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HomeMy WebLinkAbout1993-12-14; City Council; 12504; TO SET HEARING DATE FOR PROPOSED TWO FIVE-YEAR FRANCHISE EXTENSIONS FOR DANIELS CABLEVISIONe w s ?& a- < 2 0 a 6 8 i 0 z 3 Y OF CARLSBAD - AGEW BILL 9 w DEPT. HD& MTG. 12/14/93 TWO FIVE=YEAR FRANCHISE EXTENSIONS CITY Ad & DEPT. U&M FOR DANIELS CABLEVISION CITY MGR.2’ - TITLEm TO SET HEARING DATE FOR PROPOSED AB# \a150Y RECOMMENDED ACTION: Set public hearing for January 18,1994 on the proposed two five-year extensions to Daniels Cablevi Franchise with the City of Carlsbad. ITEM EXPLANATION: Daniels Cablevision has requested two five-year extensions to the current franchise agreement, Off a technical opener at the end of the first five-years, and offering to immediately increase the CL franchise fee from 3% to 5%. The City granted its first cable television franchise to Daniels Cablevision and La Costa Comm Antenna System on November 19,1977. Subsequently, Council gave approval of the sale of La C Community Antenna to Daniels Cablevision and extended the term of the franchise an additiona years to November 19, 1996, requiring the cable company to continue maintenance and replace of equipment and continuation of five-minute free air time for the duration of the franchise. 1 conditions have been incorporated into the City Code Chapter 5.28 Cable Television, which cor all the operating rules and conditions of the franchise. The City Code provides for five-year extensions. The City Council may approve, or disapprove, extension requests after holding a noticed public hearing on the matter. The noticed public hearing needs to address the following items: (a) Identify the future cable-related community needs and interests; and (b) Review the performance of the cable operator under the franchise during the c franchise term. The next step in the extension process is for Council to set the public hearing date, seeking public on the two items outlined above. FISCAL IMPACT: There is no current General Fund impact on staff time, or public hearing costs, as they are charged against the $2,000.00 deposited by Daniels for this process. EXHIBITS: 1. Staff Report 2, Letter from Daniels Cablevision requesting extension of current franchise agreement. LAIIIUII 1 B a STAFF REPORT DANIELS CABLEVISION REQUEST FOR TWO FIVE-YEAR EXTENSIONS TO THE CURRENT FRANCHISE Backaround: The original Carlsbad Cablevision franchise was granted November 19, 1977 for fifteen years (to November 19,1992). Subsequently, on September 1 , 1986, the City Council approved the transfer of ownership of La Costa Cable Television to Daniels Cablevision, Inc. (D.C.1). On November 1 1, 1986 Council approved the two following actions concerning the franchise: (a) Approved the transfer of ownership of Carlsbad Cablevision to Daniels Cablevision, Inc. (D.C.1) consolidating all the City of Carlsbad under D.C.I. Modified the franchise term from November 19, 1992 to November 19, 1996, a four-year extension of the franchise, and amended the City ordinance incorporating specific conditions into the ordinance as consideration for the four-year extension, The operating provisions of Carlsbad's cable franchise are contained within Chapter 5.28 Cable Television of the Municipal Code. (b) Request: Daniels Cablevision, Inc. has requested two five-year extensions to the current franchise extending it to 2006, as allowed by City Code. This is an alternative allowed by the City Code to a formal renewal process, as described in Federal Statutes. Daniels has offered in consideration for such an extension an immediate increase in our current franchise from 3% of gross revenues to 5% of gross revenues, to commence upon approval and to provide for a 'Technical opener" of the franchise at the end of the first five-year extension (November 19, 2001 ), when new and proven technologies can be evaluated in conjunction with demonstrated need, demand and technical/financial feasibility. The second five-year extension would automatically be granted if the City and Daniels determine that the system has kept pace with current technologies in accordance with conditions established as part of the extension. Formal Renewal Process: Under the Cable Television Protection and Competition Act of 1992 it states, as did the 1984 Act, that during the six-month period which begins with the 36th month (November 19,1993 in the City of Carlsbad's situation) before the franchise expiration, a renewal process will commence. This process is both time consuming and expensive to both the City and the cable company. If there is a concern about the quality of service, signal quality, bill practice and similar performance of the cable operator, it may be the best method of renewing a franchise. This process would start in November of this year and continue for two years based on other cities' experiences. Both parties