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HomeMy WebLinkAboutItem 8.4 RenewalTri-VlyCable (2) ~ 1\ ...,.... ...... . CITY CLERK File # [1][{J~lM~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: July 21,1998 SUBJECT: EXHIBITS ATTACHED: RECOMMENDATION: ~ FINANCIAL STATEMENT: . Franchise Agreement Renewal of the Tele-Communications, Inc., (TCl) Tri-Valley Cable Television System. (Report Prepared by: Sue Barnes, Management Assistant) 1. Letter dated FebI1l;ary 2, 1998 from Tom Baker, General Mgr., TCI 2. Cable Franchise Renewal Process Flow Chart 1. Receive Staff Report. 2. Commence proceeding for the purpose of reviewing TCl's performance under the current franchise and identifying the Dublin Community's future cable-related needs. 3. Continue Proceeding Indefinitely 4. Authorize the City Manager and/or his designee to enter into franchise renewal negotiations with TCI Franchise renewal costs will depend upon the length and extent of negotiations with the cable operator, which may continue through the end of the year 2000, but total costs are not expected to exceed $60,000. Further, it is feasible that the City can negotiate that franchise renewal expenses incurred by the City may be reimbursed by the cable operator. An effort will be made to jointly share the costs with the Cities of Livermore, Pleasanton, and San Ramon. DESCRIPTION: The Cable Communications Act of 1984, as amended by the Cable Television Act of 1992, establishes rules for renewing cable television franchises. The act refers to the process to review TCl's performance under the current franchise, hear public comments, and identify the Dublin Community's future cable-related needs as a "proceeding." The renewal process begins upon written notification from the cable operator. This notification is required to take place within 30-36 months prior to franchise expiration. Franchising authorities have six months from the notice to begin proceedings. The renewal process takes place during the thirty-six months preceding the end of a franchise agreement. The Act provides two general methods for renewing franchises: 1) a formal process; and 2) an informal process. Although most franchising authorities recommend the informal process, as it provides more flexibility in responding to proposals during the negotiations phase, it is likely that the two processes will proceed simultaneously. The key to the formal process is to assure that time limits and requirements imposed by the FCC are adhered to. If the parties cannot come to an Agreement under the "informal process", there is the ability to seek FCC input under the Formal Process on a final resolution ofthe renewal issues. On February 2, 1998, the City received correspondence from Tel requesting that Dublin commence franchise renewal proceedings (Exhibit 1). This will allow the public to provide input regarding future cable-related needs . and the performance of TCI under the current franchise. The current franchise agreement was entered into on ----------------------~---------------------------------------------- COPIES TO: Tom Baker, General Manager, TClpTri-Valley Cable Television System 8.4 G/cabletv/tvitem.doc ITEM NO. January 1, 1986, and expires on December 31, 2000. While TCI filed their notice for formal renewal proc~edings, the notice states TCl's desire to utilize the informal process. It is TCl's intention to preserve their request for the i formal renewal procedures if renewal negotiations cannot be concluded on an informal basis. . ... The proceeding also initiates franchise renewal negotiations between the eity and TCI, which federal law dictates should be concluded no later than December 31,2000. It is to the eity's advantage for the Council to commence the proceeding at this time so that negotiations may ensue, but to indefinitely continue the proceeding until such time that sufficient public comment has been received. . Once negotiations with TCI have reached a point of substantial agreement, the City may close the proceeding. In accordance with federal law, once the hearing is closed, the City may request that TCI submit a proposal for renewal of the franchise. This proposal may include any material that the City may require, including proposed infrastructure upgrades and a date by which the proposal must be submitted. Once TCl's proposal is received, the City must provide prompt public notice of its receipt, and, within four months, either renew the franchise or issue a preliminary assessment that the franchise should not be renewed. The City Manager and/or his designee will lead the City's negotiating team, and will receive support from a consultant who specializes in telecommunications law. (The selection of the consultant will be determined at a later time and will follow the City's selection procedures for professional services). In addition, Staff intends to coordinate franchise renewal efforts with the Cities of Pleasant on, San Ramon and Livermore, whose cable franchises are similar in scope and term. Joint pooling of the jurisdiction's respective expertise and resources will provide opportunities for reducing franchise renewal costs and maximizing negotiations. Components of the Renewal Process --The components of the renewal process that franchising agencies use to