin the basic tier rate regulation process under the law such applications must be acted on by the FCC within 30 days; e s /1a' e Gh e e QV e 6 1 e f -c_<_ 2 046 After a franchise authority is certified the cable operator has 30 days to submit its basic tier rates for review; The FCC can begin its regulation of the cable programming service tier rates as soon as the regulations become effective, i.e., on June 21, 1993, but the FCC must also receive a subscriber complaint for its authority to be triggered. As a consequence of the need for these transitional steps, regulation will generally be commencing for most systems sometime in the summer of 1993. 2. Question: Can systems make any changes in rates during the 120 -day rate freeze period? Answer: Yes. Certain changes in tier and equipment rate structures are anticipated during the freeze period in order to comply with the new rate rules so that, for example, the price of one tier may decrease while the price of another is increased. Such changes are allowed as long as the average subscriber charge is not increased. 9. Question: When will changes in cable rates be reflected in subscriber bills? Answer: The rules will go into effect on June 21, 1993, and in cable rates should begin to occur within a few months thereafter. The vast majority of cable rates should come down, but not all will. Given the time necessary for cities to get certified and for parties to file complaints, and for actual review of rates, governmental actions to reduce rates would probably begin to occur in the late summer or early fall. Cable systems may choose to reduce their rates before that time, however, if they anticipate their rates are too high under the new standards. 10. Question: Will refunds be provided if rates were too high? Answer: The local franchising authority or the FCC can order refunds for any period after the rules become effective on June 21, 1993. The FCC will act only in response to specific complaints. A cable system cannot be legally required to refund money for rates charged before the new rules were in effect. 11. Question: What if a franchise authority doesn't do anything about regulating cable rates? Answer: If a city demonstrates that it is unable to regulate rates for basic tier service (because it is unqualified or lacks sufficient resources to regulate rates), the FCC will do so, upon request by the city. Before the FCC will step in to regulate rates, however, the franchising authority must show why it cannot use its franchise fees to cover the costs of rate regulation. If the city does not want to regulate rates and does not ask the FCC to regulate them, the rates for the basic tier of service will not be regulated. The FCC will still review rates for tiers above the first tier, in response to consumer complaints, regardless of whether basic rates are regulated. 3 04 12. Ouestion: How will the FCC and franchise autncrit :es establish reasonable rate levels? Answer: In an effort to determine what rates we 1d he reasonable, the FCC undertook a survey of all cable television syst ns in the United States that were facing actual "effective competition" as that term is defined in the law. These rates were compared with a large random sa_nple of systems in noncompetitive situations. This survey revealed that the rates for noncompetitive systems were generally about ten percent above the rates for competitive systems on September 30, 1992, the dace the survey was completed. From this survey data the FCC developed a set of per channel "benchmark" rate standards to define reasonable rate levels. These levels are generally ten percent below the rates in effect on September 3:, 1992. These rate levels, however, are subject to certain adjustments to ._terrine current reasonable rates at the time of regulation including adjustments for local franchise fees, inflation, and certain programming cost in: Teases. 13. Ouestion: Will charges for installations, a.ditional outlets, converter boxes, and remote controls be subject to regulation? Answer: Yes. All customer premises installations and equipment are subject to regulation on an actual cost (including reasonable profit) basis. This regulation will generally be undertaken by the franchise authority. Late payment fees are not subject to regulation under the Act. 14. Ouestion: Where can interested parties get a copy of the regulations and supporting documents? Answer: The full text of the Commission decision and the new rules will be printed in a publication call the FCC Record, which is available in large law libraries around the country. The complete new rules and a summary of the decision will be published by mid -May in the Federal Resister, which should be available in most local libraries. The text is also available for purchase from the Commission's independent copy contractor, International Transcription Service, phone (202) 857 -3800. FCC 4 048 off`,0 FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Dan Withers Regional Manager Northland Cable Television 725 East First Port Angeles, WA 98362 Dear Dan: On behalf of the City of Port Angeles we wish to acknowledge your letter to Mayor Hallett regarding cable television basic rate regulation. Your detailed description of some of the changes you contemplate making in accordance with your understanding of the Federal Communications Commission's (FCC's) Report and Order 76.901 through 76.985 is appreciated. As you are aware, this matter is complex and all of the final compilation methods and forms have not yet been issued by the FCC. In the meantime this matter is being taken under advisement and we are in consultation with the City on implementation steps that may be taken subsequently. You may anticipate further information regarding the City's position on FCC certification as a regulatory body in the very near future. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Miles H. Overholt Senior Consultant MHO /ss 31i Cable Communications consultants cc: The Honorable James Hallett Craig Knutson, Port Angeles City Attorney Port Angeles City Council August 4, 1993 502 East Main Street, Auburn, Washington 98002 (206)833 -8380 1-800- 222 -9697 FAX: (206)833 -8430 OF pORT q I CITY OF PORT ANGELES Dear Lon: 321 F. FIFTH P O BOX 1150 PORT ANGELES, WASHINGTON 98362 ��T A TTOR PHONE (206) 457 0411 August 2, 1993 Lon Hurd 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 Re: July 23 Letter from Dan Withers to Mayor Hallett By now you should have received your copy of the above referenced letter. I would appreciate it if you could let me know your thoughts. Specifically, is the information provided by Dan Withers correct? Thank you for your assistance. Very ruly yours, Craig i Knutson, City Attorney CDK:cb cc: Jeff Pomeranz, City Manager Becky Upton, City Clerk FROM: 3-H CABLE COMMUNICATIONS CONSULTANTS 502 East Main Street Auburn, WA 98002 (206) 833 -8380 FAX 833 -8430 PLEASE DELIVER THE FOLLOWING FAX TO: NAME: 6a0_15 I, t y FIRM: CITY /STATE: PHONE: Total Number of Pages: Comments: Sent by; 1,0 rd FAX TRANSMITTAL PAGE (including thin) Date: FAX NBR: 635F 16. I x'9'3 1 J r 'J G t .-I! J 1 1 I 9H1'IHl itrf 1 U 11 f.,. BULLETIN TO: Clients FROM: 3-H Cable Communications Consultants SUBJECT: Cable Television Rate Regulation Update DATE: June 18, 1993 The Federal Communications Commission (FCC) citing manpower shortages, has obtained a waiver from Congress in implementing its rate regulation procedures originally scheduled to begin next week. As a result the effective date of cable regulation is set back to October 1, 1993. We believe, however, that even this date may be extended because of budget problems. A rate increase freeze will be in effect until such time as a firm date is reestablished for rate regulation. We will continue to keep you apprised of new developments as they occur. Let us know if you have any questions. cc: Auburn Kirkland Redmond Bellevue Kitsap County Renton i Des Moines Mercer Island Tukwila i Kent Port Angeles FRANCHISING REFRANCHISING COMMUNITY NEEDS ASSESSMENTS ORDINANCE PREPARATION r NEGOTIATION EVALUATION FRANCHISE ADMINISTRATION ACCESS Dear Jack: Cable Communications consultants Jack Dyste VP /Technical Services Northland Cable TV 1201 Third Avenue Ste. 3600 Seattle WA 98101 June 17, 1993 Please disregard the previously sent Franchise Fee Reporting Form indicating a 5% figure for the City of Port Angeles. The 4% figure will not increase to 5% until October of 1993 in accordance with the franchise Northland holds with the City. We apologize for any inconvenience this may have caused either party. Sincerely, Sandra Schulze Office Manager 502 East Main Street, Auburn, Washington 98002 (206)935 -9040 1 -800- 222 -9697 FAX: (206)932 -4284 5 ago Operator Address Revenue Source Northland Cable Television, Inc. 725 East First Port Angeles, WA 98362 Installation Additional Outlets Extraordinary Installation FM Installation Bulk Installation Disconnect Other Installation (VCR Reconnection, etc.) Total Installation Income Revenue Source Basic Cable 'fir I Tier II Premium Premium Premium Premium Addt'l Outlet Rate Pay Per View FM Service Bulk (Equivalents) Converter/Remote Cable Guide Total Monthly Subs. Income Local Advertising National gross) Shopping Services Rent L.O. Income Mailing Inserts Total Non Subscriber Income Units k c,r�J frnri ,�r Units (avg. Unit Price Months in Gross Revenue of Period) (each/mo.) Period X X Franchise Fee Payment Worksheet Unit Price Months in Gross Revenue (each /mo.) Period X X yy;r�:yrr �r {{,•rr ryy r,•� i:fl i f'f r.. hr ,,'.-r;'' {`',f'. „BSII r Pj;; Yrr r y;J:' `."g r: Ff: �.,a yr rf/;/r`Y /.rr'yJJ`r'•'•r' Yi /;r..4 F; r %J i, r %�•r fib Lr /Cr. .f :':rl .�i %::%f!ii�I ?.r. j �':f;%� �,y,'�r','' �•r', ;fy "f.: /.;f /.:r�irj �7'f r. ;.,,�r f r!:r.,'. {i r,:r �io•r rf,, rf p'. r. r rr i. r• X/,%1 If,'/l: r /'.ii r`'r ;`�i i:','.',•,y��J, i• %f,� *20g 15/x/, l {fdf:r.'.� %rrl.�l <fr 'rr %f• %i': liS% >G f j r. fr F.r �,v rr f,,;�:.: ".r'•,;rf f. fti %Jfil r :4'," i�`�` iT: '�ri Y .ir �'i ;i `Y%i f l r {r.r i Y JS f r f i` f•` %•f`4 JI .:,n. Jl� f {i f r;; :i• i% fifd;J`yii {i1:',:``.': �i// 5 i r j •f. frJJ /Jr:..;: fr..,;x;�:F:1 Fffr. {�p1,rYf..f'f fl/ ;y f ;1 Gross Revenue YTD Jurisdiction Port Angeles Period January 1 June 30. 1993 Gross Revenue Fee YTD 4 1 4 4 4 4 Franchise YTD Fee 4 1 Fee 1 Franchise Fee 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 41 4I 4 1 41 YTD Operator Address Revenue Source Northland Cable Television, Inc. 725 East First Port Angeles, WA 98362 Alarm Other Total Interactive Income Less Bad Debts Plus Bad Debt Recovery Net Bad Debts Total Other Income TOTAL REVENUES Adjustments TOTAL DUE CITY Explanatory Notes: *Adjustments (specify): Send original to franchisor Copy to: 3 -H Cable Communications Consultants 502 East Main Street Auburn, Washington 98002 Franchise Fee Payment Worksheet Units (avg. Unit Price Months in Gross Revenue Gross Revenue Fee Franchise of Period) (each /mo.) Period X X YTD Fee Authorized by: Title: Date: Jurisdiction Port Angeles Period January 1 June 30, 1993 4 4 4 4 4 4 4 4 4 4 YTD Instructions: Fill out complete form. If a particular income item is not pertinent to your franchise please draw a line through the appropriate boxes. Areas left blank will be assumed to be inadvertent omissions and the form will be returned for completion. Unit average of period is applicable only to those items for which a monthly (or portion thereof) rate is charged. Specify when "other" category is used. Prior period totals must equal YTD total. If promotional discount lowers normal average during period please indicate. If rates increased or lowered during period indicate starting dates. Multi- family installation income spread over a period of a contract will be reported when earned. APR 06 '93 21:43 3 -H MANAGEMENT CONS. Comments: FAX TRANSMITTAL PAGE FROM: 3 H CABLE COMMUNICATIONS CONSULTANTS 4517 California Avenue S. W. Seattle, WA 98116 (206) 935 -9040 FAX 932 -4284 PLEASE DELIVER THE FOLLOWING FAX TO: FIRM: CITY OF FORT ANGELES CITY /STATE: PHONE: Sent by: T.nn Hnnfa NAME: CRAIG KNUTSON, JEFF POMERANZ,,' ECK3 UPTON FAX NBR: 452 -0353 Total Number of Pages: 2 Unc]uding Date: April 7, 1993 P.1 c>2 Y x APR O6 '93 21:44 3 -H MANAGEMENT CONS. TO: FROM: SUBJECT: DATE: BULLETIN Client Cities 3 -H Cable Communications Consultants Cable Television Rate Regulation April 6, 1993 The Federal Communications Commission (FCC) released information on the implementation of the Cable Act of 1992's basic rate control sections. Although the FCC will not release the full text until May 1993, certain portions are available now. Some key issues: The FCC will release a table of bench marks to determine the applicable bench mark for your operator. Using this method and the rates in effect as of September 30, 1992 as the base date, if a franchisee were above such a determinant then a franchising authority (city or county, but not the FCC) may require that the rates for basic service be reduced to the bench mark rate or by 10 whichever is the lesser. Note that there is no "automatic" rate reduction. Only each certified franchising authority can effectuate this. In order to implement this empowerment a local government must be certified by the FCC. You can begin to file for certification 75 days following the official publication of the FCC's Report and Order. A franchising authority will be permitted to order rate reductions if it determines that a basic rate (using the bench mark rate) is unreasonable. The FCC may do the same for higher categories of basic rates if complaints are made by residents through the franchising authority. The same bench mark rate will apply to both basic rates and to the next category of basic so as to reduce the ability of a cable operator to minimize the effect of rate regulation through providing only "bare bones" channels. There is no regulatory system for premium channels (i.e. HBO) or Pay -Per- View. We will continue to provide you with updated information as soon as it is available. cc Auburn Bellevue Bremerton Clarkston Clyde Hill Des Moines Everett Federal Way Hunt's Point Kent Kirkland Kitsap County Marysville Reno Medina Renton Normandy Park Richland Port Angeles Sparks Pullman Tukwila Redmond Yarrow Point P.2 February 18, 1993 Mr. Lon A. Hurd Vice President /Director 3 -H Cable Communications Consultants 4517 California Avenue, Suite B Seattle, WA 98116 Re: Agreement between City of Port Angeles and 3 -H Cable Communications Consultants CITY OF PORT ANGELES 321 EAST FIFTH ST P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Dear Lon: At its meeting of February 16, 1993, the Port Angeles City Council approved the agreement for consulting services for 1993 with 3 -H Cable Communications Consultants. A copy of the fully executed agreement is enclosed for your files. We look forward to this coming year in working with 3 -H! Sincerely yours, Becky J. Upton City Clerk 5". a/o CABLE TELEVISION CONSULTANT SERVICES AGREEMENT THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this-1st day of January, 1993, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City"). CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FOR, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scone of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Compliance With the Cable Television Consumer Protection and Competition Act of 1992. Consultant shall review rates and other goods and services furnished by the cable operator, advise the City regarding compliance with the FCC's rate regulations, and report any apparent violations of City approved rates to the City. This function shall also include verifying operator adherence to FCC regulations such as carriage, positioning and must -carry restrictions as well as consumer relation minimums and mandated technical specifications. D. Collection of Franchise FeQ. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance. Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. E. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. F. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. G. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. H. Ownershin Reports/Document& Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1993 and shall expire on the 31st day of December 1993. B. Termination bv City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Service. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to five percent (5 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi -annual payments and the Consultant's fee determined on that basis. Invoices for such semi -annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Indenendent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and 2 employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity.. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remeats. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision, The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: City of Port Angeles 321 East Fifth P.O. Box 1150 Port Angeles, WA 98362 3 Approv Attest: City Attorney" v CONSULTANT: 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 to form: A 0 n A 3 -H Cab By_ Lbri7r. Hur City of Port Ange s By ,d nsultants sident/Director -Cable Communications Consultants Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 A. d Vice President /Director LAH/ss Enclosures C, February 5, 1993 Dear Craig: Enclosed are two signed copies of our contract for Cable Television Franchise Administration for 1993 complete with your changes. Please return a copy for our files pending City Council approval. Sincerely, 3 -H' CAB }CO i4. ICATIONS CONSULTANTS 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 5.210 Dan Withers General Manager Northland Cable Television 725 East First Port Angeles, WA 98362 Dear Dan: CtibieCiarnmtinicatiOtig Con We would appreciate it if you would give us a call as soon as possible to discuss the results of Northland's proof of performance testing on the system that serves the City of Port Angeles. Thank you for your usual cooperation. Sin rZly, Lon A. Hurd Vice President/Director LA b„„• t g ri A i LA. cc Jeff Pomeranz, Port Angeles City Manager Becky Upton, Port Angeles City Clerk Craig Knutson, Port Angeles City Attorney February 5, 1993 FEB 8 1993 CITY OF PORT ANGELES CITY CLERK 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935-9040 Cable Communications Consultants TO: FROM: DATE: SUBJECT: Becky Upton, Port Angeles City Clerk 3 -H Cable Communications Consultants /MHO August 28, 1992 Retiering of Programing by Northland Cable Televisic n You have asked us to comment upon the recent retiering by Northland Cable Television which has apparently resulted in some dissatisfaction over these changes which are perceived to be a rate increase by some cable televison subscribers along with considerable confusion. This action of Northland is typical of similar actions taken by cable operators throughout the Country. Premium television revenues have been on the decline over the past three years. This is largely attributable to price resistance, a confusing plethora of new services, perception that programs are repetitious, and the wearing off of the novelty of such programs. While on the whole premium rates in themselves have not increased by a great deal in this period, basic rates certainly have, pushing the total rate package for many subscribers above their comfort zone. Additionally, as Northland has pointed out, the premium program suppliers have increased their wholesale prices to the cable retailers. Over and above all of this there is concern and confusion in the ranks of the cable industry regarding new cable rate regulation which may come out of Congress next month. In response to what type of legislation that was anticipated in previous rate regulation bills the cable operators retiered their program structure so as to cause their basic service (called "Lifeline" in Port 4517 California Avenue Southwest, Suite B Seattle, Washington 981 16 (206) 935-9040 CITY OF PORT Afk,"etitiai CITY CURLS Becky Upton Page Two August 28, 1992 Angeles) to be chosen by very few subscribers under the assumption that only this lowest basic would be subject to rate regulation. That Bill did not pass and the present indications now are that regulation would apply to the lowest basic tier that at least 30% of the system's subscribers subscribe to. The right of a cable operator to unilaterally make such retiering has not been legally challenged. Section 625, Modification of Franchise Obligations of the Cable Communications Policy Act of 1984 addresses this issue but allows the cable operator to take such actions to rearrange a particular service from one service tier to another if the rates for all of the service tiers are not subject to regulation This is, of course, clearly applicable to the situation in Port Angeles where such service are not regulated. Obviously, it would seem to us, that this is an effort to perform such restructuring before Federal law institutes rate regulation which would prohibit the action that Northland has taken. It is, of course, highly likely that such retiering will be grandfathered under new legislation and would not be required to be rolled back. We will continue to keep you apprised of any activities of this nature. Management Consultants, Inc. 4517 CALIFORNIA AVENUE S.W., STE. B SEATTLE WASHINGTON 98116 (206) 932 -5232, FAX 932 -4284 Sold To: Jeff Pomeranz City Manager PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 ITEM Date P.O. No. Salesperson Contract for Consulting Services With 3 -H Cable Communications Consultants July 17, 1992 TERMS: NET 30 DAYS 1 1/2% (PERCENT) PER MONTH AFTER 30 DAYS Franchise fee paid to the City by Northland Cable Television for 1/1/92 thru 6/30/92 $38,834.59 x5% THANK YOU! Lon Hurd Contract 5% of 4% franchise fee $1,941.73 TOTAL AMOUNT DUE $1,941.73 White Copy: Return with Payment Canary Copy: For Customer BUDGET OWE l 3 O I. APP OV ATE 1 '7_.:x'7- Q 5 02 /D STATEMENT ty AMOUNT Pink Copy: For File Cable Communications Consultants Becky Upton City Clerk Port Angeles City Hall P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Sincerely, 1 n A. Hurd Vice President /Director LAH/ss Enclosure December 30, 1991 DEC 3 1 1991 ?,9117 DL EM Enclosed please find the signed copy of our contract for consultant services with the City of Port Angeles that you requested. We have retained the other copy for our files. We also look forward to another year of working with the City of Port Angeles. 5.aEyc' 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 AGREEMENT FOR CABLE COMMUNICATIONS FRANCHISE ADMINISTRATION CONSULTANT SERVICES THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1992, by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FOR, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Project and Scope of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance Consultant shall provide forms and send to the franchisee for the purpose of such verification. 1 In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. D. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. E. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. F. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. G. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1992 and shall expire on the 31st day of December 1992. B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee 2 to the Consultant. Such fee shall be equivalent to test percent (5 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assiens. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property 3 arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. 4 Approved as to form: )0 City Attorney Attest: All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: City of Port Angeles 321 East 5th P.O. Box 1150 Port Angeles, WA 98362 CONSULTANT: 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 City of Port Angeles 5 3 -H Cable icinmuica ons Consultants By By ce President /Director PORTq yF'Q c O N CITY OF PORT ANGELES 321 EAST FIFTH ST., P.O. BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457.0411 C F D E P P December 20, 1991 Messrs. Miles Overholt Lon Hurd 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 Re: 1992 Agreement between City of Port Angeles and 3 -H Cable Communications Consultants Dear Messrs. Overholt Hurd: At its regular meeting of December 17, 1991, the Port Angeles City Council considered the contractual arrangement with 3 -H Cable Communications Consultants. It was the Council's decision that the contract should be renewed for the period, January 1, 1992 December 31, 1992, with the fee to be paid by the City to 3 -H in an amount equivalent to five percent (5%) of the franchise fee paid by the franchisee to the City. Enclosed are the original and one copy of the agreement which has been signed by the Mayor. Please note the error at the top of Page 3, where ten percent is referenced and has been corrected to read five percent. The Mayor has placed her initials by the correction; please be certain you too have initialed the correction on each copy. Please sign both documents and return the fully executed original to this office. We look forward to the ongoing working relationship with 3 -H Cable Communications Consultants. Our best wishes for a happy holiday season. Sincerely yours, Becky J. Upton City Clerk Attachments 5.210 November 4, 1991 Miles Overholt and Lon Hurd 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 Dear Miles and Lon: CITY OF PORT ANGELES 321 E FIFTH P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 45 il NOV 4 1991 CITY OF PORT ANGELES CITY CLERK It is now time to start considering renewal of your contract with the City. In so doing, the City needs to make sure that it is getting commensurate services in return for the compensation it is paying. As you know, the current contract provides for payment to your firm of ten percent of the franchise fee. At this rate, the City will be paying you over $7,000 in 1991. In return, your firm has performed a technical evaluation of the franchisee's facilities, monitored the federal rate regulation issue and provided related services. This year City staff would like to present several options for the City Council to consider. One option would be changing to an hourly billing arrangement. Another option would be a reduced percentage of the franchise fee. It would facilitate matters if you could provide us with a proposal for 1992 that would include the following options: 1. An hourly billing arrangement (together with an estimated yearly total); 2. A reduced percentage of the franchise fee, e.g., five percent; 3. Continue the status quo, i.e., ten percent of the franchise fee. With each option you could describe the services that the City would receive. We would like to present this issue to the City 5.2 co November 4, 1991 Page 2 Council's Utility Advisory Committee at its December 2, 1991, meeting. Thank you for your assistance. Very ruly yours, Craig D. Knutson, City Attorney CDK:cb cc: City Manager City Clerk DATE: October 7, 1991 MEMORANDUM TO: Becky J. Upton, City Clerk FROM: Craig D. Knutson, City Attorney RE: 3 -H Cable Communications Agreement Expiration This is in response to your September 4, 1991 letter, which I received on October 4, 1991. I am not aware of any changes that need to be made to the current contract. Accordingly, I suggest that you have Louise prepare a new agreement for 1992. Then, I can send it to 3 -H for their review before taking it to the City Council. Craig D. \utson, City Attorney CDK:bw September 4, 1991 TO: Craig D. Knutson, City Attorney FROM: Becky J. Upton, City Clerkl— SUBJECT: Agreement Expiration This memorandum is intended to serve as a reminder that the following agreement is scheduled to terminate, as follows: 3 -H Cable Communications, City Clerk File No. 5.210 expires 12/31/91. If I can be of any assistance, please contact me. Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: Just to keep you up to date on the extra outlet charge by Northland Cable Television, Inc. which has been of concern to some of your citizens. Pennsylvania has a bill in committee (S -218) that would prohibit cable operators from charging subscribers for additional connections to the same home. There is a likelihood that this same wording will be incorporated into the pending legislation S-12 on a National level. On a larger note the FCC today has released its ruling on effective competition. The text of this new regulation is being Federal Expressed to us from Washington. We will forward it to you together with our recommendations as soon as it is received. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Miles H. Overholt Senior Consultant MHO /ss Cable. Communications. Consultants cc: Jeff Pomeranz Becky Upton June 13, 1991 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 ailic C able Communications Consultants The Municipal Cable REGULATOR ISSUE 2 VOLUME 14 A l From the Editor's Desk:= MIS TERM INOLOGY This edition of the Regulator is published on April 1st 1991 —April Fool's Day. It seems to be appropriate therefore to dedicate this issue to April Fool's jokes –in this case those pranks that the cable industry has perpetrated on the American public, or more specifically, upon the American Congress and municipalities. Unfortunately, these hoaxes are played on more occasions than April 1st and because they become self perpetuating, it is our purpose in these pages to examine a few of the more recent ones before they make the transition from hoax to myth to fact, something like from Tinker to Evers to Chance of baseball lore. Alas, these are not just harmless "gotcha's They are seeds of misinformation deliberately planted by cablers with the intention of deception or at the kindest interpretation, obfuscations of the actual facts, in order to retain the monopolistic position of the cable industry in this country. Perhaps the older hoax of all played by cable operators has already made the transition from hoax to myth. This time honored joke is the thigh slapper: "Do you know how long it takes for a cable operator to recover its investment? At least Fifteen years." Not very funny, huh? No, not funny, but probably one of the more costly pulled upon naive local government. First of all, for the sake of simplicity, let's arbitrarily divide cable television into two eras, pre -1985, the franchise ages, and post -1985, the refranchise ages. In the franchising decades the APRIL 1991 1 5. Q2/o ANALYSIS COMMENTARY Formerly: CAW Newsletter 10. 0 0 cable operator pleaded for, no demanded, a minimum of a fifteen -year franchise term because, it stated, it needed "at least" that long to recover its enormous capital expenditures and begin to break even. It submitted various scenarios of pro forma financial projections indicating this, or something like this, to credulous cities. "In the franchising decades the cable operator pleaded for, no demanded, a minimum of a fifteen -year franchise term because, it stated, it needed 'at least' that long to recover its enormous capital expenditures and begin to break even." There were several things wrong with this at the time. One was that most cities were not that familiar with this type of financial forecast from the private sector and did not know when to look for the accounting "foolers And plenty of "foolers" there were. To support adequately these financial assumptions or, perhaps in this case they should be called presumptions, droves and droves of backup data would be needed. These were seldom submitted. If they were, they were of dubious subjectivity and very selective reasoning. Not only were many communities poorly equipped to follow such an ill -wind blown paper trail, many, as ridiculous as it seems today, were actually afraid that if it refused to grant a fifteen year or longer term cable television franchise, its residents would be deprived of the opportunity forever to watch cable television. There were other things wrong with this hoax as well. The emphasis, emanating from the cabler accountants, was on the word "profits and more particularly, on "after -tax profits Never mind that the objective of the cable controller, or for that matter for all controllers, is to pay as little money to the government as possible and to limit the profits exposed to taxes. The low post -tax profit percentage of any corporation in or out of the cable community comes as a shock to almost any layman. The more meaningful true "bottom line" to be looked at was cash flow or operating profit. This, if shown as such, even with all attempts to portray as bad a picture as possible, was usually quite healthy in a relatively short period of time. the bank would not lend the cable operator funds for this cable build unless it were assured that the cable operator would make an adequate return on its investment and therefore to be able to repay its loan." There were almost endless other misleading byways in these projections. While costs were accurate, revenues more often were not. The greatest variable in those rate controlled days was the penetration rate. While a cabler's costs are related to the homes passed, its recoveries are from its penetration rate. This is a judgement call figure. Certainly the cable operator was in a better position to estimate this percentage than the City. If, however, someone had taken the time and effort to review these forecasts from a backward look of, say, five years later, all these penetration percentages would have been seen to be almost uniformly low. This whole mixed bag of misassumptions, red herrings, and foggy reasoning was tied up with a bow. On the ribbon were inscribed various words to the effect that the bank would not lend the cable operator funds for this cable build unless it were assured that the cable operator would make an adequate return on its investment and therefore to be able to repay its loan. Therefore, the logic proceeded, a minimum fifteen -year term of franchise would be required. Cities bought this. No one thought to ask if the pro formas submitted to the city were identical to the ones presented to the lending institution. Of course they were not. To be fair there were voices of reason even at this time. Several of the Big Eight accounting firms, notably Touche Ross Company pointed out that the break -even point would be achieved usually somewhere around the seventh year of a franchise or earlier. No one seemed inclined to 2 listen to these cries in the dark. Thus the hoax became a myth and by the time the second era of refranchising rolled around the cable industry asked the Congress and the cities to accept it as a fact. Thus, for example, was the Cable Act written, as borne out by the staff comments, so as to make it virtually impossible not to renew an incumbent franchisee. Cable operators blithely asked for a fifteen -year (or longer) franchise term in a renewal of the original franchise. If questioned, the excuse would be that the costs of an upgrade, for example, could not be justified in a shorter period. The bankers were trotted out once again. The bankers obviously had their self interests to look after and were not about to shoot down their clients' logic —or illogic. Upgrades, of course, do not approach the cost of a new build and technological improvements have greatly lowered capital equipment costs. Access monies or equipment supplied to cities are a very small portion of cost as compared to income derived from even one additional year of a guaranteed franchise term. And so it goes. The term of the franchise is the trump, perhaps the only card held by a franchising authority. It is time for the cities to leave the so called reasoning of the cablers as at least no more than a myth —not make it a fact. HIGH JINKS IN THE OZARKS Some hoaxes perpetrated by cable people are subtle. Others take some true facts and twist them about to make them appear to be what they are not. Still more merely jack numbers around until everyone is confused and is led to accept the hypotheses postulated by the cabler. There is still another category of hoaxes which are anything but subtle and demean the intelligence of the audience. An example of the latter has recently emerged from Missouri —where cross burning on lawns has long been abolished. This one cites a poll to the effect that 97% of cable subscribers surveyed said they would renew their subscriptions. This was immediately interpreted to mean that "the vast majority of cable customers are satisfied with the service, value, and programing provided Really? It would seem to our jaundiced eyes that all this means that subscribers have no other choice but to subscribe and is hardly an endorsement that would lead one to jump to such astonishing conclusions regarding consumer satisfaction. In this same analysis, the gratuitous comment was made that "re- regulation will only mean even higher [sic] service rates and poorer quality service Aw, come on. Missouri is the "Show me" State. So show us. 1 *F.F.R.F. 1 l LOST IN THE MYTHS ii t These columns chronicle the intentional myths that have over the years been planted by cable people in order to advance their own objectives. Yet not all present day myths are deliberate nor were they false when they first emerged. Neither did all myths emanate from the cable industry. One myth that has persevered is the one of channel capacity. This particular misconception was not a misconception when it first appeared nor, to be fair, was it a product of an ill intended self serving viewpoint. If humble crow is to be on the menu, our firm should be served a generous portion. The issue of channel capacity, meaning in this context, the capability of a cable television system to carry additional channels has been a prime topic in refranchise negotiations. The city wanted it; the cable operator did not want to spend the money for an upgrade. "The issue of channel capacity, meaning in this context, the capability of a cable television system to carry additional channels has been a prime topic in refranchise negotiations." Don't believe this we told our clients, it is to the vested self interests of the cable company to increase channel carriage capability. The more channels of programing it can offer the larger the basket of goods that may be sold to the consumer. The one time capital costs involved in the upgrade diminished as new subscribers were added. This was the conventional wisdom of a few years back and was dogma to both sides of the question. Many a time we would present the requirements to upgrade to a cable negotiator only to find out that the self satisfied smile on his or her face meant that the cable operator had already made plans to increase capacity with or without the city's impetus. Now however a new element has been factored into the equation which changes the results: *For Franchise Renewal File 3 programing costs. Program costs have been a rather incidental cost to the program retailers up until the latter part of the 1980's. Originally, as you know, the programers actually paid the cablers a small stipend to carry the program so as to expose its advertisers to as large an audience as possible. Gradually this pendulum has swung in the other direction. Program fees are no longer insignificant to the cable retailer; they now amount to one of the five major expenses on the cable operator's books. It follows from this that the cable operator must look very carefully before committing funds to an enterprise which when implemented will only increase its programing costs still more. The cable operator's financial analysts are studying carefully the graphs and seeing that the marginal cost line interdicting the marginal revenue line is being spread out further and further into the future. This is unacceptable to many operators. "Program costs have been a rather incidental cost to the program retailers up until the latter part of the 1980's." At the same time the excitement of a consumer having a hundred channels available has dimmed. The practicality of coping with this giant spectrum is just too much. Even with technological advances such as quadra split viewing, multi -use remote controls and double recording video recorders the viewer is overwhelmed with choice. Given these two factors; potential non -fully recoverable costs and lack of grass root consumer enthusiasm this issue has become divisive in cable refranchising negotiations. What position should local government take? It is our feeling that a franchising authority has no self -given right to ask for increased channel capacity on behalf of its citizens for entertainment purposes alone. While the Cable Act does not speak directly to this point, there is no indirect inference that we can see that would lead to the conclusion that this issue is in and of itself a refranchising matter. "It seems to be quite clear that if the city has a demonstrated need for access channel broadcasting the franchisee must make channels available for this purpose." While the Cable Act may not directly address channel carriage capability per se, it most emphatically does in the item of access broadcasting. It seems to be quite clear that if the city has a demonstrated need for access channel broadcasting the franchisee must make channels available for this purpose. Aha, this is where the rub begins and puts the city right back into the channel capacity fray. If the community has no such access channel at the time and assuming that all of the existing channel slots are already filled with programing then, absent an upgrade, a present channel(s) must be vacated for this purpose. This is not as easy as it sounds. Even assuming there is no ploy by the cable operator to place the onus on the city, the consequences of this approach can be politically devastating. With all due respect to access programing, it is not likely to be the program of choice when compared to the fanaticism of the devotees of an entertainment channel. It is our recommendation to our clients that if these conditions are present they ask for an upgrade in order to make space as soon as possible. In spite of programing costs the cable program retailer is very much aware of the uproar that ensues when a program is taken off the line -up. A franchising authority should, if a community need, push for the access channel, even insist upon it and place the burden of how it is to be accomplished upon the franchisee. This is not to say, of course, that compromise, the warp and woof of negotiations, cannot be made. The most common approach would be simply to give the cable operator a specified amount of time to make access channels available. As in all such concessions, the city should have the right to invoke penalties if such conditions are not met within the time allowed. MYTHING THE POINT The Bush Administration and vested interest groups have been trying for years to avoid having to bite the bullet and to face up to the realities of the need to restrain the rampages of the de facto monopoly that is cable television. Yet the story goes that regulation is anti capitalistic and not worthy of a nation whose economic principals seemingly have now conquered the world. Regulation is not the way of a true blue American with grit and the heritage of forging great enterprises out of determination and a free market economy. Besides, it can cost votes. This is, of course, not endemic to Republicans. The 4 Democrats, as evidenced in the last session of the Congress, breathed fire in speeches and beat their breasts proclaiming their dedication to restoring accountability to the cable industry. However, when it comes time to stand up and be counted and have the vote recorded it seems that there is never enough time for accountability of either party. "Regulation is not the way of a true blue American with grit and the heritage of forging great enterprises out of determination and a free market economy." Now, with a flash of new found inspiration some politicians have, they think, come up with a brilliant answer: by far the most satisfactory solution to this messy problem that seems not to want to go away is the simplest of all. Why, there should just be competition and that would solve the whole problem in the good old democratic way. Yes indeed, agreed the cable industry. They even, out of their inherent good actor character, volunteered to point out competitors. There was the broadcast people in general, Direct Broadcast Systems (DBS) wireless cable (Multi Microwave Distribution System) video tape recorders, motion pictures, the entire print media and potentially, (this said in almost a whisper and a gulp) telephone companies. Never mind, as these columns have discussed many times before, that these supposed competitive businesses, for one reason or another, simply do not represent more than a mosquito bite on the broad backs of the cable people. Never mind that having raised the apparition of the telephone companies the cablers want to make it disappear again. Never mind that these competitors are not only small potatoes as a factor in the cable industry, they have been worked over so much that they are now hashed browns. "The reason that we all got into this mess, they argue, is that cities would not allow other cable companies into their jurisdictions." There is, however, a still better solution to this non competition feature many politicians feel, and certainly the most forthright and best of all— other cable operators competing against each other. Gee, why hadn't they thought of this before? The hot air of this trial balloon deflated quickly when the economic facts of life and the dismal history of overbuilds was whispered to the lawmakers and federal agencies. As always when something doesn't work out there must be a villain Congress has now discovered the villain in this plot against free market enterprise. The reason that we all got into this mess, they argue, is that cities would not allow other cable companies into their jurisdictions. The reasons for this nefarious derring do were not specified but there were very sinister implications. While this approach left the entrenched cable operators embarrassedly quiet for once and ready to change the subject, other minions were prepared to draw their sabers and charge. Rejected suitors for a franchise gleefully jumped into the courtrooms. Attorney Harold Farrows' law firm, the white knight of the cablers, was delighted to pick all over poor Sacramento again on behalf of an unrequited client. Some sanity has been restored as a result of the ruling in the Nor -West case in St. Paul, Mn. that the City had the right to explore the financial and technical compatibilities of a would be franchisee, and in this case, to reject the unqualified. This has not diminished the zeal of these in and out of government who feel that a whipping boy and scapegoat has been finally discovered. It seems a shame that such a simplistic bludgeon approach would be threatened (even though surely not seriously) in blatant disregard of the realities and history of cable television franchising. The concern is not that any such proposed legislation may actually take place —it won't —but that such blatherings merely provide escapism fog and merely postpone coming to grips with the only solution to this problem and that is, of course, to put in place control measures at the community level to ensure good faith performance by the cable operator to its subscribers as well as its shareholders. FAST FORWARD /REWIND On the subject of hoaxes, or perhaps wishful thinking, or perhaps hysteria, another numbers game has been ground out by the ever opportunistic National Cable Television Association (NCTA). When the proposed effective competition standards 5 were announced by the FCC, the cable lobby pronounced, with fear and trembling, that 45% of all cable systems would be subject to rate regulation [Ed. note: with the criteria of receiving less than six channels!]. Then, suddenly the same grist churners horrifically announced that no, it would be 55 Why it suddenly increased the NCTA didn't say. Yet only a month later the NCTA now panically proclaimed, apparently with disregard of its previous positions, that no, that wasn't right, that 86% of the cable systems and 87% of subscribers, under this proposal would be regulated (horrors). What will the NCTA be suggesting next—that 105% of cable operators will be regulated if this new effective competition measurement goes into effect? It seems only appropriate that the highly litigious cable industry should now be preparing to launch a new complete 24 -hour channel devoted solely to actual courtroom cases. If, as the old saying goes, "it takes one to know one then this venture should be a great success for the cablers. It is said that coming events cast their shadows ahead. With this in mind it has been reported that the Bush administration has authorized a 15% increase in the FCC budget for fiscal 1992. Do you think that they will be spending this looking for bad actors in non effectively competitive cities? Do you recall that about this time last year the cablers were blowing their trumpets and proclaiming that in 1989 cable prices rose "only" 3.8% compared to the consumer price index of 4.6 In 1990, however, cable rates went up 13.1% compared to 6.1% for other goods and services. The NCTA had no comment. What, no trombones? The new buzz word in the arcane jargon of cable operators is "compression Compression is a new technological system whereby several T.V. channels may be squeezed into a cable bandwidth now used to deliver just one. While not intending to denigrate a process that could solve some of the problems discussed in the preceding article on system channel capacity, we cannot resist commenting that the cable industry should be good at this squeezing heaven knows it has had enough practice in applying this technique to subscribers over the years. May 9th is the date the FCC will issue the new regulations regarding effective competition and rate control. May 9th is a holiday in Canada called Ascension Day. Canada, as you may know, controls cable rates in a judicious fashion. May we dare to SUBSCRIPTION NOTICE NAMP PHONE CITY /FIRM ADDRESS CITY STATE ZIP 3 -H CABLE COMMUNICATIONS CONSULTANTS 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935-9040 These articles were written by Miles Overholt, Senior Consultant for 3 -H Cable Communications Consultants. A graduate of Harvard, he has held executive positions in the private sector and is listed in Who's Who in the West and Who's Who in Industry and Finance. 6 hope that this is an auspicious omen and that our Country will ascend as well? Congress can be really inventive when it has to. Case in point: the ill -fated Cable Television and Competition Act of 1990 has now been changed to the Cable Television Protection and Competition Act of 1991. Despite how innovative the new title is it will be the same old story in this session as the year before —a story again without a happy ending. Enclosed please find Check in the amount of $35.00/ Bill later for one year renewal subscription (4 issues) to The Municipal Cable Regulator. The Municipal Cable Communications Consultants, Regulator a Division of 3 -H Management £r Consultants, 98116 935-9040 or toll-free S 1-800- Washington This publication is Intended for the professional use of subscribers and client municipalities. EHcerpts may be used by other publications provided proper attribution is given to 3 -H Cable Communications Consultants. 3 ,1i Cable Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B 0 SEATTLE, WASHINGTON 98116 0 (206) 935 -9040 FAX (206) 932 -4284 CITY OF PORT ANGELES 140 WEST FRONT ST P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 T PHONE (206) 457 -0411 Y ATSOR April 17, 1991 Miles Overholt, Senior Consultant 3 -H Cable Communications Consultants 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 Dear Miles: At last night's meeting of the Port Angeles City Council, one of the Councilmembers voiced the concern that the latest issue of "The Municipal Cable Regulator" was overly adversarial and incendiary. The Councilmember felt that the tone and attitude that you expressed would make it difficult for you to have credibility with the cable industry with which you are supposed to be dealing. I share the Councilmember's concern. On the other hand, the City does share your apparent frustration with the current federal regulatory environment. Nonetheless, the City does want to maintain open communication and a constructive atmosphere for dealing with its cable franchisee.Thank you for your attention to this concern. Very. -truly yours, Craig L Knutson, City Attorney CDK:bw cc: City Council City Manager City Clerk -5. a io Cable Communications consultants Becky J. Upton City Clerk PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Becky: Enclosed please find the signed copy of our Contract for Consultant Services for cable television management for 1991. We enjoy doing business with the City of Port Angeles and look forward to a productive year in 1991. Sincere urd Vice President /Director LAH /ss Enclosure OMMUNICATIONS CONSULTANTS February 21, 1991 U _rP i �l FEB 22 1991 4 CITY OF PUR Ti NR CITY CLERK 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 AGREEMENT FOR CABLE COMMUNICATIONS FRANCHISE MANAGEMENT CONSULTANT SERVICES THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 1st day of January, 1991 by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FOR, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scope of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Consumer Protection. Consultant shall assist in the training of a City employee in the day to day handling of complaints or enquiries made to the City by cable subscribers. This training shall consist of personal on the job training with designated employees within thirty (30) days of this agreement. Matters discussed will include appropriate responses, liaison with the cable operator, follow -up procedures, limitations and authority of the City, filing of complaints, a glossary of technical terminology and other matters required in the performance of this assignment. 1 Additionally, Consultant will provide written procedures and forms necessary to conduct this function in the manner most beneficial to the City and its residents. Further, Consultant will be available at any time during normal business hours to assist and advise the City in the handling of such enquires or any issues relating to the regulatory powers of the City. Such services, when necessary may include on site review in order to resolve such matters. D. Cable Franchise Transfer. In the event that a transfer or sale of the cable system under Section 11 of the City's cable franchise ordinance, Consultant shall evaluate such transfer and furnish its recommendations to the City as to the advisability of approval of such transfer. E. Access Utilization. Consultant shall review the status of public, educational and governmental (PEG) use of the access channels provided. Such review will include the monitoring of the availability of such channels, time allocations provided for such use, and equitable sharing arrangements made by the franchisee. F. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. G. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. 2 H. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. J. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. K. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. A. Term. The term of this Agreement shall begin upon the 1st day of January 1991 and shall expire on the 31st day of December 1991. B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to ten percent (10 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi- annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices 3 shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. 4 VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: City of Port Angeles 321 East 5th P.O. Box 1150 Port Angeles, WA 98362 CONSULTANT: 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 5 CITY OF PORT ANGELES BY: cj r� Y O R C� Director APPROVED AS TO FORM: Craig D. clir,nutson, City Attorney A'1'1'EST: m Becky J distonc4City Cl rk 6 3 -H CAB O 1 MUNICATIONS TS All r Tr F ice President/ yoF pORr gN �FI G �N 111■ -440 y CITY OF PORT ANGELES �j J`U 321 EAST FIFTH ST P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 ti PHONE (206) 457 -0411 PA TIV E 4.1% February 20, 1991 Mr. Lon A. Hurd Vice President /Director 3 -H Cable Communications Consultants 4517 California Avenue S.W., Suite B Seattle, WA 98116 Re: Agreement for Cable Communications Franchise Management Consultant Services Dear Lon: At its meeting of February 19, 1991, the Port Angeles City Council approved the contract for cable consulting services with 3 -H Cable Communications Consultants for the period, January 1, 1991 through December 31, 1991. Enclosed are two copies of the agreement, both of which have been signed by the appropriate parties representing the City of Port Angeles. Please sign both copies of the agreement and return one copy to this office for our files. We look forward to another year of working with 3 -H Cable Communications Consultants! Sincerely yours, 6-124.