normally hire consultants with the City's costs estimated to exceed $32,000, plus commitment of our own staff resources. A key issue in the process would be to 1 e increase the franchise fee from the current 3% of gross revenues to 5%, beginning in November of 1996. If, however, as I believe, the cable operator has been responsive to consumer complaints, service levels and demonstrates community interest, then the extension process outlined in the City Code is an appropriate procedure. This extension process is shorter and can obtain the same, if not better results, for the City and the citizens. Extension Process: Simply, the extension process requires an advertised public hearing before the City Councjj to consider two items required by the federal renewal process. These items are as follows: 1. Identify the future cable-related community needs and interests; and 2. Review the performance of the cable operator under the franchise during the current franchise term. A staff team comprised of member of six departments has reviewed the question of future cable-related community needs and interests to assist the City Council in consideration of this matter. The following items were discussed with Daniels Cablevision: 1. What is the plan to extend cable service throughout the City? Response: Daniels provides cable in residential areas. Any residence within 132 of areas currently served by Daniels is provided a connection to cable. Additionally, in areas where there are forty homes within a mile, service is extended at no charge. 2. Clarify use of Channel 38 (Public Access Channel) and how the franchise- requirements of Public Access, Educational and Governmental channels (P.E.G) are met. Response: a) Public Access Channel 38 airs from 5:OO p.m. to 12 midnight, Monday through Friday. This channel is programmed by Daniels and includes Community Television Foundation grant programs, cable calendar, 'Take 5," Public Service Announcements (P.S.A), Inside North County and other non-commercial, locally produced programs. Additionally, leased access programming airs from 5:OO p.m. to 12 midnight Saturdays and Sundays. b) Educational Access Channels Channel 53: Mind Extension University Channel 12: Palomar College Courses, San Diego Channels KPBS 81 KCET; Public Broadcasting County School Programming 2 m 0 c) Government Access Channels Channel50: C-Span II - full time Channel2: C-Span I - full time Channel 51: Board of Supervisor - Tuesdays & Thursdays; and the California Channel weekdays, 9:00 a.m. to 4:OO p.m. Carlsbad City Council meetings Tuesday Channel38 and Wednesday. 3. Provide City with current plans for next cable upgrade and timing. Response: Next upgrade is called Video Compression Technology, which is expected to be available in 1996-98. This upgrade will change the current analog system to a digital system, allowing for high density television broadcasting plus additional channels. This new system will require a new box for each customer. 4. Status of cablecasts of City Council meetings. Response: In 1987 Mr. Bill Daniels established that providing free, live cablecasts of City Council meetings was a public service and should not be billed to the City. 5. Provision of library catalog access on Main Street. Response: Daniels Cablevision has requested the City to allow the library catalog system to be placed on line for Daniels’ interactive Main Street program. - Note: The Library has reached an agreement with Daniels’ Main Street to incorporate the library catalog system into the Main Street program. 6. Establish definition points of time and/or events to trigger reviews of franchise. Response: appropriate times to review the franchise: The following are considered to be reasonable and 1994 - Upon F.C.C. completion of new regulations for the 1992 Cable Act our City Code needs to be reviewed and revised as necessary. The City Code contains all the conditions of the franchise. 1996/98 - At the anticipated time of the next cable system upgrade (video compression). An opening of the franchise for review will allow the City to ensure that community needs as related to the upgrade will be met. 3 0 0 2001 - At the end of the first five-year extension. This is a technical opener of the franchise to evaluate Daniels’ pace with new and proven technologies as are present at the time, and to assure that Carlsbad’s community needs continue to be met. 2003 - At the time to initiate the renewal process. This is required by the 1992 Cable Act. - Note: The essential result of this series of openers or reviews is a recognition of an ongoing dialogue between the City of Carlsbad and Daniels Cablevision in order to be as responsive as possible to both community service needs and future community needs. Summary; The City of Carlsbad has received a request from Daniels Cablevision for two five-year extensions of the current franchise, and