HomeMy WebLinkAboutItem 8.2 Telecommunications Services
CITY CLERK
File # D[lQ~Ol-~C
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: April 4, 2006
SUBJECT:
League of California Cihes Call for Action on the Adoption of a
Telecommunications Services aud Vital City Interest Resoluhon
Report Prepared bv Joni Pattillo, Assistant City Manager
I) Proposed Resolution
2) Capitol Weekly News Artiele-MaJor Cable Deregulation Bill
3) February 7, 2006 Staff Report on Telecommunications
RECOMMENDATION: ~ Approve the proposed resolution aud direct Staff to send the
resolution to all concerned parties.
ATTACHMENTS:
FINANCIAL STATEMENT: Depending on the final resolution on Telecommunication issues,
the City of Dublin may see a significant reduction III cable franchIse fees as well the funding of Public,
Education, and Government (PEG) Support Fee.
DESCRIPTION:
The League of CalifornIa Cities IS requestmg City support for adoption of a proposed resolution
(Attachment 1) as it relates to the regulatory framework for telecommunication servIces. ThIs debate is
occurring at both the fcderal aud state levels. The artiele from the CapItol Weekly News (Attachment 2)
!1ldlcates that there IS a lot of achvlty on the possible cable deregulation aud its potential impacts to cIties.
As identified in the League of California Cities- Policy Fraulework for Telecommunication (Exhibit A)
"The primary goal for local government Illterests III the debate IS to provide the best telecommumcal1on
services to all of the constituents in our communities." The key principles of the League of California
Cities- Policy Framework for Telecommunications Refoml are as follows;
I. Revenue Protections
Protect the Authonty of local governments to collect revenues from telecommumcations
providers and ensure that any future changes are revenueneutTal for local governments.
Regulatory fees and/or taxes should apply equitably to all telecommunications servICe
providers_
COpy TO:
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ITEM NO.---B.2
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A guarantee that all eXlstlllg and any new fees/taxes remain with local govenunents to
support local public services and mitigate impacts on local rights-of-way
Oppose any state or federal legIslation that would pre-empt or threaten local taxation
authority
11. Rights-Of-Way
To protect the public's mvestment, the control of public rights-of-way must remain locaL
Local government must retain full control over the time, place and manner for thc use of
the public right-of-way in providing telecommumcations services, including the appearance
and aesthetics of equIpment placed wlthm It.
m. Access
All local community residents should be provIded access to all available
telecommumcatlOns servIces.
Telecommunications providers should be required to specifY a reasonable timeframe for
deployment of telecommunications services that includes a clear plan for the sequencing of
the build-out ofthese facilities within thc entire franchise area.
IV. Public Education and Government (PEG) Support
The resources rcquired of new entrants should be used to meet PEG support requirements
in a balanced marmer in partnership with Illcumbent providers.
For cllles currently without PEG support revenues, a minimum percentage of required
support needs to be determined.
V. Inslituhonal or Fiber Network (INET)
The authority for interested communities to establish !NET servIces and support for
education and local government facilities should remain at the loeallevcl.
VI. Public Safety Services
The authority for E-91l and 911 services should remam with local government, including
any compensation for the use of the nght-of-way All E-911 and 911 calls made by vOIce
over internet protocol shall be routed to local public safety answering points (PSAPs); Le_,
local dispatch centers.
All vIdeo proVIders must proVIde local emergency notification service.
VII. Customer Services Protection
State consumer protection laws should continue to apply as a mlmmum standard and
should be enforced at the local leveL Local governments should retain the authority to
assess penalhes to Improve customer service.
In adopting the proposed resolution, it will send a united and uniform message to the legislators at both
the federal and state level that cities want to be fully engaged in the framing of the telecommumcahon
regulatory framework.
RECOMMENDA nON
Approve the proposed resolution and dlfect Starfto send the resolution to all concerned partIes.
