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Cable TV - 1996 - 02_22MINUTES ALLEN CABLE TV AND TELECOMMUNICATIONS ADVISORY COMMITTEE REGULAR MEETING February 22, 1996 Members Present: Donald Wing Douglas Dreggors Mark Pacheco Sherry Bennett Eric Willard Ty Westfall Members Absent: Bill Huber Staff Present: Michael Stanger Donna Holden CALL TO ORDER AND ANNOUNCE A QUORUM, With a quorum of the committee present, the Regular Meeting of the Allen Cable TV and Telecommunications Advisory Committee was called to order by Chairperson Don Wing at 7:02 p.m. on Thursday, February 22, 1996, to the Meeting Room of the Allen Public Library, Two Allen Civic Plaza, Allen, Texas. The following items were discussed: APPROVAL OF MINUTES The February 8th and 15th minutes were approved as written with a motion made by Doug Dreggors and seconded by Sherry Bennett. All approved. None TABLED ITEM: EXCUSE CERTAIN MEMBERS FOR MEETING ABSENCES Mr. Willard addressed the committee stating he was out of town on business and asked the committee to excuse his absences in accordance with Section 2 of the Bylaws. Motion was made by Ms. Bennett and seconded by Mr. Westfall to formally excuse Mr. Willard's meeting absences, and to count his future absences, if any, from scratch. All approved. Page 2 of 4 CTTAC Minutes February 22, 1996 DISCUSS A STRATEGY FOR GOVERNMENT AND PUBLIC ACCESS CHANNELS Government and Public Access Guidelines Mr. Wing pointed out that a handout by TCI from the October 25, 1995 meeting is very useful information on guidelines and will be helpful to the committee when we begin to create City's public access channel guidelines. Mr. Pacheco suggested knowledge of the approved guidelines be included in the certification process instead ofjust how to use the equipment. Members agreed this should be included in the certification process. Other Cities: Donna Holden reported the City of Richardson was interested in giving the committee a tour which would take approximately one hour. Members agreed on Wednesday, February 28 at 6:00 p.m. City Council Chambers Move: Mr. Westfall asked if the City Council has decided to have their meetings broadcast live when the move to the Library Mr. Stanger and Mr. Willard both said this was their understanding, but Mr. Stanger will check with Council again after the election. Mr. Pacheco asked if the placement of video and audio equipment is being considered in designing the new chambers room. Mr. Stanger said George Conner, Director of Public Works, is working on this and is aware of the cable issue. Mr. Willard read a newspaper article which he felt suggested TCI is not moving quickly on our upgrade due to a lack of competition. Mr. Pacheco commented he felt that TCI had good customer service reports based on information gained at the TCI tour. Mr. Wing said that since the franchise has been in effect, it appears TCI has moved toward better customer service. Mr. Willard mentioned that PrimeStar, a subsidiary of TCI, has been donating equipment and software to certain schools, and said he would mention this to the AISD Superintendent. Mr. Willard reported to the committee concerning a new telecommunications tax levied by the state against telephone, cellular and paging companies. The tax is intended to fund technology for public schools, but the taxation formula was struck down by a state judge. Mr. Stanger reported to the committee about a meeting he had with two middle school students about data communication throughout the city The students are working on a project called Virtual Allen' and plan to put a series of City pages on the web, and maintain them indefinitely Page 3 of 4 CTTAC Minutes February 22, 1996 Request from Mayor to Present Report to City Council Mr. Stanger said the Council is asking all boards and commissions to participate in the Spring Planning Session by giving short presentations of their accomplishments and future issues. Mr. Willard asked that the next agenda item reflect this request, and asked that all members bring ideas to the next meeting. Members agreed that two presenters be selected on March 14 and begin preparation for the