} Becky J. Upton City Clerk enc 5.vo MMOWNWIIIIL January 30, 1991 TO: Becky Upton, City Clerk FROM: Craig Knutson, City Attorney RE: Attached is the January 24, 1991 letter from Lon Hurd asking that the City enter into a contract for consultant services for 1991. The contract that Lon attached to his letter contains the same terms and conditions as the 1990 contract. Could you please review the contract and determine whether or not 3 -H performed its obligations under the 1990 contract? Several of the requirements under Pro-iect and Scope of Work are covered by the Annual Report, which was submitted to the City Council. However, I am not familiar with 3 -H's performance on several other items such as Consumer Protection, Collection of Franchise Fee, and Bond and Insurance. Thank you for your assistance. If your review is positive, the agreement could go to the City Council at its February 19, 1991 meeti CDK:bw Attachments M E M O R A N D U M 3 H Cable Communications Consultants Contract for 1991 son, City Attorney 5.2 Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, Wa 98166 Dear Craig: Enclosed is our contract for consultant services for 1991. This is under the same terms and conditions as the 1990 contract. It has been a pleasure serving you this past year and we hope we may have the opportunity to continue to be of service to the City of Auburn. If you have any questions or if we may be of further assistance, please do not hesitate to let us know. Sincerely, CA UNICATIONS CONSULTANTS rd ce President/ Director LAH /smw Enclosure Cable: Communications Consultants i i� 7771 z 30 9/ CI IT x' January 24, 1991 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 5. 210 alli Cable Communications Consultants The Municipal Cable JAN 101991 �ssm hrl rung raluu LI e u +LLLnk REGULATOR ISSUE 1 VOLUME 14 JANUARY 1991 =From the Editor's Desk: THE YEAR THAT NEVER WAS 1990 was predicted to be a critical year for local government relations with cable operators. It was the year that was thought to be the year when a new relationship of the cable industry and the communities would begin to flower. Instead of a bud, 1990 was a dud. The great expectations of consumer groups and local government that the Congress would either amend the Cable Communications Policy Act of 1984, which permits the cable industry the right to run roughshod, or produce another new cable bill. Neither happened. Despite flurries of activity in both Houses and pro- consumer speeches by various members of the Congress, when the 101st Session came to the end there was no new cable bill, no amendment and virtually no hope for any meaningful action even in the next session. While a cable bill cleared the House in October, the Senate failed to act and the bill died. Even had the Senate reached agreement on the bill, President Bush was reputedly prepared to veto it by pocket or otherwise. Cable legislation was the victim of cross fire by lobbyists, extraneous items and a re- election year. Most local officials felt that the critical issue was one of rate reregulation. Congress felt otherwise. It became bogged down in a plethora of non -rate regulation areas. Must -carry became a dog fight between the National Cable Television Association (NCTA) and the National Association ANALYSIS COMMENTARY Formerly: CATV Newsletter $10.00 of Broadcasters (NAB). Program exclusivity, of only secondary interest to cities, proved at the closing bell to be an issue upon which legislators could not agree. Several trial balloons were floated during the Congressional session. All of them popped because of too much hot air. At one time in the House alone there were five different versions of a cable bill in committees. In order to consolidate the various diverse views a compromise was made and incorporated into the Gore-Wirth proposal. But, even with this temporary alliance, other Senators, notably John Danforth, Ernest Hollings and Daniel Inouye, were not satisfied with the proposed legislation and without their support in the last hectic days of the session, the bill died. RIP. "It may, in fact, be argued that it would be better to have no legislation passed at all than to have to live with the present potential Cable Act." Even if the 102nd Congress were to agree on the cable bill as it now stands it would be cold comfort for cities. It may, in fact, be argued that it would be better to have no legislation passed at all than to have to live with the present potential Cable Act. It may well be appropriate for local government to bide its time and wait for a more auspicious moment. The main areas of municipal concern are customer service, subscriber rates, and authority which would enable all cities to reinstate rate control. As far as customer service is concerned it could be said that, absent other conditions, municipal approval of cable rates is probably the only way to enforce service requirements and is in itself, therefore, a direct corollary of rate regulation. As we have noted in previous issues of the Regulator, unfortunately the Federal Government does not see it that way. Nationwide rate control would impact only the lowest tier of programing so- called the "lifeline" which would consist of only local broadcasts and, perhaps, CNN or C -Span. Worst of all, the cities would have little say even on this miniscule portion of rate regulation. Congress itself, of course, took no action on any of this and passed the ball to the FCC (see following article). The FCC has once again made an end run to by -pass Congressional action and to score a touchdown once more. GOOD ACTOR —POOR PERFORMANCE The timing of the Federal Communications Commission (FCC) proposed new rules to define effective competition was as full of surprises as a birthday party. Probably the biggest surprise was the timing just days after a cable bill was left to twist in the wind by Congress and almost at the identical time that the Cable Communications Policy Act of 1984 was signed six years previously. We do not believe that the esteemed commissioners of the FCC were moved by sentiment to commemorate the anniversary of legislation of which no one, at least in hindsight, can be proud. We suggest that certain commitments, all perfectly legal we hasten to add, may have been made in order to take the heat off of Congress and let cable legislation be forgot for Auld Lang Syne. In retrospect, doesn't it now seem to be less than coincidental that rate regulation, such a fiery issue on the Hill some months ago was, to continue our metaphor, placed on a back burner and not mentioned much at all in the past month or so? The issues of must -carry, program exclusivity and other tangential points came to the fore with practically nary a mention of municipal rate reregulation. Even when rate control was discussed it was pretty much 2 assumed that the FCC would abrogate this function from local government and control it from Washington. "In retrospect, doesn't it now seem to be less than coincidental that rate regulation, such a fiery issue on the Hill some months ago was, to continue our metaphor, placed on a back burner and not mentioned much at all in the past month or so? Then came the block buster of December 13, 1990 (the old joke that Friday the 13th falls on a Thursday this month may be appropriate) the commission, by a 5 -0 vote proposed rules for a redefinition of effective competition. It is stretching credibility a bit to believe that members of the Congress were not privy to the Commission's intentions only a few days before the announcement was officially made public. Actually the criteria for effective competition in themselves make sense of sorts. This begs the question as sense compared to what else? Almost anything would make more sense than Grade B contours, technically viewable and significantly watched of past FCC doctrines on this point. Penetration rate —why not? Six or more broadcast signals are certainly an improvement over three. Alternative services —a little wishful thinking is not too bad. The 5% automatic increase each year is a bit more difficult to adjust to. There seems to us to be a little butter on the toast given to the cable industry. Why 5 Why not 10% or 1 The FCC in its infinite wisdom seems to have settled on a magic number that computes the inflation rate in the United States over a period of time. It is realized that this is an "as much as" figure but it appears to be a bit simplistic even in that context. But even if all these quantified measurements were valid and solid, the FCC then ruins the whole thing by bringing down the curtain before the last act is played. We refer, of course, to the "good actor" clause in the proposed regulation. What this does is to say to the cities who fail within these parameters is in effect go ahead children and play, but don't forget who really makes the rules and will stop the game whenever it appears to get out of hand. It is, of course, far too early to know what the precise determinants will be until all of the hearings have taken place in the next few months. The National Cable Television Association (NCTA) says that it is opposed to the proposal and that should be a good sign for the cities, but the NCTA is against everything anyway. As we now read this effective competition proposal it appears that there is unquestionably one good actor in the piece: the FCC, which makes local government regulation appear from a top hat and then makes it mysteriously disappear without anyone seeing it go. Good theater, bad plot. Rules for Effective Competition (Proposed December 13, 1990—may be effective April or May 1991) 1. Applicable only to basic cable service. Defined in the Cable Communication Policy Act of 1984 as any service tier which includes the retransmission of local television broadcast signals." A city must: 2. Receive less than six broadcast signals. 3. Have greater than 50% penetration. 4. Less than 50% of community is served by MDS or DBS. 5. Less than 10% subscribers to other services (above). 6. Cable operator may raise rate up to 5% a year without approval of franchising authority. 7. "Good Actor" standard. FCC may determine that effective competition exists even if all of criteria are met but the agency deems rates and services satisfactory upon appeal by cable operator. EXCESS ACCESS Access, as used in cable television is, it would seem, a perfectly good word. The Random House dictionary, second edition unabridged, defines public access precisely the way it is used in the cable industry and by franchising authorities. 3 Then what's the problem? The problem is, enough already! Think in how many other applications this word access is used. Access road, computer access, telephone access, access only, public access (viz in a park), private access, locker room access (as in recent female sports writer incident) employee access —well, you get the idea. Perhaps what we need today is a Samuel Johnson or a Daniel Webster to come up with a more narrow interpretation of the phrase applicable to cable television. This is no idle rumination. You know what it means, we know what it means, but a lot of the general public does not have access to this knowledge. A few summers ago a summer intern at a law firm with which we are familiar was assigned to write a legal opinion, requested by a municipality, on what restrictions could be placed on public access. This particular city was concerned about First Amendment problems if certain extremist groups were not allowed to use its public access. This law intern wrote a perfectly fine, closely reasoned and researched document on this subject which concluded that public broadcasting would not be compelled to grant these groups access. Fine, but he, having apparently never heard of cable television public access, turned out this learned opinion on— Public Broadcast System, the distinguished PBS. Fortunately the city, or for that matter, PBS, did not take this opinion to heart, but it illustrates some of the confusion because of the overwork of the words: "public access This whole problem of precise terminology becomes even more murky when other cable television phrases seem to have similar meanings. Take Local Origination (LO) for example. While these words generally refer to a locally originated commercial channel, the subject of a whole rather useless section of the Cable Act, it is often confused not only with public access but with local broadcast stations. These columns have previously bewailed the lack of usage and subsequent loss of the word "community" from the old and respected title "Community Antenna System Our laments heretofore have been largely on psychological and philosophical removal of community as applied to local government. Perhaps it might be appropriate to resurrect this word as a substitute for the overworked and less appropriate "access Could not the Public, Educational and Government Access (PEG) become Community, Public, Educational, Government channels? It would seem to identify more closely what these channels represent and for whom and to whom they speak. For that matter, "franchise" is also correctly used in cable television terminology. However the specificity of this word has been also so generalized by misuse in other applications (e.g. sports franchises, fast food franchises, etc.) that it is practically meaningless today. Finally, there is the all- American overused phrase "state of the art" —the all purpose buzz word. Again, perfectly appropriate in cable franchise wording, but expropriated by too many other frivolous users. And that is the bottom line. Sam and Dan, where are you when we need you? f *F.F.R.F. tf TRADE -OFF OR STAND -OFF Fortunately, or unfortunately as may be the case, we are supposed to acquire more wisdom with age. Having acquired considerable age ourselves without the corresponding increase in wisdom we are inclined not to take this aphorism at its face value. Nevertheless, taken as hindsight perhaps we should have done some things differently knowing what we know now. This applies to cable television franchising as well as most things. During the glory days of cable franchising a dozen or more years ago, when there was competition alive in the land of cable companies seeking a franchise, a community could usually require almost anything from a would -be franchisee. A city often did sometimes overdid —but that's yet another story. One of the requirements that was included in many new franchises was access (here we go again) channels. To some communities it was the VCR of its day everyone just had to have one. However, much like a VCR, access was harder to use than was thought and many local governments, after the first blush of enthusiasm *For Franchise Renewal File I 4 was over, pretty much left its new toy alone and the channel(s) fell into disuse. Still other communities, fearful of the bother an access channel would cause, did not make it a requirement of the original franchise. Your City may or may not have any use for access. It still should be a factor in renewal negotiations. The first and most obvious reason is that it is awesome to think that the result of your discussions today may very well affect your community ten to fifteen years down the road. One may very well feel an obligation not to close out options even if today access would be not worth the effort. If this is true we suggest two essential points. First of all, hedge. Ask for the option to be awarded access channel(s), even if only required at a finite point in the future. For the sake of your community make specific when your needs will be reviewed by the council or whatever group is involved. Make a specific date. If you do not, the cable operator will feel that this is always hanging over its head, and, for prudence, will consider the probability that it may have to give up a channel at anytime and this will be factored in its budget. If, however, the operator can count on having this channel for at least a certain preset period, it can enter into contracts, for example, with program purveyors, for that particular time. The cable company's costs will therefore be reduced accordingly. Now with that chip ready to be played, it's time to ask for the quo that goes with the quid. It's trade off time. Channel capacity is almost a priceless commodity to the cabler. Cash in your chips now. Get something tangible from the cabler in exchange for postponing a decision on an access channel(s). You may wish to obtain, for example, more stringent service standards, or at least get a commitment from the operator to fund the channel if and when. Don't let access go by default. SPEAKING FRANCHISE -ESE It has been mentioned in a previous article that many of the phrases indigenous to our occupation are so general that they become just jargon rather than having any real meaning. Much of this obfuscation comes from engineers. Engineers, you see, have to make their patter sound esoteric and complicated because if they spoke the language that most of us would understand they would show how simple their work actually is and they then would be out of a job. The word "hertz" for "cycle" is symptomatic of the engineers' terrible inferiority complex. The engineers, at least, once their pidgin English has been defined, are pretty precise. Not as precise as they pretend to be, but pretty precise. This is far more than can be said for the other profession, the law, that further muddies the dark water of cable television documents. "We really believe that this is some sort of secret code with which attorneys speak to each other and that no one else can understand." For example, what does "not unduly withheld" really mean? What is "reasonable proximity If "ordinary care" means what it says it means, then what sort of care is extraordinary care? For that matter how can such phrases, so dear to the lawyer's heart (or maybe soul) as "all due haste "substantially "material" tell us? We really believe that this is some sort of secret code with which attorneys speak to each other and that no one else can understand. Having said all of this we probably have alienated all of our clients who have sworn the oath and been given the Rosetta Stone and secret handshake upon passing their bar exams. Please do not take this personally. We are not anti lawyer even though one of our sons compounded the tragedy by not only becoming one, but also marrying one to boot. Sometimes our burden is heavy to bear. Our bias is certainly not new, and all lawyers know the quotation that the immortal bard in Henry VI, Act 4: Scene two, speaks: "First thing we do, let's kill all the lawyers." If Shakespeare felt this strongly, it was a good thing he was not involved in cable television franchising. 5 FAST FORWARD /REWIND The cable industry has lobbied long, hard and well to stifle any re- regulation legislation. One of their more overworked ploys is to imply economic doom and disaster for cablers if even a shred of their retail business would be subject to government—any form of government—review. The plausibility of this sophism is somewhat hard to swallow in the face of 1989 figures that indicate that cable systems had a cash flow margin (income not reflecting depreciation or amortization expressed as a percentage of revenue) of 43.5 The communication industry as a whole had only a cash flow margin of 20.7 It does not appear that the Congress will have to salvage the cable industry as it did the S &L's. They have already benefited from an indulgent Congress. Some of the quick fix advocates of bringing the Telcos in for competition are not beating their drums as loudly as before. None of the myriad of other complications have been solved, but now, in addition, Bell operating companies have, at least temporarily, backed away from the illusion of a fiber optic America and are now speaking of fiber optic to the curb which would not include a drop to the home itself. The Bells are now apparently seeking cost justification for telephone services alone, excluding video. There will be more fine tuning on this issue down the road. You probably have heard of Telecommunications, Inc.'s (TCI) advertising plans to depict itself as fuzzy and warm. Other Multiple System Operators (MSG's) are also striving for a "we care" image. All of this is well and good. We wonder, however, that given the cable industry's own poll indicating that 91% of cable operators' view improved customer service as its biggest need, that some of these advertising funds should be diverted to more practical applications. Would, one asks, the industry be better served in hiring more customer service representatives, increasing telephone accessibility, improving billing systems, and employing more technicians? In this show and tell portrayal it might be better to have more show and less tell. SUBSCRIPTION NOTICE Enclosed please find Check in the amount of $35.00/ Bill later for one year renewal subscription (4 issues) to The Municipal Cable Regulator. NAME PHONE CITY /r1RM ADDRESS CITY STATF ZIP 3 -H CABLE COMMUNICATIONS CONSULTANTS 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 These articles were written by Miles Overholt, Senior Consultant for 3 -H Cable Communications Consultants. A graduate of Harvard, he has held executive positions in the private sector and is listed in Who's Who in the West and Who's Who in Industry and Finance. The Municipal Cable Regulator is published by 3 -H Cable Communications Consultants, a Division of 3 -H Management 0' Consultants, Inc., 4517 California Ruenue Southwest, Suite B, Seattle, Washington 98116, (206) 935 -9040 or toll -free 1 -800- 222 -9697. This publication is intended for the professional use of subscribers and client municipalities. EHcerpts may be used by other publications provided proper attribution is given to 3 -H Cable Communications Consultants. For additional information about our services please contact Lon A. Hurd, Vice President at (206) 935 -9040 or 1-800 -222 -9697. FAX (206) 932 -4284 ll Cable Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B 0 SEATTLE, WASHINGTON 98116 0 (206) 935 -9040 FAX (206) 932 -4284 6 PRANG SING RE FR NCHtSING SESSMENTS 0 kw D NANCE PREPARAT EVALUATION 0 FRANCHISE AI MINIS Dan Withers Regional Manager Northland Cable Television 725 East First Port Angeles, WA 98362 Dear Dan: I received a copy of your letter of November 20, 1990 to the City of Port Angeles regarding the increase in rates for 1991. While most of the information provided vas very clear I am not completely sure what the rates will be for a number of your monthly charges such as basic, lifeline and senior discounts. In many instances you listed amounts of increases but did not show what the new charges would actually be. I would therefore request that you forward on to our office a complete list of rates and charges of Port Angeles Cable Television within the City limits of Port Angeles. I also wish to remind you that it is the time of year for our annual technical review of your cable system. I will contact you soon to set up a time that is convenient to both of us. In addition I would appreciate it if you would copy our office on all correspondence sent to the City of Port Angeles. Since we deal with the City in all cable matters, it is important that we receive copies of all cable related materials. I look forward to hearing from you on the rates issue, and to meeting with you for the technical review. Sincerel 3 -HC Vice President/Director LAH/ss Ca a Communications Consultant NICATIONS CONSULTANTS cc: Jeff Pomeranz, City Manager Craig Knutson, City Attorney Becky Upton, City Clerk Jack Dyste, Northland Communications James Penney, Northland Communications J r )1E@NOWAE: DEC- 7 1990 C ITY OF PORT ANGELES CITY CLERK ITY EGOTIAT1ON 0 ACCESS December 7, 1990 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 9040 10 Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: H ISE ADMAN f 3 tON CableCtoninutliCatitillS Consultants November 20, 1989 NOV 2 1 1990 O1 O CITY F POR E ANGELES Thank you for your letter of November 8, 1990 regarding the still unresolved problem of obtaining lower rates for cable television in Port Angeles. As you make mention, negotiations on this issue with Northland Communications have gotten nowhere. Frankly, and unfortunately, we do not hold out much hope of a recession or even stabilization of cable subscriber rates in your City. As you are aware, the Northland people have not only incurred a large debt service in the leveraged buy out of Port Angeles Telecable, but are also pressed in other areas because of their forced position of cable operators rather than in their original venture capital investment structure. Our many discussions on this point have ended up without any concessions whatsoever and we do not foresee any changes in Northland's position down the road. While Port Angeles can, of course, seek a waiver from the FCC such a route will be costly and its cost effectiveness compared to the status quo of cable rates would have to be analyzed. Your letter asks what impact pending federal legislation may have on this situation. First of all, as you know, the 101st Congress adjourned without taking any action on the various versions of an amended Cable Act floating on the Hill. Even though some have been reported out of committee the final shape that any legislation may take is up for grabs. Many of the items in these proposals are of only tangential interest to local government. For example, issues such as children's program commercials, must carry, channel allocation and prohibitions on program exclusivity are being given a higher priority than rate regulation. The FCC was to have given a report to Congress in July, but that agency backed off because of potential pending legislation. 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 1 Craig Knutson Page Two November 20, 1990 FCC chairman Al Sikes now says that if Congress fails to act his agency will take up the question of effective competition in January of next year. The FCC apparently will throw out the concept of so many over the -air signals and substitute for it some sort of a formula that will put a price on lifeline rates. Needless to say the whole idea is pretty fuzzy at this time. Getting back to Congressional action, it doesn't appear that Port Angeles can hold its breath and expect any relief in the near future. The 101st Congress will still have to address the unresolved cable issues from the previous session while being bombarded by special interest groups; not the least of which is the cable industry. In addition, President Bush has been quoted as saying that he would veto any cable reregulation bill. In spite of all of the pessimism contained in this report we would suggest that, given the present circumstances, it might be advisable for the City of Port Angeles to wait until January and then see what action, if any, the FCC will take. We will certainly keep you informed of any development. Our firm will issue an annual report before the end of the year which will contain a report of our activities in behalf of Port Angeles. Please let us know if any further information is desired at this time or if you have any further questions. Sincerely, 3 -H CABLE COMMUNICATION CONSULTANTS Miles H. Overholt Senior Consultant MO /ss cc: Becky Upton Jeff Pomeranz NORTHLAND CABLE TELEVISION Mr. Jeff Pomeranz City Manager City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Mr. Pomeranz: November 20, 1990 725 East First Port Angeles, Washington 98362 (206) 452 -8466 1- 800 244 -7591 FAX (206) 457 -5901 IED U� i L1 i �jl �iu� To properly communicate with you and the City of our upcoming plans, I am writing to inform you that effective January 1, 1991, our basic cable rate will be increased by $1.25 per month or about 4.2 cents a day. This represents a 7.4% increase and is approximately the same as the consumer price index. The rate for extra outlets will remain the same as the 1990 rate. On January 1, 1991, there will be two other rates that will be increased. Our senior rate will increase .94 cents per month or by 6.9%. The rate for the HBO service will increase by .50 cents per month or by 5%. These rate increases, mostly due to programming and maintainence costs, are necessary for us to continue to provide the quality of ser- vice we have been providing for the past years. We are pleased to let you know that the rate charged for Showtime or Cinemax will be reduced by .50 cents per month. We did a rate comparison of the cable companies surrounding our area and we found the following: FORKS CABLE TV Basic rate as of July 1990 is $16.00 /mo with 19 channels Basic rate as of July 1991 will be $17.50 /mo with 19 channels PORT TOWNSEND CABLE Basic rate as of August 1990 is $16.65/mo with 18 channels PORT ORCHARD CABLE Basic rate as of August 1990 is $18.95/mo with 29 channels BREMERTON TCI Basic rate as of August 1990 is $18.45/mo with 28 channels 5.2c November 20, 1990 Page 2 During the 1991 year, we have some exciting plans for our cable customers. In January, 1991, we plan to ad two channels for the basic customers. Sometime in June to August we plan to launch Northland Cable News Service. This will be a taped broadcast, on our Ch 3, show- ing community highlights and news on our area. In November, 1990, we at Northland Cable increased our efforts to get more involved in our community. Our Ch 3 local channel began the "Crime Solver" segment for all law enforcement agencies to use. In October and November, we had a special for the local area food banks and we have contributed to date 800 cans of food. We have started our 330 mhz upgrade for the Port Angeles area, so our system will have a channel capacity of 41 channels. This project will continue through 1991 and should be completed by August or Septem- ber of 1991. I am including, with this letter, a copy of the rates and charges for the 1991 season. Please let me know if I can be of any help or answer any questions. DJW:td Enclosure Thank you, Dan Withers, Regional Manager DEAR CUSTOMER, EFFECTIVE JANUARY 1. 1991. OUR RATE FOR SENIOR BASIC SERVICE WILL INCREASE 5.94 A MONTH. WHICH IS AN APPROXIMATE INCREASE OF 3.2 CENTS PER DAY. THIS RATE HAS NOT BEEN INCREASED IN TWO YEARS. THE NEW RATE IS NECESSARY TO CONTINUE PROVIDING THE HIGH QUALITY OF PROGRAMMING AND CUSTOMER SERVICE WHICH YCU HAVE COME TO EXPECT FROM US. HOWEVER, OUR BASIC CABLE SERVICE IS STILL LESS THAN 5.49 A DAY 24 HOURS OF NEWS. SPORTS, AND ENTERTAINMENT FOR THE WHOLE FAMILY AT AEOUT THE COST CF ONE SOFT DRINK. THE NEW EASIC INCREASE REPRESENTS A 6.9% INCREASE IN OLR RATES. THIS INCREASE. WHILE UNDESIRABLE, IS APPROXIMATELY THE SAME AS THE CONSUMER PRICE INDEX WHICH IS AN AVERAGE OF PRICE INCREASES FCR ALL CCNSUMER PRODUCTS AND SERVICING. ANY OF CUR ACTUAL COST INCREASES HAVE FAR EXCEEDED THE CPI. FOR EXAMPLE: SINCERELY. *VEHICLE MAINTENANCE AND GASOLINE *FOSTAGE FOR EILLS AND GUIDES *PROGRAMMING COSTS *COMPLIANCE WITH NEW FEDERAL REGULATIONS +201 +182 +172 +802 NORTHLAND'S COST- CUTTING AND CABLE SYSTEM IMFRCVEMENTS HAVE PREVENTED OUR RISING COSTS FROM CREATING SIMILAR INCREASES IN YOUR CAELE 6ILL. WE WILL MAKE EVERY EFFORT TO FIGHT FUTURE RATE INCREASES AND OUR GOAL IS TO KEEP THEM IN LINE WITH THE CONSUMER PRICE INDEX. WE APPRECIATE HAVING YOU AS A CUSTOMER. AND WE HOPE YCU WILL CONTINUE TC ENJOY ALL NORTHLAND HAS TO OFFER. THIS INCLUDES PROGRAMMING. CULTURAL AND COMMUNITY EVENTS, AS WELL AS EDUCATIONAL PROGRAMS FOR OUR SCHOOLS. WE LOOK FORWARD TO CONTINUING TO GIVE YCU THE BEST PROGRAMMING AND SERVICE AVAILABLE IN THE INDUSTRY DURING THE YEARS TO COME. NORTHLAND CABLE TELEVISION CUSTOMER SERVICE POLICY CURRENT SERVICE POLICY AND PROCEDURES 1. Office hours are 9:00 am to 5:00 pm, Monday through Friday. 2. Customer service requests, i.e.: installations, service additions, etc., are scheduled within 5 business days, except during specials or promotions. 3. Trouble calls, such as no picture, etc., receive same day service. All others may be scheduled. 4. Customers with billing questions receive same day service. 5. An answering service is available to answer calls after business hours, weekends, and holidays and will page standby personnel to respond to no picture calls, system outages, and other emergencies. 6. Technical staff are on standby after business hours, weekends, and holidays to respond to no picture calls, system outages and other emergencies. 7. Refunds for service are available for service outages if they are not repaired within 24 hours of notification by the customer, unless the service outage is beyond our control. 8. Refunds are available for overpayment of accounts if requested by the customer. 9. Current billing practice: Statements are printed monthly on or about the 21st for the following month's service. If payment is not received in 40 days, a final notice is sent requesting payment within 5 days. (45 days past due.) If payment is still not received, customer will be disconnected for non payment. 10. Customers who pay for 12 months in advance will receive the 13th month free. 11. A final bill is mailed on the 21st of each month showing all charges for service and equipment not returned. 12. Monthly service rates and installation charges: see rate sheet. 13. Premium channels on some TV sets may have a small white line on the extreme left side due to the horizontal width of some TV sets working in conjunc- tion with the descrambling process. 14. Northland Cable Television complies with all local, State, and Federal laws in technically maintaining its cable systems to assure uninterrupted quality pictures under our control. 15. Should a customer have an unresolved complaint regarding Northland Cable Television service, actions or non actions, such complaints may be lodged with the Northland Cable Television City or County Franchise. FE3 NORTHL4ND CABLE TELEVISION INSTALL FEES: CHANGES IN SERVICE: A/B SWITCH: PREWIRES: SERVICE CHARGES Install basic service up to four outlets and install any combination of premium services. $29.95 Reconnect existing basic outlets and move, extend, or install extra outlets, and add premium services. $29.95 Install, move, or extend basic outlets. Install premium service. Upgrade premium service. Change one premium for another. Change from Manual to Remote control converter box. Sold in office. Sold in field with other services. Sold in field as only service performed. In cabled areas: First two outlets prewired. N/C Each additional outlet prewired in cabled areas. $10.00 ANNUAL ACCOUNTS: Pay for 12 months of service in advance and receive the 13th month free. 725 East First Port Angeles, Washington 98362 (206) 452 -8466 1- 800 244 -7591 FAX (206) 457 -5901 $19.95 $19.95 $19.95 $19.95 $19.95 5.39 5.39 $10.78 pisi NORTHLAND GiBLE TELEVISION MONTHLY CHARGE: $12.95 CHANNEL 2 CBUT CHANNEL 8 CHAN CHANNEL 3 LOCAL PROGRAMMING CHANNEL 9 KCTS CHANNEL 4 KOMO CHANNEL 10 CKVU CHANNEL 5 KING CHANNEL 11 KSTW CHANNEL 6 CHEK CHANNEL 12 KVOS CHANNEL 7 KIRO CHANNEL 13 KCPQ INITIAL HOOK UP CHARGE: $29.95 INSTALLATION CHARGE IF CUSTOMER IS CHANGING FROM BASIC CABLE TO ECONOMY BASIC SERVICE: $25.00 EXTRA CUTLETS P /MONTH 2.50 22 FM STEREO CHANNELS 2.50 PORT ANGELES ECONOMY BASIC SERVICE PACKAGE 725 East First Port Angeles, Washington 98362 (206) 452 -8466 1 -800- 244 -7591 FAX (206) 457 -5901 DEAR CUSTOMER: EFFECTIVE JANUARY 1, 1991. CUR RATES FOR CUR PREMIUM CHANNELS WILL BE ADJUSTED TO CURRENT SUPPLIER -CHARGES. HBO WILL BE $10.95 PER MONTH SHOWTIME WILL BE $9.95 PER MONTH CINEMAX WILL BE $9.95 PER MONTH DISNEY WILL BE $7.95 PER MONTH WE HAVE BEEN ABLE 'TC LOWER THE CHARGES FOR SHOWTIME AND CINEMAX WHILE HEO WILL EE INCREASED 50 CENTS PER MONTH. WE APPRECIATE HAVING YOU AS A PREMIUM SERVICE CUSTOMER AND ME HOPE THAT YCU WILL CONTINUE TO ENJOY THE FROGRAMMINE THESE SERVICES HAVE TC OFFER. SINCERELY, NORTHLAND CABLE TELEVISION of Polar q ti Ury; CITY OF PORT ANGELES 140 WEST FRONT ST P.O. BOX 1150 PORT ANGELES, WASHINGTON 98362 CIT ATTOaM PHONE (206) 457 -0411 November 8, 1990 Mr. Miles Overholt Mr. Lon Hurd 3 -H Cable Communications Consultants 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 Re: Rate Regulation and Consultant Contract Renewal Dear Miles and Lon: NOV 91990 CITY OF PORT ANGELES CITY CLERK It continues to be a high priority goal of the Port Angeles City Council to reduce cable television rates. As you know, the City initiated the process of negotiating with the local cable operator. This was a required step before the waiver process could be formally pursued. Negotiations appear to have gotten nowhere. The City Council needs to know if there is any hope for negotiations resulting in rate reduction and /or stabilization. The City Council also needs to know the status of proposed legislation in Congress that would affect these issues. Hessle Buck, an interested citizen, informs me that Senator Gore's committee is considering specific proposals at this time. On another matter, Becky Upton, the City Clerk, informs me that the Consultant Contract between the City and 3 -H is due to expire soon. We should be planning on presenting the Council with a report of your activities under the current contract and a proposal for a new or extended contract. Please respond to these issues at your earliest convenience. Very ruly yours, Craig D Knutson, City Attorney CDK:bw cc: Jeff Pomeranz, City Manager Becky Upton, City Clerk CO3H.let Jar 5.zi� C NC able Communications Consultants The Municipal Cable REGULATOR ISSUE 4 VOLUME 13 From the Editor's Desk:N. Go, Go, GAO Much ado has been made (we as well) over the U.S. General Accounting Office (GAO) report dated in August 1989 which pointed out the cable industry's quantum leap in cable television rates subsequent to the implementation in January, 1987 (actual effective date) of the Cable Act. As you will recall the cablers called "foul" and came up with some self serving statistics of their own in an attempt to repudiate the study's findings. That is pretty much water over the dam now at this penultimate moment of Congressional action which may well moot the entire issue. Nevertheless, outside of the regulatory aspect there were good solid statistics contained in the report. For example some 18% of cable systems made discounts to low income or elderly subscribers. It is meaningful to know, certainly at renewal time, the average number of channels (10/31/88) of basic was 31 and had not increased anywhere nearly as much as had basic subscriber rates. However, at the risk of being labeled a naysayer we thought that the report, viewed as a whole, was cumbersome, pedantic and full of unnecessary information. Worst of all it was assembled by bureaucrats that did not fully understand what cable television was all about. Furthermore, it seemed to us that the GAO's methodology was pretty weird. For example, the statisticians who prepared the questionnaire seemed set on a formula of categories ranging from very small cable companies to, four headings later, very large OCTOBER 1990 1 ANALYSIS COMMENTARY Formerly: CATV Newsletter $10.00 ones. While these divisions may be significant in some areas of comparison, the compilers were determined these headings would be applicable to all situations. Has size got very much to do with the average number of channels received per subscriber with lowest priced service tier? It would certainly seem that channel availability is a prime function of many other forces such as penetration, off -air broadcasts available, price and a whole bunch of other factors. What does five categories of size have to do with cable subscribers purchasing one or more premium channels? "However, at the risk of being labeled a naysayer we thought that the report, viewed as a whole, was cumbersome, pedantic and full of unnecessary information." It looks to us that some actuarial experts in the GAO office had decided that in some other survey these size differentiations were jim -dandy and that as a result all of the information gathered by the Department was going to have to fit in the same mold, applicable or not. Certainly we have no doubt that very small systems have 6.7 over the -air channels and the very large 9.0. But we are tempted to say "so what While we see a distinct lack of cable background in those making this assessment our first reaction is that it is just another federal boondoggle and that even if it isn't very good it certainly can do no harm. It is a greater blow to confidence when some of the data is force fed into the wrong tube. Case in point; the report lists four features of what it terms "optional services These are additional outlets, remote control, set -top converter and program guide. These subjects are then broken down into "monthly charges" and "one -time charges OK, it is good to know that the monthly charge for a remote control, say is $3.41 and that the average one -time charge is $60.73. The same breakdown of converters and additional outlet makes sense but program guide one -time charge? When? Since when has there been a one -time charge for a program guide? And $4.22 (down from $4.56) to boot. Turning to the sample questionnaire only further confuses the point. Not only is there no definition of this term, but also the form supplied to the cable operator respondent has three subsets under the one -time and the monthly charge —are you ready for this —Tier I, Tier II, Tier III. It seems to us that we have a severe communication problem. On this specific item it is no big deal but it does raise some credibility problems with the entire report. Go, Go, GAO —Part II While we may have been over critical of the GAO initial report of August, 1989, the department has redeemed itself (they will be delighted to know) in the report dated June, 1990. By the way, don't be concerned about these issue dates, the public receives them some time later. We strongly suggest that those of you who do not have this follow -up report ask for it. Five copies are free. Free that is if you don't count all the tax monies it has taken to research and publish this document. We also don't know why five is a magic number. Additional copies are $2.00 each. Apparently the government doesn't believe we have copy machines. If, for any insane reason you should wish to order 100 or more, the Government will give you a discount. Such a deal! In any event they can be obtained from: U.S. General Accounting Office Post Office Box 6015 Gaithersburg, MD 20877 Unlike the first pass at this in the earlier report, and for that much unlike practically all Washington publications, almost every page is worth reading. Rather than the mostly 2 meaningless statistics in the earlier edition, this follow -up cable television survey gets into issues that cannot be quantified. It speaks to ideas, controversies, and above all to a fair minded presentation of conflicting views. Is all this wasted because the forthcoming rewrite of the Cable Act will chart new courses in the relationship of a cable operator and local government? We think not. Certainly this follow -up report will not lead to the Magna Carta of future jurisdictions between the King and his subjects but it may define the problems that both the cable industry and local government have in coming to terms with the present issues which now divide the two camps. The moment that President Bush (if he does) signs off a new Cable Act controversies will begin. If there is no legislative compromise (and we fear there is not) there will be a call for yet another go around of the Cable Act. Congress certainly cannot please everyone. The divisions between parties with self- interest stakes will still remain on the table. It is, as we know, not just local government versus an alleged monopoly, it is the involvement of broadcasters, telcos, wireless cable, direct broadcast receiving, manufacturers, program suppliers, must -carry proponents, vertical integration, horizontal integration, and all the special interests who wish cable to perform in accordance with its own perceived charter. "It speaks to ideas, controversies, and above all to a fair minded presentation of conflict- ing views." It is really a shame that this report will not have time to be assimilated by the Congress or at least the staff. The phrase "hell -bent for election" is more literal as herein used than figurative. Special interests on all sides of the cable television are demanding a quick fix, and quick they will get, whether it is a fix or not only time will tell. As the introduction of the latest GAO report states we reviewed and analyzed pending legislation, examined the public, comments filed with the FCC and reviewed Congressional hearing documents analyses of legislative proposals and other available studies and reports If this was indeed the GAO's self imposed mission it did an excellent job in meeting its objectives. This report took a giant stride away from the bureaucratic and statistical pomposity of the earlier survey (incidentally it also dropped the "very small" "very large" restrictions). While this edition of the GAO presentation tries to be, and is, fair to all sides of the question it nevertheless raises questions regarding a similar level playing field at other federal agencies. Consider please the following quotation in the GAO report supplied by the Federal Trade Commission (FTC): it is difficult to see how 'trafficking' in and of itself could affect the rates charged to cable subscribers The fact that a cable system changes hands would not by itself be expected to alter marginal revenue or marginal cost, so it is difficult to see how simply changing ownership would change price or output Overall, it is difficult to see how restricting 'trafficking' would improve consumer welfare." 'The rest of the GAO follow -up presents a balanced pro and con on the issues of regulation in so doing it spells out, at least to our jaundiced eye, some previous unthinkable predicates." Gulp! One could have flunked Ec. 101 and still be aware of something called interest, or debt service or whatever, and that in the real world borrowed funds to pay for a buy out at a cost many times greater than the original investment, must be paid off. How this can be done other than by increasing the revenue stream (certainly no reduction in costs by greater efficiencies have materialized) goes beyond understanding. Charitably, the GAO does not venture an opinion on this completely ludicrous statement. It nevertheless gives one shivers to think that an agency of the U. S. Government can even give lip service to such a travesty of common sense. The rest of the GAO follow -up presents a balanced pro and con on the issues of regulation in so doing it spells out, at least to our jaundiced eye, some previous unthinkable predicates. Some of these, for example, point to the supposition that the cable industry would attempt to avoid regulation by creating a new limited basic service subscribed 3 to by only a few consumers [see subsequent article in this issue] and charging high fees for equipment rental and installation Please, to those of you who have not read it yet, do not think that the report is a cable basher. It is not, and it even puts forward a very cogent argument that no cable company has a large enough market share to be considered as an influence in the industry and that several models criteria used by the Department of Justice bear this out. TCI, at least, should take heart. In the very last paragraph of this follow up GAO document there is an ominous statement; "A regulatory scheme that controls only a fraction of a cable subscriber's monthly bill is not likely to have much regulatory impact. We couldn't have said it better ourselves. COMPLAINT PLAINT There is an old saying which you may remember: "There are lies, big lies and then there are statistics." With that as a prologue let's examine some cable statistics on cable operator's subscriber relations. Sometimes the figures just speak for themselves, but more often, they do not. A few weeks ago the cable industry trade press proudly trumpeted the results of a Better Business Bureau's (BBB) Annual Inquiry and Complaint Summary. Of complaints that were directed to the Bureau last year it reported, among other data, that complaints received regarding cable amounted to less than 1% of all complaints received. Sound pretty good? At least the cable industry seemed to so think. The National Cable Television Association (NCTA) president crowed that "Our critics' claims that cable television is a consumer problem simply are not supported by the facts." While you digest that one, try another: the complaints of the auto dealer, mail order business and credit card companies all had a higher ratio to the total complaints than did the cablers. Fine, as far as it goes. However, we really don't think that the cable industry is in very good company with these industries as fellow travelers. Over and above this there is, as usual, a flaw in the logic. Yes, certainly the venerable BBB is reporting the facts as it sees them, but by no means does this report tell the whole story. What is the exposure rate? Does, for instance, the mail order business have more customers than cable has subscribers? How about automobile dealers? This information also begs the point that there is usually an intervening party between the cable operator and the consumer; the city. Obviously this is not the case with the other industries cited. Not only is the cable industry shacked up with some strange bedfellows, but also it may be in better company than it deserves. THE POWER OF NEGATIVE THINKING We have commented in these columns (Go Go GAO II) as well as in previous issues on the motives behind the cable companies' generosity and compassion in establishing a lower tier comprised of off -air signals and sometimes C -Span for the benefit of those who couldn't afford to pay for the full menu of channels. The GAO report cited was even so cynical to suggest in discussing pro and con issues that it would be in the best interests of the cable industry to have as few subscribers in this lower tier because in the likelihood of forthcoming rate regulation being applicable only to such tiers that it would like to keep its exposure as small as possible. Now mind you that the cablers, whatever else they might not be, are excellent marketeers. Door -to -door, telemarketing, ads on T.V., billboards and radio, they have touched all bases. Certainly they are creative in many ways. Take the names they have chosen previously for their channel tiers. How do Galaxy Cable, SuperCable, and CablePlus ring in your ears? Pretty snappy, what? Now in this vein of ingenious tier names how does "negative option" sound? Not too zingy would you say? Yet this is one of the fancy appellations for the "lifeline" tier. Somehow it doesn't seem to have the pop of, say Galaxy tier. Could this be one of the reasons one of our client cities have only 57 subscribers to this low tier out of 60,000 subscribers? Perish the thought that the cablers are not out to aggressively market this "lifeline" "negative option" or whatever. It is probably just a coincidence that only 1 percent nationally of subscribers have chosen this basic basic. 4 But you can be certain the cablers are trying. One wonders, though, in which direction they are trying? f *F.F.R.1f. 1 f I l "The point where it all must start, usually preceding the franchise itself, is in the initial definitions." *For Franchise Renewal File We were privileged to act as a moderator and speaker at the recently concluded National Association of Telecommunications Officers and advisors (NATOA) Conference in Dearborn, Michigan. We discussed obtaining the maximum franchise fees from a cable operator. There are two segments which can lead to this objective. One is to have a clause in your franchise ordinance(s) of a definition of the gross billing to enable your community to collect these fees. The second is to have a mechanism to enable the franchising authority to determine whether or not the jurisdiction is, in fact, being paid the monies to which it is entitled as the result of the definition. We have discussed previously in these columns a collection tool for the use of local government and in this issue we will not dwell on the post renewal procedures. The point where it all must start, usually preceding the franchise itself, is in the initial definitions. We suggested the following as a model definition: 'Gross revenues' means any and all receipts and revenues received directly or indirectly from all sources other than transactions related to real property receipts by a franchisee not including any taxes on services furnished by a franchisee, imposed on any subscriber or used by any governmental unit, agency or instrumentality and collected by a franchisee for such entity provided also that net uncollectible debts are not considered as revenue in this definition. Revenues that are derived as a portion of a national or regional service shall be computed on a per subscriber basis if such determination cannot be achieved by other means." Please note that this is only a suggestion of words to be used. Certainly there are other wordings which may serve every bit as well. We like this particular one because it is short and sweet. Well, short anyway. There are six commandments to be observed in the drafting of a gross billings definition. They are: 1. Keep it simple (the kiss joke —keep it simple stupid). The more words in the definition the more argument there will be. 2. Do not try to list every item that you can think of in the definition. While assuredly you should have no trouble collecting a franchise fee on these specifics, you might very well have an argument on your hands if you have overlooked something or a new feature pops up in the unpredictable future. 3. Know what your jurisdiction really wants to collect on. If your community wishes to collect on any and all revenue no matter what, that can be done on an ongoing basis through your collection forms. If your city wishes to collect on only selected items, this too can be done by the same procedure. Don't forget, however, that the conception of what your jurisdiction wants to be paid on may very well change down the road. It is far easier just not to collect on certain items rather than to cast them in concrete in your definition. 4. As in all negotiations be suspicious. If your cable company wishes to change a word here and there, ask yourself why? It may seem innocuous and well it may be, but don't buy any rewording for "clarification" or "a better choice of words" without thinking it through. 5. Avoid being taken hostage. Discuss this definition early on in your negotiations. If the cabler suggests that this be discussed later, it could very well mean that you could be put in a position of having to rewrite the definition or the alternative of giving back something to which the cabler has tentatively agreed. Don't give the operator the opportunity to tell you that your definition is a "deal breaker The franchise fee is critical to the cable company. Upgrades, improved customer service, interactive features, and the like will, or at least should, pay back to the operator. A franchise fee is right out of the cabler's coffer with no mitigating revenue. The cable company will fight to avoid having to pay the franchising authority another penny of what it considers to be no less than extortion by the city. 5 6. Finally one that appears to be the simplest yet probably the most important point of all is to ask a few questions. After all is said and done an agreement has been reached, now the interpretation must be addressed. You may be astonished that even after a hard fought battle over every word and comma that you and the cabler may still have a large gulf over what the definition really means. Ask one question after another. Inquire, for example, if he or she feels this would indude income from home shopping networks. How about national advertising? It will do little good if you have agreed on the words, but they mean one thing to you and another to the cabler. You may be in for quite a shock. Shock or not, it is better to face up to the problems before the ordinance is signed rather than sometime ahead to have a rude awakening. FAST FORWARD REWIND Many of us were trembling in our boots when the Preferred case in Los Angeles came up and appeared to be initially upheld by the Ninth Circuit Court. Fully implemented it would have spelled doom for almost all regulatory functions of a local government. Now it is merely a footnote to the tumultuous history of the cable companies and municipalities. A U.S. District judge has upheld Los Angeles' position and given the situation that neither cities nor cablers wanted it, for different reasons, to go further, we apparently can close our books now. From an editorial standpoint we have a regret —the Preferred name was so easy to have fun with in these pages. Sometimes spokespersons for the cable industry say the darndest things. About forthcoming action (someday) by Congress, the president of ESPN was quoted as saying "We're concerned that the regulations proposed will wind up hurting the consumer." Note that he did not say regulation would hurt cable companies, only the subscribers. It seems to us that the implication is clearly that whatever profit margins may be reduced by regulation, if any, that the cabler will still maintain its margin and merely raise its rates in the unregulated areas. This, of course, is hardly a surprise, but one would think there should be some sugar coating on the bitter pill that the public will be forced to swallow. Most of you have by now probably read the NCTA Recommended Cable Industry Customer Service Standards. If you haven't, don't bother. It is, as to be expected, full of platitudes, promises, patronization and patter (by the way, Charlene Ladd, the Cable These articles were written by Miles Overholt, Senior Consultant for 3 -H Cable Communications Consultants. A graduate of Harvard, he has held executive positions in the private sector and is listed in Who's Who in the West. The Municipal Cable Regulator is published by 3 -H Cable j Communications Consultants, a Division of 3 -H Management Fr j Consultants, Inc., 4517 California Ruenue Southwest, Suite B, Seattle, Washington 98116, (206) 935 -9040 or toll -free 1 -800- 222 -9697. This publication is intended for the professional use of subscribers and client municipalities. EHcerpts may be used by O other publications provided proper attribution is given to 3 -H Cable Communications Consultants. ll aiii sii /1. For additional information about our services please contact Lon A. Hurd, Vice President at (206) 935 -9040 or 1- 800 -222 -9697. FAX (206) 932 -4284 6 Communications Director in Ann Arbor did us all a favor by forwarding her operator's response to these standards). In our view, these standards which were drawn up to help thwart a consumer protection legislation from Congress have done the cable industry far greater harm than good. If there were ever any doubt that the cable industry cannot regulate itself, one only has to look at this self serving attempt. C C Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B 0 SEATTLE, WASHINGTON 98116 0 (206) 935 -9040 FAX (206) 932 -4284 Dear Jack: ViaL1Warri JUL 2 3f000 Cable Com unicationsC s nt Jack Dyste V.P. Technical Services NORTHLAND COMMUNICATIONS 1201 Third Avenue Suite 3600 Seattle, WA 98101 This will be a follow -up from our meeting of April, 25, 1990 and our subsequent June 20, 1990 lunch meeting. We recall that Jim Penney and you agreed to use the standard franchise fee reporting form and that if you needed any assistance with its preparation you would let us know. We were a bit disconcerted therefore to see that your franchise fee remittance, dated July 13, 1990 was not accompanied by the needed breakdown of the figures. Is there some sort of problem here? What can we do to help? The other unresolved matter is with the A/O charges. As you will remember you agreed to again visit your "new" policy on this issue. You and I have spoken to the apparent industry trend to eliminate this fee. Did you happen to read Kagan's most recent marketing newsletter? In it he said: "Another benefit can be resolving signal leakage problems sometimes associated with unauthorized wirings of additional sets. Operators who drop extra outlet charges can grant amnesty to these subs and ensure that connections are properly made." Still on the subject of comparable Lifeline rates we note that also in the media that in a survey of a random sample of cable operators, of those who offered a Lifeline tier, all provided either more channels or a lower cost than Port Angeles Telecable. We are fully aware that each cable system is distinct and what may be good policy in one area may not work in another. Nevertheless, since such a few number of subscribers have opted for this tier at your rates, it may be that if July 20, 1990 Jack Dyste Page Two July 20, 1990 expanded and /or made less expensive that over and above whatever minimal effect this will have on your bottom line, it would seem that the goodwill it would engender would make it worthwhile. Wouldn't it be great timing to make this announcement at your proposed forthcoming open house? Let us know how you feel on these points. You know we will be very pleased to work with you on these or any other areas of concern. Sincerely, 3 -H CBLE COMMUNICATIONS CONSULTANTS f /ls files H. Overholt Senior Consultant cc: Craig Knutson, City of Port Angeles '-Michelle Maike, City of Port Angeles tr t 4% raig.Knutson,., City :Attorney ,PORT. ANGELES CITYflAL P.O.,,Box 1150 ',Pori:Angeles, WA 98362 artCrai g: We were fin -T. .