evaluate performance and determine negotiating priorities include: . Franchise Compliance Audit (is the operator complying with current provisions?) . Franchise Fee audit (is the franchising authority receiving correct franchise payments?) . Technical audit (review of operator's technology, infrastructure) . Needs Assessment (what does the city need in cable services during the term of the next franchise?) . Public Proceedings (gathering of public input, through forums, committee input and/or surveys) . Evaluation of cable operator's proposal . Negotiation of a new franchise . The single most costly component of the renewal process will likely be consulting services. Cable television, related technology issues, the eable Act, and negotiation of cable franchise renewals are specialized subjects. The City will need a significant amount of assistance in this area to establish Dublin's franchise renewal parameters, evaluate TCl's proposals in light of industry standards and federal requirements, and negotiate with TCl Reimbursement of some or all of the franchise renewal costs by TCI will be pursued as staff develops negotiating parameters. Federal law prohibits local governments from issuing exclusive franchises to cable companies. For this reason, staff is not recommending the Council initiate an RFP process for exclusive cable services. Third-party cable operators wishing to provide services in Dublin may do so at any time, regardless ofTCl's existing and/or future franchise arrangements; however, practically they do not choose do so given the tremendous infrastructure cost initially required to serve the City. Staff Recommendation: Commence proceeding for the purpose of reviewing TCl's performance under the current franchise and identifyin. the Dublin Community's future cable-related needs; Receive Staff Report; Continue the Proceeding indefinitely; . Authorize the City Manager and/or his designee to enter into franchise renewal negotiations with TCl ("* ~ . . . Exhibit 1 .~ mllla ~ Tel February 2, 1998 Mr. Paul Rankin Assistant City Manager City of Dublin 100 Civic Plaza Dublin, CA 94568 tlTY' OF DUBLIN' FES 0 4 1998 FINANCE DEPT. RECEIVED Dear: Mr. Rankin: Televue Systems, Inc. d/b/a TCI of California has appreciated the opportunity to serve the City of Dublin and its residents over the years. We are now looking forward to the renewal of our franchise. As you may know, the Cable Communications Policy Act of 1984 ("Cable Act") contains provisions which detail a procedure for the renewal of franchises. In order to comply with these provisions, TCI Tri- Valley is formally requesting that the City of Dublin commence renewal proceedings in accordance with the requirements of Section 626(a) of the Cable Act. The Cable Act does, however, in Section 626(h), provide for renewal of franchises without going through the extensive, formal procedure specified fn Sections 626(a) through (g). It seems to us that the informal process may be preferable for all concerned. We would like to meet with you at your earliest convenience to discuss the renewal proceedings outlined in the Cable Act. We look forward to meeting with you in the near future and to a continuing, mutually-beneficial relationship. V cry truly yours, ~-PL Tom Baker General Manager Tel Tri-VaIley TB:pb TCI of California 2333 Nissen Drive Livermore. CA 94550 (510) 443.0470 FAX (510) 443-3618 Trl-Valley System Office An Equal Opponunity Employer .... ... Exliibit .2 . Cable Franchise Renewal -- Formal Process The Informal Process (Simple Negotiations) occurs simultaneously) Cable Operator submits a written renewal notice I Franchising Jurisdiction initiates a public proceeding I Cable Operator submits a proposal for renewal I Upon receiving the Operator's proposal, City decides If ''Yes'' City and - cable operator sign the new franchise agreement If "No" this is a preliminary - assessment that the franchise should not be renewed 36 to 30 months prior to the expiration of the existing frnnehise tenn Two purposes: A. Identify the futl.ln: cable-rc>llltcd community needs and interests. B. Review the performance ofllie c<lble operator during exi~linz term Cable operator's proposal mu,<:t contain matc:riaJ required by the City, including proposals for upgrade City must provide prompt public notice of having received the proposal from the c~blc opemtor Congmtul31ionsl City must notice and commence an "administrative proceeding" to dt:tcnninc whether the cable opcrator has complied with thc following: (Proceeding must be initiated within six monlhs of receipt of cable operator's notice. However. the City may opt to not close the proceeding, and thus leave it open until infonnal negotiations are completed) (The cable opl;!:rator's propOl::l.1 is sul:unittcd either at the behest of the City or on the operaror's own initiativl;!:) -. (Within four months of receivin8 the proposal, City must issuc a decision to renew or not renew the francbise) 1. Substantially complied with the material tenns of the existing franchise and law 2. The quality of the openitor's service was rew;onable in lisht of community needs 3. The cable operator has the fimmcial, legal, and technical ability to provide service 4. The opCI'll.tOr's proposal is reasonable to meet the community's futu...e cable n~s .