HomeMy WebLinkAboutMINUTES - 08032004 - SD.6 .. Contra
TO: BOARD OF SUPERVISORS •.', ;'.
Costa
FROM: INTERNAL OPERATIONS COMMITTEE - `
DATE: AUGUST 3, 2004
County
SUBJECT: HEARING ON AND ADOPTION OF JOINT REPORT ON CABLE-RELATED NEEDS
AND INTERESTS AND OPERATOR PAST PERFORMANCE AND ISSUANCE OF
JOINT REQUEST FOR RENEWAL PROPOSAL FOR CABLE FRANCHISE
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION
1. OPEN public hearing on "Joint Report on Cable-Related Needs and Interests and Operator
Past Performance" dated June 17, 2004.
2. ADOPT Resolution No. 2004/414 approving and adopting the "Joint Report on Cable-
Related Needs and Interests and Operator Past Performance" dated June 17, 2004, and
authorizing the issuance of the "Joint Request for Renewal Proposal for Cable Franchises"
dated August 3, 2004; and establishing a submission deadline of October 5, 2004.
CONTINUED ON ATTACHMENT: YES SIGNATURE: r.
----------------------------------------------------------------------------------------------------------------
RECOMMENDATION
--------------------------------------------RECOMMENDATION OF COUNTY ADMINISTRATOR s-f960MMENDXTION OF BOARD COMMITTEE
� PPROVE OTHER
SIGNATURE(S)., ':r� � ¢. �__ ! �,..,✓
GAY UILKEMA, CHAIR MARK DeSAUL R
-------------------------- -------------------------------------------------------_--------------------------------------------------------------------------
ACTION OF BOARD ON `}ar_ '' �'` APPROVE AS RECOMMENDED OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS 1S A TRUE AND CORRECT
COPY OF AN ACTION TAKEN AND ENTERED
'-UNANIMOUS(ABSENT_ a^ = _} ON THE MINUTES OF THE BOARD OF SUPERVISORS
ON THE DATE SHOWN
AYES: NOES: ATTESTED: AUGUST 3,2004
ABSENT: ABSTAIN: JOHN SWEETEN,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
CONTACT: JULIE ENEA(925)335-'1077 B`F "�. �. � ,DEPUTY
CC: INTERNAL OPERATIONS COMMITTEE STAFF
PATRICIA BURKE,OFFICE OF MEDIA AND COMMUNICATIONS DIRECTOR
SARA HOFFMAN,ASSISTANT COUNTY ADMINISTRATOR
LILLIAN FUJII,DEPUTY COUNTY COUNSEL
PHILIP ARNDT,COMCAST GOVERNMENTAL AFFAIRS AND FRANCHISING MANAGER
2500 BATES AVENUE,SUITE A
CONCORD,CA 94521
Cable Franchise Renewal Negotiations with Comcast, Inc. July 19, 2004
Internal Operations Committee Wage 2
FISCAL IMPACT
No fiscal impact is associated with this recommendation. Significant fiscal and service
opportunities exist in the negotiation of cable licenses to meet the County's cable
communication needs over the life of an agreement.
BACKGROUND
On May 18, 2004, the Board of Supervisors referred to the Internal Operations Committee
the matter of the cable television franchise renewal negotiations. Since 1999, a multi-agency
consortium has been in informal negotiations with AT&T, and now Comcast but has been
unable to reach agreement on terms satisfactory to the County and the consortium.
Consequently the consortium agencies have either decided to or are considering the above
recommended actions as part of the formal cable franchise renewal process provided for
under federal law.
The County has the responsibility to ensure that cable systems meet the needs and interests
of its citizens. Federal law requires cable operators to obtain franchises from local agencies.
Federal law also establishes a process for local agencies to ascertain the community's cable-
related needs and interests and to incorporate into franchise agreements provisions
designed to meet those needs and interests. Key franchise issues include assuring that the
cable system is state-of-the-art, establishing customer service standards, establishing
requirements for public, educational and/or government access channels, and making
communications capacity available to local agencies for use as an institutional network.
As noted above, in 1999, the County and Central County Cities of Clayton, Concord,
Martinez, Pleasant Hill and Walnut Creek, and the Town of Danville formed a Cable
Consortium to negotiate the terms of renewed cable licenses with AT&T. The Consortium
retained a team of consultants that includes Miller& Van Baton to provide legal advice, The
Buske Group to help ascertain community needs and interests, and Columbia
Telecommunications Corporation to provide a technical assessment of the cable system.
The Consortium and its consultants used a wide range of techniques to gather information
for a community needs assessment, including workshops, focus groups, telephone surveys,
and public hearings, among others. This information is recorded in the attached, "Joint
Report on Cable-Related Needs and Interests and Operator Past Performance" dated June
17, 2004 and the, "Joint Request for Renewal Proposal for Cable Franchise" dated August 3,
2004.
Informal negotiations continued through a change in ownership from AT&T to Comcast and
have not resulted in a proposal that meets the Community Needs and Interests as
determined in the assessment process mentioned above. As a last resort, the Consortium
decided to seek approval from their respective Councils and Board to invoke the formal
renewal process.
Cable Franchise Renewal Negotiations with Comcast, Inc. July 19,2004
Internal Operations Committee Page 3
Formal Renewal Process
The 1984 Cable Act established procedures and standards governing renewal of a cable
franchise for an incumbent cable operator. Congress established a complex process that
requires a local franchising authority take certain steps and consider certain factors before it
can deny a request for cable franchise renewal. This process, known as the "formal
process," includes the steps outlined below. This staff report addresses step 3 in this
process.
1. Either party (normally the cable operator) gives notice of its desire to follow the formal
process
2. The franchising authority begins a proceeding to review the cable operator's past
performance and identify the community's future cable related needs and interests
3. Upon completing the review of the cable operator's past performance and
identifying the community's future cable related needs and interests, the
franchising authority issues a Request for Renewal Proposal ("RFRP")
4. The operator submits a proposal
5. The franchising authority reviews the proposal and within four months either renews the
franchise on the proposed terms, or issues a preliminary denial of renewal
6. If a preliminary denial issued, the cable operator may request an administrative hearing
to consider whether: (1) the operator has complied with its existing franchise, (2) the
operator's past service has been reasonable in light of community needs; (3)the
operator is financially, legally and technically qualified; and (4) the proposal is
reasonable to meet the future needs and interests, taking into account the cost of
meeting the needs and interests
7. After the administrative hearing, the franchising authority must issue a written decision
either granting or denying renewal based on the four factors described above
8. If the request for renewal is denied, the operator may appeal the final decision in federal
district court.