has deposited $2,000.00 with the City to process this request. In consideration of the extension, Daniels is offering to increase the current franchise fee from the current 3% to 5% immediately, and at the end of the first extension to have a technical opener to review how the company is keeping pace with new technology in conjunction with demonstrated community needs. The extension process requires an advertised public hearing before the City Council to consider, a) future cable-related community needs and interests, and; b) to review the performance of the cable operator under the franchise during the current franchise term. The records kept by this office over the last 2.5 years indicate we have received eight service complaints, five of which related to the placement of new junction boxes during the upgrading. An additional 6 complaints were received on programming and rate issues, over which the City has no jurisdiction. Staff has reviewed the issue of future community needs and recommends the following to be conditions of any extension, if granted, by the City Council: 1. Upon adoption of the resolution, franchise should immediately be increased to 5% of gross revenues, as defined in the Carlsbad City Code, Chapter 5.28. In order to ensure that communitv needs are being met, the franchise will be reviewed on the following dates for the stated purpose: a) 1994: b) 1996-98: c) 2001: d) 2003: 2. City Code revision to reflect 1992 Cable Act and F.C.C. regulations At time of the next cable system upgrade (video compression) Technical opener at end of first five-year extension At time to initiate renewal process. (These reviews will involve public hearings at City Council meetings.) 4 c 0 0 3. Maintain commitment to P.E.G. Channels at today's standards, or better. Continue live public service broadcasting of City Council meetings. Continue 5 minutes free air time ('Take Five") for duration of franchise. Based on input obtained at the public hearing, the City Council may place additional conditions on granting an extension. 4. 5. 6. 5 L,,, I I Y 1 ’ D%nk!k Cabl@MkiQn lnC. 0 P.O. Box 344 Carlsbad, CA 92018-0344 November 13, 1992 Mr. Ray Patchett City Manager City of Carlsbad 1200 Carlsbad Village Dr. Carlsbad, CA 92008 Dear Mr. Patchett: Over the past couple of months, I have had exploratory discussions with Jim Hagaman of your staff regarding a proposal to extend our current franchise agreement with the City of Carlsbad. This proposed extension would take the place of a formal renewal and its associated process which is scheduled to open via a 36- month window in mid-1993 based upon the November 1996 expiration of our current franchise. I suggest that an extension of our current agreement would result in a win-win situation for both the City of Carlsbad and Daniels Cablevision. As you are aware, in September 1992 we completed a 13 million dollar voluntary upgrade of our entire system to improve the service we provide to the residents of Carlsbad. The upgrade has allowed us to increase channel capacity, introduce new services and improve reliability. Daniels Cablevision has a solid track record of delivering to our customers and the community of Carlsbad consistent exemplary service at levels far exceeding national averages. We have also demonstrated our commitment to keeping pace with new and proven technologies. In conjunction with our request to extend our franchise for two additional five-year terms we would also propose that the current franchise fee of 3 percent increase to 5 percent beginning immediately with the approval of the extension. We would also propose to allow for a “technical opener” at the end of the first five years whereby our pace with new and proven technologies could be evaluated in conjunction with demonstrated need, demand and technical/financial feasibility. The second five year extension would be automatically granted to Daniels Cablevision following such technical review if the City and Daniels Cablevision determine that the system has kept pace with current technologies in Business Office 438-7741 @ Customer Service 931-7000 @ Advertising Sales 438-7819 5720 El Camino Real a Carlsbad, California 92008-7298 < , 0 0 accordance with conditions that will be established as part of the extension. This extension process would be immediately mutually beneficial to all concerned and would eliminate the alternative renewal process, which would undoubtedly be costly and laborious for both the City of Carlsbad and Daniels Cablevision. Please contact me at your earliest convenience should you desire to formally proceed with our extension proposal. It is my desire to accomplish the extension by Dec. 31, 1992. \, Thank you €or your consideration of this matter. *ii 2 Respectfully, &vvfd-\ / ,*.x Vice JOwGY esident and General Manager Daniels Cablevision, Inc. J0:dd cc: Mayor rrBudlt Lewis James Hagaman