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RESOLUTION NO. - 06
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*********
TELECOMMUNICATIONS SERVICES AND VITAL CITY INTERESTS
WHEREAS, technological advances in telecommunications services are outpacing the current
state and federal regulatory framework for thosc services; and
WHEREAS, the new telecommunications services will bc vital to the businesses, households and
the public safcty oflocal communItIes; and
WHEREAS, Congress and the California State legIslature are begilllling a SerIOUS debate on a new
regulatory framework for telecommunications servIces III the 2006 legislative session; and
WHEREAS, financial resources that cities receive under the current regulatory framework for
telecommunicatIOns servlces are vital to support local pubhc services such as pubhc safety and
transportation; and
WHEREAS, the taxpayers have a financial interest to protect in the public's right-of-way; and
WHEREAS, faIr, level playing-field competition among telecommunicatIOns providers is
important to dehvenng telecommunications services at the best priec for our cItIZens, the consumers; and
WHEREAS, tclecommunications mdustry serviccs to a local community such as Public Education
and Governmcnt (PEG) cham1els, INET services to local schools and E911 and 911 public safety services
to local cltJzens are important services to maintain;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin, California
does hereby adopt the following princIples for Congrcss and the state legislature to consider in Its debatc
over a new telecommunicatIOns regulatory franlework (attached hereto as Exhibit A).
PASSED, APPROVED AND ADOPTED this day of
. -.
,2006.
AYES.
NOES.
ABSENT
ABSTAIN
Mayor
ATTEST
City Clerk
'-t-q-oGtJ ~. V
ATTACHMENT 1
L E AG U E
()I CALI. FUP \1IA
CITIES
t!'D to
.
Policy Framework for Telecommunicationsl Reform
INTRODUCTION
The telecommunications debate at both the federal and state levels promises to be a key
issue lor cities in 2006. The primary goal f(lf local government interests in the debate IS
to provide the best telecommunications services to all of the constituents In our
communities. A key factor in achieving this level of service is to enable competltHm
among all telecommunications providers.
Traditional franchising at the local level has served the valuable purpose of tailoring
servicc to unique local conditions and needs and assuring responsiveness of providers to
consumers. The continued involvement of local government in any new state or lilderal
regulatory scheme by way of locally negotiated agreements is an essential component of
telecommunications regulations, best serves the needs of consumers, and is consistent
with the goal of providing consumers greater choice in telecommunications options.
Any new state or federal standards must conform to the following principles:
REVENUE PROTECTIONS
. Protect the authonty oflocal governments to collect rcvenues from
telecommunicahons providers and ensure that any future changes are revenue
neutral for local governments.
. Regulatory fces and/or taxes should apply equitably to all telecommunications
service providers.
. A guarantee that all existing and any new fees/taxes remain with local
governmcnts to support local publIc ServlCeS and mitigate impacts on local rights-
ol~way
. Oppose any state or kderallegislation that would pre-empt or threaten local
taxation authority
RIGHTS-OF-WAY
. To protect the public's investment. the control of public rights~of-way must
remain local.
. Local government must retain full control over the time, place and marmer for the
use of the public right-of-way in providing telecommunications scrvices,
including the appearance and aesthetics of equipment placed within it.
I For purposes ufthis framework~ ''telecommunicationsl! means the transmission of data, video and voice
services to businesses and consumers
Final-Februu11' 27, 21106
EXHIBIT A
.
~~'D
ACCESS
. All local community residents should be provided access to all availahle
telecommulllcahons scrvices.
. Telecommunications provIders should be reqll1red to specify a reasonable
tImeframe for deployment oftelecommumcatlOus servIces that includes a clear
plan for the sequencing of the build-out of these facilities within the entIre
franchise area.
PUBUC EDUCATION AND GOVERNMENT (PEG) SUPPORT
. The resources required of new entrants should be used to meet PEG support
requirements in a balanced marmer in partnership with incumbent providers.
. For cities currently without PEG support revenues, a minimum percentage of
requIred support needs to be detennined.
INSTITUTIONAL OR FIBER NETWORK (lNETl
. Tbe authority for interested commumtles to establisb INET services and support
for educational and local government facihtles should remain at the local leveL
PUBLIC SAFETY SERVICES
. The authority for E-9l1 and 911 services should remain with local governmcnt,
iucludmg any compensation for the use of the nght-of-way_ All E-911 and 911
calls made by voice over internet protocol shall be routed to local public safety
answering pomts (PSAPs); i.e., local dispatch centers.
. All video providers must prov1(le local emergency notification service.
CUSTOMER SERVICE PROTECTION
. State consumer protechon laws should continuc to apply as a minimum standard
and should be enforced at thc local level. Local governments should retalll the
authority to assess penalhes to Improve customer service
OTHER ISSUES
. Existing telecommumcations providers and new entrants shall adlJere to local city
policies on pubhc utility undergrounding.