The Cable Act also allows for renewal by what is called the "informal process," under which
the parties simply negotiate the terms of renewal, But under this process, the franchising
authority cannot deny renewal. The operator can argue that it has the right to continue to
operate even if the parties cannot reach agreement. Thus, the operator has a significant
negotiating advantage in the informal process. The "informal" and "formal" renewal
processes are not mutually exclusive. The parties can pursue both at the same time and it is
assumed that the County will continue informal negotiations whilepursuing the formal renewal
process. In addition, the information gathering and other work required by the formal process
Cable Franchise Renewal Negotiations with Comcast, Inc. July 19, 2004
Internal Operations Committee Page 4
can assist a franchising authority to develop its negotiating position in the informal process as
well.
As of July 23, 2004, Clayton, Martinez, Pleasant Hill and Walnut Creek have adopted the
attached Staff Report and Request for Renewal Proposal. Moraga is scheduled to adopt on
July 28, 2004 and Concord and Danville are scheduled to adopt August 3, 2004. (Concord's
Infrastructure & Franchise Committee met on June 15, 2004 and agreed to recommend
adoption of the Staff Report and Request for Renewal Proposal to the full Council.)
In its deliberations, the IOC explored potential options for increasing competition amongst
cable service providers, but learned that the County has very limited discretion under
federallaw to affect local competition.
The IOC also identified several important considerations that have bearing on the
negotiations with Comcast. One such consideration is the County's current franchise
agreement with Seren. The County has granted Seren a limited franchise allowing Seren to
serve residents of unincorporated areas near Concord and Walnut Creek. State law requires
that these agencies impose the same public, educational and governmental ("PEC") access
requirements on Comcast in the relevant areas in order to create a level playing field. As a
matter of fairness, staff believes that it is appropriate to apply other similar requirements
contained in the Seren franchises to Comcast in order to create a level playing field. In
addition, because the Seren franchises address many issues in a manner consistent with the
needs and interests of the County and the cities of Walnut Creek and Concord, staff believes
that they also provide guidance for addressing the community needs and interests not only of
those communities, but of the other Consortium Agencies as well.
Another important consideration is that any final license renewal with Comcast will likely be
for a period of ten or more years, and the Board of Supervisors, in the renewal process, must
anticipate future needs of the County and its residents over the life of the license.
After studying the issue in detail, our Committee believes that initiation of the formal renewal
process is in the best interest of the County and cable services customers.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Resolution on August 3, 2004 by the following vote: _
AYES: SUPERVISORS GIOIA, UILKE14A, GREENBERG, AESAULNIER
AND GLOVER .,
NOES: NONE "
i
ABSENT: NONE
ABSTAIN: NONE
RESOLUTION NO. 2004/414
A RESOLUTION OF THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY
ADOPTING CERTAIN CABLE-RELATED NEEDS AND INTERESTS OF THE COMMUNITY AS
IDENTIFIED IN THAT CERTAIN STAFF REPORT DATED JUNE 17, 2004 AND RELATED
REQUIREMENTS SET FORTH THEREIN, AUTHORIZING THE ISSUANCE OF A REQUEST
FOR A RENEWAL PROPOSAL FOR CABLE FRANCHISE,AND CLOSING THE INITIAL STAGE
OF FORMAL FRANCHISE RENEWAL PROCEEDINGS
WHEREAS, the County of Contra Costa has issued licenses for the operation of cable
.systems and the provisions of cable services to:
TCI Cablevision of California, Inc., now operating as Comcast of California IX, Inc.;
Televents of East County, now operating as Comcast of California IV, Inc.; Televents, inc.,
now operating as Comcast of California 1, Inc.; Tele®Vue Systems, Inc., now operating as
Comcast of California/Colorado/Texas/Washington, Inc.; AT&T Broadband HC of
Delaware, LLC, now operating as Comcast of California/Colorado, Inc.; UACC Midwest,
Inc., now operating as Comcast of California/ Massachusetts/Michigan/Utah, Inc.; TCI of
East San Fernando Valley, LP, now operating as Comcast of East San Fernando Valley,
LP; Contra Costa Cable Company, now operating as Comcast of Contra Costa, Inc., and
Crockett Cable Systems, Inc., now operating as Comcast of California VIII, Inc. (the above
cable operators are sometimes referred to collectively as "Comcast"); and
WHEREAS, the County commenced a proceeding to review the past performance of the
above cable operators, and to ascertain the future, cable-related needs and interests of the
community; and
WHEREAS, Miller&Van Eaton, L.L.P., consultants to the County has prepared and the Board
of Supervisors has received a Joint Report on Cable-Related Needs and Interests and
Operator Past Performance,"dated June 17, 2004, ("Joint Report") identifying the cable-
related needs and interests of the community, and recommending requirements to be
included in a request for renewal proposals for a cable franchise, consistent with federal
law; and
WHEREAS, on August 3, 2004, the Board of Supervisors held a public hearing on the Joint
Report in order to consider the Joint Report and obtain public comments related thereto;
and
WHEREAS, the Joint Report describes the past performance of Comcast, and finds several
instances where there has been a failure to comply with the terms of the cable license
and/or local laws; and
NOW, THEREFORE, THE BOARD OF SUPERVISORS RESOLVES THAT:
1. The cable--related needs and interests of the unincorporated areas of Contra Costa
County are accurately identified by the Joint Report.
2. The Joint Report is hereby adopted by the Board of Supervisors as its ascertainment of
the cable-related needs and interests of the community. The Board further adopts the
requirements as set forth in the Joint Report,
3. The cable operator's omissions to perform identified in the Joint Report are omissions
under the license.
4. The assessment of the past performance of Comcast contained in the Joint Report is
accepted by the Board of Supervisors. The director of the Office of Communications
and Media is authorized to issue such notices as may be required to comply with
federal law and the cable licenses.
5. The hearing on the ascertainment of cable-related needs and interests and the review
of the past performance of the operator contemplated by 47 U.S.C. §546(a) is hereby
closed.
6. Issuance of the Joint Request for Renewal Proposal for Cable Franchise dated August
3, 2004 is hereby authorized.
7. The deadline for submission of responses to the Request for Renewal Proposal for
cable franchise shall be October 5, 2004.
CC: Internal Operations Committee Staff
Office of Communications and Media
Office of county Counsel
PHILIP ARNDT,COMCAST GOVERNMENTAL AFFAIRS ANIS FRANCHISING MANAGER
2:5M BATES AVENUE,SUITE A
CONCORD,CA 94521
t hereby certify that this is a true and correct copy of an action
taken and entered on the minutes of the Board of Supervisors
on the nate shown
ATTESTED: August 3,2004
John Sweeten,Clerk of the Board of Supervisors
And County Admintstraf r
k y,
Deputy
RESOLUTION NO. 20041414
REQUZST TO SPEAK rORH
(TWEE (3) XINVTB LIXIT)
ry
Complete this forth and place it in the box near the speakers''
rostrum before addressing, the Hoard.