presentation to show it to the committee at the March 28 meeting. Updates, Other Work Plan Learning Subjects Ms. Bennett asked if staff had information on the Allen Image yet. Mr. Stanger said he had not. Mr. Westfall reported he spoke to JoAnn Holtzclaw at TCI, who agreed to mail a committee provided brochure with their bills. Mr. Westfall commented that this would be a good way to send out a brochure to Allen residents without the City incurring postage costs. Schedule Site Visits Staff will arrange a site visit to the City of Richardson on Wednesday, February 28, at 6:00 p.m. The visit will concern Richardson's government channel. Items of Interest to the Committee Mr. Stanger passed out a memo from Miller, Canfield, Paddock and Stone dated February 20, 1996 about the FCC proposal to allow uniform pricing in multiple franchise areas. Mr. Willard suggested the City file reply comments on this issue because the City would lose franchise money due to excluding franchise fees from gross revenues. Comments are due March 12. Mr. Willard motioned the City formally comment and Mr. Westfall seconded the motion. All approved. Mr. Stanger will check if the comments need to go through the City Council or an Attorney Mr. Stanger passed out a memo from Miller, Canfield, Paddock and Stone dated February 7, 1996 about the Thirteenth Order and local issues affected by the Telecommunication Act. Mr Stanger summarized the memo by stating that our local rate regulation rules may no longer conform to the new Form 1240 procedure. If TCI asks whether or not the City wants to continue rate review, the City has 15 days to respond. Mr. Willard suggested the City write a letter to TCI stating the City will continue with rate review and request they ask in writing. Mr. Stanger agreed and will prepare this letter. The Telecommunications Act does not directly affect basic rate regulation, but ceases upper tier regulation immediately for small operators. Mr. Stanger passed out a progress report from TCI, addressed to Jon McCarty, City Manager, CP Page 4 of 4 CTTAC Minutes February 22, 1996 from TCI's Joann Holtzclaw, and dated February 6, 1996. The next meeting will be March 14, 1996, 7:00 p.m. at the Library meeting room. ADJOURN Mr. Pacheco moved to adjourn the meeting and Mr. Willard seconded. This meeting was officially adjourned at 8:40 p.m. These minutes read and approved this 14th day of March, 1996. Chairperson, Don WMA g Secretary, Mink Pacheco EI I From Miller Canfield To: Jon McCarty Dale: 2988 Time 18:34:35 Palle 1 oT 1 IAw OPPICPS OF 1 MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. SIDNEY T MILLER 11880 19101 A PROFPSFIONAL t AUTEe LIABILITY COWMPANYANNAa80a, MICHAN MGE L CANFIFe 11666-19]81 SLOOMFEM HILLS, MICHIGAN FAHC H PADDOCK 1188819351 1225 NcrPPEEIJTET STREET, N W. DETROIT, MR:HIGAN FEBRIS D STONE 11882 19451 GMNO MPDS, MICHIGAN SETOFF,400 KAIAMA200, MICNIGAN LANSING e THE PRnC71Ce OF WASELLATON. D.0 20036 wws.Rx. IRu M uFR a HalaRoo.L , luoroN, o c ATE uTED OFFICES S=O. FLORIDA TELEPHONE 12021429-55)5ST FLORIDA 12021 ]85-0600 ROANE, POLAND WARSAW, POLAND FAX (2021 33111 18 202) J85-123434 TO, Interested Communities FROM: Frederick E. Ellrod III DATE. February 7, 1996 RE: New Form 1240 Process; Revision of Local Rate Regulation Rules As you know, w!'uugi ss passed Lhc Teiccuunnuulc ldo s Art of i44d on Pcln Fitly 1, 144d. We expect It to be signed into law this week. Moreover, to the 77urteenth Order w1 Reconsideration, which has recently become effective, the FCC introduced significant changes in 4 the P1QEUhh of local Late inview outlet the new annual adjubuneut method (Form 1240). In light of these changes, you should (1) carefully monitor any new filings or inquiries with respect to the FCC's revised deadlines, and (2) look into updating your rate regulation rules as soon as possible. If you would like our assistance, please contact us to discuss the costs of preparing revisions and the procedural issues involved in making the necessary changes. 