2
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Working wge/her to restore (JTlll pmlj~r:llol,al control for CIties through {'(h~calio'l and iuAn('(/(:I' (0 Im.lumf(~ Ih/! fj1u11itV ()f/{fe fo,. all Ct:l/ifornwns.
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CAPITOL WEEKLY NEWS
Nunez to sponsor major cable deregulation bill
By Shane Goldmacher
(published March 23rd, 2006)
Assembly Speaker Fabian Nunez is drafling sweeping legislation that could
fundamentally change California's phone, Internet and television landscape.
The measure would cenlralize franchising for the state's multibillion-dollar
cable market to allow telecommunication giants AT&T and Verizon to better
compete with the state's existing cable-operators.
California would become only the fourth state in the nation to allow
telecommunications companies to apply for state.issued cable franchises.
Since Texas became the first state to deregulate its cable industry last
September, California is one of a dozen states that have discussed similar
changes.
Nunez is quick to say the legislation is 'not fully cooked." The bill, AB
2987, does not yet contain any substantive legal language, but the speaker
says a fleshed-out law could be coming in the next weeks. Participants in
the high-stakes negotiations have been meeting quietly in the Capitol since
last April.
"The bread is being baked as we speak," said Nunez.
What's at stake is the opening wide of the state's estimated $5 billion
broadband market that provides millions of Californians high-speed Internet
access and cable television. It is a growing market that both AT&T and
Verizon are determined to enter AT&T already has committed to spend $4 4
billion to upgrade its existing phone lines to high-speed fiber optic lines
capable of transmitting video and Internet signals faster than OSL. The
upgrade would reach out to 18 million customers in 13 states, including
California.
But under current state law, phone companies must negotiate separate
cable-franchise agreements with each municipality into which they expand.
That's the same system the cable companies have navigated over the last
three decades. But AT&T and Verizon say the bureaucracy is outdated and
ineffective.
U
[;-mail article
3/28/2006
ATTACHMENT 2
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"If we had to follow a city-by-city process, and if we were able to secure
one agreement a week, it would take over seven years to get all the
approvals to roll out this new service in California," said AT&T spokesman
Gordon Diamond. "[We are] supporting a statewide process that would remove
some of the barriers that exist righl now to enter the video services
market."
The Nunez legislation, which is being co-authored by the chair of the
utilities and commerce committee, Assemblyman Lloyd Levine, D-Van Nuys,
would allow cable and broadband providers to seek a single franchise
agreement at the state level. The result, Levine and Nunez say, would be the
investment of billions of dollars by the telecommunications industry to
create a new, privately funded digitai infrastructure for California.
According to industry estimates, it costs $25,000 to $40,000 per mile of new
overland fiber optic lines and more than $40,000 per mile of underground
wiring.
"I am looking at the biggest investment in technology infrastructure to
reach as many Californians as possible," said Nui'iez. "I think the
opportunities are endless."
With bolh telecommunications firms and existing cable operators potentially
offering high.speed Inlemet, television and voice services in the same
area, proponenls of the new policy say the average consumer may save on
their monthly bill.
"Ultimately I think that the more competition you have, you typically drive
down the cost of the product," added Nunez, who has received more than
$20,000 from cable and telecommunications companies since 2005_
But Lenny Goldberg, a consumer adVOCate and lobbyist for The Utility Reform
Network who has been involved in the legislation discussions, worries that
the new regulations and competition may only benefit more affluent
customers.
"Often, you provide competition and the best services for the customer with
the most money," says Goldberg. "The result is [that the] so-called benefits
of competition go to the high-end and those people at lower incomes or poor
locations are paying the disproportionate share of the costs."
One of the central controversies of the proposed legislation is over what
populations would be served by the new high-capacity fiber optic lines.
Historically, cable providers have been required to "buiid out" to serve
entire municipalities with their best available technology--without
discriminating against racial groups or income levels.
Even latecomers to the cable market have been required to expand via a
3/28/2006
Page 5 of6
"balanced build out"--serving affluent and poor neighborhoods equally For
example, Sacramento's SureWest recently was forced to offer cable service to
both the wealthy Land Park neighborhood and the less affluent Oak Park area.
{PDQ ru
But telecommunications companies would rather expand without such a
"balanced build" requirement.
"This is a private investment and we have to make sure we are spending our
dollars and making our investment wisely," said AT&T spokesman Diamond.
AT&T has said that its business model is 10 bring "Project Lightspeed," its
fastest broadband, to 90 percent of "high-value" customers--defined by those
who spend more than $160 a month on telecom and entertainment services.