Name: ' Phone;
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Address.• �� City
I an speaking for, myself or organization,
(n*w of Ori nfxrtlon)
I wish to speak on Agenda item< #
My comments will be: general for against
I wish to speak on the subject of +
I do not wish to speak but leave these comments for the
Board to consider:
y e REQU38T TO 8PZAK YORK ,.....
( 'HRMS (3) MINUT8 LIMIT)
Complete this �orm and place it in the box near the speakers'
rostru efore address g. the Board.
Name: 17 �f. Phone.* f
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I an speaking for myl3 if or c ganizatiom. ,
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I wish to speak on Agehda Item # More. �
My comments will be: general for against
I wish to speak 'on the subject of - --
I do not wish to speak but leave these comments for the
Board to consider:
ADDENDUM TO ITEM SD.6
August 3, 2004
On this day,the Board of Supervisors HEARD the Internal Operations Committee(IOC)'s
recommendation to adopt Resolution 2004/414 approving and endorsing the Joint Report prepared by the
Cable Consortium.
Patricia Burke, Media Director, recommended moving forward with the Request for Renewal Proposal
outlined in the report but noted that the IOC may come back to the Board in September if there is a new
proposal at that time.
Two members of the public addressed the Board:
Robert Rothgery of East Contra Costa County
Clayton Leander, 1806 Key Blvd., El Cerrito and Diablo Video Arts
Supervisor Gioia expressed a concern that because the negotiating strength lies within Central County,the
needs of the unincorporated areas may not be addressed.
Chair Glover noted that the issue of equity of representation and equity of services for all areas of the
County needs to be addressed in the negotiation process and brought back to the Board.
Supervisor Gioia asked how much easement cable companies have onto homeowners' properties for the
installation of above ground cable boxes and other equipment.
Supervisor Uilkema suggested the easement issue could be made part of the negotiations.
The Board of Supervisors took the following action by unanimous decision:
APPROVED the adoption of Resolution 2004/414,approving and endorsing the Joint Report prepared by
the Cable Consortium that identifies the cable related needs and interests of unincorporated Contra Costa
County,and authorizing the issuance of a Request for Proposal for cable franchises,with proposals due
by October 5, 2004.
Replacement Pages for Item SD.6 on August 3, 2004:
Please be advised that the attached pages replace Pages 6, 8, and 9
of the "Joint Report on Cable-Delated Needs and Interests and
Operator Past Performance". The changes on the new pages are
emboldened for easy identification and have no impact on the
recommended actions.
has prepared this summary of the community's future cable-related needs and interests,
and an evaluation of the past performance of Comcast. This report refers to several
studies commissioned by the Consortium, which also discuss and identify many of the
needs and interests of the community, and evaluate the existing cable system. These are:
the Community Needs Assessment—Ascertainment and Recommendations regarding
Community Cable-Related Needs and Interests for the Contra Costa Cities and County
Cable Consortium; the Contra Costa Cable Consortium Cable Television Systems
Technical Evaluation; the Contra Costs I-Net Requirements Update; and the Contra Costa
Cable Consortium Cable Television Systems Updated Technical Evaluation. Staff
believes that these reports are accurate, and this report adopts the needs and interests
identified in those reports.
In addition to identifying needs and interests, as part of the preparation of this
report staff has developed certain renewal requirements, consistent with the Cable Act.
Also as contemplated by the Cable Act, staff has prepared a document that requests that
Comcast submit a proposal, showing how it intends to satisfy the future cable-related
needs and interests of the Agencies in any renewal term. The requirements that staff
recommends for adoption are reflected in that request for renewal proposal ("RFRP"),
which is attached to this document. In the RFRP, the operator is asked to explain why it
believes it should be granted franchise renewal, and is required to provide certain
information that the Consortium members will use in evaluating any proposal.
In connection with the issuance of this report, staff asks the Board to take two
actions:
1. Adopt the findings of this report(and the Consortium-commissioned
studies referenced in it) and the draft RFRP with respect to the needs and
interests of the community, and the past performance of Comcast. Cance
this is done, staff asks that the Board close the first stage of the cable
renewal proceedings,which is described below.
2. Authorize the issuance of the RFRP as attached to this report with a
deadline for response of October S,2004. Confirm that the requirements
and model system set forth in the RFRP are the requirements and the
model system that the Board believes will help meet the needs and
interests of this community.
Califomia/Colorado/Florida/Oregon, Inc.; Comcast of California/Colorado, Inc.;
Comcast of California/Colorado/Texas/\Vashington, Inc.; Comcast of East San Fernando
Valley, LP; and Comcast of Contra Costa, Inc., but all of these companies are controlled
by Comcast. Consequently, references to Comcast should be understood to refer to
corporate management or to the respective individual franchisee, as the context may
require. Similarly, Comcast operates multiple cable systems in the Consortium area, but
is in the process of reorganizing and consolidating those systems. References to the
"system" or "systems" should be understood to refer to the system or systems serving
Contra Costa County now or during the term of any renewal franchise.
6 (Revisdd)
A. The Cable Operator.
I. Bach rrounc
When the Consortium was formed, the cable Franchises in all of the Agencies
were controlled by AT&T Corp. ("AT&T"), and the respective franchises had either
expired or were nearing the end of their terms.' In February 2003, with the merger of
Comcast Corp. and AT&T Broadband, control of the franchises was transferred to the
new Comcast Corp,which is now providing service under the name"Comcast."
Comcast itself does not directly hold the various franchises under which it
provides cable service to subscribers located within the Agencies. For approximately 10
years, however, all of the cable systems and their legal owners have been controlled by
the same corporate entity. Control of the systems was first consolidated by Tele-
Communications, Inc. ("TCI") in the early 199O's. TCI was acquired by AT&T Corp. in
1999. Throughout this period, all of the systems and franchises have largely been
operated under a single, common set of corporate policies, and the individual Agencies
have been told that local management of their particular systems was under common
control and subject to the needs and priorities of the larger corporate entity.
Consequently, from the perspective of the Agencies,there has effectively been a single
operator in the County since the early 199O's.