1) The Thirreerth Order nn ReenNviderntinrr intrn(b red a nnmher of nrm deadlines and p,....,,d,,,..., f , —LO ..L..,., N- ..P..,. L— .,VL, L., L...,:.. ,..u,., "1111-11j, -Ll— 11— quarterly If you have detailed procedural rules for rates, these are not likely to conform with the new Form 1240 procedure; even if you do not have detailed rules, the timing and procedures you follow in regulating rates are likely to be affected by the new FCC Order. Among other things, under certain circumstances if a cable operator inquires as to whether a community is continuing its rate review, the franchising authority must respond within fifteen days oPTiskipsing its ability to continue its review Also, important opportunities to control the time for filing may be lost by delay in responding to a notice from the operator that it intends to follow the new rules. 2) It appears that rate regulation will continue under the new revisions to the Communications Act. The Act will not directly affect basic rate regulation, except insofar as it expands the definition of "effective competition" to include the mere offering of comparable service over the facilities of a local exchange telephone company. On the other hand, upper tier (CPS) regulation will cease. It will end immediately for small cable operators in communities with 50,000 or lower subscribers, or in 1999 for larger operators. Please feel free to contact any of us if you wish to discuss revisions to your rules. wAEslw5l cD Itw341 WCOL Miller Canfield To: Jon McCarty Dale. 2Y20/96 Tn.. 19:34:10 Page l of 1p! pAAIIff i'LLEJ VrCMILLER, CANFIELD, PADDOK AND STONE, P.L.C. r SmnmRLLN 11 ueo i vwl A PROPPSSIONAL IJb = WBUTY CONWANY N .I C.I.A. GEOact L CANHrI II...9381 MFIELD HR. MICHIGANLG rwlD II rwnnnrR 11.41DG51 1225 NuNi,,.IN SL Ra81, N.W. rTnnlT, Mlnur.Ary FEflHIS O STONE 0.83-,9aGI GMND GAPOS. MICHIGAN S1aT6 400 NAIAMAZOO. MICHIGAN WASHMGTON. D.C. 20016MONGOE, MICHIGAN AFFILITED.FwCES TELEPHONE 120214295575ST a nal nA 12021 785-0600 GOANSK HOLAa o FAX1202133 Y111a AI9Aw FIG. 12021 785-1234 — MEMORANDUM TO: Interested Communities FROM: Miller, Canfield, Paddock and Stone DATE: February 20, 1996 RE: Reply Comments Due Regardingg FCC Proposal to Allow Uniform Pricingg in Multiple Franchise Areas You may recall our notice of Ikx;ember 1, 1995 on this topic. After we distributed that notice, the FCC extended its original deadlines. Consequently, comments were filed only last week, on February 12, 1996, and reply comments are now due on March 12, 1996. We continue to believe the FCC's proposal would harm subscribers and local franchising authorities. The cable industry's comments in the opening round only reinforce this conclusion. The Notice of Proposed Rulemaking proposed two alternatives: The first would allow operators to lower basic rates in multiple franchise areas to the lowest rate in the area, but allow operators to "make up" the difference in higher CPS rates. The second proposal would allow operators to average the maximum permitted basic rates in several franchise areas to come up with one averaged area -wide basic rate. Under both proposals, operators would have the right to exclude franchise fees and franchise -related costs in setting uniform rates, and would add the fees and costs to subscriber bills separately, over and above the so-called "uniform" rate. This proposal clearly poses yet another risk of the FCC treating franchise fees -- and now all other franchise -related costs -- as sales taxes, rather than part of the retail price of cable service. This is precisely the treatment that cities are currently challenging in the Baltimore case. In fact, several industry commenters cite the Cable Services Bureau's decision in Baltimore to support their arguments in favor of the uniform rate proposal. TCI -- the operator in the Baltimore case -- states the case for itemization as follows: From. Mille, Canfield To: Jon McCmly Dale: W20196 Time: 19:36:36 Page 2 of 2 MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. 