-4 'ally able etAoget ''6,ft e-o,„ri, S't tv43' et il if orthland to- ,,s,Faitore'Pre.. cviltilOt '0 NI 96‘ or ou :warded to y. Atop,itsr.44 wis e eIem -,,..vu•••. T-i -.••‘1. -1 -_,..•„N ill` =plaint handling and: additi.o;talogtlettd1 argesl- el*eretzlcorIcoicrt letelf '''•=41-.."` 6,Vt.ttet; iOT .-V.-- ..ls 4 1, :-Dyste's'posture.othe01*t eseAssties ;•,:e. A t He told us thatall;'com laiiitco S Otide e t. .r. .._,i p:,, :ec, viewed by.-. Dyste."'He;r; rety 4 rtu presse F isix ...‘t. x „,,,,,./.....14-,---T-!,-A,,,,,„.',,,-. combativeness as.well:AsSteyelpriel ,a.i.V,S'Istatem.ik 1.04 you know, Friedman f :;;r14,1'lle-i?' On the question 'of do-,1,1;*Otu*"se 1,oniYOUtlet"..- w chargeS to e ithe modifications it:'''lgs,11....a.T oe'* ',,:*,1..rti *c.i'clentally, as a matter- .e,,_, L'; Keile free lance-ida.' .qi.a.,t-,' 4.' 0.1i'Nv.ig. eveis4Ward''0i its -Meejiri.;g rif l 1 264 .,,It 90".4i'lt:Fxxi'y'l\7 ry iha is;1 existence until our 14.' painted _into a...'corheit:.0rf! pqan '.;:ri''' 0g 01:7r\e' dani '''a ''te'ori' Lactics.. :1-..i.--', TiNeverthelesS; this TW 0. esf, ro tiSf.t• 11",, iic "a•lis[i.iPrePOgfd.±.. .",sis• s -Sr. g in suggested that if, Su f xs, gg,- kt0,there er'q ‘6, 4 tfon"-:.. yilelecable',5 k,. '-i• 4 Al 4 :I, 4 4, t 'PIK, r 4 operator would have:ey'ery righ t 4o4 rr -Ta ;Ibilhthe•su rmore thatthe 7;„ ,osition we prOpoSe'ci4 e aid to:-.TOlrec•ab10„AsT:5, engendered inpr notect after ear!SFa '`ev Hcq NC ANC p' C g'" ''"Z•ff" :433 4517 California Avenue SouthWestitalie B 98115 2Q6) 935 les H. verholt Senior Consultant. MHO /ss to as t he Io cRex� tessed`b y pyste n w• Seca se.nQ u} cxib r a e l t ►told h i 4 l th 1 s i- vas iecus'e of ,i aa:t i <5. tt'�• t tEr't yst gree tc review{ li s aver ear 'c i t isi by next v e c. i x 7J �l•`as i s °:a t pe h'at Tor d} 1 �'.Fii ✓y'!fi. ..•i .......iw�'IIa'7 i,"j<.t ,i- scion act or; e ble ct t the,,< t sac it w iowev b-irrodif to,} rand` •w hen`it is�as; i• Craig Knutson Page Two July 2, 1990 Part of the ridiculousness of this. si` a o claimed that it was no`big'deal- anyway option. He was bewildered :when charges rathert iantla 'and get back to us. He has an 'will: call him again. We• don'.t 1iiii any significant modifications ;however: .'r..`,_ JIKV !'gr�.,�:•",..,wt.';'t`klkt.t52 On a broader_'front yo e oubt it will come to be iri +3 eat deal, of. confusion,.ati would put rate regulation ;as su p that, the effectiv o X14 any as six channels. We�sh We will' certainly keep you =infor ederal legislation., giv us ak,.a meeting is needed., Y incerely, Michelle Maike City Clerk Port Angeles City Hall P.O. Box 1150 Port Angeles, WA 98352 Dear Michelle: Sincerely, n 4. Hurd Vice President /Director LAH /ss Enclosures Subject: Congressional Status of Cable Television Rate Regulation As you of course are aware, the possibility of the Congress amending the Cable Communications Policy Act of 1984 to allow some form of rate control has captured the media's attention as of late. This week's Time Magazine, for instance, has a lengthy article complete with poll results on this subject. You may recall our comments in previous issues of our newsletter, the Municipal Cable Regulator in which we expressed our skepticism on the possibility of any meaningful action in this session of Congress. The Wall street Journal of a few days ago had a more objective discussion of pressures put upon Washington by cable industry lobbies. In case you haven't seen it we are enclosing a copy of this article. We urge our client cities to continue to bring attention of the Congress to the need for local government involvement in order to rein in the cablers' soaring price increases and lack of consumer responsiveness. NICATIONS CONSULTANTS 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 5,z)o r Crackdown On Cabe Loses Speed By LAURA LANDRO And DENNIS KNEALE Staff Reporte Of THE WALL STREET JOURNAL The stampede to slap stringent new reg- ulations on cable television appears to be losing momentum. Since last year, the threat of re- regula- tion has hovered over the industry like a black cloud, hamiriering billions of dollars out of the stock prices of cable operators, scuttling the proposed sale of scores of ca- ble systems and adding to the worries held by already dubious lenders. But as the industry gathers for the an- nual National Cable Television Association convention in Atlanta this week, the most feared threats —that local authorities could regain the power to cap rates and cable companies might be forced to divest some assets —seem to be receding A dozen war- ring factions in Washington haven't i eached a consensus on just how tough any new controls on cable should be. Unless the various House and Senate committees sponsoring bills can agree, legislation may not even pass before the current session in Congress ends next fall. Analysts also note that cable is not the most burning issue facing Congress. Cable industry rivals argue that the fight isn't finished. "It's in a state of flux, and it's simply too early to call," says John Sodolski, president of the U.S. Tele- phone Association, which represents local phone companies in their bid to be allowed into the cable business. And no one is say- ing there won't be some new regulation of cable rates or controls on other aspects of the industry's business. But an intensified lobbying effort by such industry bigwigs as Time Warner Inc. Chairman Steven J. Ross may have helped to blunt the most onerous proposals. Until that effort began in earnest recently, cable operators had been ineffectual in efforts to persuade legislators to appreciate the ben- efits of cable, such as vastly expanded pro- gramming choices, and to understand that average price rises have closely tracked. general consumer price increases. Cable officials contend the campaign for re- regulation was bound to lose cr Tui n to Page B5, Column 1 t Effort to Crack Down on Cable Loses Some Steam Continued From Page BI strength once the industry's case could be niade and once congressmen began grap- pling with the nitty- gritty of how the new rules would work. Another advantage: the diverging interests of cable's opponents, such as telephone companies, broadcasters and movie companies. "No consensus has emerged, even among those who are intent upon imposing additional restrictions on cable," says Rob- ert Thomson, a vice president of Tele -Coin- munications Inc., the nation's largest cable operator. "It's probably good news for the cable industry. It indicates that maybe the underlying reasons aren't as strong —for doing anything." But some in the industry fear another year of uncertainty could hurt worse than new regulations. And the cable industry has other woes. Though business is gener- ally robust, with subscribers and cash flow on the uptick, cable stocks continue to take a beating. Dennis Leibowitz, an analyst at Donaldson, Lufkin Jenrette, calculates that $8 billion in market value has been wiped out of the stocks of publicly held ca- ble operators, which account for 45% of the industry's subscribers. And the transaction market for cable systems, flooded with ready sellers and eager buyers last year, is at a virtual standstill. Analysts agree that uncertainty over re- regulation is hurting both stock prices and system sales and that, if anything, clearly Cable Stocks: The Damage Done by Uncertainty Index of nine pure play" cable stocks, percent change from closing price at previous month's end vs. S &P 500 5% —5% —10% —15 °k —20% S 0 N 1989 Source. Haniten, Imhoff Inc Sap 5001 "Pure DJ F M A 1990 spelled out new regulations might be a boon. More worrisome, however, are tighter credit market conditions in the wake of the savings and loans debacle and problems with companies overextended by leveraged buy -outs. Banks, skittish over new federal definitions of highly leveraged transactions —which would include most cable acquisition loans —are reluctant to provide financing, even though no major cable loan has gone into default. The credit crunch "increasingly has had much more impact on deals not get- ting done or on stretching them out," says Greg Ainsworth, a broker at one of the in- dustry's leading brokerage concerns, Den- ver -based Daniels Associates. "I don't see deals stopping, but the volume of deals will be much slower, and it may take sev- eral quarters until things turn around." A number of cable systems that were put on the market have been withdrawn, and other systems have languished on the market for months without a nibble. Closely held Falcon Holding Group in Los Angeles earlier this month agreed to ac- quire systems serving 98,700 subscribers from First Carolina Corp. in a stock trans- action valued at a reported $1,900 a sub- scriber; last year, systems were fetching more than $2,400 a subscriber. "Everyone was expecting this deal not to close, but it did," adds John Waller III, whose Waller Capital Corp. represented the seller. "While the market isn't as strong as it was, this should indicate that deals are still getting done." Th' r business was alarmed when the first major proposal for regulation —a bill sponsored by Sen. John Danforth (R., Mo.) —came out last fall. But a Senate staff proposal floated more recently eased off on some of the Danforth measure's toughest provisions. Now the proposal from the staff of Rep. John Dingell (D., Mich. the House commerce committee chairman, eases back even further. "The Dingell bill is a sign that the de- bate is moving back toward the center and away from extremes," says James P. Mooney, president of the National Cable Television Association, which plays a lead role in lobbying against re- regulation. But he adds that some provisos in the Dingell draft "really give us heartburn." The Dingell draft, for example, touches on the biggest threat to cable: the idea of placing rate regulation of all cable serv- ices back in the hands of thousands of to government bodies that "tend to be so e- what tumultuous and arbitrary in their de- cision- making," Mr. Mooney says. But the new proposal throttles back on that threat by regulating the prices of only basic -cable channels rather than all serv- ices. It would set federal standards that lo- cal governments would have to follow and allow cable companies to "tier" off, or sep- H' 5 at arate, whatever channels they choose, re- moving them from basic service and rais- ing prices as the cable operators see fit. Some analysts believe Congress ap- pears increasingly inclined to let the Fed- eral Communications Commission rule on such key Issues as rate regulation and ver- tical and horizontal integration by cable operators. The FCC has promised to de- liver to Congress by July a comprehensive review of the industry's behavior since ca- ble was deregulated by the Cable Act in 1987. Although the FCC may be inclined to make it easier for cable's competitors to obtain the same programming and to limit cable's ownership of competing services such as direct broadcast satellites, the agency is unlikely to give cities back the regulation authority they had before ca- ble's broad deregulation three years ago. The FCC is also looking at whether to toughen the Cable Act's definition of "ef- fective competition," now considered three over the -air channels in the same market. In systems with no such competition —less than 5% of the total —rate increases are re- stricted by the Cable Act to 5% annually. John Reidy, an analyst at Smith Barney Harris Upham Inc., calculates that if the FCC redefines effective competition as five over the -air signals, 70% of cable systems would be subject to the rate -rise limits un- der current law. The cable industry launched a some- what belated lobbying blitz defined by re- peated, personal visits. Time Warner's two executives, Mr. Ross and President N.J. Nicholas, have lobbied in Washington half a dozen times each this spring. Gustave Hauser, chairman of cable -sys- tem operator Hauser Communications Inc., met last week with two of cable's harshest critics, Sen. Al Gore (D., Tenn. l and Sen. Ernest Hollings (D., S.C. I. "A lot of the urgency to lust reach out and regu- late seems to have diminished," he says. Legislators "want to do something, but something a lot less ferocious." Says Tim Boggs, the Washington vice president for Time Warner and a key lob- byist on the issue: "We're delivering a very clear message" to Congress, "that what the industry desires is certainty —and certainty is reached by reaching a compro- mise" on legislation. —Mary Lu Carnevale contributed to this article. ti I Cable Communications Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: May 1, 1990 Subject: Port Angeles Cable Television Franchise Discussions We were finally able to mesh schedules so that a meeting with Northland cable people was held on April 27, 1990. Present were Vern Keile, Jack Dyste, and Jim Penney. Dyste is the successor to Steve Friedman who has apparently departed, and Penney is the general counsel of Northland. The attached proposed agenda covered most of the topics which we raised at this discussion. By and large Northland people did not appear to want to hear examples of outrageous public postures in Keile's letters to subscribers nor did they seem to be aware that they had been written. This, they said was "ancient history". Eventually we moved on to an issue which particularly sticks in our craw as it does of your City. We are not even certain that you nor the City Manager and his staff has even seen the additional outlet form (attached) which Lon Hurd came across in his routine compliance audit. As you can see it makes a complete mockery of the intent of Section 1(h) of your ordinance which, as you know, was inserted to allow the subscriber to elect to install his own additional cable outlet if he so wished. This form levies charge after charge and even has a monthly charge to be paid for the privilege of installing one's own outlet. It goes without saying that this point was explicitly, as you will recall, agreed to by Telecable's attorney. There is no doubt, in our minds, that the implementation by Northland is contrary to both the spirit and the letter of the franchise ordinance. It was apparent that Northland's senior management was not aware of this procedure. Keile stated that "this is the way the City wanted it This statement probably should not be given the dignity of a denial. Yet, loyal to the cause, his superiors attempted, with little success, to support this posture. Penney raised, as was to have been expected, the issue of rate control. When it was pointed out that the Telecable attorney had agreed during the refranchising negotiations at which we were present that the issue was moot if both sides agreed to such a stipulation. Penney would have none of this and implied, at least, that his Corporation would challenge this in the courts. 4 Craig Knutson May 1, 1990 Page 2 We attempted to show Northland that this was not really a legal issue, but a business decision which would benefit the cable operator. We pointed out that not only TCI, but also the president of the National Cable Television Association (NCTA) had recommended this no additional charge policy. Our comments regarding Northland swimming against the tide was not accepted. The issue of justifying "lifeline" rate increases on some sort of objective measurement rather than the subjective basis suggested by Northland was, to say the least, not eagerly embraced by the cable people. Beyond this there is a fear among some local governments that rate increases in the next few months will go even higher. The rationale for this si that cable operators will try to get a level high enough so that they can operate at this bench mark when and if reregulation occurs. The discussion regarding Northland's "lifeline" rates being not only some 50% higher than industry norms, but that also providing significantly less program choices did not, as well, fall on fertile ground. Keile, supported at least tacitly by his superiors, attempted to make the point that because so few subscribers wanted this service at this price that therefore subscribers were completely satisfied with Telecable's present programing and rates. After a bit the whole discussion seemed to be an Alice Through the Looking Glass scenario. A few points were won. Most reluctantly Northland agreed to use the franchise fee reporting form with which you are familiar. One of the first objections was that this form would be less "accurate" than Northland's present form. Northland soon backed off this rather specious statement. They did agree to furnish an operating statement specific to the City of Port Angeles. We all agreed as well to the necessity of making certain allocation surmises in so doing. Over and above and during these discussions there was considerable finger pointing of an accusative nature towards the City by Keile. This position was neither supported nor denied by senior management. There were considerable platitudes aired about better communications and making an effort to acquaint City officials through an open house or some other method, with the problems of the cable operator in Port Angeles. Additionally an eagerness to provide the City with an access channel and certain hardware was expressed by Keile. It apparently is Northland's intention to combine a public access channel with what is termed "local origination This is a local advertising supported program which may combine with it some public access programing. All of this, of course, is to increase the number of viewers so that more local commercial time may be sold. The effective competition situation was raised. We pointed out that it appears inescapable that a revision of The Cable Act will certainly increase the criteria of it's qualifying channels to at least five as well as a much broader interpretation of effectively viewed audience. Northland did not appear to disagree with this appreciation. Their Craig Knutson May 1, 1990 Page 3 counter argument seemed to depend upon some future plans by other stations to put translators in the Port Angeles area. When pressed, however, Northland appeared to concede that such plans were a year or so away. The FCC is expected to report on this subject in July. Dependent upon such ruling we should probably revisit the City's position at that time. In a similar vein, while Northland did not argue that some rate regulation from Congress was inevitable they did not appear to agree with us that it would most certainly improve their publicly perceived image if some rate concessions were to be made prior to a federal mandate. In summation, Northland has agreed to come back to us on at least some of the more pressing items such as "lifeline" and additional outlet procedures and rates. It is also our preliminary perception that Dyste (who is experienced in cable operations as contrasted to Northland management who are largely financially propelled) has an understanding of the realities of the Port Angeles situation. We have asked for a written reply to all of the items raised in our meeting. What form this will take is open to conjecture at this point. We will by all means keep you informed of developments. As you know, discussions of this type can result into either a bunker philosophy of defending the turf or into a realistic appraisal of the City's concerns. We hope for the latter. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Mils H. Overholt Senior Consultant MHO /ss Enclosures cc Dave Flodstrom Michelle Maitre TERMINATION POINT AGREEMENT Signed Address Date I, will hold Port Angeles Telecable and the City of Port Angeles harmless from all liability and will comply with Port Angeles Telecable and FCC installation requirements. I agree to pay in advance to Port Angeles Telecable an initial inspection fee of and a monthly maintenance fee of and allow Port Angeles Telecable to repair or disconnect any faulty on premise equipment. Northland Communications Meeting (4/27/90) I. General A. Lower the volume on both sides. B. Constructive —not confrontation. C. Misunderstanding of each side's intentions. II. General City /Cable Operator Relations A. Representative relations. 1. Peacock letter. 2. Rate increase chart 1989 3 H 3. Rate increase council September 1988, Friedman replied "no upcoming rate increases but increase November 1988 anyway. B. Complaint response samples 1. Wing— County subscriber told to go to operator. 2. Sands —go to operator. 3. Rains —tenor of complaint. 4. Anderson —not responsive to City. 5. Melner— "franchise control" by City? C. Improvement III. Effective Competition A. FCC will redefine in July. B. NCTA itself suggests 5 channels. C. TCI lost in Sterling, Colorado. D. Copy of Congressional bill. E. Clippings. IV. Rate Increase Justification A. CPI (objective compare to subjective) 9/6/89. 1. Cost of doing business. 2. Measurable— compare. V. Extra Outlet Charge A. Doing away— improve customer satisfaction. 1. Clippings. 2. TCI policy. 3. Cite franchise Extra Outlet, Sec. 5 -1(h). 4. Discuss form a. Why monthly fee? VI. Lifeline A. Two major problems: 1. Rates. a. CW —Rates should be less than $10 a month. b. NCTA— Mooney fee range $5 -$10 a month. c. Rates —L.A. d. L.A. less than $10. e. Alabama —$7.95 2. Programing a. Industry Industry testifies off -air access? two satellite. b. Flint, M.22 channels $14 a month. VII. Franchise Fee Reporting A. No need for balance sheet. 1. Need operating P &L. a. Allocation —see form. B. Sample form. 1. Manual. 2. Computer. C. All cities comply. 1. Most not required —sec. 13. D. Otherwise only recourse to City is to audit (sec. 16). VIII. Access (franchise Sec. 5 (1.0 A. Used as partial justification for price increase in Freidman's letter of January 26, 1989 yet City has not asked for it. B. Character generator up $12,500. James A. Penney V.P. /General Counsel NORTHLAND COMMUNICATIONS 1201 Third Avenue, Suite 3600 Seattle, WA 98101 Cable :.Co in ti n t i n c t s u l a is January 24, 1990 Subject: Franchise Fee_Payment to City of Port Angeles Dear Mr. Penney: Thank you, in behalf of the City of Port Angeles, for the cable television franchise fee payment received on January ,22,. 1990 accompanied by an affidavit signed by Ms. Eileen Higgens. Apparently, however, someone in your organization has inadvertently misplaced our letter of July 19, 1989 directed to your attention. For your recall we are enclosing another copy of this letter together with its accompanying form. Your particular attention is called to the next to the last sentence of that communication suggesting that, in the absence of any questions from you, it would be anticipated that this form would be used as requested. Our firm has recommended to our client that in order to provide substantiation for such fees that the number of subscribers in each listed category be provided. You can well appreciate that without this supporting data the City has no way, short of an audit, as called for in Section 16 of the Franchise Ordinance, to verify the accuracy or .completeness of the mere dollar amounts indicated. Obviously your Company has these figures which are used to determine the proper payment to the City. It is suggested that the form supplied you to spread out such information (used by all the other, cable operators for cities who are our, clients as well .as numerous other system operators throughout the country) may be more convenient for.,"you:In doing so; it may she& some light on such line items classified ':merely'as. "miscellaneous" 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935-9040 James A. Penney January 24, 1990 Page two In order to reconcile units and dollar amounts it, will be appreciated if you would kindly resubmit this payment form within the guidelines suggested. Again, if there are any questions regarding this procedure we will be pleased to offer any assistance your Company may require. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Miles H. Overholt Senior Consultant MHO /ss Enclosures cc: Vern Keile Steve Friedman .ileen Higgens %/Michelle Maike Craig Knutson James Penney Vice President/General Counsel NORTHLAND CABLE TELEVISION INC 1201 Third Avenue, Ste. 3600 Port Angeles, WA 98101 July 19, 1989 Dear Mr. Penney: Your letter of July 5, 1989 regarding the FCC A/B switch requirement has been discussed with you. We anticipate receiving a copy of your letter to Port Angeles subscribers prior to November 1, 1989. On yet another issue, the City of Port Angeles has forwarded to us a copy of your letter of July 11, 1989 and a form giving the dollar breakdown of the revenues of your operation from January through June of this year. We note, however, that once again your company has apparently elected not to fill out the franchise fee payment worksheet which has been sent to you on two previous occasions. While perhaps your report complies with the letter of Section 13 of the City of Port Angeles' franchise ordinance, it does not appear to us, at least, to comply with the spirit of the requirement. In order that the City may simply and efficiently review your franchise fee payments it is helpful to have a unit identification as well as a more detailed breakdown of your source of revenues. Inasmuch as this worksheet is presently being completed by all of the major cable operators in the Puget Sound area we are somewhat surprised by your seeming reluctance to do so. It is not believed that this worksheet is complex nor that it asks for any additional data which is not already being done by your accounting department. If there are any perceived difficulties with the form we will be happy to discuss it with your representatives or make a personal visit to your office. If you have any additional questions please do not hesitate to let us know; if not we shall look forward to the City of Port Angeles' receipt of such detail together with your next franchise payment. Thank you for your cooperation. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Lon A. Hurd Vice President/Director LAH /ss cc: Michelle Maike Kurt Knutson Duane Wolfe Vern Keile Operator Northland Cable Television Address Revenue Source Seattle WA 98101 Installation Additional Outlets Extraordinary Installation FM Installation Bulk Installation Disconnect Other Installation (VCR Reconnection. etc.) Total Installation Income Basic Cable Tier I Tier II Premium Premium Premium Premium Addt'l Outlet Rate P.P.V. FM Service Bulk Converter Other rota'. Interactive Income Alarm Other Total Interactive Income Local Advertising National gross) Shopping Services Rent L.O. Income Other iotaf Non-Sii bscri ber income Franchise Fee Payment Worksheet Units (avg. Unit Price 1 Months in 1 Gross Revenue Fee Franchise YTD of Period) (each/mo.) Period X X Fee City of Port AnEeles Period from July 1. 1989-Dec. 31. 1989 Operator Northland Cable Television Address 1201 Third Avenue Ste. 3600 Seattle, WA 98101 Revenue Source Less Bad Debts Plus Bad Debt Recovery Net Bad Debts Total Other Income TOTAL REVENUES Adjustments TOTAL DUE CITY Explanatory Notes: 'Copy to: *Adjustments (specify): Send original to franchisor 3 -H Cable Communications Consultants 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 Franchise Fee Payment Worksheet Units (avg. Unit Price Months in Gross Revenue Fee of Period) (each /mo.) Period X X Authorized by: !Title: Date: City of Port Angeles Period from July 1. 1989 -Dec. 31. 1989 Franchise Fee YTD Instructions: Fill out complete form. If a particular income item is not pertinent to your franchise please draw a line through the appropriate boxes. Areas left blank will be assumed to be inadvertent omissions and the form will be returned for completion. Unit average of period is applicable only to those items for which a monthly (or portion thereof) rate is charged. Specify when "other" category is used. Prior period totals must equal YTD total. If promotional discount lowers normal average during period please indicate. If rates increased or lowered during period indicate starting dates. Multi- family installation income spread over a period of a contract will be reported when earned. 4111M anagement Consultants, Inc. 5 .Zt o S T A T E M E N T 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B SEATTLE, WASHINGTON 98116 (206) 932 -5232 Sold to Duane Wolfe Administrative Services Director PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 RE L Date January 24, 1990 P. 0 No. Salesperson TERMS: NET 30 DAYS 1 1/2 (PER CENT) PER MONTH J AFTER 30 DAYS I T F M AMOUNT Franchise fee paid to the City by Northland Cable Television for 7/1/89 thru 12/31/89 $33,415.24 x 10% THANK YOU! Lon Hurd Contract 10% of 4% franchise fee 3,341.52 White Copy Return with Payment TOTAL AMOUNT DUE. 3,341.52 SUB TOTAL: TAX. TOTAL. Canary Copy For Customer Pink Copy. For File f PoRr q gr NNIINNAIMIEW 4) 'ffAnve 9- January 10, 1990 Lon Hurd, V.P./ Director 3 -H Cable Communications Consultants 4517 California Ave. S.W. Suite B Seattle, WA 98116 Dear Lon: MMM:CH Enclosures CITY OF PORT ANGELES 321 EAST FIFTH ST P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Enclosed are copies of correspondence from the City Manager's file with regard to Port Angeles Telecable. I thought perhaps you would like them for your files, if you did not have them already. Please feel free to contact me if I can be of any further assistance. incerely, ichelle M. Maike City Clerk 6.'2.16 5. 2.10 725 East First Street Phone 452 -8466 Dave Flodstrom City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Dave, During the discussions between Port Angeles Telecable and the City at the Utility Advisory meeting, many items were discussed. In following through with these items, we would like to inform you of their status. The economy basic, channels 2 through 13 for $12.95 each month, will be implemented, hopefully before the end of the year, or at least when the equipment needed arrives. The Express Data Services are already on line and available to computer users. The Express pilot program with Stevens Middle School, called CNN Newsroom, has been a great success for Stevens students. Our October food bank month contributed $1750 to Clallam County food banks, and we are working on November, which is UGN month, and hope we can do the same amount for the UGN. Finally, concerning rates as we have stated, they will not increase $4.00 per month as they did in 1988, but will increase $1.00 per month, as was expected, based on inflationary costs. This increase will be effective January 1, 1990. Per franchise, this letter is notification of thirty days in advance. Enclosed is a copy of the letter to be mailed to all customers by December 1, 1989. We trust this letter will fully inform customers the reasons for our increase. Sincerely, PORT ANGELES TELECABLE cc Mayor Frank McPhee ii i 9 NG E L ES L S L S L S� if R ECEIVED NOV 291989 November 27, 1989 City of Port Angeles Port Angeles Washington 98362 725 East First Street Phone 452 -8466 November 10, 1989 Frank Mcphee P.O. Box 1150 Port Angeles, WA 98362 Dear Mayor Mcphee, Sincerely, le e Vern Kiele, Regional Manager Port Angeles Telecable ROW �9NGELESI/LS/SL� RECEIVED NOV 13 1989 City of Port Angeles Port Angeles Telecable is pleased to offer a wide variety of channels to choose from every day. The programs we bring you come from many sources: Satellite delivered cable networks, local broadcast station, and even regional or other out -of -town television stations. The cable industry feels that it is important we notify you of an action that has been taken by the Federal Communications Commission which may affect some of the programming provided on our distant station:0y your local cable television system. We wish to minimize consumer frustration over a new federal policy which may force cable operators to black out certain programming offered on regional and national broadcast "superstations On January 1, 1990, the Federal Communications Commission will force us to comply with a complex set of FCC rules called syndicated-exclus ivity or "syndex We want you to know the facts because these rules could affect your viewing habits. The syndex rules may force us to black out certain television programs on regional or other out -of -town television stations if a local broadcast station has requested exclusive program rights. Cable networks such as ESPN, CNN, and C -SPAN will not be affected by these rules. We take pride in giving you and our viewers the greatest entertaining options available and we will do our best to minimize any confusion or disruption created by the new FCC rules. If you have any constituent enquiries concerning the black out of their favorite cable television programming, please forward it onto Port Angeles Telecable and we will promptly contact them with the information concerning the FCC require- ments. Port Angeles Washington 98362 5.2id If you or your staff have any questions, or need more information, please contact Vern Kiele, Port Angeles Telecable 452 -8466. E 4 The Seattle limes Thursday, October 12, 1989 Syndex could cause blackout of some shows by Jay Arnold Associated Press W ASHINGTON The face on the television screen intones the bad news quiet- ly, but firmly: the feds may force us to take away some of your favorite TV shows. That message, designed to make any couch potato boil, is being spread by cable TV opera- tors, who are alerting viewers that the dreaded "syndex is coming. Syndex is not a virus that eats TV shows; it's industry jargon for syndicated exclusivity Federal Communications Commission reg- ulations that allow local, over -the- air television stations exclusive rights to the syndicated, non -net- work programs they show in their market. The FCC lifted the rules in 1980 to help boost the infant cable TV industry, but now the commission is bringing them back, effective Jan. 1. If the rules survive a pending court challenge, viewers may find fewer showings of syndicated hits such as "Cheers" or evergreens such as "Mork and Mindy" and "Hee -Haw." Some of the reruns may disap- pear completely in some cities. That could happen if cable sys- tems, forced to black out some time slots from "distant" stations that carry the same programs as local broadcasters, decide to drop the out -of -town stations entirely. Fearing a backlash from viewers, cable operators are mak- ing a pre emptive strike to make sure everyone knows who's to blame the government. "The Federal Communications Commission will force cable com- panies to comply with a complex set of rules called syndicated ex- clusivity, or syndex," the National Cable Television Association says in 60- second spots designed to play on cable TV systems nation- wide. "Syndex rules may force your local cable company to black out some of your favorite TV programs on regional or other out -of -town stations. We don't like the thought of any program blackouts, but we must by law comply with these rules," viewers are told. NCTA spokesman John Wolfe said cable wasn't "pointing the finger at anyone." The syndex rules are "terribly unfriendly to consumers," said Steven J. Simmons, chairman of Simmons Communications Inc., a cable outfit with about 350,000 subscribers in 20 states. Simmons said broadcasters around the contry have indicated they will claim exclusivity for programs such as "The Oprah Winfrey Show," "Who's the Boss? "Hee -Haw," "Simon and Simon," "The A- Team," "Wheel of Fortune," "M*A "S *II," "I Love Lucy," "Golden Girls," "A Current Affair," "Donahue," "Amen" and "Mork and Mindy." These shows will only be car- ried on one station in any given market, Simmons said. "The requirements could have such an impact that a cable com- pany, rather than have a subscrib- er sit there and watch essentially Swiss cheese may ust decide to drop the channel altogether," Simmons said. The rules would affect na- tional "superstations" such as WTBS in Atlanta, WGN in Chicago and WWOR in New York and so- called regional TV stations such as WPIX in New York and KTLA in Los Angeles. Turner Broadcasting System, which owns WTBS, Turner Net- work Television and Cable News Network, claims WTBS will be "syndex- proof." TBS is even tell- ing cable operators it will indemni- fy them against any syndex prob- lems. "We've already made arrange- ments to have a blackout -free schedule," Bert Carp, a TBS offi- cial in Washington, said. He said TBS had managed to either ac- quire national exclusivity for its programs or acquire new pro- grams. Preston Padden, president of the Association of Independent Television Stations, said syndex simply is sound business. "Our entire constitutional copy- right system is based on recogniz- ing and honoring contracts be- tween creators and exhibitors," Padden said. He said he doubted that most viewers would notice a change. "The two leading superstations, WTBS and WGN, are both promot- ing themselves as 100 percent blackout- proof," Padden said. Today's television programming can be found on F 4. 52to James A. Penney V.P./General Counsel NORTHLAND CABLE TELEVISION 1201 Third Avenue Port Angeles, WA 98101 If you have any questions please feel free to contact me. Sincerely, 3-H CA NICATIONS CONSULTANTS Lo ur e President/Director cc: Michelle Maike, City of Port Angeles January 10, 1990 Dear Mr. Penney: Our records indicate that your certificate of insurance for the City of Port Angeles has expired as of January 1, 1990. Please forward to my office a copy of the renewed certificate on behalf of the City. 5 .2.. i Cable Corn murtioationt;',Co' 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935-9040 James A. Penney V.P. /General Counsel NORTHLAND CABLE 1201 Third Avenue Ste. 3600 Port Angeles, WA 98101 Dear Mr. Penney: January 11,1990 As you stated in our phone conversation of January 11, 1990 we found that a notice of expiration of insurance was sent to your office in error. The expiration date of 7/1/90 was read in error as 1/1/90. We apologize for any inconvenience this error caused you and your staff. Sincerely, Vice President/Director ICATIONS CONSULTANTS cc: Michelle Maike, City of Port Angeles 5. to t 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935-9040 Dear Michelle: Cable Communications Consultants Michelle Maike City Clerk PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 January 5,1990 Enclosed is the financial information from Northland Communications Corporation that you requested. Please feel free to contact me if I can be of further assistance. Sincerely, 3 -H CAB E COMMUNICATIONS CONSULTANTS 'Lon A. d Vice President /Director LAH/ ss Enclosure 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 5.20 Duane Wolfe Director of Administrative Services PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Duane: .Cable ommunicatiorts T )'IR JAN 5 1990 GiIU OF PORI ARIGELES January 4, 1990 Subject: Port Angeles Telecable "Lifeline" Proposal We have examined Telecable's suggestion of creating a new tier of "economy programing" with considerable skepticism. We do not share Vern Keile or Steve, Friedman's conviction that this "lifeline" service will be a panacea for all of the perceived ills of cable television in Port Angeles. First of all it is important to put this gesture into perspective. As you know there has been considerable pressure both from consumers as well as communities (such as Mayor McPhee's letters of a few months ago) on Congress to reintroduce rate regulation of cable operators. As a result of this possibility the cable industry has been putting pressure on Washington to retain the status quo. In an effort at "compromise" the cable industry is prepared to hedge its bets and accept at a worse case scenario a regulation of its lowest tier of programing, which by an amazing coincidence will just happen to be the "lifeline" services. Almost every single cable operator from Boston to San Diego has announced that it now will have a "lifeline" structure of channels cablecast. Port Angeles Telecable is only one of thousands jumping on this bandwagon. The cable operators reason that regulation of this lowest tier will be a small price to pay for the right to raise rates of other channels (called "bundling broadcast and, of course, premium programs, to whatever level of pricing an operator may choose without regulatory hindrance. Incidentally, all other considerations aside, Port Angeles Telecable is not proposing to hand out any bargains. In Alabama a cable operator offers this service for $7.95, in Boston $4.95, in Los Angeles and even in affluent Beverly Hills it will cost less than $10.00. There is yet another side to this munificence. A cable operator pays a fee for most of the programs received by satellite and rebroadcast over its system. This varies 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 Duane Wolfe January 4,1990 Page 2. from a few pennies per subscriber to a more substantial amount for popular stations such as ESPN. Obviously, these charges reflect in higher rates charged to a subscriber. However, it does not pay programing costs when it distributes off -air (local stations) broadcasts (as compared to satellite) nor when it cablecasts the "super stations" such as WTN which are advertising revenue supported. Therefore it can readily be seen that this gesture by Northland is not as great a concession to residents' price complaints as they would wish it made out to be. The giving of the sleeves from the vest would seem to be an appropriate comparison here. Having stated the problem it is more difficult to state the solution. We suggest that, on the behalf of the City of Port Angeles, we discuss with Northland senior management the possibility of lowering this "lifeline" rate to a figure more in keeping with the spirit of the concept. Secondly the City, through its designee may wish to take a more stringent interpretation of its franchise provisions with Northland. These could include a more strict accounting of franchise fee payments, requesting the access monies called for in the franchise, review of the consumer service policies and other rights of the City as well as a public spotlight on some of the apparently high handed approaches to the citizens of the community. Perhaps an accommodation may then be reached on rolling back or at least holding the line on this newly contemplated service. We will look forward to the opportunity of reviewing this situation further in depth with you. Sincerely C verholt Senior Consultant MHO /ss cc: Michelle Maike Craig Knutson NICATIONS CONSULTANTS December 1, 1989 Lon Hurd, V -P /Director 3 -H Cable Communications Consultants 4517 California Ave. S.W. Suite B Seattle, WA 98116 Dear Lon: Here is the latest letter the subscribers received, notifying them of a $1.00 increase in rates, to be effective on January 1, 1990. The City did receive copies of the same letter one was set to City Manager Flodstrom and one to Mayor McPhee. I found it interesting that they offered the 12- channel Economy Basic Tier at a rate of $12.95, which they did not mention, nor did they inform subscribers of the $15 service charge to change to basic. I'm also enclosing copies of a couple letters I've received from subscribers. Let me know what you decide on these issues. MMM:CH Enclosures CITY OF PORT ANGELES 5210 321 EAST FIFTH ST., P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Sincerely, Michelle M. Maike City Clerk To Our Customers: The purpose of this letter is to inform you that Port Angeles Telecable will increase monthly rates on its regular 25 channel service by $1.00, bringing the total to $16.95 per month. This increase will be effec- tive January 1, 1990. To fully explain to you the basis for the increase, the cost increases we have experienced are as follows: Programming Field Personnel Salaries Benefits Office Personnel Salaries Benefits Regional Management Vehicle Operating Expenses B &O /Copyright /other Gov't Billing Cost Bad Debts Negotiated Pole Attachment Increase Cost Increase 90.1 cents November 27, 1989 29.0 cents per Subscriber per month 18.5 cents per Subscriber per month 7.0 cents per Subscriber per month 2.8 cents per Subscriber per month 6.8 cents per Subscriber per month 6.6 cents per Subscriber per month 1.0 cents per Subscriber per month 1.0 cents per Subscriber per month 17.4 cents per Subscriber per month These cost increases do not include increased costs for maintenance materials, such as cable or equipment for FCC required testing. We will also increase the cost of additional outlets to $2.50 per month for each outlet. No other rates will be increased. During the latter part of 1989, we initiated some exciting new programs. We launched a new computer data service called X- PRESS. This basic service is available to owners of home computers and requires an instal- lation kit that is available from X -PRESS Data Service. This service has also allowed us to launch a daily instructional service entitled, "CNN in the Classroom for local schools. We also have plans to launch Northland Cable News, a local programming effort designed to provide local news of specific interest to Port Angeles and Sequim residents. We have launched our Quality Assurance Program to establish maintenance standards to ensure that you are satisfied with the quality of your cable service. We are also providing a 12 channel Economy Basic Tier. This will be available by January 1, 1990, and will consist of channels 2 through 13. We are glad to answer any questions you may have about the rate increase or any other cable service related issues. Just call us at 452 -8466. Sincerely, Port Angeles Telecable I La r1 itewr rntA1 G/}60 spAyth P�1� l?� •ors UT ILir C>s A26 466 /'1! 4 11P I -ro 0 b 1 b .rN� yfc ).A JJ .2__ C,4iv LT- L ec vtar T 1 2 L ,4 yn u. P 13,-(e -0L b1u 1 c one fuZ�� s P r t e o1 T: 6 Lc. Se. a_ 1I r r e Lss C.A4 Nri,e. A- f/N ALL n, -rte ��o Sao J lga_h_fv_r ydLI.2 TCA 2 4 L 0-P (11 A y. —nf c r I1-1.� -fO 5 hi) r t y L s L h (o o u T_ LET 7 L.1,_w,ca 1 2 !�A4 S 74 /o/0 J' i C e iii o 4A Yrs --o P l j_ e LA_ lZ1 71% /U /-4 I.L. il? L Aft" J J.5 A _vP..57 ive 1� lb q 1 1_ o Po LT- A 7716-3/ 'r/c.. Go o p>eAv- T p o 4-r Le_[_cc 84 CA 12-v.. 4! A i:% 146 74 Cv c/ 400 -67/9_51_Z_ Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 L a /6 Cable Communications Consultants November 15, 1989 Subject: Cable television franchise effective competition update Dear Craig: As you know the possibility of rate regulation of at least some portions of the cable industry is the subject of several Congressional Committee's reviews. It does not appear that any substantive action will be taken this session. Senator Danforth has introduced a bill which, among other issues, would redefine effective competition. His proposed criteria would include a somewhat awkward stipulation declaring that effective competition exists when fewer than 30 percent of households subscribe to the cable television services. Port Angeles may or may not fall into this category. In any event as you well know there is many a slip between the cup and the lip when bills are introduced in the Congress. On another front, however, there are some other developments which will be of interest to Port Angeles. The "three signal" test has recently come under fire. The FCC appropriations hearing was very critical of the imposition of this completely one sided rule. As a result of at least the implied threat of cutting back FCC funding the FCC has most reluctantly agreed to review this regulation. You are aware that as of now only five cities have applied for a waiver from the existing ruling. Of these five (all but Dubuque smaller than Port Angeles) only one, Portola, California, has received permission. Dubuque reached an agreement from its franchisee to institute rate regulation but it has not yet obtained the blessing from the FCC. The most waves are currently being made by Sonora, California. That City is attempting to take the position that although it receives five broadcast signals, two are religious programs and one in Spanish language. The City's position is that regardless of availability less than half of the residents in fact view all of these stations. 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 Craig Knutson Page 2 November 15, 1989 It has been suggested, therefore, that effective competition should be defined in terms not by ,the number of stations (foreign and translators included) but by the "significantly viewed" measurement. A postscript to this is that Sonora has so far spent almost $15,000 on its viewership survey not including legal fees. The cable operator meanwhile has requested the FCC to provide an extension for six months so it can make its own survey to rebut Sonora's findings. It is our guess that nothing will come out of Washington D.C. before late fall of next year. At that time another GAO survey of cable rates will be released as well as the Congressionally mandated review by the FCC of the Cable Act itself. We will continue to keep you informed of any new developments. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Mif yam_ �holt Senior Consultant MHO /ss cc: Duane Wolfe Michelle Maike 1 a AGREEMENT FOR CABLE COMMUNICATIONS FRANCHISE MANAGEMENT CONSULTANT SERVICES THIS ACRE .MENT (hereinafter "Agreement is made and entered into effective this 9 day of i A/1989 by and between 3 -H Cable Communications Consultants (hereinafter Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FOR, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Proiect and Scone of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Reports. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Consumer Protection. Consultant shall assist in the training of a City employee in the day to day handling of complaints or enquiries made to the City by cable subscribers. This training shall consist of personal on the job training with designated employees within thirty (30) days of this agreement. Matters discussed will include appropriate responses, liaison with the cable operator, follow -up procedures, limitations and authority of the City, filing of complaints, a glossary of technical terminology and other matters required in the performance of this assignment. Additionally, Consultant will provide written procedures and forms necessary to conduct this function in the manner most beneficial to the City and its residents. Further, Consultant will be available at any time during normal business hours to assist and advise the City in the handling of such enquires or any issues relating to the regulatory powers of the City. Such services, when necessary may include on site review in order to resolve such matters. D. Cable Franchise Transfer. In the event that a transfer or sale of the cable system under Section 11 of the City's cable franchise ordinance, Consultant shall evaluate such transfer and furnish its recommendations to the City as to the advisability of approval of such transfer. E. Access Utilization. Consultant shall review the status of public, educational and governmental (PEG) use of the access channels provided. Such review will include the monitoring of the availability of such channels, time allocations provided for such use, and equitable sharing arrangements made by the franchisee. F. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. G. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. H. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any 2 J. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. K. Ownership of Reports /Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. A. Term. The term of this Agreement shall begin upon the /qt- day of /-e,_�X- 1982 and shall expire on the ,3%� of +98 990a B. Termination by the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to ten percent (10 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi annual payments and the Consultant's fee determined on that basis. 3 Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or 4 acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. Approved as to form: City Attorrry Attest: This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: CITY: CONSULTANT: 3 Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 City of Port Angeles 321 East 5th P.O. Box 1150 Port Angeles, WA 98362 3 -H Cable Co I By 1r (L4 Hurtl, V ice President /Director City of Port Angeles By 5 k„ unicajtions Consultants September 21, 1989 Lon Hurd, Vice President /Director 3 -H Cable Communications Consultants 4517 California Ave. SW, Suite B Seattle, WA 98116 Dear Lon: 5.11a CITY OF PORT ANGELES 321 EAST FIFTH ST P 0 BOX 1150 PORT ANGELES. WASHINGTON 98362 PHONE (206) 457 -0411 The City Council, at their regular meeting of September 19, 1989, approved the renewal of the contract for consultant services between yourself and the City. I have enclosed, for your signature, the contract. Please sign, retain a copy for your records, and return the original to my office. We look forward to another year of continued good service.` MMM:CH Enclosure cc: City Attorney ichelle M. Maike City Clerk Cable Communications Consultants Steve Friedman Divisional Vice President NORTHLAND CABLE TELEVISION, INC. 1201 Third Avenue, Suite 3600 Port Angeles, WA 98101 Dear Mr. Friedman: Thank you for the copy of the letter addressed to the City of Port Angeles discussing the basis that Northland contemplates using for rate increases. Without directly addressing this particular issue at this time there are certain items in the two month operating statement that raise questions. While it is understood that this financial information covers not only the City of Port Angeles but also nearby Clallam County areas nevertheless there appears to be some line items that appear to be out of line. One obvious one is a franchise expense of 2.2% of sales. The most direct method of clarifying some ambiguities would be for Northland to submit the franchise fee worksheet form which you have solely for the City of Port Angeles. Upon receipt of this information we will be better able to comment to the City on the thrust of all of the data and assumptions made in your letter of September 6, 1989. Your usual cooperation will be greatly appreciated. May we assume that the City will receive this report by October 6, 1989. Sincerely, C �.E /CO�CiMUNICATIONS CONSULTANTS Lon A. I-urd Vice President /Director LAH /ss cc: James Penney Dave Flodstrom Duane Wolfe 21U September 14, 1989 ROVR.:1): sEP15 1989 CITY OF PORT ANGELES 1 CITY_ CLERK Dear Mr. Penney: Thank you for your letter of August 18, 1989. There is apparently a misunderstanding regarding our telephone conversation concerning furnishing your company with a copy of the agreement between our firm and the City of Port Angeles. As we informed you at that time, such information should be requested from the city of Port Angeles directly. We are certain that they will be glad to provide you with whatever data is deemed to be appropriate. If you have any further questions, please feel free to contact our office. Sincerely, 3A1 C O I 'CATIONS CONSULTANTS Cable Communications Consultants James A. Penney Vice President/General Counsel NORTHLAND COMMUNICATIONS CORP. 1201 Third Avenue, Suite 3600 Seattle, WA 98101 d Vice President/Director LAH /ss cc: Craig Knutsun Duane Wolfe August 23, 1989 RE: Contract Between 3 -H and City of Port Angeles pORT 4 4/Q 1.