HomeMy WebLinkAbout1994-01-18; City Council; 12558; Extending Franchise Of Daniels Cablevisionr
C-Y OF CARLSBAD - AGEF”“A BILL !$
AB#s TITLE:
MTG 1 /I%/94 PUBLIC HEARING - PROPOSED .---_ - TWO FIVE-YEAR FRANCHISE EXTENSIONS
DEPT. U&M FOR DANIELS CABLEVISION
RECOMMENDED ACTION:
Consider public input for the future cable-related needs of Carlsbad, and if Council concurs with the
proposed extensions, staff recommends the following:
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z a) Introduce Ordinance No. A/‘;- dh8 which modifies the franchise term from
4 November 19, 1996 to November 19,2006 and increases the franchise fee from 3% to
m 5%. .
rz b) Adopt Resolution No. 44 - 3 0 which establishes additional clarification and
g conditions for approval of the franchise extensions. 4 u
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: KEM EXPLANATION:
t=d a al Daniels Cablevision has requested two five-year extensions to the current franchise agreement, offering u
0” a technical opener at the end of the first five years, and offering to immediately increase the current
4 franchise fee from 3% to 5%.
The City granted its first cable television franchise to Daniels Cablevision and La Costa Community
Antenna System on November 19, 1977. Subsequently, Council gave approval of the sale of La Costa
Community Antenna to Daniels Cablevision and extended the term of the franchise an additional four
years to November 19, 1996, and required the cable company to continue maintenance and
replacement of equipment and continuation of five-minute free air time for the duration of the franchise.
These conditions have been incorporated into the City Code Chapter 5.28 Cable Television, which
contains all the operating rules and conditions of the franchise.
The City Code provides for five-year extensions. The City Council may approve, or disapprove, such
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
current franchise term.
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2 A team comprised of members from six departments has reviewed anticipated City-related needs over
2 the next years and has identified a number of conditions contained in the attached Resolution. The
V team had difficulty in projecting the rapid technological changes occurring in the telecommunications
industry over the next years to the turn of the century. Therefore, staff recommends several openers . .
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throughout the extensions to review the following items:
Y 1994: City Code revision to reflect the Cable Act and F.C.C. regulations.
1996-98: Review proposed next cable upgrade (video compression).
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PAGE 2 OF AB# /A; 5.5 8
2001: “Technical Opener” to evaluate cable operator’s pace with new and proven
technologies.
2003: Time to initiate renewal process.
The City of Carlsbad and Daniels Cablevision have maintained a constant dialogue over the years and
the cable operator has been very responsive to the various needs of the City. Daniels enjoys a
reputation of being among the best customer service providers in the cable industry. This is reflected
in Carlsbad by the minimal staff time required to administer the franchise.
Staff is recommending that the francliise be extended for the requested time, subject to the adoption
of the proposed ordinance and resolution, and any additional conditions City Council may determine
based on public input received at this hearing.
FISCAL IMPACT:
There is no current General Fund impact on staff time, or public hearing costs, as they are being
charged against the $2,000.00 deposited by Daniels for this process.
The City’s General Fund will benefit by approving this request for two five-year extensions as the
franchise fee will increase from 3% to 5%. This will provide an estimated 2 $150,000.00 per year in
additional revenues.
EXHIBITS:
1. Ordinance No. n/S- A?&?
2. Resolution No. 94~ 30
3. Staff Report
4. Letter from Daniels Cablevision requesting extension of current franchise agreement.
ORDINANCE NO. NS-268
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA AMENDING TITLE 5 OF THE CARLSBAD MUNICIPAL CODE
BY AMENDING SECTION 5.28.050; AND TO AMEND SECTION 5.28.040
(a) TO INCREASE THE ANNUAL FRANCHISE FEE TO FIVE PERCENT
The City Council of the City of Carlsbad, California does ordain as follows:
Section 1: That Title 5, Chapter 5.28, Section 5.28.040 of the Carlsbad Municipal Code
is amended by the amendment of Subsection (a) to read as follows:
(a) In consideration of the granting and exercise of a non-exclusive franchise to
use the streets, as herein defined, for the operation of a cable television system,
any grantee shall pay to the City during the life of the franchise, in the manner and
at times directed in a Council Resolution, a franchise fee of five percent of its
gross annual revenues.