But the business plan calls for bringing the fastest "Lightspeed" technology
to only 5 percent of "low-value" customers that spend less than $110 a
month.
Diamond emphasizes that "In no way should this be interpreted as saying that
we are targeting affluent areas only It couldn't be further from the truth.
We want to provide our services to as many customers as we can,"
But cable operators say such customer selection is unacceptable.
"It is classic redlining," said California Cable Television Association
President Dennis Mangers, borrowing a term from other industries' past
practice of charging higher rates to predominantly poor, ethnic communities.
Both local government groups, which fear that certain cities or segments of
cities could be left underserved, and the legislative sponsors sound
committed to requiring some degree of a balanced build.
In February, the board of directors of the League of California Cities
adopted a telecommunications policy that demanded "all local community
residents" have access "10 all available telecommunications services."
Further, the League agreed to demand "a reasonable timeframe for deployment
of telecommunications service that includes a clear plan for the sequencing
of the build out" throughout the municipality
Nunez was equally unequivocal.
"The key thing first is you have got to be able to bring that fiber optic
cable to everyone's doorstep," he said. Levine calls expanded broadband
access the central goal of the legislation. "This bill is really about
broadband deployment. [Cable television] is really the cash cow that makes
broadband deployment financially possible," he said.
There are several other unresolved issues with the legislation, including
ensuring that any new state-issued franchise is revenue neutral to local
governments--something all sides have committed to. Under current franchise
3/2~!2006
Page 6 01'6
agreements, most municipalities receive 5 percent of the cable company's
gross revenues That amounts to an estimated $250 million in local revenue
in the state
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The League of California Cities also wants to ensure the continued providing
of public education and government (PEG) channels, as well as control over
public rights-of-way (i.e. controlling the installalion of cables underneath
public property)
These, and other sticking points, have been the focus of a series of
unpublicized meetings--chaired by Assemblyman Levine with senior-level staff
and industry stakeholders--that have been occurring in the Capitol since last
spring. Mangers said those meetings have shown Levine, Nunez, and Sen.
Martha Escutia, D-Montebello, who has her own telecom bill, to be "honest
brokers" in the regulation changes.
"The way we are going to do this is a level playing field where everybody
wins, where there is a benefit to municipalities, a benefit to the state, a
benefit to the customer," says Nunez. "That's the only way this is going to
work."
Shane Goldmacher is a Capitol Weekly staff reporter and author of The California Observer
3/2812006
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: February 7,2006
SUBJECT:
ATTACHMENTS: I)
2)
3)
4)
5)
RECOMMENDATION: 1)
W-. 2)
League of California Cities Call for Action on the
Telecommunications Revolution hnpact to Cities
Report Prepared by Joni Pattillo, Assistant City Manager, John
Bakker, Assistant City Attorney, and Jason Behrmann. Senior
Adminstrative Analyst
Western City reprint of an article on "How the
Telecommunications Will Affect Your City"
Federal Communication Commission (FCC) November 18, 2005
Notice of Proposed Rulemaking
Proposed comments for filing with the FCC
Sample Letter to Legislators or Congressional Representatives
on Telecom Reform
Proposed Resolution
Approve the proposed NATOA template and direct Staff to
distribute City's comments to the FCC by February 13,2006.
Approve the letter that was prepared by the League of California
Cities that would be sent to the City of Dublin's legislators and
congressional representatives and direct Staff to prepare those
letters for City Council's signature and distribution.
3) Approve the proposed resolution and direct Staff to send the
resolution to all concerned parties.
FINANCIAL STATEMENT: Depending on the final resolution, the City of Dublin may see a
significant reduction in cable franchise fees as well the ftmding of Public, Education, and Government
(PEG) Support Fee.
COpy TO:
_~.________M_____________________~~.__________R_____W___~_"____~___________________________________________
801341.1
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ATTACHMENT 3
DESCRIPTION:
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The League of California Cities recently sent out a call for action to all e1l1es regarding
Telecommunications Revolution and its impacts to Cities. Due to advances III technology, local telephone
companies now have the capability to provide cable television like services over their eXIsting phone lines
with some mlllor modifications. Using Internet protocol television (IPTV) capabilities, telephone
corporations are rolling out products that provIde fiber-optic based, integrated data, voice and video
services. However, each telephone corporation is approaching the roll out of IPTV differently. For
example, Verizon is complying with the Cable Act and seeking to obtam cable franchises from cities
before rolling out its IPTV product. On the other hand, SBC/AT&T is maintaining the position that its
new IPTV product is not subject to cable franchising and refusing to enter into cable franchise agreements
with local franchising authorities (LFA). Severnl citIes in California, including the City, are dealing with
sac's proposed construction of facilities for their IPTV system, which is known as Project Lightspeed.