— it 3 co S4W 4 S PATIVE June 12, 1989 3 -H Cable Communications Consultants Attn: Lon A. Hurd 4517 California Ave. SW Suite "B" Seattle, WA 98116 Dear Lon: I look forward to hearing from you. MMM:CH cc: Dave Flodstrom Duane Wolfe File CITY OF PORT ANGELES 321 EAST FIFTH ST P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 I received your letter regarding Northland's response to the require- ments of Ordinance #2470. In reviewing it myself and with Dave Flodstrom, City Manager, and Duane, we all agree that is appropriate. Let me know when a date is set for the annual meeting. Please note, however, that I will be out of the office from August 12th through the 27th. Sincerely, Michelle M. Maike City Clerk A Ell 1 e 8 f i �ILC�C�C3 a CabieCommunicationsC?msuhants June 5, 1989 Michelle M. Maike City Clerk CITY OF PORT ANGELES P.O. Box 1250 Port Angeles, WA 98362 Dear Michelle: Enclosed please find a copy of a letter that, subject to your review and approval, we plan to send to Northland Communications Corporation, Inc. If you have any questions, please feel free to contact us. We look forward to hearing from you. Sincerely, 3 -H CA E CO MUNICATIONS CONSULTANTS on A. LAH /ss Enclosure a ‘it,,t. 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 June 5, 1989 Cable Communications Consultants Steve C. Friedman Divisional Vice President NORTHLAND COMMUNICATIONS CORPORATION, INC. 1201 Third Avenue, Suite 3600 Seattle, WA 98101 Dear Mr. Friedman: I am in receipt of a copy of your letter dated May 1, 1989, to Ms. Michelle Maike, City Clerk of the City of Port Angeles. Your letter is in response to Section 16 of the Ordinance #2470. In addition, Section 17 of the Ordinance states: "On a yearly basis, no later than sixty (60) days after the anniversary date of the granting of the franchise, upon the request of the City, the company shall meet with the City officers and /or its designated representatives to review the performance of the company over the preceding twelve (12) months. The subjects shall include, but not be limited to, those items covered in the annual report required pursuant to Section 16." It would therefore be appreciated if you could have someone contact our office so that we could set up a meeting between your office, the City of Port Angeles, and our office. It is anticipated that this meeting will be held on or about August 1, 1989. Of those items discussed in your letter, the City will be looking for additional information on the following: 1. Section 16 A Annual Financial Report. In addition to the annual report of Northland Communications Corporation, Inc., this section was written with the anticipation that the City would receive financial information specific to the operation located in Port Angeles. S: Steve Friedman Page 2 June 6, 1989 2. Section 16 'L Citizen Relations. It was not intended that the information on numbers of complaints would be limited to those forwarded through the City, but also complaints received directly by Port Angeles Telecable. It is also anticipated that you will be prepared to respond as to the progress of providing the following services: 1. Section 5 D Interactive Services 2. Section 5 E Access Limitation Equipment 3. Section 5 F Access Channels 4. Section 5 G Access Facilities and Equipment 5. Section 10 Coverage 6. Section 15 -4 Discounts If you have any questions concerning this matter, please feel free to contact me. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Lon A. Hurd LAH /ss FEB 11 '89 13:28 3 -H MANAGEMENT CONS. P.2 a •I. r Cable Communications Consultants February 10, 1989 Craig Knutson City Attorney PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: ti n 4 CONFIDENTIAL ATTORNEY /CLIENT PRIVILEGE CONFIDENTIAL ATTORNEY /CLIENT PRIVILEGE Subject Port Angeles Rate Regulation We have read with interest Mr. Penney's letter to you of January 18, 1989. As you are well aware Northland's position is pretty much to be expected and does not break any new ground. We have noted, as you surely have, that Northland's counsel assumes that Canadian broadcasts are to be considered in the effective competition criteria. Obviously, if this premise is incorrect it raises the odds for the City to prevail. From a negotiating standpoint it may be that the prospect of unfavorable publicity for Northland would put pressure on the Company to take a more reasonable attitude towards, in our view, the unconsciousable rate increases. To this end, we are attaching some statistics indicating comparative percentage increases in other regional communities. As an aside all of these listed cities which have renewed their cable franchise since the Cable Act have imposed a 5% franchise fee. The major reason for these price increases are, of course, none of the reasons cited in Vern Kiele's letter of January 26, 1989. While we do not know the specific amounts involved in this particular transaction, the primary cause for the rapid inflation of cable subscriber rates is because the new purchaser of an existing cable system is paying a multiple of about three times of the cost to build a system. For example, an average per subscriber cost to build a system, with all peripheral costs included, is about $800.00. An average purchase price in 1988 was $2500.00 per subscriber. Obviously not only is the debt service on these borrowed sums enormous but the return on investment ratio at, say, 10% must rise from $8.00 to $25.00. Absent the opportunity to expand, such as is the case in Port Angeles, the only way this increased return can be obtained is through higher rates. A subscriber is, in effect, subsidizing these no value added buy outs. /U PEB 11 '89 13:29 3 -H MANAGEMENT CONS. Craig Knutson Page two February 10, 1989 P.3 Please let us know if we can furnish any additional information or if you have further questions. Sincerely, 3 -H CABLE COMMUNICATIONS CONSULTANTS Miles 2. verot Senior Consultant MHO:smw Attachment FEB 11 '89 13:29 3 -H MANAGEMENT CONS. P.4 CABLE TELEVISION RATE INCREASE ANALYSIS City of Increase Auburn 11.9 Bellevue 6.0 Bothell 6.0 Bremer ton 8.0 Des Moines 6.0 Edmonds 0 Everett 6.0 Kent 1 Kirkland 6.0 Lynnwood 6.0 Marysville 1.6 Mountlake Terrace 6.0 Normandy Park 11.9 Olympia 8.0 Puyallup 8.0 Redmond 6 0 Ren ton 11.9 8 Sultan 6.0 Tukwila 1 Port Angeles 33.4 Representative average for Puget Sound 7.1 *Iruludes only rate increases effective in the last 12 months. January 30, 1989 Steve C. Friedman Divisional Vice President Northland Communications Corporation 3500 One Union Square Building Seattle, WA 98101 Re: Telecable Response to Rate Increase Complaints Dear Mr. Friedman: CITY OF PORT ANGELES 140 WEST FRONT ST P O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Attached is a copy of the form letter that Port Angeles Telecable is sending to subscribers who complain about the recent rate increases. The letter blames the rate increase on "demands" allegedly made by the City during the franchise renegotiation process. The letter is inaccurate and should be retracted. It is signed by Vern Kiele, Port Angeles Telecable Manager, who was involved in the franchise process and should know better. He knows, as well as you and I do, that the "important facts" set forth in the attached letter are inaccurate in the following respects: 1. The City was not attempting to force Telecable to have the "best" system in the state. The City wanted its citizens to have a cable system that would be up -to -date technologically without forcing Port Angeles Telecable to increase its rates. 2. The franchise ordinance does not require Telecable to build costly upgrades. The franchise ordinance requires Port Angeles Telecable to upgrade its system from 30- channel capacity to 35- channel capacity within three years, not to 42 channels as stated in Mr. Kiele's letter. Further, Mr. Kiele and Leroy Sproat, Port Angeles Telecable engineer, stated during the franchise renegotiation process that Telecable was upgrading its system anyway and that this requirement would not cause the company to incur any additional expenses. January 30, 1989 Page 2 3. The upgrade to 54 channels after five years that is provided for in the franchise ordinance is to be implemented only if a majority of Telecable subscribers indicate in an indepen- dent random poll that they favor such an upgrade. Even in the event that the poll turns out in favor of the upgrade, the City does not have to require the company to make the upgrade. Then, if the upgrade is required, the company still has two more years to accomplish it. 4. The $5.75 pole fee is paid to Port Angeles City Light. Although City Light is legally required to charge for use of its poles, the City's pole rental fee is lower than what the PUD charges Telecable. 5. The franchise ordinance does not require the company to provide "all equipment for a City channel" as Mr. Kiele's letter inaccurately states. Rather, the franchise requires the company to make available upon City request a fund of up to $12,500 for the purchase of such equipment. 6. Federal law allowed for the City to increase its franchise fee from three percent to five percent several years ago. The City waited until October 1, 1988, and then only imposed a one percent increase. This is a considerable savings to Telecable over what other cable companies in the state are required to pay. 7. At no time during the franchise renegotiation process did City officials present Telecable with a "take it or leave it" response. The franchise ordinance was negotiated with give and take on both sides and resulted in a document that Telecable indicated was acceptable. 8. Prior to Mr. Kiele's letter, Telecable has never stated that the new franchise ordinance would result in a significant rate increase. To the contrary, you yourself told the Port Angeles City Council at an open public meeting in September, 1988, that there were no upcoming rate increases. Since the new franchise ordinance went into effect on October 1, 1988, you would have known at the September, 1988, meeting if the franchise ordinance was going to require you to increase rates by one third. We both know that your subscribers are upset by the recent rate incr-aase. You know better than I do what the real reason is for the rate increase. Your October 31, 1988, letter to customers explaining the basis for the rate increase specified increases in January 30, 1989 Page 3 programming, maintenance materials, copyright costs and property taxes as the main reasons for the increase. It is unfortunate that your manager has now seen fit to employ the strategy of blaming the City. Very truly yours, David T. Flodstrom, City Manager DTF /CDK:cb Attachment cc: City Council City Attorney Administrative Services Department 3 -H Cable Communications Consultants Vern Kiele 72;; cast First Street Phone 452-8466 Dear Ms. Peacock, VK:rlw 9NGELES!/LSL5L5L5 ILl. January 26,1989 In response to your complaint, I would like to point out a few important facts. Port Angeles Telecable's franchise with the City of Port Angeles was due to expire, and without a franchise Telecable would have to turn off the cable and remove all of its wires. There- fore, in order for Port Angeles Telecable to remain in business, we had to renegotiate a new franchise with the City of Port Angeles. During these negotiations the city officials were very demanding. Since they could not regulate rates, other demands were made: 1. They wanted a cable system comparable to the best in the State. 2. Upgrade the system to 42 channels within 3 years. 3. Upgrade the system to 54 channels after 5 years. 4. A $5.75 Pole fee. 5. Provide all equipment for a City channel. 6. Increase City franchise fee from 3% to 4% now and 5% in 5 years. That's 5% of Telecables gross income for City coffers. When we said to the City attorney and City controller that we could not meet these demands without raising rates substantially to the subscribers, we were told "well thats the way the ball bounces So in agreeing to their demands, so as to be able to stay in business, provide you with cable, and continue to employ 20 people, Telecable and the city knew rates would be increasing to cover these costs, and that you would be paying for the best cable system in the State, whether you wanted it or not. This was one of the reason the former owners decided to•sell the system and it's unfortunate that the new owners have to take all the heat. But they are and will always comply with the City franchise as written. Sincerely, CL J� Vern Kiele Manager Port Angeles Washington 98362 OF Q O RT 44to CITY OF PORT ANGELES \17.411111111MI 140 WEST FRONT ST P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 c /T y 4 rrolk- PHONE (206) 457 -0411 January 18, 1989 Steve C. Friedman Divisional Vice President Northland Communications Corporation 3500 One Union Square Building Seattle, WA 98101 Re: Port Anaeles Telecable Rates Dear Mr. Friedman: At its January 17, 1989, meeting, the Port Angeles City Council decided to proceed with the rate regulation waiver process as set forth in the regulations of the Federal Communications Commission as applicable to cable television systems. Prior to obtaining the necessary studies, the City is hereby informing you of its intent to proceed and at the same time providing you with an opportunity to negotiate a resolution. In legal terms, what needs to be resolved is whether or not the City may regulate Port Angeles Telecable's rates. As a policy matter, however, what ultimately needs to be resolved is the amount of a reasonable rate increase. As you may be aware, the resolution of the City's legal ability to regulate rates depends upon the outcome of a waiver hearing before the FCC. This hearing would focus on the question of whether or not there is effective competition in Port Angeles. This determination would be based on the results of surveys focusing on whether or not three grade B signals are received throughout the City and which channels are "significantly viewed" in Port Angeles. The party losing the waiver hearing would have to pay for the study costs. Assuming the City were to prevail in the waiver process, which is a very real possibility given the recent amendments to the FCC's regulations, the City would still have to determine what reason- able rates would be. Thus, it makes sense to pursue the negotia- tion process to begin with to see if reasonable rates may be agreed upon without the need for expensive engineering studies. As you are no doubt also aware, the City has received a number of complaints about your recent rate increase. The City Council Lam. January 18, 1989 Page 2 concurs with the tenor of these complaints in that the 33% increase is excessive. Please let us know if you are willing to consider a more reasonable rate increase and to negotiate a resolution to this situation. Very ruly yours, Craig D. Knutson, City Attorney CDK:cb cc: City Council City Manager Administrative Services Department 3 -H Cable Communications Consultants Hessle Buck NORTHLAND CABLE TELEVISION, INC. Fi3 subsidiary of Northland Telecommunications Corporation CERTIFIED MAIL RETURN RECEIPT REQUESTED Receipt No. P 760 260 156 February 3, 1989 Craig D. Knutson, Esq. City of Port Angeles 140 West Front Street P.O. Box 1150 Port Angeles, Washington 98362 Re: Northland Cable Television, Inc. Franchise Agreement with the City of Port Angeles Dear Mr. Knutson: 1201 Third Avenue, Suite 3600 Seattle, Washington 98101 (206) 621 -1351 G ENE, O' ANGELES c Arroir7y Your letter of January 18, 1989, to Steve C. Friedman con- cerning the possible reinstitution of rate regulation by the City of Port Angeles, has been referred to me. I disagree completely with your assertions that the City has a "very real possibility" in prevailing in a rate regulation waiver hearing before the Federal Communications Commission, and I suggest that you more carefully review the Commission's Second Report and Order, MM Docket No. 84 -1296, adopted March 24, 1988. The revised signal availability standard established by the Commission in the wake of American Civil Liberties Union v. FCC, 823 F.2d 1554 (D.C. Cir. 1987), cert. denied 56 U.S.L.W. 3644 (March 22, 1988), requires that, for effective competition to ex- ist, the entire cable community has available to it three off the -air broadcast signals. Although the Commission revised its rules concerning the geographical coverage of the available off the -air signals, the Commission reaffirmed that (i) the predicted Grade B contour of such broadcast signals would be _prima facie evidence of signal availability in a cable community, and (ii) any three off the -air signals (although not necessarily the same three) would be adequate for purposes of meeting the signal availability standard, and (iii) any translators licensed to the cable community would be included for determining whether effec- tive competition exists. In the Second Report and Order, the Commission specifically rejected the assertions of several parties that the three signals had to be those of the major net- works. Moreover, citing the approval of the Court in the ACLU decision, the Commission specifically rejected assertions that the three available- signal standard be reconsidered in its en- tirety. NORTHLAND CABLE TELEVISION, INC. Craig D. Knutson, Esq. February 3, 1989 Page 2 The City of Port Angeles has licensed to it a translator, call sign K61CG, which transmits the broadcast signal of KIRO -TV, Channel 7, Seattle. That signal unquestioningly satisfies one of the three signals needed for effective competition to exist. The City of Port Angeles is wholly within the predicted Grade B contours for the following stations: KVOS -TV, CBS, Chan- nel 12, Bellingham; KING -TV, NBC, Channel 5, Seattle; KOMO -TV, ABC, Channel 4, Seattle; and KCPQ, IND., Channel 13, Tacoma Seattle. Our engineering staff has found that all of the forego- ing signals can be received throughout the Port Angeles com- munity. Our engineering staff also has found that the following Canadian broadcast signals are available throughout the City of Port Angeles: CBUT, Channel 2, CHEK, Channel 6, and CHAN, Channel 8. The accuracy of our engineering studies is confirmed by the significant viewing surveys adopted by the Commission that show all of the following broadcast stations are significantly viewed in Clallam County: KOMO, KING, KIRO, KVOS, CBUT, CHEK, and CHAN. Based on the foregoing facts, we are confident the City has virtually no possibility of prevailing in a rate regulation waiver hearing. As you know, in such an event the City would be liable for what could amount to over 5100,000 in legal fees and other expert's fees and costs. Given the dismal likelihood of prevailing, we doubt the City Council would receive taxpayer ap- proval for such an undertaking. Notwithstanding our prediction of which party would prevail in a waiver proceeding, we would be happy to meet with you and /or the Port Angeles City Council to discuss and explain our recent rate increase. We believe that the increase was fully justified given the significant increases in programming costs, the in- creased franchise fee due to the City, the increased pole attach- ment fees recently negotiated with the City, the upgrade plans we have formulated and the myriad of other increased expenses as- sociated with our business operations. We believe it is in the best interest of both parties to avoid any unnecessary costs and expenses associated with preparing for and undertaking a rate regulation waiver hearing. 1201 Third Avenue, Suite 3600 Seattle, Washington 98101 (206) 621 -1351 NORTHLAND CABLE TELEVISION, INC. Craig D. Knutson, Esq. February 3, 1989 Page 3 Please give me a call at your earliest convenience so that we can set up a mutually satisfactory time for representatives of the parties to meet and discuss this matter. I am confident we can reach a resolution that is acceptable to everyone. mws /6123 cc: John S. Whetzell Steve C. Friedman Vern C. Kiele Very truly your James A. Penney Vi President and Genera Counsel 1201 Third Avenue, Suite 3600 Seattle, Washington 98101 (206) 621 -1351 i 1 /14 4._.‘ i 1 j 939 7 Q CoNA LO (-11.4el.SLN......_ L (9.›, x_..., _6- p ,(4 4-, 0 kit 20. 1 A, 1 r v L of PORT g G N if Acagli RATIVE Q December 28, 1988 3 -H Cable Communications Consultants Attn: Lon Hurd, Vice President /Director 4517 California Ave. SW, Suite B Seattle, WA 98116 Dear Lon: CITY OF PORT ANGELES 321 EAST FIFTH ST P 0 BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Attached is a copy of the itemization and franchise fee from Port Angeles Telecable, Inc. to the City of Port Angeles. I hope all is well and best wishes for a happy New Year. MMM:CH Attachment cc: File Michelle M. Maike City Clerk 5 ,zlo Cable Communications Consultants November 10, 1988 R. Duane Wolfe Administrative Services Director CITY OF PORT ANGELES P.O. Box 1150 Port Angeles, WA 98362 Dear Mr. Wolfe: It was a pleasure to meet you the other day and I look forward to working with you in the future. As we discussed, I have enclosed a schedule of franchise requirements outlined in Ordinance #2470. My intention is to forward it on to Port Angeles Telecable so that they may update us on the status of each of these requirements. I would appreciate it if you would review it and let me know your thoughts. Sincerely 3 C on Hurd Vice President /Director LAH:smw Enclosure MMUNICATIONS CONSULTANTS 5 0 5.2.i0 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 i SECTION# 4 5 (1) (c) 5 (1) (e) 5 (1) (h) 5 (5) 7 15(3) 15 (2) 16 17 5 (1) (c) 5 (1) (f) 5 (1) (g) DESCRIPTION Insurance in amount of $1,000,000. 300 MHZ system, 30 channel capability with 23 channels on line. 5 (1) (d) Two -way, non -voice return com- munication, including addressable equipment Access Limitation equipment: (Parental Control Device) Termination Point: A list of services and charges for those subscribers wishing to terminate their service at the outside of their residence. Free standard installation and basic service to city owned buildings and schools. A list of all customer service policies A 15% discount on basic service and a 50% discount on installation to low income senior citizens. A list of rates and charges Annual Report Annual Meeting System upgraded to 330 MHZ, 35 channel capability Access Channel: one channel for Public, Educational, Government (additional channels when warranted) Access Facilities and Equipment: Con- nections between companies facilities and city locations. 5 (1) (g) Access Facilities and Equipment: Operator to provide a character generator for city use and up to $12,500 for access uses. DUE DATE October 1, 1988 October 1, 1988 October 1, 1988 October 1, 1988 October 1, 1988 October 1, 1988 October 1, 1988 October 1, 1988 November 1, 1988 June 1, 1989 August 1, 1989 October 1, 1991 Upon Request Upon Request Upon Request September 14, 1988 TO: City Council FROM: Craig D. Knutson, City Attorney RE: Contract With 3 -H Cable Communications Consultants for Cable TV Oversiaht Services ISSUE: Should the City Council authorize the execution of a contract with 3 -H Cable Communications Consultants for cable TV oversight services? BACKGROUND /ANALYSIS: MEMORANDUM 3 -H Cable Communications Consultants, which the City retained to assist in the renewal of Port Angeles Telecable's franchise, provides ongoing cable TV oversight services for eleven cities in western Washington. Such services include the following: 1. Technical evaluation of the cable system: (a) Conformance to federal and franchise standards; (b) Proper notification of "kicker" clauses for upgrades and other services; 2. Conduct of annual meetings with operator; 3. Review of periodic report information; 4. Establishment of in -house policies to handle subscriber complaints: (a) Use of forms and procedures; (b) Back -up telephone advisory system for non routine matters; (c) Immediate consultation on state and federal legal issues affecting cable franchises; (d) Training city employee in handling complaints or inquiries from cable subscribers; 5 .74o September 14, 1988 Page 2 5. Forms and precise procedures for full collection of franchise fees and external audit function; 6. Franchise transfer review; 7. Review of public, educational and governmental use of access channels. 3 -H has expertise and experience in cable television matters that is not available locally or within the City staff. Their services were very useful in the franchise renewal process. The standard fee that 3 -H receives from other cities is ten percent of the franchise fee. It is anticipated that the City will receive in the neighborhood of $50,000 in cable franchise fees next year. 3 -H estimates that it will render approximately 76 hours of service on a yearly basis. This works out to approx- imately $65 per hour, which compares with 3 -H's normal rate of $85 per hour. RECOMMENDATION: The Utility Advisory Committee will consider this matter at its September 19, 1988, meeting, at which time it will decide on a recommendation for the Council's consideration. CDK:cb Attachments Craig (nu on, City Atto ey AGREEMENT FOR CABLE COMMUNICATIONS FRANCHISE MANAGEMENT CONSULTANT SERVICES THIS AGREEMENT (hereinafter "Agreement is made and entered into effective this 20 day of sPr t 1988 by and between 3 -H Cable Communications Consultants (hereinafter "Consultant and the City of Port Angeles a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (hereinafter "City CONSULTANT AND CITY, FOR THE MUTUAL CONSIDERATION HEREINAFTER SET FOR, DO HEREBY PROMISE, COVENANT AND AGREE AS FOLLOWS: 1. Project and Scope of Work: Consultant shall do, perform or cause to be done or performed in good and professional manner, the following described work. Said work shall be done and performed in accordance with all applicable federal, state and local laws, in a workmanlike manner, consistent with accepted practices for other similar services. Said work shall always be performed in the best interest of the City and its residents, and shall in no manner compromise the interests of the City and its residents without express authority of the City. A. Technical Evaluation. Upon an annual basis or when required by the City, Consultant shall supervise and appraise the testing of the cable franchisee's technical performance in accordance with Section 14 of the City's cable franchise ordinance and report its evaluation to the City. Such report, shall, among other matters, discuss the franchisee's conformance to federal, state, and local requirements. B. Rev orts. Consultant shall furnish the City with an annual report discussing franchise compliance analysis of subscriber complaints, cable operator's rates and service comparison to other regions, new state and federal legislation affecting cable franchising. C. Consumer Protection. Consultant shall assist in the training of a City employee in the day to day handling of complaints or enquiries made to the City by cable subscribers. This training shall consist of personal on the job training with designated employees within thirty (30) days of this agreement. Matters discussed will include appropriate responses, liaison with the cable operator, follow -up procedures, limitations and authority of the City, filing of complaints, a glossary of technical terminology and other matters required in the performance of this assignment. Additionally, Consultant will provide written procedures and forms necessary to conduct this function in the manner most beneficial to the 1 City and its residents. Further, Consultant will be available at any time during normal business hours to assist and advise the City in the handling of such enquires or any issues relating to the regulatory powers of the City. Such services, when necessary may include on site review in order to resolve such matters. D. Cable Franchise Transfer. In the event that a transfer or sale of the cable system under Section 11 of the City's cable franchise ordinance, Consultant shall evaluate such transfer and furnish its recommendations to the City as to the advisability of approval of such transfer. E. Access Utilization. Consultant shall review the status of public, educational and governmental (PEG) use of the access channels provided. Such review will include the monitoring of the availability of such channels, time allocations provided for such use, and equitable sharing arrangements made by the franchisee. F. Collection of Franchise Fee. Consultant shall perform an analysis of the operational statistics supplied by the franchisee for the purpose of determining whether the franchisee is paying the appropriate amount of franchise fee pursuant to the provisions of the franchise. Such analysis and audits shall be provided to the City on a semi annual basis as required by the City's cable franchise ordinance Consultant shall provide forms and send to the franchisee for the purpose of such verification. In the event that the franchisee becomes delinquent in its franchise fee payments, it shall be the responsibility of the Consultant to take such measures as necessary to attempt to ensure prompt and complete payment of the franchise fees on a timely basis. G. Bond and Insurance. Consultant shall maintain a complete record of all bonds and insurance required by the franchise ordinance. Consultant shall immediately advise the City of any default of any such requirements. Consultant shall monitor performance bonds and make recommendations, if necessary, to the City of any cause to exercise City options in the case of nonperformance. H. Current Law. Consultant shall maintain and keep current a file of federal, state and local law (statutory, administrative rule, case law) including, but not limited to Federal Communications Commission rules and regulations, as they pertain to municipal cable communication franchises. Consultant will advise the City as to any 2 J. K. Ownership of Reports Documents. Original documents, drawings, designs, and reports developed under this Agreement shall belong to and become the property of the City. II. Duration of Services. significant change or modification to the above, or any other federal, state or local law which may have application to municipal cable communication franchises. Newsletter. Consultant will furnish appropriate members of the City government with a quarterly newsletter. This publication will provide news and information of present and contemplated issues that may affect municipal cable television administration. 3 A. Term. The term of this Agreement shall begin jpon the ay of 198S shall expire on the Z.5 day of B. Termination bv_ the City. If the Consultant does not perform to the satisfaction of the City, or if Consultant refuses or fails to provide required assistance or otherwise violates a provision of this Agreement, then the City may, after giving Consultant five (5) days' written notice, terminate this Agreement and take possession of all records and data pertaining to this project. III. Fee for Consulting Services. For the performance of all services contemplated, including all costs incurred by Consultant in its performance of this Agreement (including, but not limited to, transportation, lodging, meals, photocopying, telephone, postage, and other incidental expenses) the City shall pay a fixed fee to the Consultant. Such fee shall be equivalent to ten percent (10 of the franchise fee paid by the franchisee to the City as described in Section 13 of the City's cable franchise ordinance. A. Payment. Payment by the City for Consultant's services will be made on a semi- annual basis. For accounting purposes, the annual franchise fee paid by the franchisee shall be calculated by semi annual payments and the Consultant's fee determined on that basis. Invoices for such semi annual payment of Consultant's fee shall be submitted by the Consultant every six (6) months, with payment due within thirty (30) days of presentation of the invoice. Said invoices shall present an itemized statement, and shall show the method of calculation of the Consultant's fee, including but not limited to the dollar amount of franchise fee paid for the period upon which the Consultant's fee is based; said franchise fee's relationship as a percentage of the gross revenue of the cable system for the invoice period; the amount of franchise fee paid for the franchise year to date and its relationship as a percentage of the gross revenue of the cable system for the franchise year to date; total Consultant's fee paid by the City for the franchise year to date in dollar amount, and its relationship as a percentage of the franchise fee paid by the cable system for the franchise year to date. IV. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns. Consultant shall in no event have the right, without the written consent of the City, to assign any rights or obligations hereunder, it being understood that Consultant has been selected based upon its reputation and past performance. V. Independent Contractor. It is understood and agreed that the Consultant is, and shall be, acting at all times as an independent contractor herein, and not as an employee of the City. The Consultant shall secure at its expense, and be responsible for any and all payment of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Consultant and its officers, agents and employees and all business licenses, if any, in connection with the services to be performed hereunder. In connection with the execution of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, national origin, or physical or mental disability. VI. Indemnity. Consultant agrees to indemnify, defend and hold harmless City from any and all claims of whatsoever kind for damage to person or property arising out of or in connection with Consultant's performance, either by Consultant or subcontractor, of the duties and obligations imposed upon Consultant by this Agreement. These obligations extend to, but are not limited to, claims by employees of Consultant. For this purpose, Consultant waives immunity under State and Federal Industrial Insurance (Workmen's Compensation) statutes. Should either party to this Agreement suffer injury or damage because of any act or omission of the other party, its employees, agents or others for whose acts the party is legally liable, said injured party shall make a claim in writing and give written notice of such claim to the other party within a reasonable time after the first observance of such injury or damage. VII. Rights and Remedies. The duties and obligations imposed by this Agreement and the rights and remedies available hereunder shall, except as otherwise expressly provided herein, be in addition to and not a limitation of any duties, obligations, rights and remedies otherwise imposed or available by law. VIII. Waiver of Breach. No action or failure to act by the City or Consultant shall constitute a waiver of any right or duty afforded any of them under this Agreement; nor shall any action or failure to act constitute an approval of or 4 acquiescence thereto unless specifically agreed to by both parties in writing. IX. Invalid Provision. The invalidity or unenforceability of any particular term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable term or provision was omitted. X. Entire Agreement. This instrument contains the entire Agreement of the parties, and supersedes any previous agreement between the parties either by writing, orally or course of conduct, which might have been effective on the beginning of the term of this Agreement. This Agreement may not be changed orally, but may be changed only by an agreement in writing, signed by the parties hereto. XI. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. Consultant and City agree that in the event of litigation involving this Agreement, venue shall be proper in the Superior Court of the State of Washington in and for the County of Clallam. XII. Notice. Written notices shall be deemed to have been duly served if delivered in person to the individual or entity for whom it was intended, or if delivered at or sent by registered or certified United States mail to the last business address known to that party giving the notice. CITY: All notices and requests shall be addressed to the City of Port Angeles and the Consultant as follows: Approved as to form: C City Att ney Attest: City Clerk CONSULTANT: 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 City of Port Angeles 321 East 5th P.O. Box 1150 Port Angeles, WA 98362 3 -H Cable Communications Consultants By By 5 Lon A. Hurd, Vice President /Director City of Port Angeles Mayor 4, t l J able Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B SEATTLE, WASHINGTON 98116 (206) 935 -9040 August 23, 1988 Craig Knutson City Attorney CITY OF PORT ANGELES P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: Sincerely, Miles H, rholt Senior Con MHO:smw Attachment A DIVISION OF 311 MANAGEMENT CONSULTANTS. INC. 3 -H CABLE COMMUNICATIONS CONSULTANTS iti .Charli:* 4 Apparently your letter of August 15, 1988 and ours of August 11, 1988 crossed in the mail. Part of your questions were probably answered in our earlier letter. However, the schedule of estimated hours you requested is attached. You and the Committee can well appreciate that at this point this estimate is extremely "ify" and represents only some rough in -house budgeting. Please note also that travel time is included in these hourly activity rates. Once again we look forward to working with the Utility Advisory Committee and the City of Port Angeles. Please keep us informed of developments. Technical Evaluation Travel time included Schedule of Hourly Rates On -site evaluation 15 hours Report 5 hours TOTAL 20 hours Annual Report 4 hours Consumer Protection Training 23 hours Franchise Transfer 16 hours Access Utilization 4 hours Franchise Fee Collections 4 hours Bonds Insurance 1 hour Current Law 4 hours TOTAL 76 HOURS r Cable Communications Consultants ,l n 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B SEATTLE, WASHINGTON 98116 (206) 935 -9040 August 11, 1988 Craig Knutson City Attorney CITY OF PORT ANGELES 321 East 5th P.O. Box 1150 Port Angeles, WA 98362 Dear Craig: Thank you for your telephone call. It was certainly good news to hear that Port Angeles wishes to consider the services of our firm in a cable oversight function. We are attaching a proposed agreement which, we believe, covers the sense of our letter to you of April 15, 1988 and is consistent with other arrangements both as to content and price with other of our client cities. Please feel free, of course, to suggest any modifications or additions as you see fit. Let us know if we can furnish any additional information prior to your scheduled council meeting. We very much appreciate the opportunity to be of assistance to Port Angeles and look forward to a mutually beneficial relationship with your City. Sincerely, 3- C on A :rd Vice President /Director LAH:smw Attachment A OMSION OF 3H MANAGEMENT 6 CONSULTANTS, INC. RECEIVED 8 PORT ANGELES CITY ATTORNEY MUNICATIONS CONSULTANTS 5.240 11 Can) Cable Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B April 15, 1988 Craig Knutson City Attorney CITY OF PORT ANGELES 140 West Front Street P.O. Box 1150 Port Angeles, WA 98362 A DIVISION OF 314 MANAGEMENT CONSULTANTS, INC. SEATTLE, WASHINGTON 98116 (206) 935 -9040 ECEIVE PORT ANGELES CITY ATTORNEY Dear Craig: We very much appreciated the opportunity to work with you last fall in the final stages of your City's cable television refranchising process. It certainly appears that your Franchise will be beneficial both to the residents of Port Angeles as well as to the cable operator. Now that there has been time for the dust to settle a bit after concluding your negotiations and getting the cable ordinance in the book, it may be appropriate to look down the road into the oversight responsibilities and challenges that the City will be faced with from an administrative standpoint. Port Angeles is an "in between" community from the cable regulatory view. It has a too limited financial base from franchise fees to afford a full time cable administrator, yet it is too large in the sense not to require an ongoing interface with the cable operator to make certain that both the rights of the subscribers are protected and that responsibilities of the franchisee are kept. As we believe you know, our firm performs this oversight /administrative services for many municipalities in the region. While in most jurisdictions we perform the entire oversight function, in loco parentis so to speak, we also tailor make various programs to suit the specific needs of a community. We suggest several areas of concern to Port Angeles: 1. Technical evaluation of the cable system a. Conformance to Federal and Franchise standards b. Proper notification of "kicker" clauses for upgrades and other services 2. Conduct of annual meetings with operator 3. Review of periodic report information 4. Establishment of in -house policies to handle subscriber complaints a. Use of forms and written procedures b. Back up telephone advisory system for non routine matters Craig Knutson Page 2 April 15, 1988 Sincerely, c. Immediate consultation on state and federal legal issues affecting cable franchises 5. Forms and precise procedures for full collection of franchise fees a. External audit function Without going into details at this time we merely point out that we can perform these functions for Port Angeles on an annual fixed fee basis. These services would include on site meetings and inspections, on the job training of your employee(s), immediate telephone backup and furnishing of all forms and procedures. As a talking point, a ballpark figure for this general type of services would amount to 10% of the franchise fee monies, which means, of course, that the City retains 90% of all the revenues paid to the City by the cable operator. In addition, it would appear that Section 19 of your ordinance may cover a large portion of our fees. If you feel these types of services may be beneficial to Port Angeles we would be most pleased to elaborate further on how our firm may be of assistance. 3 -H CABLE OMMUNICATIONS CONSULTANTS Miles H. Overholt Senior Consultant MHO:smw P.S. You may be interested in the current edition of our newsletter, The Municipal Cable Regulator. AGREEMENT FOR CONSULTANT SERVICES THIS AGREEMENT is made this day of 1987, by and between the CITY OF PORT ANGELES, a Municipal Corporation of the State of Washington (hereafter "City and 3 -H CABLE COMMUNICATIONS CONSULTANTS, a Washington corporation (hereafter "Consultant In consideration of the mutual promises, covenants, terms and conditions of this Agreement, the parties agree as follows: I. WORK BY CONSULTANT The Consultant agrees to perform the following work, includ- ing, but not necessarily limited, as follows: A. Perform an objective, technical evaluation of the Port Angeles Telecable system in order to: (1) Determine the system's present performance; (2) Determine the system's capabilities for up- grading in channel capacity and enhanced services; B. Perform a comparative analysis of the Port Angeles Telecable system and services as they relate to other cities of similar demographics in the region; C. Advise the City on technical issues that will need to be resolved during the Port Angeles Telecable refranchis- ing process, which issues may include: (1) Public, education and government (PEG) utili- zation; (2) Possible upgrading of Telecable facilities; (3) Relationship of technical upgrades to length of franchise; D. Prepare and submit to the City a written report including the technical evaluation and comparative analysis as described in subsections A and B above. II. PAYMENT TO CONSULTANT For the work to be performed under the terms of this Agree- ment, the City shall pay a total sum, not to exceed Three Thousand Dollars ($3,000), based on the hours worked on the project and the wage rates in Exhibit "A This fee shall in- clude all work described under "Work by Consultant" above, including all miscellaneous expenses incurred by the Consultant, including all travel expenses necessary to fulfill the terms of this Agreement. III. METHOD OF PAYMENT Upon successful completion of the report to be submitted pursuant to subsection I. D, Consultant shall submit an itemized invoice to the City for the work performed. Payment by the City shall be full compensation for work performed and services rendered, and for all supervision, labor, profit, supplies, materials, equipment or use thereof, and for all incidentals necessary to complete the work. IV. COPIES OF REPORT The Consultant shall furnish the City with ten copies of the final report. V. TIME OF PERFORMANCE After the effective date of this Agreement, and upon written authorization from the City, Consultant shall proceed with the work provided by this Agreement. The maximum time allowed in calendar days for the completion of the "Work by Consultant" shall be forty -five (45) days. The completion date may only be extended in the event of delay attributed to the City or unavoidable delays caused by forces or elements beyond the control of the City or the Consultant. Completion time shall be extended only upon an application therefor in writing from the Consultant, and a concurrence in the extension by the City Manager. VI. EXTRA WORK Work beyond the scope of this Agreement may only be per- formed if authorized in writing by the City. Performance of any work beyond the scope of this Agreement which is not authorized in writing by the City shall not be paid for by the City. If extra work is desired by the City and authorized in writing, such extra work shall be paid for at the hourly billing rates described in Exhibit "A which is attached to this Agree- ment and incorporated herein by this reference, and expenses actually incurred by the Consultant. VII. ACCEPTANCE OF WORK The report to be submitted pursuant to subsection I. D shall be furnished in a good workmanlike manner and in accordance with the best customs and standards for such work. The decision of the City Manager whether to accept the report shall be based upon the conformance of the report to the terms of this Agreement and the customs and standards for such work. XIII. ASSIGNMENT This Agreement may not be assigned without express written consent of the City. IX. DISPUTES Any disputes concerning the Consultant's performance of the work which are not disposed of by agreement between the Consultant and the City shall be referred for determination to the City Council of the City of Port Angeles. If the City's decision is deemed to be unsatisfactory, a civil action may be filed to adjudicate the dispute. X. TERMINATION OF AGREEMENT The City reserves the right to terminate this Agreement at any time upon not less than ten (10) days' written notice to the Consultant, provided that payment shall be made to the Consul- tant in the percentage that the work completed at the time of termination bears to the total work required under this Agreement. XI. PUBLIC INFORMATION The Consultant shall not issue any statements or releases of information for public dissemination without prior approval of the City. XI. INDEPENDENT CONTRACTOR The Consultant is an independent contractor and not an employee or agent of the City. XII. OWNERSHIP OF DOCUMENTS All documents prepared or obtained under the terms of this Agreement shall become the property of the City. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 3 -H CABLE COMMU ICATIONS CONSULTANTS By CITY OF PORT ANGELES By Title vice President /Director City Manager EXHIBIT "A" Costs over and above three trips will be billed at 250 per mile. Work performed beyond that outlined in "I. WORK BY CONSULTANT" shall be billed separately at a rate of $85.00 per hour. t SZNOZYMNISIIN f P o R r 4; November 10, 1987 Dear Miles and Lon: CITY OF PORT ANGELES ISEMEMINISMILagramopp 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 140 WEST FRONT ST., P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 Attention: Miles Overholt and Lon Hurd The City appreciates receiving your report in a timely fashion. The report addressed the basic questions the City had asked. The report appears to conclude that generally Telecable is doing a good job and does measure up favorably with cable services provided in areas of similar population and number of subscribers. The equipment is good quality; there is no apparent leakage that could cause problems with the signal; and the number of customer complaints is below average as is the basic monthly subscription charge. Your report does raise some questions, however. For one thing, the number of available channels is comparatively low and there are no public access channels. The difficult question we still need to answer is, "Should the system be upgraded, and if so, when Your report indicates that sometime, probably within the fifteen year term of the franchise, the system, even though it is well maintained, will deteriorate to the point that it needs to be rebuilt. At that point, if not before, perhaps the system should be upgraded to provide greater channel capacity, particularly if other systems with similar demographics have already upgraded. What we need input on are the following specific questions: 1. When is it reasonable for Telecable to be required to complete the upgrade to 330 mHz? 2. When should Telecable be required to upgrade to 400 mHz? 5,2_140 November 10, 1987 Page 2 3. Should either of these required upgrades include a complete system rebuild? 4. What direction are other communities and cable companies taking on the upgrade issue? 5. Should the City do a financial analysis of Telecable to determine its ability to pay for the various upgrade options you have identified in your report? Other technical questions that require more input from you are as follows: to Should the franchise require addressability of on- premise decoders? (See attached comments of Bill Myers.) 2. If the FCC's 75% standard becomes the determining factor for whether or not there is "effective competition will Port Angeles have the authority to regulate rates? (See attached comments of Bill Myers.) 3. Should the franchise require Telecable to consider and /or implement a different system of descrambling channels to avoid the white line on the left side of the screen for premium channels? (See attached comments of Bill Myers.) 4. Should the franchise require Telecable to give customers the option of terminating service outside the house and thereby avoid the charge for extra outlets? (See attached comments of Bill Myers.) 