Within the Consortium area,. Comcast serves approximately 135,000 subscribers and
operates approximately five cable systems,based on the number of headends.These cable
_,. ..: . 1 The original expiration dates of the various franchises are:
Contra Costa County: April 24, 1999(ContraCosta Cable Company franchise)
April 24, 1999 (Crocket Cable Systems Inc. franchise)
Nov.1, 1997 (Televents, Inc. South franchise)
July 12, 2004 (Televents, Inc. Clyde franchise)
Nov. 29, 1997 (Televents, Inc. North franchise)
Iulyl2,2OO4(TCIofEastSanFernando Valley franchise)
July 12, 2004(Tele Vue Systems, Inc. franchise)
July 12, 2044 (UACC Midwest, Inc. franchise)
July 12, 2004(TCI Cablevision of CA,Inc. franchise)
Julyl 2,2004(AT&TBroadbandHCofDelaware,LLC
Franchise)
Dec. 39, 1997 (Televents of East County franchise)
Clayton: Nov, 6, 2004
Concord: Feb. 2,2003
Danville: Aug. 18,2001
Martinez: June 30, 2002
Moraga: Aug. 31, 2000
Pleasant Hill: June 11,2002
Walnut Creek: Feb. 18, 2001 (UACC Midwest, Inc. franchise)
June 28, 20103 (Televents, Inc. franchise)
8 (Revised)
systems are operated by at least ten different franchisees. All of the systems are managed
by the same management team, and the operations of all of the franchisees are likewise
controlled by the same team. The table below shows which franchisees operate in which
communities;
Community Cable Qperautor
Contra Costa County Comcast of California 1,Inc.
Contra Costa County Comcast of East San Fernando Valley,L.P.
Contra Costa County Comcast of Contra Costa,Inc.
Contra Costa County Comcast of California IV,Inc.
Contra Costa County Comcast of California/Colorado/
Texas/Washington,Inc.
Contra Costa County Comcast of California/
Massachusetts/Michigan/Utah,Inc.
Contra Costa County Comcast of California IX,Inc.
Contra Costa County Comcast of California/Colorado,Inc.
Contra Costa County Comcast of California IV,Inc.
Clayton Comcast of California IX,Inc.
Concord Comcast of California IX,Inc.
Danville Comcast of California 1,Inc.
Martinez Comcast of California 1,Inc.
Moraga Comcast of California 1,Inc.
Pleasant Hill Comcast of California 1,Inc.
Walnut Creek Comcast of California 1,Inc.
Walnut Creek Comcast of
California./Massachusetts/Michigan/Utah,
Inc.
Unless otherwise indicated,references to"Comcast"or the"cable operator"in this staff report include
corporate rnaagL�ment,and the entities that actually,hold franchises,as the context requires.
2. The Cable System Rebuild.
When AT&T bought TCI, it acquired the antiquated and ill-maintained systems
that were serving the Consortium area. The systems were served by multiple headends
and were not capable of providing state-of-the-art services. The channel capacity of the
systems was also limited. AT&T began the process of upgrading the systems to a
capacity of 750 MHz using a hybrid fiber-optic/coaxial cable design. As of the date of
this report, most of the Consortium area has been rebuilt to a capacity of either 750 MHz
or 860 MHz. The systems serving Clayton, Concord, Danville, Martinez, Moraga,
Pleasant Hill, and many of the unincorporated portions of the County have been rebuilt.
Work has not yet begun in Walnut Creek. In addition, AT&T consolidated several
headends. Currently, Comcast operates headends at Arroyo (Walnut Creek), Pittsburg
and Pinole, and may eventually consolidate further.
9 (Revised)
THE COUNTY OF
CONTRA COSTA,
CALIFORNIA
JOINT REQUEST FOR RENEWAL
PROPOSAL
FOR
CABLE FRANCHISE
August 3, 2004
Patricia Burke
Director
Office of Media and Communications
10 Douglas Drive, Suite 210
Martinez, CA 94553
APPLICANT'S RESPONSE TO THIS REQUEST FOR RENEWAL
PROPOSAL MUST BE RECEIVED AT THE ABOVE ADDRESS
BY OCTOBER 5, 2004.
TABLE OF CONTENTS
Page
I. INTRODUCTION.............................................................................................................. I
A. Invitation to Submit Proposals................................................................................ 1
B. Format of the RFRP................................................................................................2
C. Form of Responses.................................................................................................. 3
1. Executive Summary....................................................................................4
2. Application Forms. ................................................................... ..............4
3. Proposed Franchise Agreement.................................................................. 5
4. Comments on Draft Amended Cable Ordinance........................................ 5
D. Evaluation of Responses......................................................................................... 5
E. Further Information................................................................................................. 7
II. REQUIREMENTS AND MODEL FOR FACILITIES AND EQUIPMENT
ANDPEG........................................................................................................................... 8
A. Requirements For: Facilities And.Equipment(47 U.S.C. § 544);
For PEG And I-Net Channel Capacity(47 U.S.C. § 53 1)...................................... 8
1. General System Design............................................................................... 8
2. Channels, Facilities and Equipment for PEG Use; PEG
and I-Net Capacity Management. ............................................................. 11
3. Facilities and Equipment to Support an Institutional Network................. 15
B. Model: System Characteristics ............................................................................ 18
1. General System Design............................................................................. 18
2. Downstream PEG Capacity on Subscriber Network................................25
3. Upstream Capacity for PEG use. ..............................................................28
4. Institutional network................................................................................. 30
5. Access Facilities and Equipment. ............................................................. 36
6. Miscellaneous PEG Requirements............................................................ 39
7. Cable Drops and Outlets for Public Facilities...........................................40
III. CONSTRUCTION TIMETABLE AND CONSTRUCTION CONDITIONS.................41
A. Needs and Interests...............................................................................................41
B. Model: Construction Standards............................................................................43
1. Timetable for Construction; Construction Plan........................................43
2. Local Construction Standards; Joint Trenching........................................44
3. Maintenance Plan......................................................................................44
i
4. Franchise Area. .........................................................................................44
5. Economic Redlining.................................................................................. 45
6. Subcontractors...........................................................................................45
7. Initial and.Continuing Tests......................................................................45
8. Inspections during Construction............................................................... 45
9. Performance Tests.....................................................................................46
10. System Maintenance................................................................................. 46
IV. OTHER FRANCHISE TERMS AND REGULATORY CONDITIONS ........................ 48
V. APPLICATION FORMS.................................................................................................. 49
A. Instructions............................................................................................................49
B. Identification of Applicant.................................................................................... 50
C. Applicant's Affidavit............................................................................................ 51
ii
COUNTY OF CONTRA COSTA, CALIFORNIA
JOINT REQUEST FOR RENEWAL PROPOSAL FOR
CABLE FRANCHISE
I. INTRODUCTION
A. Invitation to Submit Proposals
The County of Contra Costa, California(the "Franchising Authority") is a member of the
Contra Costa Cable Consortium (the "Consortium").' The Consortium is a group of local
government agencies formed to make efficient use of resources in connection with the renewal of
various cable television franchises currently held by companies affiliated with Comcast Cable
Communications, Inc. These companies include Comcast of California I, Inc.;, Comcast of
California IV, Inc.; Comcast of California VIII, Inc.; Comcast of California IX, Inc.; Comcast of
California, Massachusetts, Michigan, and Utah, Inc.;, Comcast of
California/Colorado/Florida/Oregon, Inc.;, Comcast of California/Colorado, L.L.C.; Comcast of
Califomia/Colorado/Texas/Washington, Inc.; Comcast of East San Fernando Valley, LP; and
Comcast of Contra Costa, Inc., all of which will be referred to as "Comcast." Pursuant to the
franchise renewal provision of the federal Cable Act, 47 U.S.C. § 546, and other provisions of
applicable law, the Consortium has conducted a proceeding to determine the community's future
cable-related needs and interests and to review Comeast's past performance. The findings of that
proceeding are described in the accompanying Joint Report on Cable-Related Needs and
Interests and Operator Past Performance (the"Joint Report").2 This Joint Request for a Renewal
Proposal (the "RFRP"), which is based on and incorporates the findings of the Joint Report,
invites Comcast to submit one or more cable franchise renewal proposals describing the cable-
related facilities, equipment, and services that Comcast proposes to provide within the
Franchising Authority during any applicable franchise renewal term.