In addition, saC! AT&T and Verizon are seeking regulatory relief in Congress to allow them to quickly
roll out IPTV without local interference.
In the meantime, the Federal Communication Commission (FCC) released a Notice of Proposed
Rulemaking (NPRM) on November 18, 2005 (Attachment II) relating to the local franchising process.
(MB Docket No. 05-311) The NPRM sets forth several tentative conclusions, and requests public
comment on the conclusions.
FCC Proposed Rulemakine:
Tbe basic premise of the NPRM seems to be that LFAs are violating the Cable Communications Policy
Act of 1984 ("Cable Act") by acting as unreasonable barners to entry. It states that: "As potential new
entrants seek to enter the [multichannel video programming distributor] marketplace, there have been
indications that in many areas the current operation of the local franchising process is serving as an
unreasonable barrier to entry." (NPRM, page 4.)
Tbe purpose of the NPRM is to "determine whether, in awarding franchises, LFAs are carrying out
legJ.timate policy objectives allowed by the Act or are hindering the federal communications policy
objectives of increased competition in the delivery of video programming and accelerated broadband
deployment and if that is the case, whether and how [the FCC] can remedy the problem." (NPRM, page
7.)
The NPRM goes on to make several tentative conclusions, including that; the FCC may preempt any LF A
law or rcgulation that causes unreasonable refusal to award a competitive franchise; the Cable Act
empowers the FCC to ensure LFAs do not unreasonably interfere with the ability of any potential new
entrant to provide video programming; and the Cable Act authorizes the FCC to take actions to ensure that
the local franchising process does not undermine the policy goal of greater cable competition. (NPRM,
pages 9-10.)
In fact, the only concession the NPRM makes to LFAs relates to the "universal service" provision of the
Cable Act. (47 U.S C. 54l(a)(3).) The NPRM tentatively concludes "that it is not unreasonable for a
LFA, in awarding a franchise, to 'assure that access to cable service is not denied to any group of potential
residential cable subscribers because the income of the residents of the local area in which such group
resides.. '" (NPRM, page II )
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Proposed Response to the FCC Proposed Rulemakine: and Pendin2 Le!!islation In Conl!ress lOt{) 10
A. Provide Comments through the NATOA Template By February 13,2006
In the NPRM, the FCC requests comments on several issues related to franchising authority. The
National Association of Telecommunications Officers and Advisers (NATOA) has developed a template
for cities tbat would like to comment on the NPRM. Staff has fined out the comment template with the
information that is relevant to the City of Dublin (Attachment 3). If Council approves the proposed
comments, Staff will file the comments with the FCC by the February 13,2006 deadline.
B. Propose that each of the City Councilmembers make contact with the City's legislators and
congressional representatives
The League of California Cities is encouraging elected officials to make contact either through phone calls
or writing the legislators and congressional representatives about the City's concerns in any reform
legislation as it relates to Telecommunication Reform. Attached is a draft letter (Attachment 4) prepared
by the League of Cali fornia CitIes that could be used by City Councilmembers. If Council approves the
proposed letter, Staff will prepare letters for each individual Couneilmember's signature to the City's
legislators and congressional representatives.
C. Adopt a Resolution
Another action that is being recommended by Staff that was not included in the League of California
Cities guide points is a proposed resolution expressing the City's support for the franchising of cable
television. In the proposed resolution (Attachment 5) sets forth the City's position in support of continued
local control over franchising and takes issue witb the assertion of federal control in cable franchising as
proposed in the NPRM and in the bills currently pending in Congress. If Council approves the proposed
resolution, it would be sent to the City's legislators and congressional representatives and the FCC.
RECOMMENDATION
Staff recommends that Council take the following actions I) Approve the proposed conunents to the
FCC's NPRM and direct Staff to file the City's comments with the FCC by February 13, 2006, 2)
Approve the letter that was prepared by the League of California Cities that would be sent to the City of
Dublin's legislators and congressional representatives and direct Staff to prepare those letters for City
Council's signature and distribution, 3) Approve the proposed resolution and direct Staff to send the
resolution to all concerned parties.
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