5. How much PEG production facilities and equipment should the franchise reasonably require Telecable to provide given the experience of other communities? There are several other non technical issues on which your input would be beneficial. They are as follows: 1. Since, as your report indicates, there is a possibility of a transfer of the franchise during the fifteen -year term, what strong transferability language is present in other standard franchise ordinances /agreements that could be used in the Telecable franchise? (Your input on this issue has been specifically requested by Telecable.) November 10, 1987 Page 3 2. Are there National Cable Television Association (NCTA) standards and /or guidelines with which the franchise should require'Telecable to comply? (See draft franchise ordinance that we provided to you earlier.) As I indicated to you over the phone, I anticipate that a subcommittee of the City Council will want to meet with you sometime next week to discuss the above questions and other matters that may be of concern to the City Council. Telecable is requesting the City Council to adopt a franchise ordinance before the end of the year. In order to do this, some difficult issues need to be resolved in a short period of time. Your assistance in this regard will be very much appreciated. very .truly yours, Craig Knutson, City A Lorney CDKocb Attachment cco City Council City Manager Director of Administrative Services Assistant Police Chief MEMO: November 6, 1987 TO: Craig Knutson, City Attorney FROM: Bill Myers, Assistant Police Chie SUBJ: Telecable Franchise With regards to the recent meeting with Port Angeles Telecable and some of the questions that came about as a result of those conversations, the follow- ing concerns should be referred to the consultant for comment. (1) We should know the direction other cable systems are going regarding addressability. PA Telecable keeps putting this off as a "pie in the sky" concept in favor of their relatively old technology, a manual decod- ing system. The costs cited by the consultant are misleading, which he admits. If basic service is not scrambled and the varying levels of premium service are scrambled addressable decoders are required at only about 25% of the subscribers, perhaps 1,550 of them. Using the consultants cost of $115.00 each this amounts to $178,250, not $714,495 as the study suggest- ed. As well, one has to deduct the present cost of the HAMLIN descrambler, about $50.00 (probably less, considering their relatively decreasing desireability in the industry). That's a reduction of $77,500 the difference between these two technologies is actually only about $100,750 less than 1/7 the cost cited. As a practical matter neither is the case, since a gradual changeover to the addressable system of subscribing to premium services would be the case. Hamlins would have a salvage value and new subscribers would get addressable decoders at some increased cost, perhaps $50 more. Costs cited for the head end seem in line. The "computer system" will un- doubtedly be half the cost by the time it is purchased, judging from the experience other software and hardware costs have decreased over the years. There is NO doubt that addressability of on- premise decoders is the cur- rent and future technology of choice of the industry. My guess is TCI and VIACOM are both headed toward 100% addressability. (2) I believe the system should attain a 330 mHz bandwidth as soon as practic- able, but certainly by the end of five years. As Verne states, this is far more an advantage to them than to us. All the bantying over one or two public access channels is related ultimately to the channel cap- ability and their ability to offer more commercial channels, temporarily relieved by a 330 mHz system. (3) Although the white line on the left side of the screen has been dismissed in the past as horizontal sweep problems in individual sets, I don't buy that totally. I've seen a $3,300 Mitsubishi that displayed that same problem on premium channels only. The response to that argument still. remains the problem exists ONLY on descrambled channels inserted by the encode /decode system it is NOT a basic signal problem. (4) If the current decision holds over "effective competition and common sense prevails that foreign (i.e. Canadian and French language) channels do not apply we will be regulating rates. I suspect 75% of the community can't receive three U. S. stations without each house looking like the antenna array for Radio Free Europe. (5) We do not have a direction from the consultant on progress to 400 mHz systems by other cable companies. If TCI, VIACOM, etc. are all planning this in five or ten years we should keep our triggering clauses (30% or whatever) intact. (6) Although they all deny it, REVENUE is the real reason they do not want to give up the additional outlet charge. Their investment in a second outlet is a splitter (probably less than $1.00 the way they buy them); cable (their cost again is so low that it not a factor but lets make it $1.00); and labor that might make it $10.00 total. That means they will recover 100% in six to eight months. After that it is all profit. Maintenance is nil as these are passive devices, usnally failing only because the subscriber drives a nail through the cable or physically breaks the splitter, as it has no moving or critical electronic parts. They use as their primary defense their responsibility to FCC regs dealing with radiation. Although that is a legitimate concern, it is minimal at the signal levels that should be delivered to the customer. Granted, if Telecable has signal levels at the home several Db higher than neces- sary and the subscriber almost intentionally attempts to radiate them, it can present a problem. You have to understand that the same radiation potential telecable alludes to exists when one hooks up his new VCR to his television set, or installs an A/B switch so the kids can use the set for their latest television game set. Even the most inept home installer, following elementary instructions or guidelines, can do a competent installation of multiple outlets. The following could resolve this: (a) The customer would agree to install in accordance with industry standards i.e. type of cable, shield, splitter. (This could even go so far as buying the stuff from Telecable if priced approp- riately). Telecable could have a simple handout sheet that explains this. (b) The custorrer should sign a hold harmless agreement. (c) The customer should also know (and agree to, along with the hold harmless) that if Telecable is called for service due to alleged cable problems and it turns out to be the customers' on- premise equipment /extra outlets /etc. a charge may be levied by Telecable. The cable company could either fix it, or disconnect it. ets that p,st be yve might be that l e tian r ax teat other than to {d) dd t or alternative charge, o attar t° o a er this rea �hle le�ble is aatrealn t no premise e signal the wh e yes Y o the r ll bet di a_t ale i or �.nt f ma t e rial dies fo f rad a tion be a.x'st ale Z suspe er a� the no e am some have b;�►sic�?,- fy�'tlY having with �j, °sYstert pr f ycan t leve Tr►� e frequencies. any) f u sed by fie s a sl y t on T land roblde {if to those d yon what P tycal C:aane te l e phone ou1 }e. are iden to the rovidi 3 a ccept u sing We for i rests lusivity of P uct ��estiturethe d� Tele �ple s will °p factor e analogy to of subscribers fad of is premise noteworthy majorj1e. But the cation There i li mid that the monitor app l each degrees at i my b P.A. ter a to There is litr �llati °dishes, by u v ale e to are now for on-premise n°p hers 8 T etc., that posti shy davaylable to She one 'VCR's, o Cv1 des Tele a home. of pr emir simply o ne of many lY the CATV i with it according bimt deal ?ORT q c T r MANN September 14, 1987 3 -H Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 Attention: Lon A. Hurd Vice President /Director Dear Mr. Hurd: Very truly yours, i f David T. Flodstrom City Manager DTF:CDK:cc cc: City Council Port Angeles Telecable, Inc. CITY OF PORT ANGELES 140 WEST FRONT ST P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 The City is in receipt of the signed Agreement for Consultant Services. You are hereby authorized to proceed with the work. The completion date will be October 30, 1987. S.2■v AGREEMENT FOR CONSULTANT SERVICES THIS AGREEMENT is made this /0 day of SEP /6'' 1987, by and between the CITY OF PORT ANGELES, a Municipal Corporation of the State of Washington (hereafter "City and 3 -H CABLE COMMUNICA- TIONS CONSULTANTS, a Washington Corporation (hereafter "Consultant"). In consideration of the mutual promises, covenants, terms and conditions of this Agreement, the parties agree as follows: I WORK BY CONSULTANT The Consultant agrees to perform the following work to assist the City in the process of refranchising Port Angeles Telecable, Inc., pursuant to the Cable Communications Act of 1984, including, but not necessarily limited, as follows: A. Perform an objective, technical evaluation of the Port Angeles Telecable System in order to: (1) Determine the system's present performance; (2) Determine the system's capabilities for upgrading in channel capacity and enhanced services; B. Perform a comparative analysis of the Port Angeles Telecable system and services as they relate to other cities of similar demographics in the region; C. Advise the City on technical issues that will need to be resolved during the Port Angeles Telecable refranchising process, which issues may include: (1) Public, education and government (PEG) utilization; (2) Possible upgrading of Telecable facilities; (3) Relationship of technical upgrades to length of franchise; D. Prepare and submit to the City a written report including the technical evaluation and comparative analysis as described in Subsections A and B above. II PAYMENT TO CONSULTANT For the work to be performed under the terms of this Agreement, the City shall pay a total sum, not to exceed Three Thousand ($3,000) -1- Dollars, based on the hours worked on the project and the hourly rates in Exhibit "A The fee shall be in full payment of all work described under "Work by Consultant" above, including all miscellaneous expenses incurred by the Consultant, including all travel expenses necessary to fulfill the terms of this Agreement. III METHOD OF PAYMENT Upon successful completion of the report to be submitted pursuant to subsection I.D, Consultant shall submit an itemized invoice to the City for the work performed. Payment by the City shall be full compen- sation for work performed and services rendered, and for all super- vision, labor, profit, supplies, materials, equipment or use thereof, and for all incidentals necessary to complete the work. IV COPIES OF REPORT The Consultant shall furnish the City with ten copies of the final report. V TIME OF PERFORMANCE After the effective date of this Agreement, and upon written authorization from the City, Consultant shall proceed with the work provided by this Agreement. The maximum time allowed in calendar days for the completion of the "Work by Consultant" shall be forty -five (45) days. The completion date may only be extended in the event of delay attributed to the City or unavoidable delays caused by forces or elements beyond the control of the City or the Consultant. Completion time shall be extended only upon an application therefor in writing from the Consultant, and a concurrence in the extension by the City Manager. VI EXTRA WORK Work beyond the scope of this Agreement may only be performed if authorized in writing by the City. Performance of any work beyond the scope of this Agreement which is not authorized in writing by the City shall not be paid for by the City. If extra work is desired by the City and authorized in writing, such extra work shall be paid for at the hourly billing rates described in Exhibit "A", which is attached to this Agreement and incorporated herein by this reference, and expenses actually incurred by the Consultant. VII ACCEPTANCE OF WORK The report to be submitted pursuant to subsection I.D shall be furnished in a good workmanlike manner and in accordance with the best customs and standards for such work. The decision of the City Manager whether to accept the report shall be based upon the conformance of the report to the terms of this Agreement and the customs and standards for such work. VIII ASSIGNMENT This Agreement may not be assigned without express written consent of the City. IX DISPUTES Any disputes concerning the Consultant's performance of the work which are not disposed of by agreement between the Consultant and the City shall be referred for determination to the City Council of the City of Port Angeles. If the City's decision is deemed to be unsatis- factory, a civil action may be filed to adjudicate the dispute. X TERMINATION OF AGREEMENT The City reserves the right to terminate this Agreement at any time upon not less than ten (10) days' written notice to the Consul- tant, provided that payment shall be made to the Consultant in the percentage that the work completed at the time of termination bears to the total work required under this Agreement. XI PUBLIC INFORMATION The Consultant shall not issue any statements or releases of information for public dissemination without prior approval of the City. XII INDEPENDENT CONTRACTOR The Consultant is an independent contractor and not an employee or agent of the City. XIII OWNERSHIP OF DOCUMENTS All documents prepared or obtained under the terms of this Agree- ment shall be come the property of the City. IN WITNESS WHEREOF, the parties hereto have executed this Agree- ment as of the day and year first above written. 3 -H CAB CO TIONS CONSULTANTS BY: Title Vice- President /Director CITY OF PORT ANGELES BY: L-)4 City Manager EXHIBIT "A" 1. Work done in accomplishment of "I WORK BY CONSULTANT shall be at the rate of $85 per hour. 2. Work done beyond the work to be accomplished pursuant to "I WORK BY CONSULTANT shall be done at the rate of $85 per hour. Mileage shall be at the rate of 21 cents per mile. A DIVISION OF 31-I MANAGEMENT CONSULTANTS, INC. C able Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B SEATTLE, WASHINGTON 98116 (206) 935 -9040 March 15, 1985 Robert E. Orton, Director Finance Admin. Services CITY OF PORT ANGELES 140 West Front St. P.O. Box 1150 Port Angeles, WA 98362 Dear Mr. Orton: Please accept our sincere apologies for our delay in getting back to you in the matter of alleged reception problems of cable TV by one of the residents of your community. We have spent a considerable length of time researching this matter. Without getting into a technical discussion, the difficulty seems to lie in the fact that the video scrambler used by your cable operator provides an information carriage interval which may not be wide enough to fully cover the screen on certain large kinescope TV sets of recent manufacture. This is not a problem unique to your area. It is a question of certain technological developments being made at such a pace that the necessary coordination is sometimes after the fact. The Federal Communications Commission has been made aware of this matter and, we would hope, sometime in the future will set forth technical standards to which all parties must abide. In the meantime, we have been in touch both with the cable scrambler equipment company as well as representatives of the TV receiver firm. They both decline, pending Federal resolution, to enter into the issue further at this time. Therefore, without a large scale detailed engineering study and the possibility of petition to the FCC, it appears, that within reasonable cost strictures, we will be unable to be of any assistance to you in this problem. While we regret our inability to solve this situation for you, we sincerely hope you will keep us in mind should another opportunity to u,e our services arise. Siincere1 L Vic- President /Director 5.210 oF QoRTAN, ±.rt; CITY OF PORT ANGELES G limmilIMME, 140 WEST FRONT ST., P.O. BOX 1150 PORT ANGELES, WASHINGTON 98362 ~,STgATIVE StQ% PHONE (206) 457 -0411 Vern Kiele, Manager Port Angeles Telecable, Inc. 725 East First Street Port Angeles, WA 98362 Dear Vern: I have been meaning to write to follow up our recent meeting. We did agree that the City would inform Port Angeles Telecable of the two other complaints received about premium channel reception which were similar to Mr. Shue's. We received inquiries from Lawrence Lilijdahl, 415 East Vashon (Mitsubishi television set), and Frank N. Sinder, 1306 East Fourth Street (Zenith television set). I believe that your company indicated that both of these customers would be visited in order to determine whether or not their signal problems were serviceable. We also agreed to mutually notify the Federal Communications Commission of the "technology lag" which is apparently causing this difficulty for several Telecable customers. I believe you indicated that you could provide the name and address of an individual or department within FCC to which our inquiry may be directed. I would appreciate hearing from you. Thank you. Very truly yours, t E. Orton, Director F nce Admin. Services REO:LF cc: Peter Shue Lawrence Lilijdahl Frank N. Sinder May 2, 1985 5,210 MEMORANDUM May 21, 1985 TO: Dave Flodstrom, City Manager FROM: Rob Orton, Director, Finance A\A&1 inistrative Services RE: Telecable Complaints Dave: REO:LF Attachment cc: Bud Rudolph Craig Knutson For your information, I forwarded the other complaints we received about signal quality to Port Angeles Telecable. Their reply is attached for your review. As the letter did not indicate whether or not Telecable made a physical inspection of the residences of the two other individuals who complained (i.e., Lilijdahl and Sinder), I inquired of Leroy Sproat who indicated to me that both of the individuals' television sets were personally inspected. Neither have premium services similar to Mr. Shue, and in fact, neither had a complaint that even remotely approximated Mr. Shue's. Telecable has also provided the name of an FCC engineer to which I will direct an inquiry about FCC resolution of this problem. I thought I would pass this along for your edification. 5.240 x ,125 East First Street Phone 452 -8466 Robert E. Orton Director Finance Admin. Ser. 140 W. Front St. Port Angeles, WA 98362 Dear Rob, Peter Shue: Gary P. Soulsdy Engineer in Charge 3256 Federal Bldg. 915 Second Av. Seattle, WA 98714 figiff RAGELES Rif May 13, 1985 Here is our answer to the three premium channel complaints you received and forward to us. The manufacture of Mr. Shue's television set agreed to repair his set under warrenty at no cost to Mr. Shue. Therefore, admitting his set has a problem. Lawrence Lilijdahl: Mr. Lilijdahl does not have a premium service Frank Sinder: Mr. Sinder does not have a premium service. RE: Premium Channel Reception Complaints. Please feel free to forward any other complaints to us, as we strive to give the best service posible. If you still feel we have a premium channel reception problem, the person you would contact at the F.C.C. would be: Sincerely, 7 LeRoy Sproat Engineer Port Angeles Washington 98362 5.216 gr CITY OF PORT ANGELES o A 1� 140 WEST FRONT ST., P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 X 141 /14 S Q` PHONE (206) 457 -0411 1V E Peter Shue 2321 West 18th Street Port Angeles, WA 98362 Dear Peter: May 2, 1985 Sorry I have taken so long to follow up our telephone conversation some weeks ago. As I indicated to you, our negotiations with Port Angeles Telecable are not in and of themselves going to produce a resolution to this matter. I believe that they have demonstrated that they are using state- of -the- art equipment in an environment approved by the Federal Communications Commission (FCC). Part of the problem does seem to reside with the television receiver manufacturers. At various points in time during our work on this complaint, Magnavox has seemed to at least imply some responsibility. I believe they did indicate to you that in your particular instance, they would make an adjustment to your set, at no cost to you, which would resolve the problem. They also seemed to imply some responsibility during discussions with the communications consultant which we wanted to hire in an attempt to help us resolve this difficulty. The company of which I spoke is called 3 -H Cable Communications Consultants in Seattle. After reviewing the situation, they sent me a letter on March 15th (copy enclosed) which essentially verifies our technical "impasse This company did indicate that the FCC is aware of the matter and will likely set technical standards to eliminate the signal problems. Both the City and Port Angeles Telecable have agreed to jointly notify an appropriate individual in the FCC of the predicament as it affects our area. We will also request to be kept abreast of developments or hearings which the FCC may convene regarding new rules and regulations in the matter. 5. 210 Regrettably, I am unable to offer any other remedy or counsel on this matter. Whether we are able to do so in the future, also looks rather dim. The 1984 Cable Communications Policy Act, enacted last year, virtually removes 90% of the regulatory powers which municipalities had as franchising authorities over this industry. In addition to deregulating rate control, the company is essentially guaranteed automatic franchise renewal. The burden of proof is on the City for justification as to reasons why the franchise could not or should not be renewed. As an enforcement agency, the City no longer has any leverage with which to deal with the company on technical compliance. Sorry we couldn't help you further, but we will hope together that the FCC moves to resolve this matter in the not too distant future. Thank you. Very truly yours, Rcbert E. Orton, Director Finance Admin. Services. REO LF 1 0 AK pORTgN a ArowNbelmm- wammill..4■?miliVit7 V RA TIVE Peter Shue 505 West 12th Street Port Angeles, WA 98362 Dear Mr. Shue and Mr. Kiele: Very truly yours, /2 L Rqbert E. Orton, Director Filnance Admin. Services REO:LF cc: Dave Flodstrom City Council Members Bud Rudolph Craig Knutson CITY OF PORT ANGELES February 20, 1985 Vern Kiele, Manager Port Angeles Telecable 725 East First Street Port Angeles, WA 98362 5,216 140 WEST FRONT ST., P.O. BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 As you know, I have been reviewing the complaint advanced by Mr. Shue with both parties for some time now. I believe it fair to say that the situation is at impasse. On the one hand, Mr. Shue is insisting that the Telecable scramble signal is the cause of his inferior video quality, while Port Angeles Telecable execu- tives insist that their scrambling technology is "state -of- the art and the problem that Mr. Shue's television (Magnavox) is "under- scanning consequently producing an off center picture. At this point, the City is essentially in the middle of a dispute between two points of fact, without engineering or technical expertise on staff to determine an adequate solution, let alone fixing responsibility. Consequently, I have recommended to the City Manager that the City consult with an independent third party for engineering and technical expertise to evaluate the situation and provide a written report to the City. It will be my recommendation to proceed with such an evaluation unless the cost of consultation services becomes out of proportion to the magnitude of the problem. Since the media notoriety regarding Mr. Shue's problem, the City has re- ceived two other complaints of a similar nature involving Mitsubishi and Zenith manufactured televisions. I shall keep you both posted as we progress further into a resolution of this matter. Ittimespiesata pORT q F� Lon Hurd, Vice Pres. Director 3 -11 Cable Communications Consultants 4517 California Avenue SW, Suite B Seattle, WA 98116 Dear Mr. Hurd: CITY OF PORT ANGELES February 20, 1985 5.2co 140 WEST FRONT ST P.O BOX 1150 PORT ANGELES, WASHINGTON 98362 PHONE (206) 457 -0411 This will follow our conversation of February 20th regarding settlement of a dispute between our local telecable company, Port Angeles Telecable, Inc., and a subscriber, one Mr. Peter Schue. As I indicated, the City of Port Angeles is the franchising authority for the Port Angeles Telecable operation and has received a complaint from one of its customers regarding poor quality television reception on paid premium channels. The customer is citing the City's franchise ordinance as grounds for the City's in resolving this issue; our City Attorney agrees that we should attempt to adjudicate the matter. I am enclosing the following correspondence: 1. Letter to the City of Port Angeles from the customer, Peter Schue, dated January 16, 1985, invoking the appropriate section of City Ordinance 1799, and outlining the basis of his complaint. 2. Letter from Hamlin, U.S.A., Inc., to Leroy Sprout and Vern Kiele, executives of Port Angeles Telecable, dated January 18, 1985, discussing the problem from their perspective. 3. Letter to Mr. Schue dated January 21, 1985, from NAP Consumer Elec- tronics Corporation discussing his specific problem and possible remedies to Mr. Schue's Mangavox set. 4. A copy of a recently printed article in the Port Angeles Daily News pertinent to Mr. Schue's difficulties. As I indicated to you, this has been the only dispute of technical system competence which the City has been involved in since the Telecable fran- chise began. As it normally a smooth operation, we do not maintain technical or engineering staff necessary to deliver an opinion. I would be interested in obtaining an estimate from your firm for technical consultation in order to examine and suggest a possible feasible remedy for this difficulty. I would hope for a written examination and policy recom- mendation from your firm. If I may provide you with additional information to assist you in preparing an estimate, please don't hesitate to contact me. Thank you. Very truly yours, .1/ 1 Robert E rt Director Finance Admin. Services REO LF MEMORANDUM February 20, 1985 TO: Dave Flodstrom, City Manager FROM: Rob Orton, Director, Finance A .ninistrative Services RE: Complaint Against Port Angeles Telecable by Peter Schue Dave: As you know, I have spent a considerable amount of time with this situation and have discussed the problems at length with Mr. Schue and with Leroy Sproat and Vern Kiele of the Port Angeles Telecable Co. Craig feels that it is appropriate that we attempt to adjudicate this problem by virtue of our franchise agreement. At this point, we are in the middle of a dispute of fact. Mr. Schue contends that the Port Angeles Telecable scramble signal is causing problems on his TV set, and others; while the Telecable Company insists that their scrambling methodology is state -of- the -art and that Mr. Schue's problem is due to poor quality control on the manufacture of his television set causing it to "underscan" and produce an off center picture. As we do not have the technical expertise to make an engineering decision regarding this problem, I recommended to you some time ago that we contact an independent third party to evaluate the situation and make a recommendation to the City. I have contacted the firm of 3 -H Cable Communication Consultants of Seattle. They are presently consultants to eleven Washington cities and other smaller cities on an as- needed basis. I have provided this company with information from both sides of the issue and asked them to prepare an estimate to do an engineering evaluation of the problem and make a recommendation to me. I believe that this charge would be a legitimate expense against the franchise fee revenues. I shall keep you posted as we progress. I have informed both Port Angeles Telecable and Mr. Schue under separate cover of my progress in this matter. REO:LF cc: Craig Knutson Ron Saville 5.210 r' Ste f photograph by-Rick Roes Pete Shue points to band of light that intrudes: on picture: High -tech TV own wants city to unscramble signal By SHERIDAN FAHNESTOCK of The Daily News Pete Shue bought a new "top -of- the line" Magnavox television set Oct. 30. He likes everything about it except the flickering yellow band down the left side of the screen while he's watching pay -TV channels. That isn't what he paid $1,100 for. Shue said he knows of 11 other "state-of- the -art" sets,' made by Quasar, Sony and Sylvania as well as Magnavox, with the same problem. The trouble, he said, is that the computer controls in the sophisticated sets pick up a scrambler signal that Port Angeles Telecable sends to prevent non- subscribers from watching the programs. Telecable provides equipment to subscribers which is intended to screen out that signal, but it apparently isn't -completely effective on Shue's TV set. Shue said the cable company told him the problem was in the set, but that the Magnavox service center found the yellow band was coming from the cable signal. Shue has appealed to the city, contending that the ci- ty ordinance giving Port Angeles Telecable its fran- chise requires that the company, "shall provide its subscribers within the city with good quality television reception, station selection and other system services." City Manager Dave Flodstrom said Wednesday that while federal deregulation has lessened the city's power to regulate a cable -TV business, "there is, I think, a responsibility by the city and Telecable to meet Mr. Shue's needs." ",The service Port Angeles Telecable provides is outstanding. We' to never been confronted with.this kind' of a problem before," Flodstrom said. "It will re= quire some kind of a technical'tnodification to the' signal he, is receiving or to his television set." Flodstrom noted that Port Angeles Telecable uses a visual scrambler rather than the more popular audio scrambler to reduce "signal thefts." The visual scrambler Is more effective than the audio one in preventing, non subscribers from enjoying pros grams they don't pay for, Shue said. Vern Kiele, Telecable manager, said he would be glad to discuss the matter with Shue, but that otherwise he would not comment. Mete Said that,Shue, in fact, had been in to see him,. but that "he. wouldn't listen. Asked whether the problem involved the computer controls in Shin's set, Kiele said, "you're getting warm." He would not elaborate. Shue said Magnavox is "willing to go in and attempt to hide that cable signal." They would do it by removing the' computer chip which controls the horizontal width and replace it with a control :requiring manual adjustment, he said. Shue said the cable company told him his set was overscanning.' But Shue doesn't want to lose part of his picture to get rid of the scrambler signal. In a letter to the city, Shue suggested Telecable use an audio signal scrambler, so he and other buyers of "state -of- the -art" equipment can get full' use from their TV sets. foNvI 01. u ill lipCi L. 1eVy li np flat -rate monthly charge wo ed to public utility bills. The board agreed the flat more equitable than a pr assessment because each would be charged the same In a property tax levy, 1 would be taxed 25 cents pe dollars of assessed valua would mean owners of ex more than one lot would pay persons with only one lot or a ed -at a lower value. The commissioners voted letter to the Clallam County P ty District seeking informati many households are within t which includes Dry Creek, I mond and Gales Addition. Th stoners also must determine emergency medical service: will cost and how much each would be billed to provide sue] The district's citizen advi, mittee recently conducted door survey asking residen want emergency medical Committee members later n the cothmission that the sury overwhelmingly indicated si such a program. Currently, Fire District 2 i local district which pro' emergency medical services. The commissioners conside flat -rate fee and a property t ment but said the flat -rate cha be more equitable and proba receive greater voter support The district has asked adjc districts and Olympic Ambu cost estimates of providing Life Support (paramedic) se part of the program. If voter; the measure, Fire District 2 a begin providing Basic Life (emergency medical technic first responders) services wit volunteers. Although the district has re formal cost figures yet, the stoners said an emergency me vices program probably we $45,000 to $55,000 per year. The city of Port Angeles chat monthly fee for its Medic 1 and residents are billed throug utilities department. "In the city limits, that syste well," said Steve Ilk, a Fire 1 resident and member of the cil vtsory committee. "You cross limits and you have a system t quitable. If you're going to ask commit themselves to 25 certs sand for six years, then th (district) is going to ask them t themselves for an additional and God knows who else." Tax assessment funds assessed in 1985 for collector but a flat -rate charge could tit this year, said board memi Ruud. 5. 2(0 Y Peter Shue 505 W. 12th Port Angeles, WA 98362 (home) 452 -5879 January 16, 1985 City of Port Angeles P.O. Box 1150 Port Angeles, WA 98362 Dear Sirs: I am currently experiencing problems with the quality of service I receive from Port Angeles Telecable. Per City ordinance #1799, Section 5, Number 3, it states the "company shall provide its' subscribers within the City with good quality television reception, station selection and other system services Because of the contents of this statement, I would like to explain my problem in hopes of any help you may be able to offer. The scramble signal that Port Angeles Telecable is currently using on their pay T.V. channels,:_is obscuring the video quality on my screen however, channels 2 through 13 work normally. I've contacted Magnavox (the manu facturers of the T.V. I own) and they are willing to attempt to "hide" this signal. After discussing this with Magnavox, it is my understanding that they will remove the "chip" portion of the set that controls the width and replace it with a variable control so the width will have to be manually adjusted. Per a telephone conversation I had with Port Angeles Telecable, they stated if they removed the signal, my T.V. would show a complete video as it does on channels 2 through 13. They also stated the old system they previously used would allow my T.V. to work normally, however, under this system non customers were able to get access to their services beyond Port Angeles Telecables control. I recognize the fact that I am not a profesional in the telecable field, but I'd like to mention one possible idea /solution. Scientific Atlanta Systems (a- telecable company) uses an audio scrambler which has proven to give a quality service to customers. I am currently aware of 12 sets, which are all state of the art, top of the line sets of various manufacturers, in the area who are experiencing the same problem as I am. I realize Port Angeles Telecable must have some means of monitoring the use of their services, but I feel that taking a very expen sive T.V. that is in quality working order and disabling a portion of it in order to fit Port Angeles Telecable, is not a reasonable solution. Any help you can give me converning this matter would be';greatly appreciated. Sincerely, Peter Shue 5, 210 600 EAST FIRST STREET 5 \9 CUSTOMER'S •RDER NO ►1. IL o NAME ADDRESS 00119 _0 0 GIBSON G.E. ZENITH FISHER AMANA Kitchen Aid JENN -AIR MAGNAVOX DESCRIPTION DATE ALL CLAIMS AND RETURNED GOODS MUST BE ACCOMPANIED BY THIS BILL RECEIVED BY A 95 TAX PHONE 457 -6202 PORT ANGELES, WASH. 98362 CHARGE' d" ON ACCT NOSE RETD. PAID 0 I PRICE .I AMOUNT I TOTAL 11 R(•11 PRINTED BY THE STANDARD REGISTER COMPANY, U S A. CONSUMER ELEC I ROWS CORP. 1622 South Anderson Avenue Compton. CA 90220. Tel (213) 637-2543 PRODUCT SERVICES January 21, 1985 Mr. Pete Shue 505 W 12th Port. Angeles, WA J 2 p. 4 oj1 Dear Mr..Shue: In reply to your inquiry regarding your problem of reception on one particular cable channel, we are not aware of any problems in our design that would cause a problem as you describe. Also, you tell me that all other channels are received properly which would tell me that there is some problem involving the transmission or decoding process. In our telephone conversation you mentioned that some other brands are able to make the interference line disappear by centering the picture. Newer design sets don't always use a centering control, and that is the case with the Magnavox model you have. We would be willing to attempt a modification on your set to correct the reception problem, but since we have not had this problem elsewhere, we don't have a preset circuit modification. I personally have a chassis similar to yours on field test connected to a cable system with 53 cable channels one of which is a premium channel (H.B.O.) and I have never seen any problem such as you have described to me. Sincerely, Gene Hazlet Field Engineer GH /dmo A NORTH AMERICAN PHILIPS COMPANY 5.210 Leroy Sproat Vern Kiele Port Angeles Telecable 725 East lst. Port Angeles, WA 98362 Dear Leroy: January 18, 1985 The most secure way to protect a TV premium channel is by means of scrambling. The system you are using has been, without a doubt, the most popular in the cable industry is known as sync- suppression. This method of scramble attenuates the horizontal sync pulse to a point that a normal television receiver cannot rece- ive the proper syncronizing information to produce a stable, watchable picture, therefore, denying access to the non paying subscriber. The paying subscriber is given a descrambler unit which revereses the procedure and gives them access to the premium channel. This technique of scrambling occasionally causes a paying subscriber's TV set to develope a white verticle bar on the left or right side of the viewing screen. During the process of attenuating the horizontal sync, the horizontal scanning be- comes slightly narrower. Szio If the subscriber's set is underscanning due to a misajusted horizontal size, horiz- ontal centering control, or low voltage, the white verticle line will appear. Gener- ally, this problem can be corrected by a qualified television service store at a min- imal cost to the subscriber. Our experience has shown that this problem is minisc- ule throughout the country in operating cable systems. I feel that when the problem arises with a subscriber and it is explained as outlined in this letter, the majority will be understanding. I appreciate your confidence in Hamlin Products, and if I can be of further assistance, please feel free to contact me. RP at 13610 First Ave So Best regards, G- CT%'.--/ Ray Pastie Executive Vice President Seattle, Washington 98168 Phone (206) 246 -9332 TWX 910 444 2063 .Just disable the color guns of the picture tube so that only the red, blue or green guns are operating alone (Connect a 100K resistor from the color grid to ground). Advance the receiver brightness Control so that the area between the bars is dimly lighted. With proper AFPC adjustment, and with correct tint control setting, the appropriate "null" bars will have the same brightness level as the background, and almost disappear, as noted below: Gun Operating Red Blue Green Bars That Have Same Light as Background Bar #6 Bars #3 and #9 Bar #7 Overscan Adjustment The crosshatch pattern (H V) generated by the WR 508B consists of a fixed number of vertical and horizontal bars Accordingly, the crosshatch function provides a convenient method for adjusting the receiver overscan to insure that the proper portion of the raster Is extended beyond the edge of the receiver mask Service notes for color receivers usually specify a recommended amount of overscan at the left and right, and a different amount of overscan at the top and bottom. The recommended overscan varies in different receiver models. Because the WR 508B provides a fixed number of vertical and horizontal bars, it is easy to judge the amount of overscan. The appearance of the crosshatch pattern with correct overscan in a representative model color receiver is shown in Figure 6. Figure 6. Crosshatch pattern showing fixed number of horizontal and vertical lines There are 11 horizontal and 12 vertical lines generated. Of these, approximately 9 horizontal and vertical lines will be seen with normal overscan adjustment. Horizontal and Vertical Linearity Adjustment 1'. Set the PATTERN switch to "CROSSHATCH" and the FUNCTION switch to "PATTERN Adjust receiver fine tuning control if necessary. 2. The crosshatch pattern permits accurate checks of the horizontal and vertical linearity in both black- and -white and color receivers. Adjust the horizontal adjustment controls of the receiver so that the vertical bars of the crosshatch pattern are equally spaced. Adjust the vertical controls so that the horizontal bars of the crosshatch pattern are equally spaced. Purity Adjustment Color purity adjustments can be made using the blank raster function of the WR -508B. The purpose of purity adjustment is to obtain a high- quality or "pure" red, blue, and green field. The red field for example, should be a uniform red, with no contamination from blue or green light. When all three primary color fields are properly adjusted, a pure, uniform white raster will be obtained. Convergence Adjustment Misconvergence of a color receiver can be noted by observing the crosshatch or dot pattern on the screen. If the set is properly converged, the lines or dots will be clear and sharp, with no color fringing There are two basic steps in the convergence procedure— static convergence and dynamic convergence. in static convergence, the permanent magnets on the neck of the picture tube are adjusted to obtain convergence of the red, blue and green beams at the center of the screen only. In the dynamic convergence procedure, the current waveforms passing through the convergence electromagnets are adjusted for proper convergence at the edge areas of the receiver screen. The receiver manufacturer's recommended procedure for convergence adjustment must be followed. The dot, or the crosshatch patterns can be used in the convergence procedure. Many technicians prefer to use the dot pattern for static conver9ence, and the crosshatch pattern for the various adjustments in the vertical dynamic and horizontal dynamic convergence procedure. Before adjusting convergence, it is necessary to check other adjustments, especially purity, as specified in the service data for the receiver. These adjustments include horizontal tuning, horizontal drive, high voltage regulation, height, width, linearity, focusing, etc. 5.5 ENCODER CHECKOUT (CON'T) The term "scrambler window" denotes the time during which the Encoder attenuates the video signal. The window must be set so that it is in proper time relation to the horizontal sync. The system is designed to operate with the scrambler window set symmetrically on either side of the horizontal blanking pedestal, such that the window boundaries lie equally in the overscan regions of the picture. Adjustment objective is to center the Encoder's scrambler window. The control is a multi -turn potentiometer located at the right side of the Encoder control panel, labeled "SCM DLY Adjust it to center the window (white bands) with respect to the horizontal blanking pedestal as shown in Figure 5 -5, "ENCODER CENTERED Do not hesitate to gently turn the control several revolutions in either direction. Counterclockwise rotation (left turning) moves the window to the left, while clockwise rotation moves the window to the right. Set SCM DLY to achieve symmetry (equal widths of DELAY ADJUSTMENT EFFECTS ENCODER CHECKOUT AND ADJUST Figure 5 -5. Scrambler /Descrambler Window Adjustment Effects 1 DECODEF NORMAL t MEMORANDUM February 16, 1984 TO: Dave Flodstrom, Mayor Duncan and Councilmembers FROM: Rob Orton, Director, Finance Administrative Serc RE: Rate Increase Request by Port Angeles Telecable 5,210 ISSUE: Port Angeles Telecable, Inc., has requested an increase in its basic subscription rates to $8.50 a month from the current $6.95 a month. The company is also requesting an increase in the extra outlet rate to $1.50 a month from $1 per month. BACKGROUND: Port Angeles Telecable, Inc., operates under a franchise granted by the City of Port Angeles which provides for the regulation of basic subscriber rates. The agreement provides that the subscriber rates are considered reasonable compensation for the company for its services. "Reasonable compensation" may be defined at the discretion of the City Council after a study and consideration of the national figures for similar services as affected by local conditions." Our agreement enables the Council to change the rate structure if changes are necessary in the best interests of the City and company subscribers, and are fair and reasonable compensation to the company for services being rendered. The City may only regulate basic subscriber rates. Rates for tiered ser- vices, such as the Home Box Office channels and the Sports Network, are exempt from regulation by the Federal government. The company was last granted an increase in 1981 at which time the basic rate increased to $6.95 from $5.50. This was the first rate increase the company requested in ten years. DEREGULATION: City staff had forecast that the issue of deregulation would be resolved in November of 1983. House Resolution 4103 proposes deregula- tion but because of prolonged debate over the issue, Representative Dingle has asked the telecable industry and opposing cities to sit down and negotiate a settlement. Our sources indicate that Dingle is interested in passing a compromise bill this legislative session. ANALYSIS: The analysis concentrates on three areas: One, an examination of national basic services rates; two, an analysis of local rates for simi- lar services; and three, a determination of a reasonable rate of return for the company. An industry publication (Attachment No. 3), indicates the national average rate for basic subscription services to be $8.66 (June, 1983). A survey by Paul Kagan Associates dated October, 1983 (Attachment No. 11), indicates the average basic rate is $8.46 across the United States. 6 The Washington State Cable Association has provided information on fifty four Washington localities which show an average subscriber rate of $9.65 per month current to June, 1983. A separate industry report pegs the Washington average rate at $8.98 for June, 1983. Washington pay television rates are typically higher than the average for the United States and have been for some years. Staff analysis in years past has concentrated on selecting a rate of return for telecable operations and then determining if that target is met through increased revenues by the requested rate increase. Because the City has a regulatory function, we have looked to the Washington Utilities Transpor- tation Commission (WUTC) for benchmarks in determining an allowable rate of return. Presently, the WUTC allows 11.44% return on investment for the telephone company. While displaying characteristics of a monopoly business, the Telecable Company cannot be favorably compared to a regulated electric utility or perhaps even the phone company. Competitive alternatives for television reception exist in Clallam County. Consequently, the higher degree of risk for telecable in a competitive environment suggests that the rate of return should be higher than a regulated, monopolistic utility. A thorough discussion of the rate of return methodology and calculation assuming implementation of the requested rate increase, are contained in Attachment No. 1. The rate of return for the company in 1983 was 31.5 Oversimply, this is calculated by dividing net income (profit), into the total net investment in physical plant. Under the proposed rate schedule, the projected rate of return would be 29.8 In addition to higher risk, it should be pointed out that the rate of return on investment appears higher for Telecable because plant assets have been written down on an accelerated depreciation basis. This was done for maximum tax advantage but it tends to inflate the return percentage. If the company replaces or adds fixed assets in some proportion to its depreciation schedule, the rate of return for the company will continue to decline. Operating expenses and income as well as assets related to Showtime and Home Box Office have been removed from the calculations. In addition to the staff analysis, ten other attachments are appended to this report in support of its conclusions. CONCLUSIONS: The franchise agreement requires the City Council to review Telecable's rate increase requests by evaluating what is fair and reason- able compensation to the company for services after a study and considera- tion of national figures for similar services as may be affected by local conditions, and as to whether or not changes in the rate structure are in the best interests of the City and the company's subscribers. Our conclu- sions follow: t 1. The proposed rate of $8.50 compares favorably to the national average subscription rate of $8.46. 2. The proposed rate of $8.50 per month is competitive with the Washing- ton State average rate of $8.98 per month, and the survey of 54 Washington localities with pay television services with an average rate of $9.65 per month. 3. The proposed outlet charge of $1.50 per month appears below the rate for other Washington communities. No national statistics are avail- able on outlet charges. 4. Revenues from the proposed rate increase are forecast to produce a rate of return of 29.8 This figure is lower than the return in 1982 and in 1983. REO:LF Attachments cc: Duane Wolfe Bud Rudolph Merri Lannoye Port Angeles Telecable 725 East First Street Phone 452 -8466 Dear Councilmembers: PORT Ar7illie', �9A'GELES 2 /PC. February 7, 1984 Pursuant to Ordinance 2269, Port Angeles Telecable, Inc., was granted a non exclusive franchise to operate and maintain a cable television system within the City of Port Angeles, The rates charged for this service are subject to approval by the city council, pursuant to $14(2) of that ordinance. "The City and Company agree that the rates provided in subsection(1) of this section are reasonable compensation to Company for its services and that the term "reasonable compensation" may be hereafter defined at the discretion of the City after a study and consideration of the national figures for similar services as affected by local conditions." Implicit in this provision is that Port Angeles Telecable may apply to alter the "reasonable compensation" established by $14(1). Port Angeles Telecable hereby requests an increase in the basic service rate from $6.95 to $8.50 per month, and in the extra outlet fee from $1.00 to $1.50 per month. In support of this increase, we enclose a chart showing comparable basic cable rates for communities in the Northwest. This chart was obtained from the Northwest TV Cable Association of which Port Angeles Telecable, Inc. is an active member. The average of these rates, including Port Angeles, is $9.65 per month. The Port Angeles Telecable rate is 28% lower than this figure. Also enclosed is a study from Paul Kagan Associates, Inc., which states that the average basic service rate nationwide is $8.58 per month. Finally, we offer a third information source, a report from Cable Information Service of Denver, Colorado, which shows a national average basic cable rate of $8.66 per month, and a Washington State average of $8.98 per month. Please note that under $5(6) of the franchise, Port Angeles Telecable is to .make available to its subscribers all signals, stations and system services available, within limit of the system's technical facilities." While Port Angeles Telecable fully complies with this provision of the ordinance, the present "system technical facilities" of Port Angeles Telecable are not the most modern services and facilities available. The capital investment necessary for the improvements to make the system state -of- the -art is suppressed by the low basic service fees Port Angeles Telecable is able to charge. We now have eighteen channels available for use, but could expand to a thirty channel capability. Should the expansion be financially possible, we would go to the greater capability, and the number of channels actually offered would gradually increase as demand for additional channels became apparent. 6.ZVd Port Angeles Washington 98362 For these reasons, we believe that Port Angeles Telecable is entitled to at least the average national TV cable service fee, both under the terms of the ordinance granting the franchise, and to enable Port Angeles Telecable to provide the most modern service to its customers. We therefore request the increase to $8.50 per month for basic service and to $1.50 per month per extra outlet, discussed above. It is our understanding that this request will be able to be considered by the Council at its February 21, 1984, meeting, and we hope this date can be made available. By a letter addressed to our customers of this date, we have informed them of our request for a rate increase, and also indicated that the matter will be before the City Council on February 21, 1984. As additional information, we enclose for your review a "Service and Rate History of Port Angeles Telecable" and a "Description to Operating Statement Upon Rate Increase each of which provide further information regarding our rate increase. Port Angeles Telecable is ready and willing to provide any additional information which the City Council or its staff might wish for consideration of our request, and to answer any questions that the Council might have.. Thank you for your attention and consideration of our request. Very truly yours,' Vern Kiele General Manager 725 East First Street Port Angeles Phone 452 -8466 Washington 98362 PDEI o 0 ##5ELES o /H!. Carelton Rudolph Accounting Manager City of Port Angeles. 140 W. Front St. Port Angeles, WA 98362 Dear Mr. Rudolph, VCK:jmj January 25, 1984 RE: Information on Rate Increase As you requested, here is all information as of December 31, 1983: 1. Last subscriber rate increase February 17, 1981 .45 2. Current subscriber rate $6.95 3. Current additional outlet rate $1.00 4. Number of cable subscribers 6,246 5. Number of additional outlets 3,882 6. Proposed subscriber rate $8.50 7. Proposed additional outlet rate $1.50 8. Penetration within city limits of Port Angeles- 80 -85% homes passed Sincerely, Vernon C. Kiele, Manager DESCRIPTION OF CHANGES TO OPERATING STATEMENT UPON RATE INCREAS Port Angeles,Telecable intends, if its rate increase is granted, to incur certain expenses. While the incurrence of these expenses is not a primary justification for the rate increase, reference to them in any post increase operating expense statement is appropriate. Among the costs to be incurred will be the following: 1. Approximately $5,000 in costs associated with receivin and altering the basic service to add an additional channel. 2. Replacement of converters as a result of adding the additional channel (approximately 3800 converters $75 each, for a total of $285,000). These converters will be phased in over an approximately three year period, with the costs associa• therewith paid for by revenues. 3. Salaries, equipment, etc., for two new employees, estimated at approximately $30,000 per year. 4. Additional "head end" equipment to improve reception, $16,000. 0 2 2 PORT ANGELES TELECABLE, INC. A Washington Corporation Financial Statements July 31, 1983 5.210 CIL9 tr November 22, 1983 Port Angeles Telecable, Inc. 726 East First Street Port Angeles, WA 98362 E•1 Gentlemen: We have compiled the accompanying balance sheet of Port Angelea Telecable, Inc. as of July 31, 1983 and the related statements of income, retained earnings, and changes in financial position for the year then ended in accordance with -1 standards established by the American Institute of Certified Public Accountants. A compilation is limited to presenting in the form of financial statements information that is the representation of management. We have not audited or reviewed the accompanying financial statements and accordingly do not G express an opinion or any other form of assurance on them. We are not independent with respect to Port Angeles Telecable, Inc. Very truly yours, Certified Public Accountants AIKEN SANDERS CERTIFIED PUBLIC ACCOUNTANTS 11O8 EAST FIRST STREET PORT ANGELES, WASHINGTON 98362 Z PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division INDEX TO FINANCIAL STATEMENTS Page 1. Balance Sheet as of July 31, 1983 and 1982 Page 2. Statement of Income for the years ended July 31, 1983 and 1982. Page 3. Statement of Changes in Financial Position for the year ended July 31, 1983. Page 4. Schedule of Stockholders' Equity. Page 5. Schedule of Operating Expenses. Page 6. Schedule of Showtime Income. Schedule of Satellite Service Income. Schedule of Home Box Office Income. Page 7. Notes to Financial Statements. 1L s G Current Assets Cash on hand and in bank Accounts receivable Inventory estimate Prepaid expenses Operating Plant Equipment Land Building Cable System Equipment Showtime Equipment Home Box Office Equipment Sattelite Equipment Shop tools equipment Office furniture equipment Apartment furniture Automotive equipment Less: Accumulated Depreciation Other Assets Cash Value Officers Life Insurance Inter division accounts Note 3 Current Liabilities Accounts payable Accrued and withheld taxes Long term debt due within one year Deferred income subscribers Customers deposits Long Term Debt Mortgage payable First Federal Savings Less: Long term debt due within one year Stockholders' Equity Schedule Page-4 See Accountant's Compilation Report. PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division As of July 31, 1983 and 1982 ASSETS (1) LIABILITIES AND STOCKHOLDERS' EQUITY July 31, 1983 1982 39,469 22,375 1,160 3,551 66,555 20,119 67,997 987,891 70,938 21,319 77,644 8,066 20,125 930 81,393 1,356,422 977,597 378,825 -o- -o- -o- 23,320 21,669 1,160 3,470 49,619 20,119 67,997 902,349 67,523 -0- 37,959 7,509 23,666 930 70,715 1,198,767 882,264 316,503 39,363 35,742 67,244 87,068 106,607 122,810 551,987 488,932 61,306 51,015 13,675 12,124 -0- 484 11,680 6,944 24,040 13,509 110,701 84,076 484 484 -0- 441,286 404,856 551,987 488,932 Source of Funds: Net Income Add income not affecting working capital Depreciation Proceeds from sale of truck book value gain or loss included in operations Application of Funds: Purchase of Plant Equipment Building improvements Cable system equipment Automotive equipment Other furniture equipment Showtime equipment Home Box Office equipment Sattelite Service equipment Reduction in long term debt Increase Cash Value Officers Life Insurance Distribution to stockholders dividend Increase in Inter Division accounts Increase (Decrease) in Working Capital PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division Statement of Changes in Financial Position For the years ended July 31, 1983 and 1982 Changes in Working Capital Increase (decrease) in current assets Cash Accounts receivable trade Prepaid expenses Increase (decrease).in current liabilities Accounts payable trade Accrued expenses and withheld taxes !Customer deposits Deferred income Long term debt due within one year Increase (Decrease) in Working Capital See Accountant's Compilation Report. (3) July 31, 1983 1982 162,455 169,560 100,994 88,120 263,399 257,680 -0- 2,263 263,449 259,943 -0- 7,287 85,542 50,891 10,678 11,941 2,678 8,550 3,415 3,609 21,319 -0- 39,685 7,246 -0- 137 3,621 3,455 126,025 138,468 19,824) 38,368 273,139 269,952 9,690) 10,009) 16,149 14,208) 706 5,000 80 39) 16,935 9,247) 10,291 5,481 1,551 817 10,531 2,869 4,736 2,889) 484) 5,516) 26,625 762 9,690) 10,009) Distribution to stockholders Dividends Total Stockholder's Equity r C 2 4 2 Y Capital Invested Retained Earnings Beginning of period Net income for the period PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division Schedule of Stockholder's Equity For the years ended July 31, 1983 and 1982 See Accountant's Compilation Report. (4) July 31, 1983 1982 37,120 37,120 367,736 162,455 530.191 126,025 404,166 441,286 336,644 169,560 506,204 138,468 367,736 404,856 z 0 u 4 V O z Officers salaries Salaries and wages Parts, materials supplies Rent Light power Truck expenses Pole contact rental Permits, fees licenses Repairs maintenance Payroll taxes Business taxes Property taxes Office expense Legal accounting Dues subscriptions Insurance Depreciation Director fees expenses Advertising promotion Travel allowance Employee medical insurance Copyright Other expenses Data Cable expense Less: Reimburses expenses PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division Schedule of Operating Expenses For the years ended July 31, 1983 and 1982 See Accountant's Compilation Report. (5) July 31, 1983 1982 21,353 20,400 214,876 196,122 5,418 4,229 848 3,613 21,524 3,011 25,912 10,017 25,528 29,248 5,298 25,226 12,397 2,000 2,643 77,796 14,419 3,800 1,617 16,289 10,245 40 28,891 562 ,009 84,270 656 2,774 19,325 3,493 24,893 :5,134 22,518 17,239 4,827 24,581 7,962 2,203 7,052 70,773 10,794 2,854 1,575 14,714 7,259 43 22,307 493,727 65,563 477,739 428,164 I V 4 V 7 ea u Subscriber Revenue Expenses Advertising Office supplies Repairs Professional services Franchise Depreciation Installation cost Salaries payroll taxes Subscriber Revenue Expenses Advertising Office supplies Franchise Depreciation Repair Subscriber Revenue Expenses Advertising Office supplies Franchise Depreciation PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division Schedule of Showtime Income For the years ended July 31, 1983 and 1982 See Accountant's Compilation Report. SCHEDULE OF SATELLITE SERVICE INCOME SCHEDULE OF HOME BOX OFFICE INCOME (6) July 31, 1983 1982 212,961 202,159 6,430 -0- 33 210 122 ,603 7,376 3,080 10,198 149,930 63,031 54,504 1983 1982 45,125 36,324 1,574 320 10,015 12,784 76 24,769 20,356 20;175 20,984 1,414 837 9,523 3,038 14,812 6,172 6,727 921 32 210 117,591 9,039 3,480 9,655 147,655 204 61 7,170 8,608 106 16,149 Note 1. Depreciation has been provided as follows: Clas Buildings Cable System Equipment Shop tools Equipment Office Furniture Equip. Automotive equipment Showtime, Sattellite Service Home Box Office Note 2. PORT ANGELES TELECABLE, INC. A Washington Corporation Port Angeles Division Notes to Financial Statements July 31, 1983 and 1982 Accumulated Depreciation Method /Life 7 -31 -83 7 -31 -82 Straight Line /10 -20 years 28,664 30,149 Double Declining Balance/ 6 -8 years /ACRS 5 years 794,455 735,761 Double Declining Balance/ 10 years /ACRS 5 years 6,762 6,469 Double Declining Balance/ 10 years /ACRS 5 years 13,730 11,790 Double Declining Balance/ 5 years /ACRS 5 years 54,579 41,886 Double Declining Balance/ 7 years /ACRS 5 years 79,407 56,209 977,597 882,264 o! The corporation has elected not to be subject_to Federal Income Tax under the Internal Revenue Code Section 1371 -1378. Therefore, the stockholders are including in their income their proportionate share of the corporation t taxable income, whether or not distributed. The allowance shown on the 1 income statement is calculated using current corporate rates. The Port Angeles Division paid the income tax allowance of $73,255.00. Note 3. The inter division accounts under Other Assets reflects the balances at July 31st that the cable division has advanced to the other divisions of the company. MEMORANDUM February 14, 1984 Rob Orton, Director, Finance Administrative Services TO: FROM: Bud Rudolph, Accounting Manager RE: -pe Information Review of the Request for a Subscriber Rate Increase for Port Angeles Telecable, Inc. 5.z.to As you know, the Federal Communications Commission has delegated the responsibility for reviewing cable subscriber rates to the local municipality which has granted the franchise. Municipalities have adopted stances ranging from a free market position where the customer determines the validity of rate increases by accepting or rejecting the service at new rates, to a rate -of- return review approach, such as with public utilities. The review process adopted should take into consideration the degree to which the service is a monopoly or has some characteristics of a monopoly business. Information provided by the Cable Television Information Center suggests that the more characteristics of a monopoly business a cable company has, the more a rate -of- return review approach is appropriate. A free market approach does not work when the consumer cannot discontinue service because of a rate increase without suffering personal consequences and no rational alternative exists. Factors which are considered characteristics of a monopoly business include: 1. A mature system with a high rate of penetration. 