1 In addition to the Franchising Authority, the members of the Consortium are: The Cities of
Clayton, Concord., Martinez, Pleasant Hill and Walnut Creek, and the Towns of Danville and
Moraga.
2 The Joint Report is based on anextensive ascertainment of Comcast's past performance and
future community needs and interests conducted by the Franchising Authority in conjunction
with the Consortium. Among other sources, the Joint Report relies on the work of the
Consortium's consultants, The Buske Group and Cable Telecommunications Corporation
("CTC"). The Buske Group and CTC prepared a series of reports, which are appended to the
Joint Report, including the Community Needs Assessment — Ascertainment and
Recommendations Regarding Community Cable-Related Needs Institute for the Contra Costa
Citizens and County Cable Consortium (the "Buske Report"); the Contra Costa Cable
Consortium Cable Television Systems Technical Evaluation (the "CTC Technical Report"); the
Contra Costa Cable Consortium Cable Television Systems Technical Evaluation Update (the
"CTC Technical Update"); and the Contra Costa I-Net Requirements Update (the "CTC I-Net
Report").
This RFRP applies to every franchise granted by the Franchising Authority that is
controlled by Comcast. If Comcast controls more than one cable franchise granted by the
Franchising Authority, Comcast may, at its discretion, submit a single response to this RFLP.
Comcast may also, at its discretion, submit to the Franchising Authority the same response it
provides to one or more of the other Consortium members, provided that any such combined
response clearly addresses the needs and interests of the Franchising Authority, and clearly
identifies any instances in which Comcast proposes different franchise terms for different
agencies.
While this RFRP is specifically designed for a cable franchise renewal proposal, the
Franchising Authority also invites any other interested party to submit a proposal for a cable
franchise using the attached forms by the deadline established herein. Applicants other than
Comcast responding to the RFRP may read RFRP language such as "upgrades," "rebuilds" and
"renewal term" as applying equally to proposals for a new system with a new initial term.
The Franchising Authority is seeking a proposal that:
(1) describes, in detail, what services, facilities and equipment the Applicant proposes
to provide during a renewal franchise term;
(2) demonstrates that Applicant's proposal will satisfy community cable-related needs
and interests capably, creatively, economically, responsibly and in a manner that will provide the
benefits of cable communications technology to the residents, institutions, organizations, and
businesses in the Franchising Authority now and for any franchise term;
(3) shows that Applicant is financially, technically, and legally qualified to hold a
renewal cable franchise; and
(4) explains why the Applicant believes that renewal is warranted in light of its past
performance.
B. Format of the RFRP
This RFRP is being issued pursuant to applicable law. It is intended to satisfy all
requirements of the Cable Communications Policy Act of 1984, as amended by the Cable
Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act
of 1996, 47 U.S.C. § 521 et seq. The Franchising Authority reserves the right to modify this
RFRP, including the extension of due dates or deadlines established as part of this RFRP and/or
request additional information or clarifications from Applicants.
Section I of this RFRP provides an overview of the franchise renewal process and the
requirements for an adequate response to this RFRP. Sections II--IV of this RFRP set forth the
minimum standards that the Franchising Authority believes are necessary for a proposal to meet
the community's cable-related needs and interests. Section V of this RFRP consists of forms that
must be completed by an applicant as part of any proposal. Appendix I is a proposed franchise
2
agreement that incorporates provisions that the Franchising Authority believes meet the
community's cable-related needs and interests. Appendix 2 is a proposed amended cable
ordinance.
C. Form of Responses
Any applicant responding to this RFRP shall submit a proposal consisting of the
following:
1. An Executive Summary;
2. The fully completed application forms contained in Part V of this RFRP;
3. A proposed Franchise Agreement; and
4. (if applicable) comments on the Draft Amended Cable Ordinance.
Additional information about the requirements for each of these sections is
provided below. An application must be responsive to, and be submitted in the
format required by, this RFRP and must include all required information. The
Franchising Authority reserves the right to reject a nonconforming application or
to require Applicant to provide supplemental information or an amended proposal
if the Applicant's filing does not conform to the requirements of this RFRP. No
proposal shall be considered submitted to the Franchising Authority until all
information required by this RFRP has been furnished to the Franchising
Authority.
Applicant shall submit an original and two (2) copies of its entire proposal to the
Franchising Authority on the date and at the place indicated on the cover page of this RFRP, in
accordance with the instructions set forth in this Introduction and in Section V. Applicant
should also provide an additional twelve (12) copies of the Executive Summary to the
Franchising Authority. Applicant should also provide a complete copy of its proposal on a
computer diskette, with documents in Microsoft Nord, Excel, and FileMaker Pro as appropriate
for word processing, spreadsheet, and database components.
Applicant has an obligation to update the information required under the heading
"=Identification of Applicant" and the information required by Forms I and 11 if the information
provided changes while the Application is pending. If Applicant discovers an error in its
submission, the Franchising Authority should be notified of the error as soon as possible. If
there is a material change in the financial position of the Applicant or any parent company,
Applicant should notify the Franchising Authority of the change promptly and describe the
change in detail.
Applicant will be expected to respond to any requests for additional information
concerning the proposal fully and promptly, in accordance with the deadlines specified in such
requests. Applicant's proposals may be rejected, consistent with applicable law, if Applicant fails
3
to provide information required in the form requested, or submits false,misleading or incomplete
information.