2_ If franchise -related costs are reported in a separate, unaveraged line item, subscribers will know which rates recover governmentally -imposed costs and which rates recover the operator's cost of providing service. Where costs are imposed by regulators, subscribers have a right to know the magnitude and assess the benefit of the cost. In other words, subscribers will benefit from the "sunshine effect" -- otherwise hidden costs are exposed to subscriber scrutiny. This argument is simply outrageous, and must be countered. It completely ignores the fact that franchise fees and franchise -related costs are compensation for the use of property and are thus part of the operator's cost of providing cable service. It also implicitly accuses local governments of deception. If the segregation of franchise fees and costs is allowed to stand, the way may be clear for operators to exclude all of those amounts in computing its gross revenues. That would result in a still further reduction in franchise fees. Unfortunately, given the FCC's recent track record, this utterly specious argument may be found credible unless cities respond vigorously. Several operators argue in favor of allowing the industry to average not only rates in communities that are regulating rates, but in those that do not, on the theory that if a community does not regulate rates its rates are presumed reasonable. The NCTA requested preemption of the current rules governing franchising authority review of proposed rates out of concern that local governments might act as "roadblocks." The cable industry made it very clear that it would not support any plan under which they might possibly lose revenues. Cablevision noted that uniform pricing is possible under the current rules, but stated that this was unacceptable because "they do so only by forfeiting large amounts of revenue to which they are entitled." Not surprisingly, none of the commenters recommended that any savings resulting from the efficiencies ostensibly promoted by the proposal should be passed through to subscribers. In other words, if the industry view prevails, the result will be completely one-sided: Operators will save money, franchising authorities will lose money, and subscribers will see no real benefit at all. If you have any questions or are interested in filing reply comments, please call Tim Lay or Matt Ames of our office. t We're taking television into tomorrow. / rA- I TO Cablevision of North Texas r RECEIVED February 6, 1996 FEB 1 p 1996 CITY MANAGER Mr. Jon McCarty City Manager City of Allen One Butler Circle Allen, Texas 75002 Dear Mr. McCarty: TCI Cablevision of North Texas is pleased to have been a key player in the City of Allen throughout the last year. We experienced still another year of rapid growth and technical development. Our energies have been focused on: 1) customer service, 2) new construction activities, 3) system improvement and 4) development to address future community needs. Customer Service Our commitment to first class customer service resulted in a number of achievements in Ile- 1995: scheduling windows of two hours for customer convenience extended service hours now include: service calls Monday - Saturday 8:00 am - 9:00 pm; Sunday 10:00 am - 7:00 pm installation Tuesday - Saturday 8:00 am - 7:00 pm improved telephone response and assistance techniques our subscriber base grew from 5,676 to an ending count of 6,410 Construction Activity in the Allen community we constructed 11.63 miles of underground plant and 1.77 miles of aerial plant this new construction enabled us to offer service to approximately 1,188 additional residents of the City of Allen 9 PiCircle Suite 101 i Allen, n, TexTelae 79002 3425 727 5'23 Fax (21d1990.]516 164)IN wan ll St Suite 101MCKlnue,,, Texas 74169 12161562-55M Mr. Jon McCarty Page 2 February 6, 1996 System Improvement we have upgraded our systems stand-by power supplies capability by an additional 71% one (1) additional channel was activated Advancement and Future Development We continue to meet and/or exceed FCC industry guidelines in order to provide our customers with quality service. We look forward to being instrumental in the growth of the City of Allen. If you have any question or feel we could be of assistance in any area, please do not hesitate to contact me. Sincerely, TCI CABLEVISION OF NORTH TEXAS t- I JoAnn Holtzclaw General Manager JH:mvz 11