2. A non competitive situation. 3. Few or no off -air signals are available. The greater the degree of monopoly business characteristic the higher the inelasticity of demand and customers will not quickly terminate service. Total revenues will always increase as the price for cable service increases, subject to an upper limit where the customer will discontinue service. A free market approach could lead to monopolistic profits if subscriber rates were allowed to increase without review. A municipality may make an implied assumption that cable television within its community has more in common with public utilities than it has with normal market sensitive businesses. In considering the risk factors associated with cable systems, as compared with regulated public utilities, the fair and reasonable required rate of return would be expected to be higher for cable than for the utilities. These risks include (a) business risk associated with the sale of service, and (b) the financial risk associated with attracting capital to develop or expand services and rebuild because of obsolescence. As described in the Cable Television Information Center's draft dealing with the subject of regulating cable television subscriber rates, the rate -of- return regulation procedures are intended to: (1) Provide a reasonable rate of return to the cable company taking into consideration the risks; (2) Provide incentives to modernize equipment and upgrade the levels of services provided; (3) While protecting the public interest. Based on information provided by Port Angeles Telecable, Inc., the rates of return on the net operating plant follows. Financial activities related to Showtime, Home Box Office, the Satellite Service, and advertising has been excluded from this review. Subscriber and rate information necessary to make the rate -of- return computations are as follows: 1. Current subscriber rate $6 95 2. Current additional outlet rate $1 00 3. Number of subscribers 6,246 4. Number of additional outlets 3,882 5. Proposed subscriber rate $8 50 6. Proposed additional outlet rate $1.50 7. Penetration rate 80 85% Financial information, based on Port Angeles Telecable, Inc.,'s financial statements for the year ended July 31, 1983, required to make the rate -of- return computation is as follows: Current Operating Costs: $477,739 Less: Depreciation on Showtime, HBO and Satellite Equipment (23,198) Total $454,541 Add: Allowance for Federal Tax 45,418 Current Operating Costs $499,959 Proposed Estimated Operating Costs: Current Operating Costs $499,959 Add: New Salaries Expenses 30,000 Proposed Operating Costs $529,959 Current Net Operating Plant: Operating Plant net of Showtime, HBO and Satellite Equipment Less: Accumulated Depreciation net of Showtime, HBO, and Satellite Equipment Accum. Net Plant Current $1,186,521 (898,190) 288,331 Proposed Net Operating Plant: Current Net Plant Add: Costs for Additional Channel New Converters New "Head end" Equipment The current rate of return on net operating plant could be computed as follows: Rate of Return Subscriber Rate Revenues Operating Costs Net Operating Plant (520,916 69,876) 499,959 288,331 Rate of Return 594,331 188,331 5,000 285,000 16,000 594,331 90,833 31.5% 288,331 The rate of return on net operating plant based on proposed changes could be computed as follows: Subscriber Rate Revenue Operating Costs Net Operating Plant (637,092 69,876) 529,959 177,009 29.8% The operating plant for Port Angeles Telecable, Inc., has been substantially depreciated for financial reporting purposes, resulting in a low net plant figure and a higher computed rate -of- return on investment in net operating plant. James Ainey, Commission Accounting Advisor for the Utilities and Transportation Commission indicated that a recent rate -of- return allowed Pacific Northwest Bell was 11.44 He indicated that PNB's allowed rates vary from one location to another, depending on each local situation. Another factor which could be appropriate to consider is comparisons with other subscriber rates recently charged by other cable companies and regional and national averages. These averages do not take into consideration variations in the amount of services provided for the subscription rate from one company to the next. Recently, the subscriber rates in the northwest have exceeded the national averages. However, Port Angeles Telecable rates have been less than both the national and regional averages. In the latest Cable TV Franchising Report by Paul Kagan Associates, Inc., for December /January, the current average rate requests are $9.39 and the average new rates granted are $9.07. A System Operator Special Report recently issued, using June 30, 1983, figures, indicated a national average of $8.66. According to an October, 1983 survey by Paul Kagan and Associates, the averatge national rate is $8.46. Washington's average rate on this report was $8.98. 1� s&.nationa i resourcecenter. •we constantly' receive' call about the• state. of" ,cable development in a variety,of areas.= rimarily financial; technicalt adrriinistrative,andprogramri irig: lie: following are :5omezof.our ".most requested "statistics, complied here for your convenience, General t •Number -of Systems ti Number of Subscribers Number of Homes Passed Number of tT'v,Hotiseliolds Penetration of Homes, Penetration •o&TV Households Cllannel;Capacity %u �Systenis' :total able Stat annel Capacity Existing Cable Systems Municipal 14t�1 w�,1a 100 %ti' Owne'r'ship of _Cable Systems* (Partial- Listing)`' Category:' Broadcaster_ Newsliaper. Program Producer/ Distributor s Telephone CTIC CableReports,.,LL: -y; #;Systems 4,608 943• „1;540, ,Enhanced /Interactive 'Services! Adressable Systems' Activated Addressable Subscribers• Cable Security' Systems Cable= Security Subscribers Homes Passed Security •Source: Paul 'Kagan -Financial Databook ,1983; 12 /1782.' .5748 26,517 ;906- 51;190,000' :83 ;400,000 S1_5�o 31.6% o Subscribers:' ;45,. 23; 22:F Neg._ 100% -�a 27.9' T:120'810±) M _l 83,7551. 6 ;962,800 ,:Number .of Subscribers :Per- s; Subsci beTS Systems ubscritiers' 50 ;000 '1 ,000 19,949 5,000 9;999 o W° 6 ��,aiO4:' ��,�4�9 500= 999 Total Financial Average'Rate- basic; 2 Q $8;:4b` Average -Rate —Pay $9.56+.+ „,Average -ate• IncleasetGranted ;rf jA i-8 %ati _1982 Industry' Revenue- (Es(;) $4.62rbilliori 4981 Industry Revenue: (F`CC)'` '$3 :59 :billiori ethange froni:,J981' .'29% *Television and gable Factbookl. Cable' and ,Services •Vot: /.83 Source: .Titsch: /-83 *Source: TV Digest; -11/1/83 +Source: Paul KaganiAssociates;•: 10/83 6� 4 i. 'its me 3,i"r'fS .•T, ltor: Janet iuig#ey Cantrtbtcting Sditor< Ai 1ta 13+antla h,: Articles Editor t;utlt �Atnetto CCtrrntetton *image Fay Robinsaa ..#C1 abieHeports '!-is preduced'byrThei¢ able 3'elevis1ol WNtettatwif Can ter„.a nonpartisan, non advisory group :developed -io NAP" Excel' officiais`make interned decisions aboutteteeommi►ntiations policy Noj aai• Lion owls newstettet•snay be repraduaed vt n.�ertiltl tttOrtl�' Psiileret' 'the•L'abie Trileyision Inttlraiatlotf'Center 18003`iorth -Kern Street, Suite• 1007' Atl nnata tiii�aea 198 Tite Cabtertelevtlsron Internet O n Center- November -1983 a i Recent new rates approved in Washington State include: Information provided by Port Angeles Telecable based on Washington State Cable Association figures show an average rate of $9.65. The intent of this report has been to provide comparative and rate -of- return information for review and not to make any specific recommendations. If additional information is required, please let me know and I'll do what I can to provide it. CGR:LF Mt. Vernon 8 50 Castle Rock 9 50 Connell 9 39 Aberdeen 9 00 Thurston 12 00 MEMO: September 2, 1983 TO: Dave Flodstrom, Mayor Dunca d Cou. ilmembers FROM: Rob Orton, Director of Finance •.min. Svcs. RE: Telecable Franchise Renewal Attached is a draft ordinance renewing the franchise agreement between the City and Port Angeles Telecable Company. I have highlighted changes in the draft by underlining. The ordinance provides for a renewal of the franchise for five with the provision to allow renegotiation of the agreement if federal deregulation laws are placed into effect in the fall of this year. As I mentioned, impending federal legislation promises to deregulate several areas of local control over the telecable industry. Rather than try to "outguess" the legislation, I am suggesting that we wait until it materializes and then reopen the agreement for more specific deliberations. Other than Dr. Quast's comment about telephone service, no other Council members appeared to have comments about the franchise agree- ment. Certain of our department heads do have some concerns and interests about the telecable franchise which I hope would be ad- dressed in negotiations with the company once federal direction on deregulation is made clear. It is my hope that the company will be disposed to speaking of these issues when the contract is reopened to implement impacts of the new federal law. Thank you. cc: Duane Wolfe Merri Lannoye Lew Cosens Mike Cleland Larry Glenn 5. 2( Most comments of other departments concern City access to the system, and in particular, the Light Department about pole contacts. Presently, the franchise agreement allows telecable to use City Light poles in part exchange for the franchise fee levied on the company. However, the Light Department does not benefit from revenues received through the franchise tax. 72'5 East First Street Phone 452 -8466 Dear TV Cable Customer: e l !P; tft ZE I o0 S /H!. February 6, 1984 One of the happier, but at the same time certainly the saddest, things that must be done in managing a cable television service is the necessity for raising rates. It is sad because we are as unhappy about having to raise rates as our customers are about having to pay a higher rate; it can be a happy event also, because a rate increase also means that we are able to increase the services that we provide to our customers. While Port Angeles Telecable succeeded in "holding the line" on rates during the period of the recession, we now need a rate increase which will also allow a service increase. Application will, therefore, be made to the Port Angeles City Council for approval of a rate increase in the near future. The amount of the requested increase will be $1.55 per month for the basic rate, and $.50 for each extra outlet. We feel that the rate increase is both appropriate and justified. Port Angeles Telecable has been operating at a basic service rate 28% below the average service rate in the Northwest for comparable cities. This information was obtained from the Northwest TV Cable Association. Port Angeles Telecable has only increased its basic rate by seven percent since 1976, or one percent per year. This figure is, of course, far below the inflation rate during the same period of time. If the rate increase is granted, Port Angeles Telecable will be able to provide the following improvements in the services which are provided to you: 1. There will be an additional channel added to basic television service. 2. Quality will be much improved in areas where there is an adjacent channel problem. 3. We can add equipment that will increase our channel capacity from its present 18 to a maximum of 30 channels. It is our present understanding that our request for a rate increase will go before the Port Angeles City Council at its meeting of February 21, 1984. We feel that Port Angeles Telecable gives the best possible service for the lowest amount of money, and that we will continue to do so in the future. We greatly appreciate your patronage. Very truly yours, c 64 Vernon C. Kiele, General Manager Port Angeles Washington 98362 SERVICE AND RATE HISTORY OF PORT ANGELFS TELECABLE Port Angeles Telecable began providing cable service to the City of Port Angeles in 1960. At that time, the cable carried eight channels, all broadcast for public reception, but difficult to receive in Port Angeles. This service was available at a rate of $4.00 per month. In 1968, a rate increase to $4.50 per month was granted, and this was shortly followed, in 1969, by an increase in the number of available channels to nine. In 1970, another channel was added. In 1971; a rate increase to $5.00 per month was allowed. The level of service and the cost remained the same until 1975. In 1975, the number of channels was increased to eleven, and a rate increase to $5.50 was granted. Telecable added an additional service at this time, carrying twenty -two channels of F.M. music on its cable, there- by improving music reception in Port Angeles. In 1978, Port Angeles Telecable first went beyond merely offering off air channels, and began offering cable -only services, by offering the Showtime movie channel. In 1980, Port Angeles Telecable added a "satellite service making available to Port Angeles cable consumers an additional four channels. In 1981, the basic rate was increased to $6.95, the level at which it now stands. Since that increase, Telecable has continued to add services; in 1982, the HBO movie network was added, and in 1983, the MTV network was added to the satellite service. A_brief review of this service and rate history shows that Port Angeles Telecable, in twenty -four years, has raised its rates approximately 58 far less than the rate of inflation for the canparable period. In the same period of time, the basic services provided by Port Angeles Telecable has gone from eight to eleven channels, and an FM radio reception service has been added. Additional channels have been added, which can be received only through the use of the cable system. The level of service provided in Port Angeles by Port Angeles Telecable is well within the van of service provided by cable companies serving cities of similar size. Airway Heights .Davenport Cable Deer Park Cable Wilbor Cable Cable TV Puget Sound Cascade Antenna Columbia TV Cable Cowlitz Cable Cox Cable Yakima Cox Cable Vancouver Cox Cable Aberdeen Cox Cable Spokane Delta Cable Forks Telecable (average) Grand Coulee Group W Walla Walla Harbor Video Cable `King Video Cable Lake TV Cable McCaw Okanagon Blaine Centralia /Chehalis Cle Elum Coupeville Everson /Nooksack Fall City_ Ferndale Freeland Grandview Langley Lynden North Bend Oakville Omak Oroville Prosser Selah Sudden Valley Sunnyside 13.00 13.00 13.00 13.00 9.95 8.00 8.00 8.90 10.50 7.95 8.50 10.00 10.00 10.00 7.75 9.95 8.95 9.95 12.95 8.95 10.45 9.95 10.95 8.00 6.75 10.25 10.45 8.00 9.95 10.00 7.95 10.25 8.95 10.50 10.50 8.50 9.95 10.45 9.95 Tenino Tonasket Win lock Yakima Nationwide Cablevision Olympia Port Angeles Telecable Olympic TV Cable Pullman Cable Quincy Cable RGA Cable Viacan Vista Cable Wrights Cablevision Bellingham Port Townsend AVERAGE This list of charges was published June 1, 1983. Source: Washington State Cable Association. 10.95 10.50 8.95 9.95 8.95 6.95 9.75 7.00 10.95 10.00 10.50 9.50 8.00 7.00 9.25 9.65 EXTRA -OUTLET CHARGE Olympic TV Cable Port Orchard $1.95 Group W Seattle $2.50 Nation Wide Cablevision Bremerton $1.95 Harbor Video Cable Montesano, Shelton, McLeary $1.50 Cox Cable Aberdeen $1.50 Viacom King Co. and Snohomish Co. $2.00 Cowlitz Cable Longview $1.00 Bellingham $1.60 AVERAGE $1.75 AT YEAR ENU 1. IV lip (NIL) 2. NEW CABLE IIILES (MIL) 3. NEW HOMES PASSED (NIL) 4. TOTAL HOMES PASSED (MIL) 5. HP X OF TV NH X 6. NEW BASICS 251 HP (MIL) 7. GROWTH SUB BASE 8. SUB BASE (MIL) 9. TOTAL BASIC SUBS (MIL) 10. SUBS X OF TV NH 11. 2 BASIC TO HP 12.1 PAY TO BASIC 13. PAY SUB UNITS 14. CHURN Q 33 X 15. NET NEW PAY SUBS 16. TOTAL PAY UNITS 17_ AVG MO BASIC RATE 18. AVG BASIC SUBS 19. BASIC REV (NIL) (MIL) (NIL) (MIL) 1981 1982 79.00 81.00 83.00 85.00 87.00 89.00 91.00 93.00 94.50 96.00 97.50 99.00. 100.00 60 7.00 42 53 1.75 1.88 10 11.5 21.23 25.62 22.98 27.50 X 29 34 38 43 47 51 54 56 58 59 60 60 X 55 56 57 59 61 63 64 65 67 69 70 70 X 68 76 85 94 103 112 121 130 139 148 157 166 15.51 20.79 26.86 34.09 42.27 50.59 59.46 67.90 76.04 83.78 91.06 97.67 104.44 3.02 6.37 9.39 0 7.95 (MIL) 21.14 (MIL) 2016.76 20. EXP BASIC NO RATE 3.95 21. AVG EXP BASIC SUBS (NIL) 0.50 22. EXP BASIC REV (NIL) 23.70 23. AVG HC PAY RATE 8.91 24. AVG PAY UNITS (NIL) 12.33 25. PAY REV (lit L) S 1317.87 26. AVG HO REV /BASIC S 13.24 27. ANN SUBSCRIP REV (MIL) 3358.33 28. INSTALL REV (MIL) S 56.70 29. IOTAL CABLE REV (MIL) 3415.03 PAUL KAGAN'S 10 YEAR CABLE TV INDUSTRY PROJECTIONS 65 7.50 49.50 61 5.12 5.28 10.40 50 6.00 55.50 67 1.50 30.25 31.75 6.86 6.07 12.93 8.25 25.24 29: 2498.65 3049.94 4.15 4.36 1.50 3.00 74.70 156.87 50 6.00 61.50 72 1.50 10 10 34.92 36.42 8.86 7.23 16.10 9.30 9.67 10.06 18.15 23.82 30.47 2025.53 2765.03 3678.51 1985 1986 1987 1988 1989 1990 1991 1992 1993 50 6.00 67.50 78 1.50 9 39.70 41.20 11.25 8.18 19.43 45 5.00 72.50 81 13.95 8.32 22.27 45 5.00 71.50 85 16.70 8.87 25.56 25 2.50 80.00 86 1.25 1.25 0.63 7. 6 5 44.08 48.05 51.71 45.33 49.30 52.39 19.62 8.44 28.06 9.28 9.65 10.04 10.44 T8 38.81 43.27 47.32 50.85 3649.75 4322.08 5011.04 5699.54 6369.73 4.58 4.80 5.04 5.30 5.56 6.00 9.00 10.35 11.90 13.69 329.43 518.85 626.51 756.51 913.48 15 1.50 81.50 86 0.38 4 54.49 54.87 22.41 8.14 30.55 10.86 53.63 6986.75 5.84 15.74 1103.03 10 1.00 82.50 86 .25 3 56.51 56.76 25.09 7.74 32.83 1983 CABLE TV INVESTOR, Paul Kagan Associates, Inc., Carmel, CA. 11.29 11.74 55.81 57.45 7562.05 8095.70 6.13 6.44 18.10 20.82 1331.91 1608.28 10 10 1.00 1.00 83.50 84.50 86 85 .25 2 57.90 58.15 27.65 7.28 34.93 .25 .25 1 1 58.73 59.57 58.98 30.05 6.61 36.66 12.21 58.56 8581.95 6.76 23.94 1942.00 tO 1.00 85.50 86 59.82 60 10 115 32.23 6.77 39.00 12.70 59.40 9052.58 7.10 27.53 2344.97 10.46 10.88 11.31 11.77 12.24 12.73 13.24 13.77 14.32 38.18 46.43 55.03 63.68 71.97 19.91 87.42 94.36 101.05 4793.08 6062.01 7471.48 8992.53 10569.85 12205.06 13885.69 15588.22 17361.49 15.18 16.80 18.72 20.69 22.53 24.53 26.67 28.99 31.50 34.22 37.16 40.35 4598.87 5971.84 7657.68 9634.01 11699.56 13927.53 16275.74 18659.64 21099.01 23589.67 26112.17 28759.04 $4.15 94.10 106.29 112.57 124.29 123.74 104.02 90.12 124.76 107.41 86.89 88.74 4693.02 6065.94 7163.97 9746.58 11823.85 14051.27 16379.76 18749.75 21223.78 23697.08 26199.06 28847.77 (TABLE CONTINUED ON NEXT PAGE) MEMO: July 27, 1982 TO: Manager Flodstrom, Mayor Duncan FROM: Rob Orton, Director of Finance RE: Regulation and Taxation of Telecable Co ncilmembers inistrative Services By virtue of our membership in the Cable Television Information Center, I have been monitoring "this years" attempt by the federal government to deregulate or eliminate local taxation and rate regu- lation of the cablevision industry. I feel that the Council should be advised that two pieces of federal legislation nearing completion would have the direct effect of eliminating municipal regulation of telecable rates for all but the most basic service. According to the legislation's definition of "basic service the City would be inhibited from regulating just about any rate at all. The legislation would also provide for automatic renewal of franchises by municipalities meaning, as I take it, that the City could not chose to unilaterally cancel the franchise agreement it has with any cable television company. Most significant of all, the legislation would restrict franchise fees to an amount equal to the City's cost of regulation and ad- ministration. Currently, we charge the Port Angeles Telecable Comapny a 3% franchise fee against the gross sales. The City receives about $22,000 a year from this particular tax. If the federal law restricts franchise fees only to the amount of esti- mated administrative costs the City incurs in administration, we would lose all of the $22,000 in revenue. The City's involvement in rate regulation is sporadic, and the only ongoing administrative costs that we incur are limited to two professional periodicals about the industry to which I subscribe for information in current events, plus my own time in analysis and review during rate increase requests from the company. According to the Association of Washington Cities and other sources, revenue lost by the franchise fee could be replaced by a business and occupation tax. However, any tax imposed would be subject to federal scrutiny and disallowed if it is shown that the cable company was singled out for a business and occupation tax. In other words, a tax would have to be imposed generally before it could be imposed on one specific business. A second and more viable option is to replace the franchise fee with a utility tax under the same State statutes which permit the City to tax PUD sales within the City. ..Memo Telecable Regulation July 27, 1982 Page -2- My two contacts in the industry are Mr. Harold Horn of the Cable Television Information Center, Washington D.C. (of which we have been a member for six years), and Paul Kagen Associates of Cali- fornia who is our authority on regional and national rates. Both of these individuals indicate that the passage of the deregulation legislation is highly probable. In each of the last six years since I have been with the City, there have been lobbies to have municipal regulation prohibited. The present bills are the first to really put a scare in the regulatory community. According to my contacts, even if the City imposed a utility tax by State statute to replace the franchise fee, it might be dis- allowed by the Federal Communications Commission if it is viewed as, or interpreted as a franchise fee. In my research I discovered that the Association of Washington Cities, National League of Cities, Cable Television Regulation Division, and the Cable Television In- formation Center seem to disagree on whether or not Washington cities have the right to replace the franchise fee with the utility tax. I am confident that we could replace the lost revenue through a substitute statutory tax, however, I thought that the Council should be aware of this impending possibility as well as the great likeli- hood that our role in telecable regulation may become severely limited if not eliminated altogether. A DIVISION OF 31-1 MANAGEMENT CONSULTANTS, INC. (211 able Communications Consultants 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B SEATTLE, WASHINGTON 98116 (206) 935 -9040 January 30, 1985 Honorable Dorothy Duncan Mayor, City of Port Angeles 140 W. Front St. P.O. Box 1150 Port Angeles, WA 98362 Dear Mayor Duncan: The Cable Communications Policy Act of 1984 is now in effect. Is your city prepared to comply with the many restrictions and administrative functions which this bill mandates? For example: 'Can your city "prescribe rules and procedures under which the cable operator is permitted to use channel capacity... Section 611(d)(1) says you must. Are you prepared to comply with Section 625 which requires you to negotiate with the cable operator for modification of the franchise? 'Could your city even begin to meet the con- ditions of Section 626(c) regarding renewal procedures which begin 36 months before the franchise expiration? Not many cities can answer "yes These are not legal questions, but ones which require professional assistance from specialized consultants in this field. Our firm can supply you with the answers to these questions and the literally hundreds of others that arise from this new Federal legislation. We are cable consultants to municipalities. Our clients in Washington State alone include Everett, Bremerton, Pullman, Clarkston, Bellevue, Redmond, Kirkland, Renton, Kent, Tukwila, Medina and many others. We invite you to inquire of them as to the value of our services and we are confident that they will tell you that we have saved their communities many times the cost of our services. This new act is perplexing and time wasted now by a city can be costly. If you have a question, please give us a call. We will be more than pleased to discuss it with you without charge or obligation. We look forward to the opportunity to be of service to you. Sincerely, 3 H C•:' S f n A. •urd OMMUNICATIONS CONSULTANTS Vice President /Director 3 6. 412/0 J Cable Communications Consultants Consultants to Local Governments Port Angeles CATV COMPLAINT PROCEDURES Specializing in Cable Television: franchising refranchising community needs assessments negotiation evaluation ordinance preparation franchise administration access 4517 California Avenue Southwest, Suite B, Seattle, Washington 98116 (206) 935 -9040 3 -H Cable Communications Consultants PROCEDURE Cable Operator Comnlaint/Violation Handling PROCEDURE FOR FRANCHISEE NOTIFICATION FORM The purpose of the "complaint /violation" form is: 1. To communicate in a standard simple uniform ;manner with a cable operator; and 2. To establish a uniform file of the history of a franchising authority's relationship with the franchisee for potential evidence during a renewal proceeding as outlined in Section 626 of the Cable Communications Policy Act of 1984. I. Form Preparation The form is designed to supply the minimum amount of information to the operator to enable it to conclude the problem presented. It is not intended to preclude the forwarding of additional information such as copies of correspondence or more detailed memoranda together with the form itself. The form is designed so that the addresses (cable company and complainant) are folded to fit into a standard #10 window envelope, thus saving the labor of addressing separate envelopes. Similarly the second and third notices are printed so that the cable operator's address is viewed in the window envelope. In some instances it may be more convenient and legible to take the information (e.g. telephone) on a scratch pad prior to transposing the information on the multi -part form. For this reason pads of single sheet forms are provided. Once the pertinent data has been transcribed the scratch form should be discarded. The filling out of the form itself is self explanatory. If it is felt necessary to keep a numerical record of the forms, the appropriate blank on the forms should be utilized. It is important if such a system is to be used that the numbers be applied sequentially to all forms on hand before attempting to use the forms. This system rather than an as- you -go system will serve as a control against missing numbers or those out of sequence. There are several areas on the form wherein the judgment of the franchising official or his /her designee must be used. The first and most critical of these is the determination between "Franchise Violation" and "Citizen Complaint This choice is both one of degree and of the wording of the franchise. There are obvious citizen complaints such as programming, billing, premium rates which are not specifically covered in the franchise or are preempted by Federal law that can not be justifiably labeled as a franchise violation. On the other hand there are many complaints regarding such items as outages, failure to wire a given area, construction standards, etc., which are clearly specified in most franchises and which legitimately can be classified as a franchise violation. Then there are "grey" area matters: cosmetics, telephone answering, non standard construction which could be classified as either category. This then becomes a matter of judgment. Some of the factors that should be considered in making this decision are frequency of this type of complaint; how the franchisee handled similar types of complaints; the seriousness of the reported defect (were the cosmetics major the number of residents affected and other areas of local concern. The overriding criteria should be the long range objective of the program. If it is perceived the franchisee has not lived up to the spirit as well as the letter of the franchise and the city feels it would prefer not to renew, then the tilt should be to the "violation" side of the form. On the other hand, it is important not to "cry wolf" too often so as to minimize both at present and at a later date, the validity of the charge. The second item of judgment is in the area of establishing a "reply due" date. Historical precedence, time of the month, complexity of the charge, etc., are primary considerations. Probably an average due date would be between two and three weeks, everything else being equal. Subsequent second and third notices, unless specific need to the contrary, should have proportionately shorter period for the follow -up. The final area of discretion is in determining the appropriate file codes to be checked so that the completed file may be placed in the appropriate subject. The codes suggested are arbitrary and have no relationship to whether the report is initially classified as a complaint or a franchise violation. Again, it must be reiterated that these subjects appear to be those most commonly used and the type that would be utilized for public hearings under Section 626 of the Cable Act. "Fr" stands for franchise and included under "Fr modification" would be such items as unilateral program changes, denial or change in access regulations, etc. "Serviceability" is intended to mean, in this instance, the ability of the cable operator to provide service to a given residence. This is not intended to cover technical malfunctions which would be included under "Pix quality "Service response" is applicable both to the time it takes the cable operator to go to a residence for a service call or related items such as being unable to reach the operator by telephone or lack of or delayed telephone response. Construction category can also cover a multitude of problems relating to improper wiring of a residence, failure to replace landscaping, incorrect depth of undergrounding, too low overhang on overhead stringing, etc. "Billing" and "Outage" are self explanatory. The "Other" category is used as a catch -all but should be limited in applicability for ease of filing and subsequent analyses. In every case, the particular subject must be written to the right of the box on the form. II. Filing Please refer to the attached diagramatic flow chart for an explanation of the filing steps required. Initially a set of 31 file folders, numbered from one (1) to thirty -one (31) must be made up. A pendaflex commercial file will be the most convenient receptacle for these files. The pink copy will be placed in an appropriately numbered file as determined by the reply due date placed on the form at the time it is filled out. On a daily basis, the file for that day of the month (watch out for weekends and holidays) must be removed and the enclosed form(s), if any, be taken out for the sending of the second or third notice as appropriate. The second and /or third notice, together with the original pink copy together with the remaining copy of the second /third notice will be refiled in the newly assigned reply date. When a reply is received from the franchisee the form(s) will be removed from the thirty -one (31) day file and place in a subject file according to the category checked on the bottom of the form. The remaining (yellow) copy may be sent at the discretion of the franchising authority officer to a city official in whose jurisdiction the complaint falls for information purposes. For example, problems, even though solved, on construction may be sent to the Director of Public Works, franchise fee issues to the City Treasurer /Finance Director and other matters, if desired, sent to the City Attorney. If, after the third notice has been sent, still no reply has been received from the cable operator a management decision must be made by the cable officer as to the next step. If the problem regards a complaint rather than a I I 1 I 1 I 1 I I I 1 I I I I I 1 I I franchise violation the important matter is to resolve the complaint. This may take a telephone call, personal visit or other means. In any event, even after the problem has reached a resolution, it is essential that the fact that the franchisee has failed to respond (if such is the case) to three written notices be fully noted and placed in the subject file. In some cases regarding possible franchise violations it will be necessary to initiate more serious action. It may be that the matter should be referred to the City Attorney or, in some cases, to the City Council for action. MN MI NM r MS i O NM NM MIS M SW OM I OM r— i FLOW CHART CATV COMPLAINT Indicates direct action Indicates direction of paper flow MI MI MI MN r NM MO I MI NM M OM r r N COMPLAINANT GOLD COPY FRANCHISEE CABLE ADMINISTRATOR WHITE COPY STAGE I Initial Yellow Gold 1. NOTICE FORMS r PINK COPY V 30 DAY 'TICKLER' FILE Pink Yellow White t— MI r MI r MI N r I MN MI IN N r r 30 DAY "TICKLER'' FILE 2nd /3rd NOTICE WHITE COPY Yellow STAGE I I Failure to Reply Yellow 2nd /3rd NOTICE FRANCHISEE i White all NM MN MI MI MI MI MS r MI MN MI MN IIIII r MI r NM FRANCHISEE V COMPLAINANT CITY JURISDICTIONAL OFFICER 4 WHITE COPY CABLE ADMINISTRATOR NOTICE FORMS 4 STAGE III Reply from Franchisee white SUBJECT FILE CHRONO- Yellow LOGICAL FILE 30 DAY 'TICKLER" FILE On r N V MO OM MB MI N r r NM MI a■II r• 30 DAY 'TICKLER' FILE CITY ATTORNEY/ COUNCIL /ETC. CABLE 0. ADMINISTRATOR STAGE IV No Reply from Franchisee after 3rd Notice CITY OF PORT ANGELES 321 EAST 5T1-1, P.O. BOX 1150 PORT ANGEL FS, WASHINGTON 98362 PHONE (206) 457 -0411 NOTICE OF REPORTED: FRANCHISE VIOLATION CITIZEN COMPLAINT No Complainant (if applicable) Date Address Apt. No. Telephone: work City Zip home call after Nature of charge Referred to for action: Cable operator Address City Zip Attention Title To Franchisee: The above matter warrants your prompt attention. Please return all (2) copies of this form together with copies of correspondence and /or additional information as required to be received no later than Franchisee's action taken (Indicate follow up date if applicable): RETURN BOTH COPIES OF FORM FILE CODES Serviceability Construction Billing Pix quality ❑Fr. modification Outage Service response Other (specify) 198 198 DISTRIBUTION WHITE YELLOW franchisee PINK pending file GOLD complainant WHITE subject file YELLOW chronological file PINK official referral O Cable Communications Consultants Report on PORT ANGELES TELECABLE October 22, 1987 Specializing in: Franchising Refranchising Rate Increase Requests Negotiations Evaluations Report on PORT ANGELES TELECABLE TABLE OF CONTENTS Analysis of Port Angeles Telecable System's Present Performance Page 1 Analysis of Port Angeles Telecable System's Capabilities for Upgrading in Channel Capacity and Enhanced Services Graphs, Attachments, and Glossary Page 6 Comparative Analysis of Port Angeles Telecable System and Services Page 13 Analysis of Port Angeles Telecable System's Present Performance Technical Analysis of Present Performance Backeround Many of the measurements discussed in this report are, of course, technical terms. For this reason attached is a glossary which may be an aid in understanding some of the engineering terminology which may be used. It is not the intention, however, to bog down the Committee with technical jargon where it may be avoided. System Description The headend of the Port Angeles Telecable system is located at the south end of Cemetery Road. At this site are two satellite receivers "dishes These two earth stations (one manufactured by Jerrold, the other by Maycom) presently receive eight satellite signals. At this location also are thirteen stacked array yagi (each "cut" for a specific channel bandwidth) antennae for reception of ten VHF off air transmissions. Three are redundant at this time. Additionally a microwave receiver picks up a Tacoma station for retransmission. The signal receivers are manufactured by Jerrold and Blonder- Tongue, both known for quality equipment. The modulators are produced by Catel, a smaller company but whose products are used throughout the cable industry. The cable system consists of 35 miles of distribution and 15 miles of trunk cable. Trunk cable is 3/4" strand and lash while the distribution lines are .500 gauge. Drop cables (connecting feeder cables to an individual dwelling unit) are RG 59U and are 67% double shielded. All cables are of Comscope manufacture and are of good quality. The electronic equipment throughout the system is Texcan while the home converters are Hamlin. Again, all of the products used by Port Angeles Telecable are manufactured by reputable names in the cable industry. All connections have been shrink fitted to minimize corrosion and signal leakage. While all of the distribution connections, splits, terminations, etc. seem to have been done in a work manlike manner and we could find no present problems, it must be kept in 2 mind that most of the system was built over 10 years ago and that even with a good preventive maintenance schedule deterioration with associated signal degredation will eventually occur unless the cable system is rebuilt. The Port Angeles Telecable system is engineered for 330 MHz but in its present configuration it has only a 300 MHz capacity of carrying approximately 30 channels. At present there are 20 channels of basic and 5 of premium on -line. There are seventeen employees. Six are office workers, four in construction, four installers /service technicians, a head technician, a head engineer and general manager. The personnel both in experience and in the expertise which we were able to observe are equal to, or exceed personnel in other comparable size cable systems. Technical A spot check sweep of the cable system indicated no excess radiation leakage (radiation leakage as used here does not signify any hazardous condition but may cause problems with the television signal. The FCC (Federal Communications Commission) requires certain logs to be maintained in this regard (Attachment A). Those records which were inspected showed all radiation levels to be within accepted limits. System performance is measured by various means. At the least a cable system must meet the criteria of FCC Rules and Regulations Part 76 Subpart K. It appears that in those measurements, Port Angeles Telecable met or exceeded federal minimums. Our examination of the May 1987 Proof of Performance Tests indicate the following more significant measurements: Hum modulation level 4% If a problem, it would appear as large dark horizontal bar slowly floating vertically through picture, in severe amounts can cause hum in audio and errors in data. Video signal to noise ratio 46 to 50 db This is a very common measurement and low ratios would show 3 on the television screen as background motion resembling snow and white specks usually a different value than Carrier -to- Noise. Peak to valley (6Mhz video) Less than 2 db full spectrum Poor response appears as fuzzy picture and in severe cases resembles cross modulation. Carrier to noise 48 db System noise can be seen in the picture as background motion resembling snow, in audio as a hissing or crackling sound, and causes errors in data. Carrier to hum ratio 4% Substandard ratio will appear as a thin white horizontal line slowly rolling from the bottom to top of picture, may cause vertical hold problems. Carrier to composite triple beat -58 db If not balanced this can appear in picture as background wavy lines and can cause errors in data. Additionally we made a spot check of signal levels at various locations. These readings were: Headend Amplifier Tap offs Low 27 db Mid 27 db High 30 db Super 32 db Low 8 db Mid 10 db High 15 db Super 17 db Low 14 db 4 I I I House* Mid 10 db High 11 db Super 8 db Low 0 db Mid 2 db High 8 db Super 8 db *(Note that these readings are distorted by the subscriber illegally installing his own splitting device. If this circumstance were factored out the levels would exceed FCC requirements of +.1 db) All levels of the signal strength at the various locations represent an average reading received across and (except as noted) were consistent and well in excess of those needed to provide quality video and audio reception. Although significant as background information only or for comparative purposes in the future, summaries of some other signal measurements kept by the operator are attached as Attachment B. Another less technical measurement of a cable operator's performance is in the area of customer service. Graphs I and II are appended indicating an analysis of complaints by type and number for an average month. In addition, as a sample of raw data, a copy of a more detailed log maintained by Port Angeles Telecable is also attached as Attachment C. While for obvious reasons the objectivity of these type of reports remains open to question, nevertheless given variances from community to community certain valid comparisons can be made. Telecable's ratio of complaints is .93% for an average month. A 1.5% is thought to be the median. By this yardstick Port Angeles customer relations are considerably better than the normal cable operation on a nationwide basis. 5 Analysis of Port Angeles Telecable System's Capabilities for Upgrading in Channel Capacity and Enhanced Services I I Channel Capacity Upgrade Back eround Before discussing the specifics of the steps and costs to upgrade the Port Angeles cable system one or two caveats must be kept in mind. The first is that although we are speaking of a franchise which presumably will not expire until 2002 we still must deal with 1987 economics and technology. As a point of reference, therefore, we will discuss upgrades without assumptions of still to be proven techniques such as distribution via fiber optics or over the air methods. That is not to say, of course, that such approaches or even some not yet evolved may be more practical down the road of this cable franchise. It is also assumed that the physical size of the system will remain as it is. Similarly our cost estimates (which are rounded off approximations only) deal with constant 1987 dollars. These figures take into consideration neither inflation nor the possibility of reduced equipment costs as manufacturing processes become more sophisticated. Several methods and various types of upgrading the existing Port Angeles Telecable system are discussed. A particular distinction is made within the framework of these illustrations. "Upgrading as herein used, signifies altering and /or adding equipment so as to increase channel carriage capacity. In our examples of upgrading the actual distribution of the cable lines are presumed to remain the same; that is neither significant time nor material is expended in removing or replacing the present cable runs. "Rebuilding on the other hand, means just what it implies; in a broad sense, replacing most of the entire system including the cable itself. It may, of course, be more practical to, given the need to replace the wire because of normal wear and tear, to effect a system wide cable replacement at the time of adding additional hardware for an upgrade to higher capacity. The present Port Angeles cable system is designed for 330 MHz because of the spacing of the line amplifiers although the equipment in place permits presently only 300 MHz. A 300 MHz system is able to carry approximately (There are 7 1 technical bandwidth variations which preclude assumption of an absolute number of channels.) 30 channels. Example (a). Upgrade to 330 MHz (approximately 35 channel capability) This initial upgrade may be performed by replacing modules within the existing system's amplification pedestals and, as in all cases, some further headend equipment. It is assumed in this illustration that labor costs would be comparatively minimal and may be accomplished by the in -house technical force without adding additional bodies nor requiring sub contracted assistance. Headend equipment consisting primarily of receivers and modulators may be computed at $4,000.00 per activated channel. This, of course, is a variable in this and in all subsequent examples. 34 Trunk Modules Q $389.00 each $13,226 231 Line Extender Modules Q $272.00 each $62,832 Sub Total without headend variable $76,058 Example (b). Upgrade to 400 MHz (approximately 54 channel capability) As in the previous example, this hypothesis is that there will be no replacement of existing cable runs. Any recabling that is done is assumed to be charged to maintenance costs, not as a project capital expenditure. It will be necessary, however, to narrow the spacing between the existing amplifiers and in so doing, of course, to add additional amplifiers. This work is rather extensive. It is the industry's practice to subcontract this task and it is so assumed in this case. 34 Trunk Modules Q $404.00 each $13,736 231 Line Extender Modules Q $300.00 each $69,300 4 New Amplifiers $500.00 each $2,000 25 New Line Extenders Q $400.00 each $10.000 Sub Total Material without headend variable $95,036 8 I I I I I I I I I I I I I I I I I I 1 Contracted Labor 50 miles $1750.00 each Sub Total without headend variable Example (c). Total System Rebuild to 400 MHz (approximately 54 channel capability) In this case it is also assumed that Port Angeles Telecable would follow the cable industry practice and would subcontract the entire task including system redesign and equipment. Contracted labor and material $17,500 /mile x 50 miles $875,000 Sub Total without headend variable $875,000 9 $87,500 $182,536 i Enhanced Services Upgrade Backeround In the simplest terms enhanced services are those usually broadcast or other services which require 2 -way capability (upstream downstream). These are also loosely labled "interactive services The most common application of this technique today is addressability. The most simple example of addressability is one where a subscriber uses the telephone to order a particular service (such as pay per -view) and the cable operator can comply with the request using the "downstream" portion of the cable. This type of system could also be used, for example, to disconnect a subscriber's service. Example (a). Minimum Interactive Upgrade The following figures are a bit skewed because it is presumed that all converters would be replaced with new devices without accounting for salvage value or that there may be only an incremental cost of replacing defective non addressable subscriber converters or new subscribers are added. It is also assumed that the labor contribution to this project could be accomplished with existing personnel without significant additional manpower costs. There is an additional variable cost of headend equipment of $2,500 per addressable channel. Inasmuch as Port Angeles Telecable already has the theoretical capability within the cable system design itself, all that would be required is additional hardware as indicated below: In -house computer and software package $10,000 Addressable converters ($115 x 6,213 subscribers) $714,495 Sub Total without headend variable $724,495 Example (b). Full Interactive Upgrade. The next stage of addressability is a full two-way interactive system. In this concept the telephone is not required and information from the 1 0 subscriber is by use of push buttons on the converter or remote control device. There are comparatively few examples of this type of addressability anywhere at this time. None, as far as we know, are yet economically viable. Labor costs are relatively insignificant. The material costs of such a lay -out are approximately: Push -pull modules for an estimated 265 amplifiers and line extenders Q $365.00 each $96,725 Addressable converters ($150 x 6,213 subscribers) $931,950 Inhouse computer and software package $10,000 Sub Total Equipment without headend variable $1,038,675 There are other applications of interactive technology to create enhanced service for either the private or public sector of the community. Examples of the former are fire and burglar alarms and computer tie -ins through television cable. Other uses that have been test marketed are banking and even shopping via two -way cable. Unfortunately, while some sections of some few communities do make use of alarm systems, on the whole the technology has exceeded the economic factors to make these concepts practical. In the public sector, largely in major cities where such services were obtained by a bidding process in an original franchise, other adaptions of the systems have been applied. Interactive services have been used for traffic light control, for meter reading, heat control sensors in public buildings and in an office to office computer connection. In all cases of these more complex versions of interactive services, essentially the only additional factors to the formula of costs in the example of the fully addressable system is whatever monitoring device is needed at the origination point. Additional drop lines may be required in some circumstances. It should be stressed again that these more esoteric applications, while loudly heralded by the cable industry a few years ago are now largely downplayed by cable operators. The industry has often found itself in an non competitive price 1 1 situation as compared to other types of transmission means such as supplied by telephone companies. 12 Comparative Analysis of Port Angeles Telecable System and Services Background This portion of the report consists of two charts. Graph III compares a large number of cable systems in the region which have generally the same size cable systems. Graph IV then focuses this analysis to a yet fewer number of a closer "fit" to Port Angeles. The first chart may be useful in a larger perspective while greater detail is contained in the second chart. While it is believed that the category headings are self explanatory there are a few necessary comments pertaining to this data. Notice, for example, the large number of systems in this area operated by MSOs (Multiple System Operators) primarily TCI, Inc. and Viacom. This is representative of a national trend of acquisition of independent operators (such as in Port Angeles) as well as consolidation of other medium sized MSO's. This may be significant to your community in that it may be a signal to the Committee to include a solid protective transfer clause in the Cable TV Master Ordinance or Franchise Agreement. The close similarity of rates among the various cable systems is also of interest. Much of this, of course, is because of common ownership. Other than this commonality, it is apparent that other cable operators (who are not competitve with each other) maintain roughly the same price structure. This may be of significance to Port Angeles in the future. If the FCC (Federal Communications Commission) does radically rewrite its definition of "effective competition" in the latter part of November so as to include Port Angeles in the category of allowing some sort of rate regulation, basic rates of other contiguous or nearby areas may be significant. While it is probably useless to speculate at this time upon the specifics of what language the FCC refined definition may take, there is a feeling that it may permit local government so qualified to set up a basic rate formula tied into adjacent "competitive" areas. It should also be kept in mind the relative stability of channel carriage capability. While a few years ago many medium sized cities were asking for 108 channel capability, this is now perceived as impractical. Most operators even with 14 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 54 channel capability have difficulty in finding enough programs to use all the channels at the present time. However, from a marketing viewpoint, it is to the operator's advantage to have as big as possible package of programs to sell to its subscribers. On the assumption that a new franchise will call for a trigger clause based, presumably upon upgrades in similar demographic communities, it is suggested that the portion of the chart containing channel capability be periodically updated. Should the committee have any additional questions regarding services in another community, we will be pleased to provide further information. 15 Graphs, Attachments and Glossary MI MI MN MN NM MI NM NM M N MI OM NM MI NM M MN NM 7% 7% Port Angeles Telecable Complaint Analysis 2 3/° 2% 34% Set Problems Bad Drops Fittings 36% M Bad Converter O Bad Connection Bad Splitter Replace Jumper 1111 Illegal Hook -up Bad Transformer Disconnect in Error Graph 1 Citv Aberdeen Anacortes Auburn Bellevue Bellingham Bothell Bremerton Clarkston Des Moines Edmonds Everett Kent Kirkland Lacey Lynnwood Marysville Mountlake Terrac Normandy Park Oak Harbor Olympia Port Townsend Wenatchee Cable Operator r Cox TCI TCI Viacom TCI Viacom TCI TCI TCI Chambers Viacom TCI Viacom TCI Pullman 1Rock Associates Puyallup Viacom Redmond Viacom Renton 1 TCI Sequim Port Ang. Telecable Sultan Viacom _Tukwila TCI Vancouver Cnty Columbia TCI Lynnwood TC I e r Viacom L TCI 1 Viacom 1 TCI Summit Comm. jBsc Subs 1 _ayst 11,500 270 MHz 3,125 300 MHz 6,558 330 MHz 19,405 330 MHz 19,0811 300 MHz 2,6721 330 MHz 8,321€ 330 Mhz 2,429 300 MHz 3,598 300 MHz 4,333 300 MHz 20,287 5,186 3,776 3,016 6,2791 2,887 5,070 1,121 3,049 7,131 330 MHz 330 MHz 330 MHz 330 MHz WAS 1,177 270 MHz 5,302 270 MHz 5,432 330 MHz 9,022 330 MHz 9,144 1 330 MHz 1,208 300 MHz 600 330 MHz 1,162 330 MHz *29,000 400 MHz *15,089 300 MHz 1 System information includes surrounding county areas Port Angeles Telecable Service Analysis Desigrlj I Chan CDcty 23 30 35 35 30 35 35 30 30 30 35 35 35 35 330 MHz 35 300 MHz 30 u-------- 330 MHz 1 35 300 MHz 30 300 MHz 1 30 330 MHz 1 35 23 23 35 35 35 30 35 35 54 30 Access Chans i Addrssbity_ Prodctn Studio 0 No No L 0 No No 1 0 I No No 3 L No Shared 1 1 Yes Yes 3 No Shared 2 Yes Van 0 No Shared 3 No 1 Shared 0 No No 1 I No Yes 3 I No Shared 4 I No Shared 1 Yes Yes 3 No Shared 1 No No 3 No No 3 No Shared 2 No No 1 1 Yes Yes No No 1 Yes 3 No 0 No 3 No 3 No 8 Yes No No No No Yes Shared Shared No No Shared Yes N/A 1 Basic Rate i Prem. Rate $12.95 $15.00 $15.50 $15.00 $14.00 $15.00 $15.50 $15.75 $15.50 $12.95 $15.00 $15.50 1 $15.00 $15.00 $15.00 $15.50 $15.00 $15.50 $15.00 $15.00 $12.95 $13.34 $13.95 $15.50 $15.50 $11.95 $15.00 $15.50 $11.95 $15.00 $9.95 $11.95 $12.95 $12.95 $11.95 $12.95 $12.95 $11.95 $12.95 $12.95 $12.95 $12.95 $12.95 $11.95 $12.95 $12.95 $12.95 $12.95 $12.95 $11.95 $14.95 $11.00 $12.95 $12.95 $12.95 $10.45 $12.95 $12.95 $10.00 $13.95 Graph III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 .Citv Aberdeen :Cox 4 Anacortes iTC1 Auburn ;Tel Bremerton :ICI 4 Clarkston :TCI 4 4 Edmonds Chambers 8,011 4,333 99 300 MHz I e Lynnwood :Viacom e 9,820 6,279 64 330 MHz 1 e 4 10,683 7,131 Olympia :TCI Port Townsend Pullman :Cable Operator Summit Rock Associates Homes Passed SElse UM. Pint MIS I 1 1 12,557 11,500 155 4 T 11,795 1 6,558 96 I 1 330 MHz 1 15,273 1 8,321 118 1 330 MHz 4 1 3,169 2,429 41 I 300 MHz E 3 1 4 3,755 3,125 55 2,421 1,177 6,900 5,302 E E Average E 9,240 5,210 1 88 System informatron includes surroundirvi county areas 1 Svst Desian 270 MHz 300 MHz 121 330 MHz 270 MHz 300 MHz 01 -4FPk 52 270 MHz 23 4 Puyallup ;Viacom 7,203 5,432 94 330 MHz 35 1 Renton I iTC1 I 1 17,824 9,144: 1 94 330 MHz 35 I e e Sequim :Port Ang Telecable 1,751 1,208 17 300 MHz 4 Wenatcee :TCI *20.000 h 4 4 *15,089 237 300 MHz 30 Chan Coctv: #Channels I #Chans Bse ;#Chank Prem PP( 3 Lel Oria. Chan 1 Access Chans 1 I 23 19 3 13 4 30 27 23 e i I 1 35 35 31 1 e I 1 e 35 35 31 e I 4 4 30 27 30 35 35 30 ITT ,t 23 4 4 4 Port Angeles Telecable Service Analysis 28 35 31 16 23 28 35 30 28 4 4 4 4 1 30 25 4 30 26 6 4 0 4 30 4 1 5 30 22 24 3 4 3 0 5 0 5 30 4 0 0 0 0 0 1 0 0 ..4 t 4 AddrssbItv 1 yrdetn Studio Ilse Rate: I 1 O No T No 1., $12 95 $9 95 4 4 4 0 No No $15 00 511 95 T 1 O t Yes No 515 50 $12 95 1 2 1-. Yes 1 Van 51550 512 95 0 No Shared $15 75 511 95 O No 3 1 1 I-I Yes No I I Shared t 1 4 4 No Yes No No 4 Yes Yes 3 No I Shared e 0 No No $12 95 $15 00 $15 00 4 91295 3 I 1 $13 34 $13 95 91550 $11 95 1 1 1 Prem Rate 51295 $12 95 $11 95 111111.WitillOW1001.116 j 13 3 I 0 0 1 I No e_ I 19 3 4 0 0 .I 1 No 24 4 1 1 13 1 31 I I e 4 0 0 I e 20 5 !0 1 1 4 i• 25 3 5 3 0 0 0 1 No No $15 00 1 91395 I t e 33 3 I e 23 4 e 1 e I 1 $14.15 3 1 $12.29 31 i I 1 13 L 1 1 1 H 3, fit_ 7: 51495 $11 00 91295 $12 95 91045 Graph IV IMOTh RN IM M U MN =NUMMI Type of Problem Disconnect in Error I Bad Transformer I 1 Illegal Hook -up 2 Replace Jumper 2 Bad Splitter 3 Bad Connection Bad Converter Bad Drops Fittings Set Problems 1 Port Angeles Telecable Complaint Analysis 4 4 20 21 i 0 5 10 15 20 25 Number of Complaints Graph II //2 9 w 4e04-0(1 /P0> /'TH N 6 306 4 /7k d sew e 00,0P Lth tit /6 /964= ,o e?,oi° u/ /r %'O P/Qc9A e_s ,AJ 9 ;d/isr /5Y7 ,0I'U 17(7 9S 6 o foci A- TAIW/1/� i- Mfr 7&/%1/ ,O =vGltio ✓mac -5 'A(1/%97' x T/ve /67 ,6c C 4 2 o r s, l° //Vf, 4-'/ e L tuog/( OA1 0062Ee7 7, Ys ";e04 -r ss-00,A /lr f -/ec'4; /5v" /s —st Attachment A Tf:f Po-er OA). 7 7 3L P ,mo/' Q/51,44/ /QO c2 /1O I Se „oh /4 9 •Q,Qo O /j° o t 0# 4,2 vow (d cJ ,t3 Q" .�h� e /c- /e,. /P &x"z "C'a) /ti) 'ore/zz/ co/2 c=_ i'r r i%(iG d r) /;Q /47 7 X G5 ,eGi,C` s r v l''�J i D pa yv�,%-�. 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Q(V a /V )'0-7 Z. 3 6 7/0 G'/A,,, 7,/,?/-14/7,3 4/ T,44' 94 7P -7 9Q, (71 ,�9 G$3/ 4 '4' »4T -/2 -S7 M i 5 2 -+S -g c/e let ,'i1.cd C es s/14 /e/9047 it/ o6r� 7 J4 Nails F s vc 42o1' ,t) 0 7 K rV7 /IL c. c,/A;‘) ,4 T //3S i2 eq- srd,yc/Z 145 fc?, /66 04 Ai 74 4 e 6 e d eefs7 440 ao 0 '27Vf C 4's 7/,' ,<at h r/ /7 �v/f ,1 1.4 ),1 S 12"1" o 7 o K,e Cif •64.e 6 Y5T' q-- o,v h, s e)l 4) /,)/f /kW 5il/26 C' <lSrz/r/� 4 d ‘Y /s7 a)4 ,n6-77ce�vd6 /0197's �•o UAJg 2 U /4 0 S«,ev 6) .4 7 lc; 3c`_ 1,4 7) ,'C) c z-' 0 u 7/ i v/ -•CU 7/ 9 7 c- xSC c. Q iC "2" c t' 4,7 S /2-e? X/ ;9i.7 .0 iIi 104;1 /e :?''