The following describes in more detail the requirements for each section of a responsive
proposal:
I. Executive Summary.
The proposal shall include an Executive Summary, which shall present a clear and
concise narrative description of the cable system it proposes to provide. Responses shall not
exceed fifteen pages (double-spaced). The following topics must be covered in the Executive
Summary:
• Overview of proposal;
• Ownership and management of system;
• Financial commitments;
• System design and construction;
• Program services and other service(s)(if proposed);
• Public, educational and governmental access;
• Institutional network (including network characteristics and capabilities);
• The rates Applicant will be able to charge in light of its proposal, as an indication
of the costs involved; and
• Other.
The purpose of this section is to provide the reader with an understandable overview of
the proposal, not to discuss details that will be covered elsewhere in the application forms.
2. Application Forms.
The Applicant shall also fully complete the identification of the Applicant, the
Applicant's Affidavit, and the application forms contained in Section V of this RFRP.
Instructions for completing these forms are included in Section V.A of this RFRP.
To aid the Applicant, and so that there is no misunderstanding as to the intent of particular
requirements, we have set out a model for satisfying the minimum requirements. An Applicant is
not required to follow the model in every respect. If an Applicant proposes a cable system that
differs from the model, however, then the Applicant must explain in detail why it has departed
from the model suggested by the Franchising Authority, and demonstrate how the Applicant's
proposal will meet the needs and interests embodied in the model. If the change would result in
some needs and interests not being satisfied, or not being satisfied as well, then the Applicant
must explain in detail why it believes that the change is justified, and provide supporting
documentation. Applicant must include with its proposal all information on which it intends to
rely in making that demonstration.
4
3. Proposed Franchise Agreement
For Applicant's information, the Franchising Authority is including a proposed Model
Franchise as an attachment to this RFRP. The proposed franchise is intended to serve as a model
for the final franchise that will be entered into for the Franchising Authority. The Franchising
Authority has determined that a franchise containing the terms set forth in this Model Franchise
would meet the community's future cable-related needs and interests. Applicants should
therefore assume that the terms of its proposal, if found acceptable, will be incorporated in a
franchise using the language and structure of the attached proposed Model Franchise. An
Applicant need not discuss the terms set forth in the Model Franchise if the Applicant is willing
to accept them, although comments on the Model Franchise are welcome. An Applicant must
address the Model Franchise in its response, however, if the Applicant demands that changes be
made to the Model Franchise as a condition of renewal, or if the Applicant believes that a
particular provision should have been part of the RFRP itself. If the Applicant objects to any
particular section of the Model Franchise, it should identify the section and explain the basis for
its objection, including proposed substitute language. The Applicant must clearly state whether
it is willing to accept the section as proposed in the Model Franchise, assuming no amendments
are made. If an Applicant requires the Franchising Authority to acid provisions to the Model
Franchise, the Applicant must submit language for each provision that it wants added, and
explain why it is demanding that the language be added and provide support for the change. An
Applicant must clearly state whether it is willing to accept a franchise that does not contain the
added language. For example, the Model Franchise is for a term of 10 years. If the Applicant
insists upon a longer term, its proposal must include proof that a longer term is required even
considering the availability of 47 U.S.C. §546(a)-(g).
4. Comments on Draft Amended Cable Ordinance
The Franchising Authority is in the process of adopting a new regulatory Cable
Ordinance, a draft of which is also attached to the RFRP as Appendix 2. An Applicant is not
required to address the Cable Ordinance in its response, but applicants are invited to submit any
comments they may have. As is the case with the Model Franchise, an Applicant must address
the Cable Ordinance if its proposal is conditioned upon changes to the Cable Ordinance. If an
Applicant objects to any particular section of the Cable Ordinance, it should identify the section
and explain the basis for its objection, including proposed substitute language. The Applicant
must clearly state whether it is willing to comply with the Cable Ordinance, assuming no
amendments are made. If an Applicant requires the Franchising Authority to acid provisions to
the Cable Ordinance,the Applicant must submit language for each provision that it wants added,
and explain why it is demanding that the language be added, and provide support for the change.
An Applicant must clearly state whether it is willing to comply with the Cable Ordinance
without the added language. Failure to agree to comply with any lawful provision of the
proposed Cable Ordinance may be deemed grounds for denial of the application.
D. Evaluation of Responses
If an Applicant submits a complete proposal by the deadline that the Franchising
Authority has established., the proposal will be evaluated in accordance with applicable
provisions of federal and local law. In determining whether a cable franchise renewal should be
5
granted, the Franchising Authority will consider, for example, whether the Applicant's past
performance justifies renewal; whether an Applicant has the financial, technical and legal
qualifications to perform as promised during a renewal term.; and whether the Applicant has
submitted a proposal that is reasonable to meet future, cable-related needs and interests of this
community, considering the cost of meeting those needs and interests. If the Franchising
Authority determines that a renewal franchise should be granted, the terms of the proposal will
be incorporated into a franchise agreement, as discussed above.
In evaluating a proposal, the Franchising Authority will specifically consider whether
Applicant's proposal will, in practice, satisfy the future cable-related needs and interests of the
community. For example, an Applicant cannot satisfy the facilities and equipment requirements
by "providing"them under conditions that may impede their use. An Applicant may be deemed
not to have "provided" the required facilities and equipment for public, educational and
governmental ("PEG") use if under its proposal, for example: (1) PEG use of facilities or
equipment would be subordinate to other uses; (2) there would be a charge for the use of the
equipment and facilities or channels, (3) the equipment or facilities generally would not be
available for PEG use at all times, or (4) there are conditions on use of such facilities or
equipment beyond the conditions that are imposed by the Cable Act.
In addition, the community's needs and interests related to PEG use (including PEG use
of the institutional network) present particular issues when a second provider has entered a
community. The franchise must therefore include provisions that require the incumbent to
cooperate with competitors to ensure that PEG and I-Net obligations are satisfied cost-
effectively, and that, under appropriate circumstances, permit the Franchising Authority to
modify obligations as appropriate so that it can comply with the requirements of state law for
competitive franchises, as applicable. California Government Code section 53066.3 provides in
part that when a franchising authority grants an additional franchise in an area where another
franchise has already been granted, the additional franchise shall contain the same public,
educational and governmental ("PEG") access requirements that are set forth in the existing
franchise. If the Franchising Authority has granted such an additional franchise, the Franchising
Authority will evaluate the Applicant's proposal in light of the requirements of Government
Code section 53066.3.
Furthermore, three Consortium members have entered into franchise agreements with
Seren Innovations, Inc. These agreements are attached as exhibits to the Joint Report. The
Franchising Authority will look favorably on proposals that propose the same terms as the Seren
agreements, not because they necessarily meet all of the community's needs and interests, but
because taken as a whole the combination of services, facilities and equipment is acceptable.