Section 2: That Title 5, Chapter 5.28, Section 5.28.050 of the Carlsbad Municipal Code
is amended by the amendment of Subsection (a) to read as follows:
(a) Franchises may be granted by the Council under this Chapter for terms up to
fifteen years with extensions to franchisee up to ten years.
(i) Upon written notice given by the City, or the grantee, to the other not less than
one year prior to the end of the initial franchise term, or any extension thereof, the
terms and conditions of such franchise may be subject to renegotiation for
additional terms up to ten years. Renegotiation shall be directed toward effecting
alteration of the terms and conditions of the franchise to reflect those technical
and economic changes which have occurred during the initial franchise period,
or any extension thereof. If such renegotiation does not result in tlie granting of
an additional franchise term by the City, the franchise shall terminate without
further action by the City at the end of the initial fifteen-year franchise term, or any
extension thereof. Prior to making a decision to approve or disapprove an
extension of a franchise, the Council shall hold a noticed public hearing on the
question.
EFFECTIVE DATE: This ordinance shall be effective thirty days after its adoption; and the
City Clerk shall certify to the adoption of this ordinance and cause it to be published at least
once in the “Carlsbad Sun” within fifteen days after its adoption.
ill/i /illI
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INTRODUCED AND FIRST READ at a meeting of the Carlsbad City Council held on the
day of , 1994 and thereafter.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad at its
regular meeting held on the day of I 1994, by the following vote, to wit:
AYES:
NOES:
ABSENT:
All-EST:
CLAUDE A. LEWIS, Mayor
ALETHA L. RAUTENKRANZ, City Clerk
(SEAL)
RESOLUTION NO. 9 4 - 3 0
A RESOLUTION OF THE C17y COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA APPROVING TWO FIVE-YEAR EXTENSIONS TO DANIELS
CABLEVISION, INC., FRANCHISEE WlTH THE CITY OF CARLSBAD
WHEREAS, Daniels Cablevision, Inc. has requested two additional five-year extensions
to its franchise, and;
WHEREAS, Daniels Cablevision, Inc., in consideration of the City of Carlsbad granting the
requested franchise extensions, offered to increase the current 3% annual franchise fee to a 5%
annual franchise fee immediately, and;
WHEREAS, Daniels Cablevision, Inc. also proposed to allow for a “technical opener” at
the end of the first five-year extension whereby new and proven technologies will be reviewed
to determine if the cable system has kept pace with current technology in accordance with
conditions that can be established as part of the extension process, and;
WHEREAS, the City Council in granting a second five-year extension, can establish
conditions to assure that the cable system keeps pace with the current technology at that time,
and;
WHEREAS, the City Council of Carlsbad held a public hearing on the 18th day of
, 199’4, providing members of the public an opportunity to express their JANUARY
views on the future cable-related community needs and interest, and the past performance of the
cable operator, and;
WHEREAS, City staff has reported its findings on future community needs of Carlsbad,
and recent performance records.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as
1.
2.
The above recitations are true and correct.
The City Council hereby approves the requested two five-year extensions to the
Daniels Cablevision franchise, subject to the following conditions:
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1 a) Openers to the franchise shall occur at the following times for the stated purposes:
i.
ii.
1994: The municipal code will be revised to incorporate provisions of the
1992 Cable Act and related F.C.C. regulations. Daniels Cablevision, Inc.
must comply with these changes to City ordinances.
1996-98: City will review a proposal submitted by Daniels Cablevision, Inc.
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14 C. Franchisee will continue the public service of live broadcasting of City Council
15 meetings at no cost to the City for the duration of the franchise.
16 d. Franchisee will continue five-minute free air time (‘Take Five”) for the duration of
17 the franchise.