/r,;QtZ 5 d 7 �'C FC1% (70,e,040 7C Ay re= 5 AS;;; %i‘"w //3 f` C4. .f 7% A1 cY c L C J 7C Cnt) -4- r Fv uAlt) "c% (5" 36 9 T .e/t'/ of 7"c,2 o A s 7,1/' (4.7; 6 L/ Six 4.r;o So o rx' 1 1 6 e2 3 i0/75 oxd Am,, 477 LA) /L% 3-z3 f e I6Y.T9ia0 .51' 1K/k, 6Y, -C yr a 3/ 4 )/45zeTio.) AP.=,r7 .0Ti 4/ 44/ 3/ g'7 P� Li(C��O c-( t i5`/P ,O ,13,c� i;°/fl#P7' 0 0 0 0 0 0 0 0 0 0 0 dpi qpi j g7 i 0, ;5 �7 /,G?irTi ,3,d /36 4// 9 g7 �P����cN 7 /7 s-6-v, ,¢c 777i 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1987 Headend Log (readings in dbs) o o C January 6 18 12 OK 36 10 27 February 6 16 10 OK 36 10 27 March 6 16 10 OK 36 10 27 April 6 18 12 OK 36 10 27 May 6 16 10 OK 36 10 27 June 6 17 11 OK 36 10 27 July 6 17 11 OK 36 10 27 August 6 16 10 OK 36 10 27 September 6 15 9 OK 36 10 27 October November December Attachment B MN NM MN I NM MN MN UM MN NM M M MR I REPORT PROG: DDP7755 REV 07D REPORT DATE: 09/11/o7 05:24 PM. ROJTt TO PORT ANGELES TELECABLc TIC EQUIPMENT SUMMARY FROM 08/01/87 THRU 08/31/87 TOTAL NO. OF FiXcS EQUIP ANALYSIS Attachment C PAGE: 1 CORP: 23731 FRANCHISE TAX ARIA 1 2 3 4 5 :OTHER :TOTAL ELEC INTERFERE J• C• 1 u• 0• 0 0• 0 J: 0: 0: 0: 0: 0: 0: 0: 0: C: 0: 0: 0: 1 HEADEND PR08LEM 0: C: 0: 0: 1: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 3: 0: 0: 0: 0: 1 HEAD END 0• 0• 1 0• 1. 0. G• 0• 0. 0• 0: 0 0: U: 0: 0: 0: 0: 0: 0: 0: 2 7ISC IN ERROR 1 G 0• 0• 0• 0. 0• 0. 0• 0: 0: 0: 0: 0: 3: U: 0: 0: 0: 0: 0: 1 PUO OUTAGE 0: G: 0: 0: 2: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: U: 0: C: 0: 0: C: 2 OUTAGE 0: C: L: 0: 1: 0: 3: 0: 0: 0: C: 0: 0: 0: 0: 0: 0: 0: 0: 0: 1 CRACKED SHIELD 0: C: u: 0: 1: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: C: 0: 1 BAD FITTINGS 0: 3: 1: 0: 1: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 2 REPLACE TAP 0: C: 1: J: 1: 0: 2: U: J: 0: 0: 0: 0: 0: 0: 0: J: 0: 0: 0: 0: 2 SYSTEM 1 0: 2: 0: 6: 0: J: u: 0: 0: 0: 0: 0: 0: 0: 0: J: 0: J: 0: 0: 9 REPLACE DROP 5: 2: C: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: G: 0: 0: 0: 0: 0: 7 REPLACE OUTLET 0: 1: 0: 0: J: 0: 0: C: 0: 0: 0: 0: 3: 0: 0: 0: J: C: 0: G: 0: 1 REPLCE FITTNSS 12: C: 9: C: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: C: 0: 0: G: 21 REPLACE SPLITTER 3: t;: 1: 0: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: J: 4 SPLICE CROP 1: 0: C: 0: 3: 0: u: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 4 HOOK UP TV 4: L: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: C: 0: 4 FINE TuNE TV 4: 1: u: 0: 0: 0: 3: C: 0: 0: 0: 0: 0: 0: 0: C: U: C: 0: C: 0: 5 FINE TUNE VCR U: C: 1: 0: 0: 0: 0: 3: 0: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 1 REP TRANSFORME' 1: 0: J: 0: u: 0: 0: 0: 0: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 1 REP CONVERTER 4: 2: 2: 0: 1: 0: 3: G: 0: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: C: C: 9 REPLACE JLMPcR 2: C: J: J: u: 0: J: 0: 0: 0: 0: 0: 0: 0: 3: 0: 0: 0: 3: C: J: 2 CUSTOMER EDLC 7: 7: 4: 0: 11: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 0: U: 0: 0: Z9 NO TROUBLE FND 5: 2: U: 1: 1: 0: 0: C: 0: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 9 CUSTOMER 48: 15: 17: 1: 15: 0 0: 0: 3• 0: 0: 0: 0: 0: 0: 0: 0: 0: J: 0: C: 97 ILLEGAL HOOKUP 1: C 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 1 ILLEGAL OUTLET 1: 0: 0: 0: 1: 0: U: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 2 VERTICAL HOLD 0: 0: 0: 0: 1: 0: 0: G: 0: 0: 0: 0: 0: 0: 0: 0: J: 0: 0: 0: 0: 1 BURNT CAGLE 0: 0: 0: 1: 0: 0: 0: 0: 3: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 1 HORIZONTAL HOLD 1: 0: L: 0: 0: 0: J: 0: 0: 0: 3: 0: 0: 0: 0: G: 0: 0: 0: 0: 0: 1 TV SET BAD 4: 1: 3: 1: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: J: 0: 0: 0: 0: 9 CUSTOMER 7• 1: 2• 2• C• 0• 0• 0• 0• 0: 0: U: 0: 0: 0: 0: 0: 0: 0: 0: 15 LOOSE FITTINGS 2: C: 0: 0: 1: 0: 0: 0: J: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 3 OTHER 2. C• 0• 0• 1 0 0• 0. 0• 0• 0: 0: 0: 0: 0: 0: J: 0: 0: 0: J: 3 IOTA_ 5a• 16: 3• 2o• C• 0• G• 0• 0• 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 0: 126 1 Access The right to use cable systems, usually to originate programming to reach subscribers. 1 1 1 1 I Aerial Plant Cable that is suspended in the air on poles that are often leased from the local telephone or power company. 1 1 1 1 Amplitude Modulation Varying the amplitude or a radio carrier wave in accordance with the input or modulating signal. I Angstrom A minute unit of length used in expressing the length of light waves. 1 Angstrom one ten thousandth of a micron. 1 1 1 1 I Attenuation The decrease of signal strength as it progresses from source to receiver. It is a function of the transmission medium, distance, and frequencies being transmitted. 1 1 Active Any circuit containing amplifying devices, such as tubes or transistors. Additional Signals According to FCC regulations, signals that some systems may carry in addition to those required or permitted as minimum service or mandatory carriage. Addressable Cable System An addressable cable system is one in which each converter/ descrambler is normally controlled by a central computer which uses an integrated program to authorize program choices, automatically generate billing information, and produce reports and accounts for the cable system. Adjacent Channel Any of two TV channels are considered adjacent when their video carriers, either off -air or on a cable system, are 6 MHz apart. FM signals on a cable system, two channels apart are adjacent when their carriers are 400 to 600 KHz apart. Allocations The assignments of frequencies by the FCC for various communications uses (e.g., television, radio, landmobile, defense, microwave, etc.) to achieve a fair division of the available spectrum and to minimize interference among users. Amplifier A device used to boost the strength of an electronic signal. Amplifiers are spaced at intervals throughout a cable system to rebuild the strength of television signals which weaken as they pass through the cable network. Amplitude Modulated Link A technique for linking cable grids or branch lines by high- frequency microwave rather than coaxial trunk line. Reduces the cost of wiring rural regions or congested urban areas. Antenna A device used to transmit or receive broadcast signals. Antenna Array A radiating or receiving system composed of several spaced radiators or elements. Antenna Power The product of the square of the broadcast antenna current and the antenna resistance where the current is measured. Antenna Preamplifier A small amplifier, usually mast mounted, for amplifying weak signals to a level sufficient to compensate for down -lead losses and to supply sufficient input to system control devices. Antenna Run Transmission lines which extend from the receiving antenna to the beginning of the distribution lines. Attenuation Loss The actual power loss in a cable, attenuator, coupling, or other device when 1 GLOSSARY OF TERMS 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 GLOSSARY OF TERMS electrical energy is transmitted through it, usually expressed in decibels. Attenuator A device for reducing the amplitude of a signal without deliberately introducing distortion. Augmented Channel System A way of gaining more VHF channel capacity on a conventional single cable system through the installation of subscriber set -top converters. Back Matched Tap A cable tap device which employs transformer isolation and also employs impedance matching at the tap-off points. Back Porch That portion of the composite picture signal which lies between the trailing edge of the horizontal sync pulse and the trailing edge of the corresponding blanking pulse. Band A segment of the radio frequency spectrum as wide or narrow as may be desired. Presently the complete band of CAN operations can be as wide as 5 MHz to 500 MHz. Band Pass Filter An active or passive circuit which allows signals within the desired frequency band to pass through but impedes signals outside this pass band desired. Bandwidth A measure of spectrum (frequency) use or capacity. For instance, a voice transmission by telephone requires a bandwidth of about 3000 cycles per second (3KHz). A TV channel occupies 50 to 300 MHz on the electromagnetic spectrum. Bias An unvarying of an electropotential difference (voltage between a given circuits elements), usually grid of a tube or base of a transistor, and the cathode or emitter. Bit An electrical or light pulse whose presence or absence indicates data. The capacity of the optical waveguide to transmit information through the waveguide without error is expressed in bits per second per unit length. Blanking (Picture) The portion of the composite video signal whose instantaneous amplitude make the vertical and horizontal retrace invisible. Booster A relay device retransmitting broadcast signals at increased power on the same frequencies as those originally received. Branch That portion of a cable television system linking the "trunk or main line, to each "drop or household terminal connection. Bridging Amplifier or Bridger An amplifier which is connected directly into the main trunk of a CAN system but isolated from it. It provides service into the distribution or feeder systems. Broadband A general term used to describe wide bandwidth equipment or systems which can carry a large proportion of the electromagnetic spectrum. A broadband communications system can accommodate all broadcast and many other services. Broadband Communication Any electronic delivery system having the capacity to carry a wide range of electromagnetic frequencies. The modern cable operation would be "broadband while telephone and telegraph circuits would be termed "narrow band Cable Powering A method of supplying power to solid -state CAN equipment by using the coaxial cable to carry both signal and power simultaneously. Cable Spacer A device used in lashed cable construction to provide a separation between the cable 2 1 1 1 1 1 1 1 I Cable Television Relay (CAR) Station A fixed or mobile station used for the transmission of television and related audio signals, signals of standard and FM broadcast stations, signals of instructional television fixed stations, and cable casting from the point of reception to a terminal point from which the signals are distributed to the public by cable. I Cable Television Relay Studio to Headend Link (SHL) Station A fixed CAR station used for the transmission of television program material and related communications from a cable television I studio to the headend of a cable television system. Carrier Wave A RF Wave (defined by its frequency) which is used as a 'vehicle" to carry intelligent information (modulation) upon it. 1 1 1 I Characteristic Impedance The total apparent impedance looking into the end of an infinite length transmission line. The common characteristic impedance used in CAN is 75 Ohms. 1 1 1 1 1 GLOSSARY OF TERMS and the messenger strand. Cable System By legal definition, a facility serving a single community or a distinct governmental entity. Thus, one cable operation distributing signals within two separate but contiguous municipalities would be viewed by the commission as two systems, even though unified in management and operation and providing the same service to each area. Cable Television Apparatus for distributing video programming by wire connections to individual television receivers; cable television service includes carriage of video television signals locally available, carried by microwave from distant points, and originated solely for wire distribution, as well as nonvideo programming and return service. Cable Television Channel A frequency Band 6 MHz in width within which a standard television broadcast signal is delivered by cable to a subscriber terminal. Cable Television Relay Pickup Station A land mobile CAR station used for the transmission of television signals and related communications from the scenes of events occurring at points removed from cable television studios to cable television studios or headends. Channel In television, a single path or section of the spectrum 6 MHz wide, which carries a television signal. Channel Capacity The maximum number of 6 MHz channels which can be simultaneously carried on a CAN system. Channel Frequency Response The relationship within a cable television channel between amplitude and frequency of a constant amplitude input signal as measured at a subscriber terminal. Chrominance Signal That portion of the NTSC color television signal which contains the color information. Closed Circuit A system of transmitting TV signals in which the receiving and originating equipment are directly linked by cable, microwave or telephone lines, without broadcasting through the air. Coaxial Cable Copper or copper- sheathed aluminum wire surrounded by an insulating layer of polyethylene foam, used by CAN systems. The insulating layer is covered with tubular shielding composed of tiny strands of braided copper wire, or a seamless aluminum sheath, and protective outer skin. The wire and the shielding react with each other to set up an electromagnetic field between them. This system reduces frequency loss and gives cable its great signal- carrying capacity. 3 1 1 1 1 1 1 Decibel The standard unit used to express the ratio of two power levels. It is used in communications to express either a gain or loss in power between the input and output devices. (a) a -3db loss is approximately 50% of a decrease in power. (b) a -2db loss is approximately 37% of a decrease in power. (c) a -ldb loss is approximately 20% of a decrease in power. (d) a -.5db loss is approximately 11% of a decrease in power. Directional Coupler A high quality tapping device providinf isolation between tap and output terminals. 1 1 1 1 1 1 1 1 1 1 1 1 GLOSSARY OF TERMS Co- Channel Any two or more TV signals are considered co-channel when their video carriers, either off -air or after conversion by CAN equipment, occupy the same TV channel. Conduit A tube, manufactured of an environment protective material, through which CATV cable is conveyed in an underground system. Converter A device used to convert non -VHF television signals into standard VHF channels. Cable systems often install converters where more than 12 channels are relayed on a single cable. Converters also protect signals from the interference of strong local signals. Cross Arm A wooden or metal device used to obtain the necessary cable strand clearance in a horizontal plane rather than the usual vertical plane on a utility company pole. Cross Modulation A form of signal distortion in which modulation from one or more r -f carrier(s) is imposed on another carrier. Directional Tap A combined directional coupler and splitter used to tap off signals from the directional (feeder) lines to feed subcarrier drops. Discontinuity An abrupt break or interruption in continuity of a characteristic impedance or a transmission line. Caused by structural defects in coaxial cable where the Zo changes locally. Distant Signal The signal of a television broadcast station beyond the Grade B contour of that station. Generally, signals originating at a point too distant to be picked up by ordinary television reception equipment. Distortion The departure, during transmission or amplification, of the received signal wave form from that of the original transmitted wave form. Distribution Plant The hardware of a cable system amplifiers, trunk cable and feeder lines, attached to utility poles or fed through underground conduits like telephone and electric wires. Distribution System The part of a CATV system used to carry signals from the headend to subscriber's receivers. Often applied, more narrowly, to the part of a CATV system starting at the bridger amplifiers. Downstream The direction in a cable system from the headend to the terminals. Drop A small branch of cable which connects the antenna terminals on the back of the subscriber's television receiver to the feeder cable inthe street. Earth Stations Ground terminals that use antennas and associated electronic equipment to transmit, receive and process communications via satellite. 4 1 Easement The right to use land for a specific purpose, such as laying cable. Feeder Line Intermediate cable distribution lines that connect the main trunk line to the smaller house drops that lead into residences. Flat Loss Equal loss at all frequencies, such as caused by atfenuators. Flat Outputs Operation of a CAN system with equal levels of all N signals at the output of each amplifier. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 GLOSSARY OF TERMS FM Band The range of cable frequencies from 88 MHz through 108 MHz, normally used for FM radio signal carriage. Franchise Contractual agreement between a CAN operator and the governing municipal authority. Under federal regulation a franchise, certificate, contract or any other agreement amounts to a license to operate. Frequency The number of times an electromagnetic signal repeats an identical cycle in a unit of time, usually one second. One Hertz (Hz) is one cycle per second. A KHz (Kilohertz) is one thousand cycles per second; a MHz (Megahertz) is one million cycles per second; a GHz (Gigahertz) is one billion cycles per second. Frequency Bandwidth The number of hertz (cycles per second) in the band; based upon the information transmitted and method of transmission. Frequency Response The change of gain with frequency. Gain A measure of amplification expressed in dB. For matched CAN components. Gain of an amplifier is usually specified at the highest frequency of operation, for example, at Channel 13 for all band equipment. Ghost A shadowy or weak image in the received picture, offset either to the Ieff of the primary image, the result of transmission conditions which create secondary signals that are received earlier or later than the main or primary signal. A ghost displaced to the left of the primary image is designated as "leading" and one displaced to the right is designated as "following" (lagging). When the tonal variations of the ghost are the same as the primary image, it is designated as "positive" and when it is the reverse, it is designated as "negative Halo Most commonly, a dark area surrounding an unusually bright object, caused by overloading of the damera tube. Reflection of studio lights from a piece of jewelry, for example, might cause this effect. With certain camera tube operating adjustments, a white area may surround dark objects. Hardware The equipment involved in production, storage, distribution or reception of electronic signals. In CAN it means the headend, the coaxial cable network, amplifiers, the television receiver and production equipment like cameras and videotape recorders. Harmonic Distortion Form of interference involving the generation of harmonics according to the frequency relationship f =nf1 for each frequency present, where n is a whole number equal to 2 or more. Headend Electronic control center generally located at the antenna side of a CAN system usually including antennas, preamplifiers, frequency converters, demodulators, modulators and other related equipment which amplify, filter and convert incoming broadcast TV signals to cable system channels. 5 1 1 1 High Band TV channels 7 through 13. High VHF Band Part of the frequency band which the FCC allocates to VHF broadcasting, including channels 7 through 13, or 174 through 216 MHz. 1 1 1 1 I Impedance The total opposition to AC electron current flow within a device. Impedance is generally a frequency dependent parameter. This characteristic is expressed in Ohms. 1 1 1 1 1 1 I 1 1 1 Horizontal (Hum) Bars Relatively broad horizontal bars, alternatively black and white, which extend over the entire picture. They may be stationary, or may move up or down. Sometimes referred to as a "venetian blind" effect. Caused by approximate 60 -cycle interfering frequency, or one of its harmonic frequencies. House Drops The coaxial cable that connects each building or home to the nearest feeder line of the cable network. Hue Corresponds to "color" in everyday use; i.e., red, blue, etc. Black, white and gray do not have hue. Hum Modulation Form of distortion where the power -line frequency modulated the TV signal, causing hum bars to appear in the picture. Insertion Loss Additional loss in a system when a device such as a directional coupler is inserted; equal to the difference in signal level between input and output of such a device. Interactive Mode A cable system that allows two -way communication, including contact between subscriber and operator, or contacts among groups of subscribers. Interconnect To link CAN headends, usually with microwave, so that subscribers to different cable systems can see the same programming simultaneously. Interference Energy which tends to interfere with the reception of the desired signals, such as fading from airline flights, r -f interference from adjacent channels, or "ghosting" from reflecting objects such as mountains and buildings. Isolation The characteristic attentuation of RF signals (expressed in dBs) between one of the output ports of a splitter or directional coupler and the other output port. Jumper Cable Short length of flexible coaxial cable used in older CAN systems to connect system coaxial cable to amplifiers or other CAN components. Load The device that receives signal power from a signal transmission system. Loading Effect The effect of reducing voltage or signal output level due to drawing excessible current from a circuit's output. Local Origination Channel A channel on a cable system (exclusive of broadcast signals) which is programmed by the cable operator and subject to his exclusive control. Local Station Any television station placing a signal of Grade B Contour or better over any portion of the 6 GLOSSARY OF TERMS Hertz The name of the unit used to describe the frequency of electrical signals, or the bandwidth required by such signals. One hertz equals one cycle per second; one megahertz equals one million cycles per second of electrical signal. 1 GLOSSARY OF TERMS area in which a cable system is operating. Can also refer to any television station located within thirty five miles of any portion of a cable system. Luminance This indicates the amount of Tight intensity, which is perceived by the eye as brightness. Main Trunk The major link from the headend to feeder lines. Master Antenna Television System An antenna system that serves a concentration of television sets such as an apartment building, hotel or motel. Microwave Line -of- sight, point to-point transmission of signals at high frequency. Mid Band The part of the frequency band that lies between television channels 6 and 7, reserved by the FCC for air, maritime and land mobile units, FM radio and aeronautical and maritime navigation. Mid band frequencies, 108 to 174 MHz, can also be used to provide additional channels on cable television systems. Modulator The electronic equipment required to combine video and audio signals from a studio and convert them to radio frequencies (r -f) for distribution on a cable system. Also, a very low- powered television signal generator used to provide signals for distribution on a CAN system. Monitor A special type of television receiver. It is not tunable to channels, and is used for viewing video tapes, or to display the picture transmitted by a live television camera. MSO (Multiple System Operator) A company which owns more than one CAN system. Multiplexing More than one signal sent in the same channel without mixture. Division can be by frequency, time, or space. Pedestal Housing An environment protection device in underground CAN systems, with direct above ground access, used to house subscriber isolation units, passive distribution equipment and solid state trunk and distribution amplifiers. Performance Standards The minimum technical criteria that must be met by CAN systems, consistent with standards set by the FCC or the local ordinance. Picture Tube A cathode -ray tube used to produce an image by variation of the intensity of a scanning beam. Plant The physical equipment, or hardware of a cable system. Pole Attachment When CATV systems use existing pole lines maintained by power and telephone companies, an attachment contract must be negotiated between the parties of interest. Pole Contact Point The vertical contact point on each pole for the CATV cable. Pole Rearrangements The physical movement of telephone and /or power cables or equipment on a utility pole to accommodate CAN cable. Pole Rights An agreement between the CAN operator and the utility companies or other owners of poles or conduits upon which the operator has granted the right of attaching his fittings for the suspension of his cable. Pulse A sudden change of brief duration produced in the current or voltage of a circuit in order to 7 GLOSSARY OF TERMS actuate or control an instrument. Radiance The radiant flux per -unit solid angle and per -unit surface area measured normal to the direction of propagation of the flux. Raster The scanned (illuminated) area of the cathode ray picture tube. Redundant Cable The unused cable(s) in a multiple -cable system. These cables are capped off and reserved until the need for greater channel capacity or bidirectional capability arises. Reflections or Echoes In video transmission this may refer to either a signal or the picture produced. 1. Signal: (a) Waves reflected from structures or other objects. (b) Wves which are the result of impedance or other irregularities in the transmission medium. 2. Picture: "Echoes" observed in the picture produced by the reflected waves. Resolution (Horizontal) The amount of resolvable detail in the horizontal direction in a picture. It is usually expressed as the number of distinct vertical lines, alternatively black and white, which can be seen in three quarters of the width of the picture. This information usually is derived by observation of the vertical wedge of a test pattern. A picture which is sharp and clean and shows small details has good, or high, resolution. If the picture is soft and blurred and small details are indistinct it has poor, or low, rephase response of the pickup equipment the transmission medium and the picture monitor, as well as the se of the scanning spots. Resolution (Vertical) The amount of resolvable detail in the vertical direction in a picture. It is usually expressed as the number of distinct horizontal lines, alternately black and white, which can be seen in a test pattern. Vertical resolution is primarily fixed by the number of horizontal scanning lines per frame. Beyond this, vertical resolution depends on the size and shape of the scanning spots of the pickup equipment and picture monitor and does not depend upon the high- frequency response or bandwidth of the transmission medium or picture monitor. RF (Radio Frequency) The frequency spectrum from 15 kHz to 100 GHz. RFI (Radio Frequency Interference) Electromagnetic radiation in the radio frequency spectrum frm 15kHz to 100 GHz. Ringing An oscillatory transient occurring in the output of a system as a result of a sudden change in input. Results in close- spaced multiple reflections, particularly noticeable when observing test patterns, equivalent square waves, sine squared signal, or any fixed objects whose reproduction requires frequency components approximating the cutoff frequency of the system. Satellite Communications A satellite placed at the right altitude where it can remain stationary with respect to the earth below it (synchronous altitude), can act as a communications station linking together a large portion of the earth's surface. Scanning Line A single continuous narrow strip of the picture area containing highlights, shadows, halftones, determined by the process of scanning. Second Order Beat An unwanted carrier created by two separate carriers beating against each other. These beating carriers may have the same or different frequencies. Second Harmonic A second order beach whose beating carriers have the same frequency. 8 GLOSSARY OF TERMS Semiconductor Material with an electrical characteristic which is insulators. Most commonly used semiconductors for transistors and diodes are germanium, silicon, and gallium arsenide. Sideband RF energy dispersed about an RF carrier which contains the modulated imfornation impressed on the carrier. In amplitude modulation, two sidebands are normally produced; however, in television AM the lower sideband is suppressed by what is known as a vestigal sideband filter. Signal The coherent, significant and intentional components of information (such as sound or picture) received, or transmitted, as electrical impulses. Signals are noted in terms of strength (voltage) and frequency (cycles per second). Signal Level The rms voltage mesured during the r -f signal peak. It is usually expressed in microvolts referred to an impedance of 75 ohms, or in dBmV, the value in decibels with respect to a reference level of 9 dBmV, which is 1 millivolt across 75 ohms. Signal Noise Ratio The ratio of the signal to noise level with both measured either at the input or output of electronic equipment, usually expressed in dB. Smear A term used to describe a picture condition in which objects appear to be extended horizontally beyond their normal boundaries in a blurred or "smeared" manner. Snow Heavy random noise. Software Programming and programming materials such as films, video-tapes and slides. Solid State A term taken from physics, used interchangeable with the word transistorized; also includes other semiconductor elements, such as diodes. Generally refers to tubeless equipment. Spacing Length of cable between amplifiers expressed as dB loss at the highest TV channel provided for in a system, equal to amplifier gain in maintrunks. Span Distance between line extenders or distribution amplifiers; also, distance between taps. Spectrum An array of the components of an emission or wave separated and arranged in the order of some varying characteristic (as wave length, mass, or energy), usually in CAN is the frequency band from 54 to 216 Mhz. Sp lifter A passive device (one with no active electronic components) which distributes a television signal carried on a cable in two or more paths and sends it to a number of receivers simultaneously. Standard Television Signal A signal which conforms to the television transmission standards of the FCC. Standing Wave Radio An alternative method of expressing return Toss which describes the ability of a load to absorb energy without reflecting any back to the source. Ideally, the S.W.R. should have a ratio of 1 +1. Streaking A term used to describe a picture condition in which objects appear to be extended horizontally beyond their normal boundaries. This will be more apparent at vertical edges of objects when there is a large transition from black to white or white to black. The change in luminance is carried beyond the transition, and may be either negative or positive. For example, if the tonal degradation is an opposite shade to the original figure (white following white), the streaking may extend to the right edge of the picture, and in extreme cases of low- frequency distortion, can extend over a whole line interval. 9 1 GLOSSARY OF TERMS Subscriber Drop A cable which connects the tap or coupler of the feeder cable to the subscriber's premises and TV set. Subscriber Terminal The cable television system terminal to which a subscriber's equipment is connected. Separate terminals may be provided for delivery of signals of various classes. Sync An abbreviation of the words "Synchronization "synchronizing etc. Applies to the synchronization signals, or timing pulses, which lock the electron beam of the picture monitors in step, both horizontally and vertically, with the electron beam of the pickup tube. The color sync signal (NTSC) is known as the color burst. Sync Generator A device used to supply a common or master sync signal to a system of several cameras. This ensures that their scanning pulses will be in phase. Scanning pulses out of phase produce distortion or rolling, sometimes called "sync loss System Level The level of signal in a CATV system at the output of each amplifier. Must be carefully chosen and maintained for least distortion and noise. System Mode or System Tilt The tilt at the output of each amplifier, normally set in the head end for the main trunk (or bridger for the distribution system). System Noise Refers to the random energy generated by thermal and shot effects in the system. It is specified in terms of its rms level as measured in a 4 MHz bandwidth centered within a 6 MHz cable televison channel. Tap A device installed in the feeder cable which connects the home TV set to the cable network. Also called a drop. Tap Loss The characteristic insertion Toss of RF signal expressed as a dB ratio of a power level fed at the input of a splitter or coupler to the level at the tap port. Tearing A term used to describe a picture condition in which groups of horizontal lines are displaced in an irregular manner. Caused by lack of horizontal synchronization. Terminal The connectors, transformers and converter (if necessary) on the cable subscriber's set. Third Order Beat An unwanted carrier created by three separate carriers beating against each other. These beating carriers may have the same or different frequencies. Third Harmonic A third order beat whose three beating carriers all have the same frequency. Tree Network The conventional cable distribution network that includes the cable and all the appurtenant devices necessary to carry the signals from the head end to each of the subscribers' terminals. Trunk The backbone or main line of the cable system. This main coaxial cable carries signals from the headend to the extremities of the area served with the minimum possible number of amplifiers and no subscriber taps. Trunk Line The major distribution cable used in CATV. It divides into feeder lines which are tapped for service to subscribers. Trunkline Amplifier An amplifier inserted into the trunkline; a weak input signal is amplified before being applied to the output cable, usually carrying a number of TV channels simultaneously. 10 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 GLOSSARY OF TERMS Two -Way Capacity A CATV system with two -way capacity can conduct signals to the head end as well as away from it. Underground Installation A method of installing cable underground as opposed to aerial suspension on poles. Upstream Signals traveling from subscribers to the headend. Usable Space The space on a utility pole above the 'minimum grade level which can be used for the attachment of wires and cables to carry CATV signals. Video Band The frequency band utilized to transmit a composite video signal. Video Transmission The original video signal before ft is modulated and converted to radio frequency and broadcast or cablecast. A home television set reconverts radio-frequencies to a video signal. VITS (Vertical Interval Test Signal) A method whereby broadcasters add test signals to the blanked portion of the vertical interval. Normally placed on lines 17 through 21 in both field one and two. Voltage Generator A two-terminal circuit element with a terminal element substantially independent of the current through the element. An ideal voltage generator has no internal impedance and therefore would deliver an infinite amount of current without terminal voltage being affected (Sometimes referred to as voltage driver or a source driver). VSWR An abbreviation for Voltage Standing Wave Radio. Reflections present in the original signal to produce voltage peaks and dips in addition and subtraction. The ratio of the peak -to-dip voltage is termed VSWR. A perfect match with zero reflections produces a VSWR of 1. For freedom from ghosting, most matches in a CAN system must be at a VSWR of 1.25 or less. Windshield Wiper Effect Onset of overload in multichannel CATV systems caused by cross modulation, where the horizontal sync pulses of one or more TV channels are superimposed on the desired channel carrier. Both black and white windshield wiping are observed and are caused by different mechanisms. 11 able Communications Consultants Port Angeles Washington PORT ANGELES TELECABLE REVIEW August 4,1989 Consultants to Local Governments Specializing in Cable Television: 5.2- EIS w franchising refranchising 40 community needs assessments negotiation 4 evaluation ordinance preparation franchise 's+ administration access 4517 California Avenue Southwest, Suite B, Seattle, Washington 98116 (206) 935 -9040 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Dear Duane: Cable Communications Consultants Duane Wolfe City Administrator of Finance PORT ANGELES CITY HALL P.O. Box 1150 Port Angeles, WA 98362 August 3, 1989 Preparatory to the periodic meeting scheduled with the cable television Operator, Port Angeles Telecable (owned by Northland Communications Corporation) we are enclosing a proposed agenda and other documents relating to the franchisee's technical and operational compliance with the franchise. For convenience we are attaching various reports and correspondence received from Northland relative to matters of concern to the City of Port Angeles. Members of the cable television committee and staff have seen the majority of these documents. Also among these attachments we have prepared a chronological summary of compliance items and their present status. Please note that some of these items are incomplete. The more important ones and issues that the City may wish to raise in the forthcoming meeting are those of financial reporting and consumer relations. To the former point it would seem to be the intention of Section 16(B) of the Cable Television Ordinance that the financial report should be of Port Angeles Telecable and not that of its parent company. The purpose of requiring this financial information is so that the City may have an indication of the local operator's financial stability, its source of funds, its ability to comply with future commitments such as upgrading and access equipment, and, in general, to be able to satisfy itself that, in words of the Cable Act "The Operator has the financial, legal, and technical ability to provide the services, facilities, and equipment... An umbrella financial report does not address the specifics needed by Port Angeles. Of all the items that are incompletely reported the more important is citizen relations. Section 16(L) of your Ordinance calls for information on complaints received and their disposition. Because of Telecable's reported inability in the past to have such information available, it is difficult for the City or its designee to ascertain if its residents are receiving the level of services required. Beyond the technicalities, there presently seems to be also a communication gap with the Cable Operator. It 4517 California Avenue Southwest, Suite B Seattle, Washington 98116 (206) 935 -9040 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 would appear that the annual meeting would be an appropriate time for an open discussion on the subject of common consumer service goals and handling. To this view you will notice a rather comprehensive set of procedures which we obtained from Northland. However, we have been told that these policies have just been put in place and that no data from them could be furnished at this point. In addition, on July 28, 1989 we conducted a technical on -site review of the cable system. Our technical report is available but not included in this material because of the details involved. The signal level readings taken at the headend and the amplifiers were essentially the same as those taken one year ago. Pictures were viewed at a subscribers house located at the end of the system and these showed no change from the previous report. We have been informed by Steve Friedman, Regional Vice President of Northland, that his Company would like to address specifically this perceived community relations problem and to make some proposals regarding the City's access channel. Our firm will be pleased to answer questions at the meeting relating to the material appended, or of course, on any other item bearing upon cable television regulation by the City of Port Angeles. Sincerely, C C o MMUNICATIONS CONSULTANTS on Vice President /Director LAH/ ss Attachments: A. Proposed Agenda B. Cable Television Action Calendar C. Service and Rate Comparison D. Complaint Chart E. Northland Communications' Letter of June 20, 1989 F. Northland Communications' Letter of May 1, 1989 E. Port Angeles Telecable's Customer Service Procedure G. Northland Communications' Quality Assurance Policies H. 3 -H Cable Communications Consultants' Most Recent Newsletter Proposed Agenda August 14, 1989 PROPOSED AGENDA City of Port Angeles Cable Television Franchise Meeting (August 14, 1989) I. Consultant's Report A. Review Chronological Compliance Chart II. Consumer Relations A. Comparative Graph B. Data unobtainable from cable Operator C. Future Procedure III. Rates and Services A. Comparative Data IV. Northland Comments A. Community Relations B. Access Proposal V. Discussion and Questions Cable Television Action Calendar DATE DUE October 1,1988 October 1,1988 October 1,1988 October 1,1988 October 1, 1988 October 1,1988 City of Port Angeles Cable Television Action Calendar Port Angeles Telecable Effective Date of Franchise: October 1,1988 ACTION Insurance in the amount of $1,000,000. 300 MHZ system, 30 channel capability with 23 channels on line. Two-way, non -voice return communication, including addressable equipment. Access Limitation equipment (Parental Control Device) Termination Point: A list of services and charges for those subscribers wishing to terminate their service at the outside of their residence. Free standard installation and basic service to city owned buildings and schools. October 1,1988 Customer Service. ORDINANCE REFERENCE Sec. 4 Sec. 5 (1) (c) Sec. 5 (1) (d) Sec. 5 (1) (e) Sec. 5 (1) (h) Sec. 5 (5) 1 Completed. COMPLETION This has been exceeded with 30 channels on line at the present time and room for an additional one or two channels. The local manager reports a two-way capability that is not in use. Also he reports that there is no addressability equipment available. Completed. The agreement is available to subscribers and a copy of it is enclosed. There are no subscribers under this plan to date. All buildings that have requested service are hooked up, however, the new City Hall, for example, has neither requested nor received this service. Sec. 7 A list of customer service policies is attached, however, we were unable to obtain a customer MI I MI MI MI r i MI NM OM MN E OM MN NM r October 1, 1988 November 1,1988 June 1, 1989 August 1, 1989 October 1, 1991 City of Port Angeles Cable Television Action Calendar Port Angeles Telecable Effective Date of Franchise: October 1,1988 DATE DUE ACTION October 1,1988 Customer Service. (continued) A 15% discount on basic service and a 50% discount on installation to low income senior citizens. A list of rates and charges. Annual Report. Annual Meeting. System upgraded to 330 MHz, 35 channel capability. ORDINANCE REFERENCE COMPLETION Sec. 7 service log. Therefore, a comparative analysis by type is not available at this time. We have been advised that there has been a changeover in the type of logs maintained. An updated report will be available to the City in a few months. A chart indicating complaints per subscriber in various other Washington cable franchises is attached. Please note that because of Northland's inability to furnish in -house complaint details, this graph takes into account only complaints received by a City or its designee. Sec. 15 (3) Sec. 15 (2) Sec. 16 Sec. 17 Sec. 5 (1) (c) 2 This service is available with 260 individual subscribers as well as bulk ageements with low income senior housing at present. Completed. Completed. Scheduled for August 14, 1989. The system is at 300 MHz at this point. The upgrade has been broken into phases, the first of which has been submitted to the corporate MI MO MI I E MM MII MN MN OM I DATE DUE October 1, 1991 Upon Request City of Port Angeles Cable Television Action Calendar Port Angeles Telecable Effective Date of Franchise: October 1,1988 ACTION System Upgrade. (continued) Access channel: one channel for Public, Educational, Government (additional channels when warranted). Upon Request Operator to provide a character generator for City use and up to $12,500 for access uses. ORDINANCE REFERENCE Sec. 5 (1) (c) Sec. 5 (1) (f) Sec. 5 (1) (g) 3 COMPLETION offices for approval. It is unknown what Corporate scheduling is on this matter. This channel is available upon request. As of yet, the City has not required the use of this channel. The Operator has a character generator and access funds are available for the City upon request. NM I NM NM I= ININ NM MO NM MI MI MI NM INN OM MN Service and Rate Comparison MN IM MN MI MINN= I= MMINIIMMI NM City Anacortes Auburn Bremerton Clarkston Edmonds Lynnwood Olympia Port Angeles Port Townsend Pullman Puyallup Renton Sequim Wenatchee MAMPAININA Puget Sound avg. National avg. tn... Cable Operator TC I TCI TCI TCI Chambers Lynnwood Viacom TCI Port Ang. Telecable TC I TCI Port Ang. Telecable L Summit Comm. Rock Associates SERVICE AND RATE COMPARISON #Basic Subs. Chan. Cpctv. 3,125 30 6,558 35 8,321 35 2,429 30 4,333 30 6,279 35 7,131 35 6,352 32 1,177 23 5,302 23 5,432 R 35 9,144 35 1,2081 32 15,089' 30 31 Addressabilitv Basic Rate I Prem. No $17.00 No $17.35 L Yes $15.75 No $17.00 No $16.95 No 1 $16.50 Yes $15.75 No $15.95 No L $15.96 No L $15.40_j Yes I $15.40 No 1 $17.35 No $15.95 No $15.75 $16.29 35 $15.56 Rate $11.95 $12.95 $12.95 $11.95 $12.95 $12.95 $11.95 $10.45 $14.95 $11.00 $12.95 $12.95 $10.45 $13.95 $12.45 $10.48 Complaint Chart r M MI MN M MN MI MI MN MN NM M I ANNUAL COMPLAINT TO CITY REPORT (Per 1,000 Subscribers) CITY AVE. OF SUB. COMPLAINTS RATIO AUBURN 7,115 22 3.09 BELLEVUE 21,294 62 2.91 KENT 5,406 16 2.95 KIRKLAND 9,098 19 2.08 PORT ANGELES 6.352 25 3.93 REDMOND 11,296 29 2.56 RENTON 10,118 36 3.55 TUKWILA 1,190 5 4.20 AVERAGE 2.97 MI MN NM MI MO NM MR NM l♦ I NM OM OM Complaint Per 1,000 Customers 4.4 4.0 3.6 H 3.2 2.8 2.4 2.0 H 1.6 1.2 0.8 0.4 0.0 3.09 2.91 2.95 Annual Complaint to City Report 2.08 3.93 2.56 3.55 4.2 Aub. Belle. Kent. Kirk. Pt. Ang. Red. Renton Tuk. City Northland Communications' Letter of June 20,1989 `;EI NORTHLAND COMMUNIGITIONS CORPORATION June 20, 1989 Mr. Dave Flodstrom City Manager City of Port Angeles 140 West Front Street P.O. Box 1150 Port Angeles, WA 98362 Gentlemen: 1201 Third Avenue, Suite 3600 Seattle, Washington 98101 (206) 621 -1351 Mr. Lon A. Hurd 3 -H Cable Communications Consultants 4517 California Avenue Suite B Seattle, WA 98116 This letter will respond to the City's letter of May 20, 1989 and to Mr. Lon Hurd's letter of June 16, 1989, both of which requested additional information in our annual report. Pursuant to the categories identified in the City's letter, and in the interest of providing information to assist with Mr. Hurd's request for a future meeting among the City, our office and Mr. Hurd's office, the following is the additional information requested by the City: Item A We do not have an audited financial report specific to our service to customers within the City of Port Angeles or for the Port Angeles Telecable systems. Such a report was filed for the parent corporation, Northland Telecommunications Corporation. Item H During 1988, we performed 2,273 installations of basic service, 1,090 extra outlets, 446 HBO, 316 Cinemax, 388 Showtime, 245 Movie Channel and 317 Disney customers. Item I During 1988, we disconnected 2,068 basic customers, 952 extra outlets, 468 HBO, 298 Cinemax, 414 Showtime, 217 Movie Channels and 354 Disney customers. Item L The franchise specifically asks for comments on citizen relations, although it suggests we include the number of complaints received and their resolution. We receive complaints, such as those the City referred to us, but we also receive letters and service calls. By policy, any letters we receive that require a response are, sent a response, although we may respond in writing or by telephone directly with the customer. Not every letter is a complaint, as they may be comments, suggestions or compliments, sometimes on a NORTH -AND COMMUNIGITIONS CORPORATION Mr. Dave Flodstrom June 20, 1989 Page 2 piece of scratch paper, or just noted on the bill. We take each of these comments seriously, and will respond with a service call, when necessary. These letters, complaints, comments, etc., are normally different from a service call. A service call is usually received by telephone and reflects a problem with the customer's cable service. Examples are: outages, problems with a scrambled channel, direct pickup, snowy pictures, etc. As explained in the annual report, these are responded to immediately by dispatching a service technician. These policies and response priorities are important to customer relations. A customer must believe that any complaints or service calls must be a top priority to us, and that we will take steps to resolve it. We have recently taken an additional step to indicate to our customers how important service is, via the implementation of our Quality Assurance Policy. This company wide policy requires customer contact in two ways: 1 Customer Calls Using random sampling methods, we select customers for unsolicited calls to check on their satisfaction with service. Any identified service problems are immediately scheduled for resolution. Customer service representatives, system management and corporate management all participate in these calls. These calls are made throughout the year and will result in communication with about 15% of the customers each year. 2. Call Backs After every service call is signed off as completed by the service technician, the customer must be called. Our purpose is to make sure the service call has been completed to the customer's satisfaction, and the problem no longer exists. The Quality Assurance Policy requires a telephone call to the customer within 48 hours; if the customer cannot be reached, a postcard is sent to the customer inviting their comments concerning the resolution of the service issue or need for a follow -up service call. The Quality Assurance Policy also contains many technical elements, designed to test and measure service, and to identify service problems before they affect a customer's cable television picture. This Policy Mr. Dave Flodstrom NORTHzAND COMMUNICATIONS CORPORATION June 20, 1989 Page 3 Another element of our commitment to quality service and public relations is the customer survey we conducted to assist us in deciding which services, such as TNT, to add to the system. We believe this input was important in assisting us in decision making. Item M We are currently working on the planning and design for the system upgrade to 330 mhz. This upgrade will expand channel capacity to 40 channels. Whereas we will divide the upgrade into project phases, until the planning and design is completed, we will be unable to provide a specific timetable. However, I would be willing to meet with the City later this year to provide the more specific timetable requested. I cannot speculate on the exact services we will add, as customer surveys and new programming developments will determine these additions. New satellite services, which are often announced, and the development of new technologies, such as High Definition Television (HDTV), will also impact new service additions. From a rate standpoint, we expect the only economic impact to be the cost of programming, if any. At the City's and Mr. Hurd's convenience, I would be pleased to meet, on or about August 1, 1989, to discuss the topics raised in Mr. Hurd's letter. Please contact my office at (206) 621 -0314 to schedule an appointment. In the meantime, should you have any further questions, I am available to discuss them. cc: Vern Kiele Jim Penney 1489.kms is representative of our commitment to quality service and to allowing the customer to voice their satisfaction with service. Sincerely, T-642 c Steve C. Friedman Divisional Vice President Letter of May 1,1989 Northland Communications' 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I. Number of Disconnects During the Period Same as item H above. 1 1 rallN NORTHLAND COMMUNICATIONS C RPOR4TION May 1, 1989 Ms. Michelle M. Maike City Clerk City of Port Angeles 321 East Fifth Street P.O. Box 1250 Port Angeles, WA 98362• Dear Ms. Maike: 1201 Third Avenue, Suite 3600 Seattle, Washington 98101 (206) 621 -1351 Pursuant to Ordinance No. 24760, Section 16, we submit our annual report in response to the request of the City of Port Angeles. A. Annual Financial Report I have attached our Annual Report for 1988 for Northland Telecommunications, Inc. (NTC), parent of NCTV. B. Copy of 10 -K Report Not applicable. C. Number of Subscribers We serve 6,352 Equivalent Basic Subscribers within the City. D. Number of Homes Passed We pass a total of 7,377 homes within the City. E. Number of Subscribers with Basic 6,352 customers within the City subscribe to basic. F. Number of Subscribers with Premium 2,247 customers subscribe to a premium service. G. Number of Interactive Subscribers No interactive services are available at this time. H. Number of Hookups during the Period Due to the acquisition in late 1988, our records are not sufficient to supply this information. J. Number of Miles of Cable Constructed None. NORTHLAND COMMUNIC6ITIONS CORPORATION K. Number of Miles of Cable We have 106 miles of plant within the City. L. Citizen Relations We received 25 complaints through the City concerning our rates. Every complaint was resolved by contacting the customer via telephone or letter. Copies of our response to the customer were forwarded to the City after resolution. Any other complaints are resolved directly with the customer when received. It is company policy that we respond to all letters sent by customers. M. Future Technical Plans We plan to upgrade the System to 330 Mhz capability. The initial step in the upgrade is to review existing plant maps to analyze electronic spacing of amplifiers and line extenders. Thereafter, we will analyze the quality of the cable and ability of the passives to pass the 330 Mhz bandwidth. This planning and analysis will allow us to establish a systematic plan to complete the upgrade, with solid and reliable service throughout the bandwidth. In addition to the planning, when any field work is required in system plant or equipment, we modify or replace the equipment to upgrade it to 330 Mhz capability. N. Future Programming Plans Specific plans for future programming changes have not been made. It is our intention, however, should we plan to add any new services, to seek the opinions of customers in a similar manner to last year's survey. -\--0. Maps Detailed design maps are available should the City wish to inspect them. P. Current Billing Practices Statements are printed and mailed on or about the 22nd of each month, billing the customer for service for the upcoming month. If a customer does not pay within 40 days, they are sent a notice requiring payment within 5 days (45 days past due) or they will be disconnected. Customers who pay for 11 months in advance will receive the 12th month free. Q Emergency Power If a limited power outage occurs, we have a portable generator that can keep most channels on air. This is also the case for individual power supplies out in the field. R. Current Service Policy Procedures A summary of our customer service policies include the following: Office hours are 9 AM to 5 PM, Monday through Friday. NORTHLAND COMMUNICATIONS CORPORATION Customer service requests (installations, service additions, etc.) are scheduled within three business days. lly/1139 Trouble calls, such as picture problems, same day service. Sincerely, Steve C. Friedman Divisional Vice President cc: Mr. David Floodstrom, City Manager Mr. Duane Wolfe, Director of Adm. Svcs. Mr. Craig Knutson, City Attorney Mr. Jim Penney Mr. Vern Kiele receive Customers with billing questions receive same day service. Technical staff is on standby after hours, on weekends and on holidays to respond to no picture calls, system outages and other emergencies. An answering service is available to answer calls after hours, and will page standby personnel to respond to no picture calls, system outages and other emergencies. Refunds for service are available for service outages if they are not repaired within 24 hours of notification by the customer, unless the outage is beyond our control. S. Comments We have made significant progress in leakage detection and repair, and are continuing to perform leakage maintenance. We plan to complete the CLI during 1989. Regular Company training sessions for office and field staffs are planned to instruct in technical, financial and customer relations topics. I trust this answers the issues requested to be included in the Report. If you have any questions, please call Vern Kiele or me. CUSTOMER SERVICE POLICY CURRENT SERVICE POLICY AND PROCEDURES 1. Office hours 9:00 AM to 5 :00 PM Monday through Friday. r 2. Customer service requests iet installations, service additions etc.•are scheduled within 3 business days, except during specials or promotions. 3. Trouble calls, such as no picture etc., receive same day service. All others may be scheduled. 4. Customers with billing questions, receive same day service. 