In determining whether an Applicant is legally qualified, the Franchising Authority
intends to consider whether the Applicant is willing to comply with a franchise that is acceptable
to the Franchising Authority. If the Applicant insists on changes to the Model Franchise or on
contract conditions that the Franchising Authority finds unacceptable, the Franchising Authority
may deny the request for renewal. Additionally, any cable franchise granted will be subject to
the Cable Ordinance. If the Applicant is unwilling to comply with a lawful provision of the
Cable Ordinance,then the Applicant's proposal may be denied.
6
With respect to any provision of the Model Franchise or of the Cable Ordinance to which
the Applicant objects, a conditional response or a failure to state that the Applicant is willing to
accept the condition as is will be assumed to mean that the Applicant is not willing to accept the
condition, and Applicant's legal requirements and qualifications will be evaluated accordingly.
Similarly, where Applicant does not object to a provision, Applicant must be willing to abide by
the provision and (in the case of franchise provisions) enter into a franchise containing the
provision.
Finally, the promises made in any proposal should be enforceable from both a legal and a
practical standpoint. Therefore, in evaluating the adequacy of a proposal, the Franchising
Authority will, for example, give little weight to promises that are phrased in a way that allows
an Applicant to escape or avoid obligations, that are so vague as to be unenforceable, or that are
so vague as to allow the operator to avoid obligations while disputing terms. The Franchising
Authority does not generally engage in binding arbitration, and will not accept a proposal that
makes the operator's obligations contingent upon an arbitrator's decision. Similarly, an
Applicant should not seek to add to a superficially conforming proposal conditions that would
render the proposal unworkable or cause it to fail to meet the Franchising Authority's needs and
interests. Provisions in this RFRP which require the Franchising Authority's approval or
direction will be exercised by Franchising Authority in a reasonable manner consistent with all.
applicable laws.
E. Further Information
Questions concerning this RFRP should be submitted in writing no later than 5:00 p.m.,
September 6, 2004, to Patricia Burke, Director, Office of Communications and Media, 10
Douglas Drive, Suite 210, Martinez, CA 94553. All responses will be issued in writing.
However, an Applicant must submit a response to this RFRP by the deadline, regardless of
whether the questions asked have been answered.
7
IL REQUIREMENTS AND MODEL FOR FACILITIES AND EQUIPMENT AND
PEG
A. Requirements For. Facilities And Equipment (47 U.S.C. § 544); For PEG
And I-Net Channel Capacity(47 U.S.C. § 531)
The Franchising Authority has identified its future cable-related needs and interests in
detail in the Joint Report. Please note that the Joint Report adopts needs and interests identified
in the Buske Report, the CTC I-let Report, the CTC Technical Report, and the CTC Technical
Update, all of which should be read carefully. The needs and interests for facilities, equipment,
channel capacity and rules for use of that capacity for which Cable Act requirements are being
established are summarized below. Applicant must submit a proposal for provision of facilities,
equipment and channels that, at a minimum, satisfies these needs and interests. If an Applicant
believes that the Applicant's existing system or systems serving all or part of the Franchising
Authority already meets a particular need or interest,the Applicant should so state.
I. General System Design. There is a need or interest in a system that
includes the facilities and equipment required to meet the following:
« The system should be state-of-the-art, with substantially greater
capacity, reliability and flexibility to respond to changes in cable
television that could be expected over a new franchise term. A
system that will meet this need and interest would have the
characteristics of a 750 MHz or greater system (860 MHz in areas
that have not been rebuilt), with fiber to the node, small nodes, and
minimum active components in any cascade, or a system with
similar characteristics that is capable of providing the level of
functionality described below.
• The system should provide substantially greater channel capacity
than is provided on any portions of the existing cable system that
have not been upgraded. The entire system should be capable of
responding to subscriber demands for channels delivered in various
formats without substantial additional upgrades, and should be
designed so that it will be capable of responding to technological
developments (e.g., high definition television and interactive
television) promptly. The system should include equipment and
facilities typical of a well-designed, modern cable system, and
which will maximize consumer choices.
The system should provide enhanced signal quality and system
reliability than is provided by the unrebuilt portions of the cable
system, if any. The system should have a minimal number of
8
failure points between signal sources (headend) and each.
individual subscriber.
« The system should provide two-way activated facilities and
equipment with ample bandwidth upstream and downstream to
support broadband, advanced cable services, and the institutional
network and PEG uses described below.
« Facilities and equipment should be sufficiently flexible so that as
subscriber demand increases, the system's upstream and
downstream capacity to subscribers can be rapidly and efficiently
expanded through such techniques as "node splitting" without the
need for major cable plant construction or modification. Further,
the need for future node splitting should be reduced by requiring
nodes of limited size, e.g., limiting initial node size to 500 homes
per node, or including provision for reducing node size by splitting
the cable distribution plant either through physical segmentation or
electronic multiplexing. There is also a need and interest in
having the system include equipment and facilities typical of well-
designed, modern cable systems, and the equipment and facilities
required to maximize consumer choices.
• The system should be able to satisfy all applicable technical
standards for system performance over the franchise term.
The system should permit the operator to respond quickly and
effectively to outages, requests for service, and customer
complaints.
« The system should allow subscribers to receive signals in
substantially the same form in which they were received by the
operator from the programming source, ems., color television
signals should be received by subscribers in color, stereo signals
should be received by subscribers in stereo, secondary audio
signals should be receivable, and closed captioning signals should
be receivable on television sets capable of decoding the closed
captioning signal.
• The system should allow parents to control viewing by children,
with only minor modification of adult viewing options.
« The system should ensure that the services (including, by way of
example, customer service support) provided by the operator are
reasonably accessible to the hearing-impaired and other persons
with disabilities;
9
* The system should provide useable emergency alert capabilities
that allow the Franchising Authority to remotely and securely
override the audio and video portion of all channels in the event of
an emergency. This system, should permit the Franchising
Authority to send out a local emergency alert throughout the
community, and should also function effectively as part of a
regional, state, and national emergency alert system.
* PEG users should be able to take advantage of the capabilities of
an advanced system, as such capabilities are activated for
commercial purposes; and to ensure that changes in the system do
not hamper the use of the system for PEG purposes.
* Customers should be able to use PEG resources interactively from
the home to the extent interactivity is supported on the system for
commercial applications.
* All parts of the Franchising Authority should be served by systems
that have similar characteristics and capabilities. There is a need
and interest in having equivalent facilities available throughout the
community.
* An Applicant should establish a clear and enforceable program for
inspecting all drops to ensure that they are properly grounded and
otherwise satisfy all applicable safety codes.