18 e. Upon adoption of Ordinance No. NS-268 raising the franchise fee from 3% to 5%,
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I Daniels Cablevision, Inc. will commence paying the new franchise fee beginning
b.
for a cable upgrade (video compression). Daniels Cablevision, Inc. shall
comply with any conditions placed on City’s approval of the upgrade.
. . . III. 2001: City will review franchisee’s pace with new and proven
technologies. Daniels Cablevision, Inc. shall comply with any new
conditions required by City as a result of the review.
Daniels Cablevision, Inc. maintains, or improves, its compliance with the
franchise’s P.E.G. requirements by its current mixing of programming.
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on the ordinance adoption date.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad at its
regular meeting held on the 18th day of JAN-, 1994, by the following vote, to wit:
AYES: Council Members Lewis, Stanton, Nygaard, Finnila
NOES: None
ABSENT: Council Member Kulchin
ATTEST:
28
I/ City Clerk
STAFF REPORT
EXHIBIT 3
DANIELS CABLEVISION REQUEST FOR IWO 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 1,1988, the City Council approved
the transfer of ownership of La Costa Cable Television to Daniels Cablevision, Inc. (D.C.1). On
November 11, 1988 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.
03 Modified the franchise term from November 19, 1992 to November 19,
1998, 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
Televlslon of the Municipal Code.
Retwest:
Danlels Cablevision, Inc. has requested two five-year extensions to the current franchise
extending it to 2008, 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 38th 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. lf 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
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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
Council 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?
Reswnse: 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.
a) Public Access Channel 36 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 5:00 p.m. to 12 midnight Saturdays and Sundays.
b) Educational Access Channels
l Channel 53:
l Channel 12:
l Channels KPBS & KCET:
Mind Extension University
Palomar College Courses, San Diego
County School Programming
Public Broadcasting
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c) Government Access Channels
l Channel 50:
l Channel 2:
l Channel 51:
l Channel 38
C-Span II - full time
C-Span I - full time
Board of Supervisor - Tuesdays &
Thursdays; and the California Channel
weekdays, 9:OO a.m. to 4:00 p.m.
Carlsbad City Council meetings Tuesday
and Wednesday.
3. Provide Clty with current plans for next cable upgrade and tfmlng.
Response: Next upgrade is called Video Compression Technology, which
is expected to be available in 199898. 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.
ResDonse: Daniels Cablevision has requested the City to allow the library
catalog system to be placed on line for Daniels’ interactive Main Street
program.
m: The Library has reached an agreement with Daniel& 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: The following are considered to be reasonable and
appropriate times to review the franchise:
l 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.
l 1998/98 - At the anticipated time of the next cable system
upgrade (video compression). An opening of the franchise
for review will allow the Cii to ensure that community
needs as related to the upgrade will be met.
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l m- 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.
l 2093 - At the time to initiate the renewal process. This is
required by the 1992 Cable Act.
The essential result of this series of openers or reviews is a recognition of an Note:
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 Cii 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:
I. 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.
2. In order to ensure that communitv needs are beina met, the
franchise will be reviewed on the following dates for the stated
purpose:
a) 1994: City Code revision to reflect 1992 Cable Act and F.C.C. regulations
b) 199698: At time of the next cable system upgrade (video compression)
c) 2001: Technical opener at end of first five-year extension
d) 2003: At time to initiate renewal process.
mese reviews will involve public hearings at City Council meetings.)
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3. Maintain commitment to PEG. Channels at today’s standards, or
better.
4. Continue live public service broadcasting of City Council meetings.
5. Continue 5 minutes free air time (Take Five”) for duration of franchise.
6. Based on input obtained at the public hearing, the City Council may place
additional conditions on granting an extension.
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EXHIBIT 4
Daniels Cablevision Inc.
P.O. Box 344
Carlsbad, CA 92018-d344
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 l Customer Service 931-7000 l Advertising Sales 438-7819
E73rl El r3-inr. C)fini . P3~lrh-3~ P-li$r.rnio winno 7r)no
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.
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Thank you for your consideration of this matter.
Respectfully,
and General Manager Daniels Cablevision, Inc.
JO:dd
cc: Mayor IrBudl@ Lewis James Hagaman