5. An answering service is available to answer rr11q after business hours, weekends and holidays and will page standby personell to respond to no picture calls, system outages and other emergencies. 6. Technical staff are on starry after business hours, weekends and holidays to respond to no picture calls, system outages and other emergencies. 7. Refunds for service are available for service outages if they are not re- paired within 24 hours of notification by the customer, unless the service outage is beyond our control. 8. Refunds are available for overpayment of accounts if requested by the customer. 9. Current billing practice; Statements are printed monthly on or about the 21st for the following month's service. If payment is not received in 40 days, a final notice is sent requesting payment within 5 days. (45 days past due). If payment is still not received customer will be disconnected for non- payment. 10. Customers who pay for 12 months in advance will receive the itth month free. 11. A final bill is mailed on the 21st of each month showing all charges for service and equipment not returned. 12. bnthly service rates and installation charges see rate sheet. 13. Port Angeles city residents only, may opt to have their service terminate outside of their hares, by signing 'hold harmless' agreements and paying inspection and special service fees. 14. Prerru um channels on some t.v sets may have a small white line on the extreme left side, due to the horizontal width of some t.v. seta working in con junction with the descsambling process. 15. Port Angeles Telecable complies with all local, State, and Federal laws in technically maintaining its cable systems to assure uninterrupted quality pictures under our control. 16. Should a customer have an unresolved complaint regarding Port Angeles Telecable service, actions or non- actions, such complaints may be lodged with Telecable City or County Franchise. S. 725 East First Street Phone 452-8466 SENDING PAST DUE NOTICES: DISCONNECT FOR NON PAYMENT: RECONNECTING AFTER DNP: FINAL BILLS: ANGELES k BILLING AND COLLECTION PROCEDURE CURRENT BILLING PRACTICES: Statements are printed and mailed on or about the 22nd of each month, bill ng the customer for service for the upcoming month. If a customer does not pay within 40 days, they are sent a notice requiring payment within 5 days (45 days past due) or they will be disconnected. Customers who pay for 1 year in advance, receive 1 month free. Final notices will be sent to all subscribers whose accounts are 30 days delinquent. These past due notices will specify the time frame which the subscriber must pay to prevent their service from being disconnected. On the disconnect date listed on the final notice, the Installer will go to the address to disconnect the service. He will knock on the door and request payment or any equipment that belongs to us. If no one is home the service will be disconnected outside. The customer will be charged accordingly for any unreturned equipment on their final statement. The account must be paid in full through the disconnect date plus $19.95 reconnect fee. Then an order can be scheduled for the next open day to reconnect. Final bills will be sent to all customers disconnected in the above pro- cedures. This final bill will include all charges to be made to the account, i.e., charges for not returning a converter, etc. These bills are dated and must be paid on Date Due. Accounts will be sent to a collection agency if they have been through all of the above steps and still have failed to pay their outstanding balance. All payments must be sent to them; no longer will the office take payments on accounts that are at the collection agency. Port Angeles Washington 98362 725 East First Street Phone 452 -8466 /rf'GELES!/LSc�LSL�, L;LS /Nl. 8. ABOVE ALL -BE POLITE AND COURTEOUS! DICONNECT FOR NON -PAY PROCEDURE 1. Knock on door and try to collect money owed. 2. If no one home DISCONNECT. 3. If customer home -let them know who you are and advise them of the money owed. 4. If customer doesn't have any money- advise them that you have to disconnect the service. 5. If customer pays -mark the amount on the DNP order and thank the customer. 6. If customer has moved -let whoever answers the door that there is an outstanding bill for this address and you have to dis- connect the service. 7. Advise the new potential customer that they can have cable service if thet call the office. Port Angeles Washington 98362 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 PORT ANC:PI PS PORT ANGELES TELD ABLE SERVICE PACKAGES BASIC CHANNELS $15.95 PREMIUM CHANNELS CHANNEL 2 Cam, SHOWrIME $10.45 CHANNEL 3 Local Weather /Ads HBO $10.45 CHANNEL 4 KOMO MOVIE CHANNEL $10.45 CHANNEL 5 KING CIN M X $10.45 CHANNEL 6 CHEK DISNEY 7.95 CHANNEL 7 KKIRO CHANNEL 8 CHAN SHOWCASE PACKAGE $37.95 *CHOICE OF 3 OUT OF 4 PREMIUMS CHANNEL, 9 KCTS BASIC CHANNEL 10 CKVU SHOWrIME CHANNEL 11 KSTW MOVIE CHANNEL CHANNEL, 12 KVOS CINEMAX CHANNEL 13 KC PO DISNEY CHANNEL 19 SHOPPING CHANNEL (WITS DISNEY IN THIS PACKAGE SAVE $6.85 WITH OTHER 3 AS THE PACKAGE SAVE $9.35 CHANNEL, 20 NASHVILLE CHANNEL 21 USA 22 CHANNELS OF FM $2.00 CHANNEL, 22 CABLE NEWS NETSNORK EXTRA CUTLETS $2.00 CHANNEL 24 WTBS Atlanta TOTAL PACKAGE $58.85 (saves $6.85) CHANNEL 25 NICKELODEON BASIC MOVIE CHANNEL SHOWTIME CINEMAX CHANNEL, 26 ESPN CHANNEL 27 MTV NETWORK CHANNEL 28 ARTS ENTERTAINMENT CHANNEL, 29 DISCOVERY CHANNEL 30 LIFETIME CHANNEL 31 CABLE HEADLINE NEWS CHANNEL 32 ?NT HBO DISNEY TERMINATION POINT AGREEMENT I, will hold Port Angeles Telecable and the City of Port Angeles harmless from all liability and will comply with Port Angeles Telecable and FCC installation requirements. I agree to pay in advance to Port Angeles Telecable an initial inspection fee of and a monthly maintenance fee of and allow Port Angeles Telecable to repair or disconnect any faulty on premise equipment. Signed Address Date 7 1 i Quality Assurance Policies Northland Communications' 1 NORTHLAND COMMUNI�9TIONS 1 CORPOR4TION 1 NCP -21 Rev. 0 Page 1 of 27 Purpose The purpose of this policy is to insure that quality and consistent service is provided to each Northland subscriber and that Northland service maintains a high level of perceived value. Position Responsibilities An employee which holds a position listed below shall complete the requirements as outlined in this policy. Page Vice President Technical Services 6 Regional Manager 7 System Manager /Manager Technician 8 Technician 9 Installer /Technician Installer 10 1 Office Manager 11 Customer Service Representative 12 1 Procedures and Requirements Refer to the attached Subscriber Random Selection Procedures, FCC File Requirements and the current copy of FCC Regulations Parts 17, 25, 76, 78 and 9 0, for procedures and requirements to comply with this policy. The system performance tests performed at system test points will be made using generally accepted engineering practices. The system test results will be compared to theoretical performance. 1 1 1406 QUALITY ASSURANCE POLICY APPROVED: -71 -41.4j DATE /7/a -el 2 /9g4 1 J hn S. Whetzell, es dent NORTHLAND COMMUNIGITIONS CORPORATION Forms The following forms will be used: 1406 QUALITY ASSURANCE POLICY NCP -21 Rev. 0 Page 2 of 27 QA01 System Performance Test Point Log 14 QA02 Daily Signal Leakage Log 15 QA03 System Leakage Inspection Report 16 QA04 Headend Log 17 QA05 Daily Test Point Log 18 QA06 Signal Leakage Work Order 19 QA07 FCC File Checklist 20 QA08 Customer Call Form 21 QA09 CLI Report 22 QA10 Customer Call Back Form 23 QA11 Service Workorder 24 QAl2 Weekly Workorder Log 25 QA13 Response Postcard 26 QA14 Quality Assurance Flow Chart 27 Page NORTHLAND COMMUNIG1TIONS CORPORATION Each quarter, using a current list of all active customers, the system will randomly select customers to be called for the "call" program during the upcoming quarter. The procedures to be used to select customers are as follows: 1. Obtain a complete list of all active customers. The same report should be used from quarter to quarter. 2. Determine the total number of active customers on the list. This is the total population to be surveyed. 3. Determine the total number of customers to be called during the upcoming quarter by adding calls to be made by each CSR, office manager, etc. This is the total calls to be completed. 4. Add 50% to the sample to insure enough customers are selected who will be at home or available to answer the phone. This is the total to be sampled. 5. Divide the total population #2) by the total sample #4) to calculate the interval in the selection process. 6. Using the list of active customers, and starting at the beginning of the list, count the random number of customers from the beginning of the list. The random number will be a predetermined number that will vary each quarter. The random number to use to count will be: 1406 Quarter Random Number 1 7 2 3 3 9 4 5 QUALITY ASSURANCE POLICY Subscriber Random Selection Procedures NCP -21 Rev. 0 Page 3 of 27 NOTE: New quarterly random numbers would be selected each year NORTHLAND COMMUNGTIONS CORPORATION QUALITY ASSURANCE POLICY Subscriber Random Selection Procedures 7. Counting to the random number, select the first customer to call. Highlight the name to indicate that it was selected, then record the name and phone number on the Customer Call Form. 8. Using the interval calculated in #5, count to the next customer on the list. Highlight the name and record on the next Customer Call Form. Complete this procedure for the entire list of active customers. EXAMPLE A. Cable system 2,000 subscribers "total population B. Calculating "total sample" #4) 1 Office Manager 25 calls /quarter 1 CSR 75 calls /quarter Total calls 100 Plus: 50% of total calls 50 Total Sample 150 C. Calculating "interval" #5) Total population 2,000 Divided by total sample 150 Interval 13.33 or 13 (rounded) D. Selecting first customer NCP -21 Rev. 0 Page 4 of 27 If it is the first quarter, count to the 7th customer on the list of active customers. Highlight and record. E. Selecting remaining customers 1406 From the first customer, as selected above, count every 13th customer. Highlight and record. NORTHLAND COMMUNIG1TIONS CORPORATION 1406 QUALITY ASSURANCE POLICY FCC FILE REQUIREMENTS NCP -21 Rev. 0 Page 5 of 27 I. Equal Employment Opportunity (EEO) Reference FCC Regulations Part 76.71 .79 The File must contain a copy of our current EEO policy, plus copies of Form 395 -A, the system's annual employment report. Form 395 -A will be completed by the Seattle office and a copy sent to your FCC File. The File must also contain, if applicable, copies of all EEO complaints (including exhibits, letter and other pertinent documents) that have been filed with the FCC. II. Proof of Performance Test Results Reference FCC Regulations Part 76.601 .619 The File should contain a list of test point locations used to test and prove that the system is operating in compliance with the technical standards of the FCC. Also included must be the system test results at each test point. In addition the frequency measurement results of all channels or carriers that are carried within the aeronautical bands of 108 137 and 335 400 Mhz. III. Signal Leakage Reports Reference FCC Regulations Part 76.601 .619 Systems must maintain a regular monitoring program for signal leakage by substantially covering the plant every three months. This can be accomplished by incorporating monitoring into the daily activities of system personnel whose duties generally cover the system. During monitoring, any leakage source which produces a field strength of 20 microvolts /meter or greater at a distance of 3 meters should be noted and repaired. The system should maintain a log showing the date and location of each 1. .kage source identified, the date the leak was repaired, anu its probable cause. In addition a current copy of the CLI Test Results must be maintained in this file. NORTHLAND COMMUNIGITIONS CORPORATION IV. Local Origination Political Reference FCC Regulations Part 76.205 .221 V. System Information Reference FCC Regulations Part 76.400 .403 1406 QUALITY ASSURANCE POLICY FCC FILE REQUIREMENTS NCP -21 Rev. 0 Page 6 of 27 If a cable system permits any legally qualified candidate for public office to use the cable system's channels and facilities, the system must grant equal opportunities to all other candidates for that office. Candidates may be charged for such use, if desired, in accordance with the system's commercial advertising rates. In accordance with these requirements, a system is required to maintain in the File a complete record of all requests for cablecast time made by or on behalf of candidates for public office. Attached to the request must be a notation showing the disposition made by the operator of such requests and the charges made, if any, if the request is granted. The system must keep in its FCC file a current copy of Part 76 of the FCC rules plus copies of other parts appropriate for the system, such as 17, 25, 78 and 90. VI. FCC Correspondence File Reference Various Parts of FCC Regulations parts 17, 25, 76, 78 and 90. This section should contain copies of all correspondence with the FCC, including channel addition notification letters. All correspondence must be prepared by the Seattle office (copies provided for system FCC File). Also included should be copies of appropriate licenses (e.g., earth stations, microwave, etc.) and any other information deemed relevant (originals will be kept in the Seattle office). NORTHLAND COMMUNICLITIONS CORPORATION Position: Vice President Technical Services Frequency: Random during system visits Description of responsibilities 1. Make the following System Performance Tests at random locations and enter results on the System Performance Test Point Log (QA01) 2. Leakage and FCC Compliance 3. Using the subscriber list generated from the Subscriber Random Selection Procedures, call 5 subscribers to determine level of satisfaction. Enter response to questions on Customer Call Form (QA08). Observe picture quality at their home if necessary. 1406 a. Signal Levels (Headend and System) b. Carrier to Noise c. Hum Modulation d. Composite Triple Beat e. Peak to Valley f. Observe Picture Quality QUALITY ASSURANCE POLICY NCP -21 Rev. 0 Page 7 of 27 a. Monitor 10 miles of plant to determine locations and leakage levels. Enter results on System Leakage Inspection Report (QA05). b. Supply report to System Manager and Regional Manager as if FCC had tested system. c. Check FCC file against FCC File Check List (QA07). 4. If required, take appropriate corrective action on items 1 3. 5. Submit report on items 1 4 to President, Divisional Vice President and Regional Manager. 1417 NORTHLAND COMMUNIGITIONS CORPORATION Position: Regional Manager Frequency: Annual Description of responsibilities: 2. Leakage and FCC Compliance QUALITY ASSURANCE POLICY NCP -21 Rev. 0 Page 8 of 27 1. Make the following System Performance Tests to verify 100% of the trunk system. CTB to be measured at last line extender in cascade. Enter results on the Headend Log (QA04) and System Performance Test Point Log (QA01). a. Signal Levels (Headend and System) b. Carrier to Noise at low and high frequencies c. Hum Modulation d. Composite Triple Beat e. Peak to Valley f. Observe Picture Quality a. Drive 10 miles of plant for signal leakage to determine locations and leakage levels. Enter results on System Leakage Inspection Report (QA03). b. Supply report to System Manager as if FCC had tested system. c. Check FCC file against FCC File Check List (QA07). d. Verify Video and Audio Carrier frequencies and enter results on Headend Log (QA04). 3. Using the subscriber list generated from the Subscriber Random Selection Procedures, call 25 subscribers to determine level of satisfaction. Enter response to questions on their Customer Call Form (QA08). Observe picture quality at home if necessary. 4. Review subscriber Call and Call Back Forms to determine subscriber level of satisfaction. 5. If required, take appropriate corrective action on items 1 4. 6. Submit results on each test point in item 1 and reports on items 2 4 to Divisional Vice President and Vice President, Technical Services. NORTHIAND COMMUNIC61TIONS CORPO@4TION Position: System Manager /Manager Technician Frequency: Quarterly /Annual Description of responsibilities: 2. Leakage and FCC Compliance 1417 QUALITY ASSURANCE POLICY NCP -21 Rev. 0 Page 9 of 27 1. Make the following System Performance Tests to verify 100% of the trunk system and enter results in the Headend Log (QA04) and System Performance Test Point Log (QA01). a. Signal Levels (Headend and System) b. Carrier to Noise at low and high frequencies c. Hum Modulation d. Observe Picture Quality a. Complete CLI Report (QA09) annually and submit report to the system FCC file, Regional Manager, Divisional Vice President, Vice President Technical Services. b. Verify 100% quarterly monitoring of system. c. Maintain Signal Leakage Log information in FCC file using The Daily Signal Leakage Log (QA02) and Signal Leakage Work Order (QA06). 3. Using the subscriber list generated from the Subscriber Random Selection Procedures, call 25 subscribers to determine level of satisfaction. Enter response to questions on Customer Call Form (QA08). Observe picture quality at their home if necessary. 4. Review subscriber Call and Call Back Forms to determine subscriber level of satisfaction. 5. If required, take appropriate corrective action on items 1 4 6. Submit results on each test point in item 1 and reports on items 2 4 to Regional Manager. Position: Technician Frequency: Daily Description of responsibilities: 1. Make the following system tests and enter the results on the Daily Test Point Log (QA05). 2. Leakage and FCC Compliance 3. Submit reports on items 1 and 2 to System Manager. 1417 NORTHLAND COMMUNIGITIONS CORPORATION QUALITY ASSURANCE POLICY NCP -21 Page 10 of 27 a. Signal Levels on each channel at a know test point. b. Observe or measure video modulation level and quality on each channel. c. Listen to or measure each channel for audio modulation level and quality. d. If required, take appropriate corrective action. a. Perform daily leakage monitoring of the system. b. Make entries in Daily Signal Leakage Log (QA02) of all detected leaks. c. Take appropriate corrective action and enter results in the Daily Signal Leakage Log (QA02) or Signal Leakage Work Order (QA06). NORTHLAND COMMUNGTIONS CORPOIa4TiON Position: Installer /Tech and Installer Frequency: Daily QUALITY ASSURANCE POLICY NCP -21 REV. 0 Page 11 of 27 Description of responsibilities: 1. System Operations a. Report all unresolvable service problems to the System Technician. 2. Leakage and FCC Compliance 1417 a. Perform daily leakage monitoring of the system. b. Make entries in The Daily Signal Leakage Log (QA02) of all detected leakage. c. Write Signal Leakage Work Order (QA06) for any detected leaks not repaired. NORTHIAND COMMUNIG1TIONS CORPOR4TION Position: Office Manager Frequency: Quarterly Description of responsibilities: 1. Using the subscriber list generated from the Subscriber Random Selection Procedures, call 25 subscribers to determine level of satisfaction. Enter responses to questions on Customer Call Form (QA08). Schedule service calls if necessary. 2. Review subscriber Call and Call Back Forms to determine subscriber level of satisfaction. 3. Maintain Call, Call Back, Workorder Log and Service Workorder files. 4. Submit reports to the System Manager. 1417 QUALITY ASSURANCE POLICY NCP -21 Rev. 0 Page 12 of 27 NORTHLAND COMMUNICATIONS CORPO[ ITION NCP -21 Rev. 0 Page 13 of 27 Position: Customer Service Representative Frequency: Monthly QUALITY ASSURANCE POLICY Description of responsibilities: 1. Using the subscriber list generated from the Subscriber Random Selection Procedures, call 25 subscribers to determine level of satisfaction. Enter responses to questions on Customer Call Form (QA08). Schedule service calls if necessary. 2. Call Back all subscribers within 48 hours that have had a service call to determine if the problem they were experiencing was resolved. Enter responses to questions on Customer Call Back Form (QA10) and reschedule a service call if necessary. If a telephone contact is not made within 48 hours of the completion of the original service call mail a Response Postcard (QA13) to the subscriber. 3. Call back five subscribers that have had changes in service. Example: New installation, add outlet, etc. Enter response to questions on Customer Call Back Form (QA10). 4. Submit reports on items 1 3 to the System Manager and Office Manager. 1417 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 NORTHLAND O;BLE LEVISION ?aee 14 of 27 System Performance Test Point Log Date Test Location System Cascade Trunk Bridger LE :ate of Last Test Tested By /Title Quality: A,= Excellent 3 Good C Fair X See Comments Visual Carrier Pix !Ch Ctr Level Qlty C/N HUM CTB XMOD Comments 1 -5 +5. 2 00000000000 3 0000o0000oo 4 00000000000 5 00000000000 6 00000000000 14 00000000000 15 00000000000 '16 00000000000 .17 0000o0000oo 18 00000000000 19 00000000000 20 00000000000 21 00000000000 22 00000000000 7 00000000000 8 00000000000 9 000000oo00o 10 o00000oo00o 11 00000000000 12 00000000000 13 00000000000 23 00000000000 24 00000000000 25 00000000000 26 00000000000 27 00000000000 28 00000000000 29 000000000oo 30 00000000000 31 00000000000 32 00000000000 33 00000000000 34 00000000000 35 00000000000 36 oo000000000 37 00000000000 38 00000000000 39 00000000000 40 00000000000 00000000000 00000000000 00000000000 0000000000o Peak To Valley db Photo Attached Yes Nm �tl N.OIRTHIAND C 3LE __EVISION Work Order Date aa¢e 15 of 27 Daily Signal Leakage Log mpioyee /T_tie Reporting Period Detection Equipment Operational Below 20 Microvolts /Meter Yes No Sheet of :ate 1 Detectedi Location Written Repaired Probable Cause 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 NO[ THIAND Cr'BLE System Leakage inspection Report =L E`JISION Date System Inspected By /Title Description of Equipment Used Miles of Plant Inspected Channel Monitored and Measured Location Microvolt /Meter F 'aee i6 of 27 Date System NORTH AND C- BLE TELEVISION Quality: A Excellent Visual Carrier Aural Carrier Video Audio Visual Aural. Ch Ctr Level Ctr Level Qlty Qlty Freq Freq. Comments -5 +5 2 00000000000 3 00000000000 4 00000000000 5 00000000000 6 00000000000 14 00000000000 115 00000000000 i16 00o00000000 17 00000000000 18 00000000000 19 00000000000 20 00000000000 21 00000000000 22' 00000000000 7 00000000000 8 00000000000 9 00000000000 10 00000000000 11 00000000000 12 00000000000 13 00000O00000 23 00000000000 24 00000000000 25 00000000000 26 00000000000 27 000co000000 28 00000000000 29 00000000000 30 00000O00000 31 00000000000 32 oo00o000000 33 00000000000 34 00000000000 35 00000O00000 36 00000O00000 37 00000000000 38 00000000000 39 00000O00000 40 00000000000 00000000000 00000000000 00000O00000 000000o00oo -5 +5 00000000000 00000O00000 00000000000 00000O00000 00000O00000 00000000000 00000O00000 oo000000000 oc000O00000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 0000o000000 o0000000000 o0000000000 o0000000000 oo000000000 00000000000 o0000000000 00000000000 00000000000 00000000000 00000000000 00000000000 00000000000 o000o000000 0000o000000 0000o000000 000000oo00o 000000oo000 00000000000 Headend Log Paee i7 of Test Location Tested By /Title 3 Good C Fair X See Comments w 0 CO 0 4) 4) In -0 4) O U �-1 -1 Id .i N N -d i Id w a a) 11 ••-1 o0 0-0 r0 r-1 o cia 0 o a) 0 01 Id N 11 U N 11 ul 4) rd a) rn F U F rd r v a) .1 N r 4) U N 14 14 -Ia <U 4) N nj U .-1 4) rd a t u n •r4 .0 U L+ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 88888808 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 rn 0 0 0 0 0 0 0 0 If) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00000000 0 0 0 0 0 0 0 0 88888888 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 c) N r•) r v) .D '<f u) w 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p 0 0 0 0 p 0 0 0 0 0 0 p 0 0 0 0 0 0 p 0 0 0 0 p 0 0 0 0 p 0 q 000000 00000 0 0 0 8888888888888888888888 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000000000000000 00000000000000000000 000000000000000 00000000000000000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 888888 0 0 0 0 0 0 0 0 0 0 0 0 000000 0 0 0 0 0 0 0 0 0 0 0 0 r CO a) O N N 0 0000 0000 0000 0000 000 0000 0000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 88888888888888888888 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000000000000 00000000000000000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r Nrnrn- ru)%JD U 0, Ni ill tDrCOrno r r r (V N(V r-4 rV Nrnfnrnr r) Mrnr 'a' M M MN MN M M M I MN ME M OM :ate Detected System Detected By /Title Location Comments Date Repaired Probable Cause Comments .ORTHIAND OBLE LEVISION Repaired By /Title Signal Leaxage Worx Order ?aee i9 of 27 iN.O THIAND C- BLE ___"11SION mate System Checked Ey /Title Equal Employment Opportunity A. Copy of EEO Policy B. Copies of Form 395 -A C. Copies of any complaints filed with FCC i 1 II. Proof of Performance Test Results A. List of Test Point Locations 3. Test Point Results C. Results of Aeronautical Channei Frequencies III. Signal Leakage A. Leakage Detection Logs B. Copy of CLI Test IV. Local Origination Political A. Log of Candidates Request for Coverage v. System Information A. Copy of FCC Rules Appropriate for System B. Channel Line up C. Copies of Form 325, Schedule 1 D. Copies of Form 325, Schedule 2 VI. FCC Correspondence File A. Channel Addition Notification Letters B. Appropriate Licenses C. Other 0noo ,r 'l" FCC File Checklist ?age 21 of 27 NORTNIAND C:3LE TELEVISION Customer Call Form late Customer Name _vstem Address .ccount Phone Good morning /afternoon Mr /Mrs my name is and I am the CSR, Manager, etc with Northland Cable Television. You have been selected to be part of our customer call program that will assist us in reviewing your satisfaction with your cable television service. Do you have a moment to answer five brief questions? 1. How would you rate your cable television reception? Good Fair Poor If fair or poor what problems are you having 2. Are you able to receive all of the basic channels that we offer at this time? Yes No If no find our why and how we can help them. Do they have a cable ready VCR or TV that is not programmed properly? 3 Do you have any questions regarding your monthly bill? Yes No If yes what is the question(s) 4. Have Northland Cable Television's staff been friendly and helpful during any contacts you have had? Yes No Comments 5. Do you have any comments or suggestions for us that we could use to improve your cable service? If yes explain Thank you for your help today. We will be using this information to further improve the quality of service that Northland provides here in our community. :ate of Previous Test System Physical System ID System Community ID 1 5 2 6 3 7 4 8 Total Strand Miles of Plant miles Total Strand Miles Monitored miles Description of Equipment Used in Test: Detection Equipment Level Neasurement Equipment Calibration Procedures of Equipment Used in Test: Detection Equipment Verification Level Measurement Equipment Calibration TEST PROCEDURES Test Signal for Detection: Test Signal for Measurements: ?aae 22 of 27 CLI REPORT Frequency mhz Level Carried on System dbu Type Frequency mhz Level Carried on System dbc Modulation Type Correction Factor for Unmodulated Signal db Page 22a of 27 After completing the leakage detection equipment verification in the :aiibration procedures, the system was monitored for signal leakage .:sing t:.e detection equipment listed above. The system monitoring Included all areas that may have less leakage integrity than the rest. The Test signal :listed above used for measurements was set to the same level. as the highest carrier level on the system. During the test all detected leaks were logged and measured using the level measurement equipment described above. After tuning the equipme to the test signal, the dipole was placed 10' from the suspected system component keeping it a minimum of 10 ft. from the ground and other metalic objects then rotating the dipole on a vertical axis to obtain a peak reading. The correction factor listed above was used to compensate for the difference between a modulated and unmodulated carrier. CALCULATIONS Readings were converted to microvolts /meter using the following steps: 1. Convert readings to actual leakage level in dbmv using the formula: Leakage level dbmv Reading Pre Amp Gain Correction Factor Example: -39 dbmv -26 dbmv 16 db 3 db 2. Convert leakage level in dbmv to microvolts using the attached chart. Example: -39 dbmv 11.22 microvolts 3. Convert microvolts to microvolts /meter using the following formula: Microvolts /meter voltage in microvolts x .021 x freq. in mhz Example: 31.4 microvolts /meter 11.22 microvolts x .021 x 133.2 ?a¢e of 27 dBmV to Voltage Conversion 0 dBmV 1.0 my ACROSS 75 ohms dBmV p V dBmV pV dBmV pV dBmV p V -59 1.12 -29 35.48 1 1,122 +31 35,480 -58 1.26 -28 39.81 2 1,259 +32 39,810 -57 1.41 -27 44.67 3 1,413 +33 44,670 -56 1.58 -26 50.12 4 1,585 +34 50,120 -55 1.78 -25 56.23 5 1,778 +35 56,230 -54 1.99 -24 63.10 6 1,995 +36 63,100 -53 2.24 -23 70.79 7 2,239 +37 70,790 -52 2.51 -22 79.43 8 2,512 +38 79,430 -51 2.82 -21 89.13 9 2,818 +39 89,130 -50 3.16 -20 100.0 +10 3,162 +40 100,000 -49 3.55 -19 112.2 +11 3,548 +41 112,200 -48 3.98 -18 125.9 +12 3,981 +42 125,900 -47 4.47 -17 141.3 +13 4,467 +43 141,300 -46 5.01 -16 158.5 +14 5,012 +44 158,500 -45 5.62 -15 177.8 +15 5,623 +45 177,800 -44 6.31 -14 199.5 +16 6,310 +46 199,500 -43 7.08 -13 223.9 +17 7,079 +47 223,900 -42 7.94 -12 251.2 +18 7,943 +48 251,200 41 8.91 -11 281.8 +19 8,913 +49 281,800 -40 10.00 -10 316.2 +20 10,000 +50 316,200 39 11.22 9 354.8 +21 11,220 +51 354,800 -38 12.59 8 398.1 +22 12,590 +52 398,100 -37 14.13 7 446.7 +23 14,130 +53 446,700 36 15.85 6 501.2 +24 15,850 +54 501,200 -35 17.78 5 562.3 +25 17,780 +55 562,300 -34 19.95 4 631.0 +26 19,950 +56 631,000 -33 22.39 3 707.9 +27 22,390 +57 707,900 32 25.12 2 794.3 +28 25,120 +58 793,300 -31 28.18 1 891.3 +29 28,180 +59 891,300 30 31.62 0 1,000 +30 31,620 +60 1,000,000 CLI Page .3 of :•leasurements of less than 50 microvolts /meter are not included in the CLI calculations. Micrcvoits /meter Squared x Qty Total 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x Sum Total ?a¢e 22c of 27 CLI 10 Log (Sum Total of Leaks x Plant Miles /Miles Monitored) 10 Log Completed by Date Title Date System Account Phone Description of work performed If no explain If no explain If no explain QA10 Rev. 0 Page 23 of 27 Customer Name Address Customer Call Back Form Good' morning /afternoon Mr /Mrs my name is and I am a Customer Service Representative for Northland Cable Television. Our records show that on (date) we (work performed) for you. Do you have a moment to answer a few questions regarding the work we performed? Was the work performed when it was scheduled? Yes No 2. Was the work performed to your satisfaction? Yes No 3. Was our office and technical staff friendly and helpful? Yes No 4. Do you have any suggestions for us that we could use to improve your cable service? Yes No If yes explain Thank you for your help today. We will be using this information to further improve the quality of service that Northland provides in ou community. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 NORTHLAND C TELEVISION Customer Service Representative Customer Information Date Customer Name Service Address System Tag Number Services Subscribed to: Customer has VCR Service Drop U.G. Other Information Nature of Complaint CSR's Signature Technician Scheduled Date Completion Date Cause of Problem: TV VCR Converter Trap Action taken to correct problem Technician's Signature Customer This service call has been completed to my satisfaction This service call was not completed to my satisfaction Remarks Customer's Signature /Date Converter Aerial Work Order Time Received Home Phone Work Phone Time Time Paee 24 of 27 Service Workorder Fitting Amplifier Splice Trunk /Distribution Cable Splitter Tap Drop Other Office Worx Cider Worx Work Order Work Order Customer. Received ;Customer Order Scheduled Completed Call Back Name Nummer Date Time Date Time Date Time Date /Time Week of Sheet ?ante 25 of 2 Weekly Service Workorder L of ?age i6 of 27 We tried to telephone you to make sure you were satisfied with the service we recently performed for you. Our goal is to resolve any service problems you may be experiencing. If you are continuing to experience the problem, please call us or complete and return this postcard. 1. Was the work performed when scheduled? Yes No 2. Was the work performed to your satisfaction? Yes No 3. Was our office and technical staff friendly and helpful?' Yes No 4. Please write in the space provided below any suggestions you have that we could use to improve service to you and our community. Comments: Work Order Bulk Rate or Stamp 3 -H Cable Communications Consultants' Most Recent Newsletter SID Cable Communications Consultants The Municipal Cable REGULATOR ISSUE 2, VOLUME 12 From the Editor's Desk:= Perhaps the kindest thing to be said about the Cable Communications Policy Act of 1984 is that it was passed in haste in the midnight madness of a Congress desperate to adjourn, urged by a strident cable lobby, and agreed to by a weary group of city spokespersons. It was flawed from its inception. Just moments after President Reagan signed the bill it raised not only eyebrows but also questions. It also raised the ire not only of local governments who thought it went too far, but of the cable industry who felt it did not go far enough. Perhaps worst of all it raised expectations that a truce, if not an armistice, had been negotiated in the evolving conflicts between local communities and the resentful cable operators. "The bill was conceptually wrong, poorly drafted, ambiguous, contradictory, and poor public policy. Otherwise it is fine." Few legislative acts are indeed perfect. The Cable Act, however, is an excellent example of legislation that should be revisited. It is not our purpose to recite the dreary litany of the Cable Act's imperfections. The fact that after four years of devastating experience no serious such action has been taken speaks to the relative importance of these issues in the larger cosmos of Congressional responsiveness. The Cable Act has been rocked by explosive and divergent court decisions, diluted by (some say) a jealous Federal Communication Commission, and chewed full of loop holes by subjective interpretations. The bill was conceptually wrong, poorly drafted, ambiguous, contradictory, and poor public policy. Otherwise it is fine. Now, however, the winds of cable policy review seem to be quickening, and the breeze is blowing in from the grass roots. Three bills have been introduced in the Senate that would re- JULY 1989 ANALYSIS COMMENTARY Formerly: CA7V Newsletter $1 regulate, at least, basic rates. All of these have been largely triggered by consumer complaints to legislators who know how to sail quickly before the wind of constituents' clamor. True, this is not an election year, and it is safer to discuss causes in committees rather than in the hustings. Yet there seems to be a genuineness this time to Congress's concerns that was not present in previous sessions. In other years the impression given was that both houses were going through the motions prompted only because of powerful lobbies such as the National Association of Broadcasters and the power of their Political Action Committees (PACs). The cabler's cause was certainly not helped by the Tennessee operator who sent a zeroxed form letter to Gore in answer to a query on rate increases." While Senator Howard Metzenbaum by his committee position has always been pivotal in re- examining cable industry re- regulation, two powerful newer adherents in the Senate appear to have more populist motives. Senator Joeseph Lieberman of Connecticut has seen and heard the turmoil in his state as the Consumer Council duels with its local operator on a whole gamut of issues. Senator Albert Gore's interests seem to arise even more directly from the citizens of his state. He has attended various town meetings and has listened to rural areas' howl of anguish over astronomical basic rate hikes. The cabler's cause was certainly not helped by the Tennessee operator who sent a zeroxed form letter to Gore in answer to a query on rate increases. Companion bills have also been offered in the House but, as usual, the spotlight will be on the Senate's version. A spotlight probably will be the only illumination provided to local government. There seems to be little chance that the main issue of importance to local franchising authorities, rate regulation, will be severed from Congress's other concerns over must -carry cross ownership, television company (Telco) involvement, and all of the other tag alongs which will be attached to any cable television de- regulation law making. It is axiomatic that the more the number of issues in a congressional amendment package, the more the political involvement and then, it follows, the lesser chance of it being adopted. This is not to say, just because legislation will not result, that the hearings will not be beneficial to communities. The cablers are not so deaf as to be unaware of public sentiment, or, a better word, resentment. Now, even before the large scale media attention begins there may be a scramble by the industry to polish its image harken to several recent stances by cablers. Jim Mooney, President of the National Cable Television Association (NCTA), talks of improving communication with local officials. Robert Miron, the next chairman of the NCTA, is quoted as saying that the FCC [and there's the catch] should review the Cable Act every two years. In the thesis that action speaks louder than words, consider the Tele- Communication Inc. (TCI) concession that Dubuque did not have effective competition and that rate regulation could be established by the local authorities. Consider, too, the American Television Communication Corporation's (ATC) recent franchise commitment to the State of Hawaii. It could be very well argued in all of these instances that there were other special circumstances involved and that large scale generalities should not be drawn. Nevertheless, cablers appear ready to hedge their bets a bit. It is not wise to step upon toes that soon again may have boots. fF.F.R.F.* ,f 11 I FORECAST FORE -TASTE Paul Kagen Associates have supplied statistical data on the cable industry for the past decade. The Kagen forecast for the next decade should wave a red flag for local governments. Many of those who drafted cable television franchises ten or more years back did not have the advantage of widely published projections such as are available today. We have commented before on cable television franchises that spoke to a franchise fee only on basic rates. Others were self limiting by making reference only to an ill defined "income Today, again referring to the Kagen figures, even with the increase in basic rates, other income (premium and pay per view) generated by a cabler is just about equal to basic subscriber sales. With the 20/20 vision of hindsight this means, of course, that a local jurisdiction limited to a franchise fee only on basic income collects today only half as much in franchise fees as does a *For Franchise Renewal File 2 community with a more inclusive definition of income. The early nineteenth century philosopher, Hegel, wrote: "What experience and history teach is this —that people and governments never have learned anything from history, or acted on principles deduced from it Let us hope that the eminent Mr. Hegel was not discussing local government refranchising processes. Just in case he is right, the people who will make predictions based upon cable television franchise history must be gross about it. Gross (in its other meaning) is a perfectly clear well defined word. If some items, such as taxes, are not to be included in the franchise fee payments, a perfectly fine word devoid of legalese is "except By extension, everything not specifically excepted (or excluded if you will) is part of the gross. Incidentally, for the purists, the word "income" after "gross" is probably more appropriate than "revenue Revenue generally refers to monies paid to governments. Income is a broader term and more applicable to the private sector. "With the 20/20 vision of hindsight this means, of course, that a local jurisdiction limited to a franchise fee only on basic income collects today only half as much in franchise fees as does a community with a more inclusive definition of income." In any event, the Kagen predictions are that in 1998 the cable industry income from premium subscribers will be rising from today's 37.2 million to 57 million and Pay- Per -View (PPV) from 1988's 6.3 million to 53.6 million. Of course this does not even count income from advertising, home shopping, surcharges (if any) for High Definition Television (HDTV), interactive services, computer interfaces, and on and on. The moral: Don't haggle with Hegel —look to history to prepare for the future. WHO PAYS THE PIPER? Are franchise fees, Public Education and Government (PEG) access monies, and consultant fees (which may be paid by a cable operator) merely passed on to the subscriber in higher monthly rates? This is an often asked question. As such, it deserves an unambiguous answer. So as not to appear to vacillate, we can reply with a number of answers. Words that come to mind are: "it all depends "sometimes "maybe, maybe not and other straightforward responses. First of all, the question must be broken down. A franchise fee, according to the Cable Act, may be designated as such on a subscriber's bill. This makes it simple for the cabler and probably is considered by the consumer as just another ubiquitous tax. Access monies, senior discounts, institutional networks, and so forth are a different kettle of fish. They cannot be attributed on the bill as may a franchise fee and are therefore a different problem for the cable operator. But, back to franchise fees in themselves. It all comes down to size and location. If a small community is served by a cable operator that encompasses a larger area, the rates charged to subscribers of the smaller jurisdictions will remain the same as the rates paid by customers of the larger metropolitan entity. It usually is simply too much trouble for a large cabler to change a billing system to reflect, for example, a hike in a franchise fee of from three to five percent in only a small portion of its system. In this case, the smaller area may receive the benefits of a higher percentage franchise fee without any change of rates to its residents. Of course this works the other way around too. Sometimes city officials of smaller town "A" may decline to increase the required fee (at franchise renewal time) or even elect to have no franchise fee paid at all; only to discover that overall rates nevertheless have been increased to its subscribers by an increased franchise fee paid to big city "B "It usually is simply too much trouble for a large cabler to change a billing system to reflect, for example, a hike in a franchise fee of from three to five percent in only a small portion of its system." For the stand alone (one operator, one jurisdiction) system, city officials must measure monetary non -fee benefits received against different circumstances. There are two broad options, with subsets, open to the cabler. The first is for the operator to simply raise the rates over a period of time until those costs are paid back. The catch to the city-side is that it is very unlikely that rates will be lowered once the expenses have been recovered. The other way to go is for the franchisee to absorb these expenses in its operating budget. A combination is for the operator to "eat" part of these expenditures and perhaps pass the remainder on in the form of increased subscriber prices. Another choice, the text books would say, would be for the cable operator to increase its efficiencies and lower its operating costs to the point where the profits would remain the same. To the operator, it is never a viable option to reduce profits and keep the selling price, absent other costs, the same. All of this is a mixed bag both for local governments as well as for cable subscribers and the cable company itself. From a governmental standpoint the raising of rates because of inclusion of institutional network costs, for example, could be seen as an indirect tax upon cable subscribers to 3 subsidize other portions (schools) of the residents. The subscriber obviously pays more and the cabler may feel its prices are at or near to the point when price resistance may inhibit sales. Economists will argue that, forgetting actual competition (e.g. other forms of entertainment), there is still competition for the consumer's disposable (after root needs are met) income. This concern was apparently behind ATC's Oceanics decision in Hawaii —a decision not to pass all of the multi million dollar franchise requirement costs on to its customers. "Another choice, the text books would say, would be for the cable operator to increase its efficiencies and lower its operating costs to the point where the profits would remain the same." City officials, however, face yet another catch -22 situation when costs are not passed on. Again, based upon the unarguable premise that a cabler will not diminish its profit ratio, the operator will have to face expense reductions and/or increase productivity. Labor is its greatest ongoing expense. Technicians, engineers, and sales persons can be directly related to income derivation. What's left is the so called "soft" part of the business. This usually means that overtime for technical people can be reduced, some middle management eliminated, and cuts or consolidation of the intangible producers such as customer service representatives. While all of this may result in more stable rates, a higher price may be paid by subscribers in worsened consumer service. While on the subject of expenses to a cable operator that may or may not be passed on to consumers, it is necessary to define what are franchise related costs and those which are merely expenses normally incurred by a cable television operator. A few fall into a grey area. For instance, for a system with a 108 channel availability it may be argued that access channels are merely taking up otherwise unused channel space and help to sell the cabler's service. Even other contributions such as disabled person's discounts or school hook -ups would be considered, in other ventures, merely good will. However, the most absurd notion so avidly pushed by cable operators is that a pure and simple upgrade of the cable system is done only because local government wants it. Up to a point channel capacity is similar to a bouquet of roses, the more flowers in the arrangement, the more that can be sold and/or a higher price obtained. While certainly additional channels are desirable to a subscriber, with or without refranchising pressures the cabler would most likely do it anyway. It's time for the operator to take the thorns off the expanded rose bouquet; the flowers will smell just as sweet. The answers to the questions poised at the start of this dialogue are more complex than "who pays It also must be asked "pays for what One thing, however, is certain; it's all right as long as someone else pays the bill. REWIND FAST FORWARD When we first started writing these columns some years ago, our concern was over what we could find to write about every three months. Our concern now is to attempt to sift through the topics to find the most pertinent. This past quarter had more than its share of headlines. The Birmingham go- around, the Dubuque surprise ending, the aloha to "standard" fifteen year franchises, and Congressional voices being heard over the clamor (is this what is called "signal to noise ratio All of these deserve review from the city -side, but we shall restrain ourselves until there is a bit more granite chiseling. Some daily newspapers in their Sunday editions run a feature called "quote of the week". We are tempted to nominate some additions without editorial comment. For instance: "What has transpired in terms of basic rates has been, for the most part, a catch -up process —a process of recovery from years and years of essentially irrational economic regulation by local political authorities" —from a Cablevision interview with Jim Mooney of NCTA. Another from Jim Hamm of the City of Dallas, speaking of the Warner /Amex franchise agreement: "Complaints...averaged about 400 a month, just to City Hall, and the only franchise promise related to customer service was that the cable company must respond to complaints within three days And sad to quote, this last from Attorney Gary Matz apropos the Norfolk renewal process: "Nobody showed up at the public hearings November 1 should be a good day for city officials to bring a bottle of aspirin to the office. This date is the deadline set by the FCC for cable operators to inform subscribers by mail of the availability of A/B switches. Remember A/B switches? At one time these devices which can be used to shift between cable and off -air reception were to be furnished to subscribers so requesting without charge. Subsequently the courts and the FCC have watered down this concept so that the cable franchisees must now only provide information as to availability of these gadgets, a list of local television signals not carried by the cable system, and an explanation of how the thing -a -ma- jigs work. One shudders at the thought of all the confused subscribers that will call City Hall for an 4 explanation of the explanation. On second thought, that day may be a good day not to show up for work at all. RATING RATIONAL RATIOS The more important the task, the more straightforward it should be. Alas, that is not the case for city officials concerned with cable television oversight responsibilities. No one would argue that the pnmary function of local government is to attempt to see that residents of a community be treated as fairly as possible by the cable operator. Within this orb are many segments of consumer satisfaction or, unfortunately, dissatisfaction. Topics spring readily to mind: billing mistakes, unacceptable telephone answering procedures, technical response time, broken appointments, and more. Sometimes it appears to municipalities that all discussions with the cable operator begin or end with these subjects. It has become a relationship that sometimes is as ritualistic as the mating dance of blue herons. "The cablers speak of plans, of procedures, of policies, and of platitudes; yet the telephone rings again." The city officials ask "why and the cabler asks "when The city asks 'how come and the cabler asks "where The city threatens, and the cabler promises. Then the telephone rings again and the dance goes on. This scenario is all too familiar. Local jurisdictions at first take heart in the cable story that the franchisee is every bit as concerned, if not more so, with consumer relations as is the city. The cablers speak of plans, of procedures, of policies, and of platitudes; yet the telephone rings again. The trouble with all of this is that it is so difficult to separate the wheat from chaff. How serious is the situation? What of complaints to city hall? Are these the tip of the iceberg, or the iceberg of the tip? For example, sometime ago Pittsburgh's cable system went through an upgrade. The city received about ten complaints a week during this phase. When Denver went through a similar time (although an office relocation was also involved) it received around two hundred and fifty complaints to the city per week. Does this mean that the Pittsburgh cabler is better than the one in Denver? Not necessarily. There are many forces that are at work that cause complaints to be made to a city. One that comes into play has very little to do with the cable company itself. It is simply that consumer perception of a local government's role may vary from area to area. This could be because of historical involvement, media attention, a city's high profile in cable related issues, or other aspects which have really very little direct bearing on a cabler's performance. It is a delusion to draw any conclusions on a community -by- community comparison of complaints even if size is factored out. "Since, in all fairness, consumer relations is indeed a major concern to a cable company, surely a cabler keeps this information on its own operation. Cannot this data then be extrapolated to establish at least a bench mark Then where can one turn to measure qualitatively cable operator performance? Since, in all fairness, consumer relations is indeed a major concern to a cable company, surely a cabler keeps this information on its own operation. Cannot this date then be extrapolated to establish at least a bench mark? The answer is, unfortunately, yes, and probably not. Yes, this information is maintained by the cabler, and no, it probably doesn't mean very much in itself. For starters a generally accepted common overall complaint ratio is obtained by dividing the number of total complaints received in a given period by the number of basic subscribers to the cable system. This composite ratio averaged out from several cable operators is about 1.5 A percentage figure below this figure can be said to be on the "good" side; a higher number is "poor We have put quotation marks around these words because there is no absolute measurement or standard that has been accepted on a general basis throughout the cable industry. One operator's "complaint" may be another's mere "inquiry". While most Multiple System Operators (MSOs) have corporate guidelines, there is no national exchange of this type of information. Even if there were it would be suspect. This is not to imply in Percent 2.0 1.8 1 .6 1 .4 1 .2 1 .0 0.8 0.6 0.4 0.2 0.0 Jan Feb Mar Apr May *1. System Outage *2. Change in Billing System *3. Revised Channel Allocation Complaints Per Subscriber Per Month 2 *3 any way that a franchisee deliberately falsifies this data, but in the final analysis all complaints received by a cabler are subjective. It doesn't take much imagination on the part of a cable television employee to understand that the fewer the complaints logged in, the happier his or her boss will be. This trait is not, of course, indigenous to the cable industry. Rather than attempting to compare consumer complaints one to another in various communities, it may be more worthwhile to compare this figure within a single operation at a given point over a certain time span. To do this, certain assumptions must be made. First, of course, is that the operator will provide this data (it probably will). Second, there must be constants, as far as possible, in determination of what goes into the franchisee's complaint log. Thirdly, wide variables such as a system outage or change in billing procedure must be either factored out, equated to a parallel event, or at least footnoted. A chart of this ratio is helpful to see overall progress or regress. A hypothetical graph of such relationship is illustrated below. "...the local government administrator may be put into the awkward position of requesting the operator to improve its customer relations posture without being able to point out what specifically needs to be done to achieve this aim." Note that it is a normal pattern for complaints to rise in winter months with increased viewers and to decrease during vacation times. A city officer may wish to add another line indicating goals established, it is hoped, jointly with the cabler. Certainly information exchange of this type should be one of the more important topics of whatever periodic discussions that a city holds with its franchisee. These total complaint ratios are, of course, Jun Jul Aug Sep Oct Nov Dec Actual Percentage of Complaints Per Subscriber Per Month 0 Target Goals 5 made up of many segments. It is sometimes less fruitful to put these gross figures to use unless a more detailed analysis of what they are composed is made. Otherwise the local government administrator may be put into the awkward position of requesting the operator to improve its customer relations posture without being able to point out what specifically needs to be done to achieve this aim. At that point not only a These articles were written by Miles Overholt, Senior Consultant for 3 -H Cable Communi- cations Consultants. A graduate of Harvard, he has held executive positions in the private sector and is listed in Who's Who in the West. For additional information about our services please contact Lon A. Hurd, Vice President, at (206) 935 -9040 or 1- 800 -222 -9697. FAX (206) 932 -4284 1 1 Cable Communications Consultants 6 dissection of the elements must take place, but also where comparisons of relative ratios from other communities are valid. In the next issue of the Municipal Cable Regulator, we shall examine the component parts of cable complaints and compare them to actual ratios of four different size communities. We shall then go one step further and examine the composition of the individual portions themselves. The Municipal Cable Regulator is published by 3 -H Cable Consultants, Consultants, a Division of 3 -H Management 0' nts Inc, 4517 California Ruenue Southwest, Suite 8, 222- 98116, 2 9697. This publicationisintended for toll-free he professional use may be used of subscribers and client by other publications provided proper attribution is given to 3- H Cable Communications Consultants. 4517 CALIFORNIA AVENUE SOUTHWEST, SUITE B 0 SEATTLE, WASHINGTON 98116 0 (206) 935 -9040 FAX (206) 932 -4284 1- 800 222 -9697