* A franchise should include provisions that ensure that the cable
system will stay apace of developments in the industry over the
franchise term, and so that the community can take advantage of
changes in technology. Among other things, an appropriate
provision should permit the Franchising Authority to require
further upgrades of the technical capabilities of the cable system
(including by construction of additional two-way links between
public buildings); and for additions and improvements to the
facilities, equipment and other support required for PEG use.
• There is a need and interest in having the cable system designed so
that users can (physically or virtually) "co-locate" facilities or
equipment at the cable system's headend and control centers and
major backbone facilities such as hubsites and optical transfer
nodes (UTN).
+ The operator should be obligated to interconnect its cable system
to other cable systems in the Franchising Authority, and to systems
in adjoining jurisdictions, so that PEG signals (including
institutional network signals) can be effectively transmitted to and
10
from each system seamlessly, without substantial deterioration or
degradation.
2. Channels. Facilities and Equipment for PEG Use;PEG and I-Net Capacity
Management. An Applicant must submit a proposal that at a minimum
satisfies the needs and interests summarized below.
• There is a need and interest in having a sufficient channel capacity
provided for PEG use receivable by all subscribers. The capacity
provided for PEG use should enable schools at various levels, the
public, non-profit organizations, and the Franchising Authority to
have full opportunities to create and disseminate information.
Existing capacity devoted to PEG use is inadequate. All rebuilt
portions of the system should make six access channels available
in each jurisdiction: One public access channel, one K-12
educational access channel, two higher education access channels,
one local government access channel, and CCTV, the County
government access channel.
• There also is a need or interest in having additional channel
capacity set aside if and as the use of the PEG channel capacity
grows. To accomplish this, the operator should make available up
to 8% of the total spectrum on the cable system (including the six
channels specified above) for present and future PEG access
purposes. The Franchising Authority should have the right to
require Comcast to set aside additional capacity out of that total
amount for PEG use. Moreover, PEG channel capacity should be
available in analog formats and digital formats, if both formats are
provided commercially. If Comcast converts all of its current
analog channels to digital, the PEG channels should also be
converted, at Comcast's expense. PEG programmers should be
able to use the capacity provided for transmission of any
information, not just video, subject only to restrictions on use
lawfully established by the Cable Act. Moreover, sufficient
capacity should be available on the network to enable PEG users to
take full advantage of advances in cable technology and system
capabilities, including two-way capability that allows PEG
providers and users to take advantage of interactive television
services if and as they become available on the cable system.
Among other things, there is a need and interest in assuring the
company's cable modem platform can be used to receive and
3 The requirements for PEG support and for the I-Net are in addition to the obligation to pay a
franchise fee.
11
transmit PEG programming, without unreasonable interference,
with appropriate connections to avoid latency and other technical
problems.
• There is a need and interest in having PEG channel capacity
managed by an entity or entities committed to promoting and
qualified to promote the use and development of the channel
capacity.
• There is a need and interest in having substantially improved
access facilities and equipment so that use of the system can be
encouraged, so that potential users can be properly trained and
assisted in production, so that production facilities are readily
available for remote and studio productions (and post-production
work), and so that playback can occur smoothly.
• More specifically, there is a need and interest in having the cable
operator provide facilities and equipment to be used to provide
PEG access. This need could be met in several ways, including:
(1) A regional approach whereby PEG access facilities and
equipment are provided on a regional basis within the Consortium
area under the control of a non-profit organization or other
management structure determined by the Franchising Authority
and the other members of the Consortium. Under this approach, a
main Community Media Center and a satellite facility would be
provided. (2) An agency-by-agency approach, whereby a
Community Media Center is provided within the Franchising
Authority for its residents' use, with the facility operated by a non-
profit organization or other entity designated by the Franchising
Authority, including itself. Existing government access operations
would remain independent and would need to be funded
adequately. Under either approach, some government access
operations might share facilities with the Community Media
Centers. Under each of these alternatives, the respective
Community Media Centers would need to provide public and
educational access users with spaces of sufficient size (and
expandability) so that (a) there is adequate studio space, designed
in such a way that it can meet user demands efficiently; (b)there is
adequate space for equipment to playback and control
programming on PEG channels; (c) there is separate and adequate
4 As a result, with the exception of Board and Council chamber equipment packages, equipment
needs have been combined. If a non-profit is not established to manage the Community Media
Centers, separate equipment packages would be required for educational and public use.
12
space available for editing programs and performing ether post-
production tasks; (d) there is separate and adequate space available
for training, planning meetings and administrative functions (office
space, storage space, bathrooms, and so on); and (e) PEG facilities
and equipment are distributed so that people throughout this large
and diverse community have reasonable access to them, at
convenient locations and times. Each facility should have
adequate parking and be fully accessible to persons with
disabilities.
• There is a need and interest in having high-quality equipment
provided for public use that could be used for producing
programming in the field or in the studio; editing it; and for
playing back programming that may be produced utilizing a
variety of formats. This equipment should be replaced and
upgraded over the term of the franchise as needed.
• There is a need and interest in having high quality equipment
provided for educational use, including playback equipment and
equipment permitting educators to receive and record
programming submitted over the channels set aside f6r educational
use on the subscriber network or the institutional network. This
equipment should be replaced and upgraded over the term of the
franchise as needed.
• There is a need and interest in having high quality equipment
provided for government use, including cameras and sound
equipment for the governing body's Council chambers, field and
editing equipment and studio equipment for public service
programming. This equipment should be replaced and upgraded
over the term of the franchise as needed.
• There is a continuing need and interest in being able to utilize the
existing PEG facilities and equipment until those facilities and
equipment are no longer needed. Any proposal should contain a
provision that ensures that such facilities and equipment will
remain available for at least up to 24 months, to allow for
continuing PEG operations until the transition to new facilities is
complete.
• There is a need and interest in having PEG facilities and equipment
available so that the access channels can be programmed from
central locations, without the assistance of the cable operator.
• There is a need and interest in allowing members of the public,
educators and government representatives to produce programming
13
and transmit that programming, at no charge from the operator,
from suitable distant locations throughout the Franchising
Authority to central PEG programming control site(s), and from
there, through the headend to subscribers, without the assistance of
the operator.
« There is a need and interest in providing equipment and facilities
for training programs in production and post-production of video
and related electronic arts (e.g., graphics and special effects).
• There is a need and interest in ensuring that technical changes in
the system do not hamper the use of the system for PEG purposes.
• There is a need and interest in allowing customers to use PEG
resources interactively from the home to the extent interactivity is
supported on the system for commercial applications.
• There is a need and interest in publicizing particular PEG access
programs and the day and time they are on the air by, among other
things, listing such programs on any channel guides provided by
the operator.
• There is a need and interest in having the initial 6 PEG channels
contiguous to each other to the extent permitted under federal law
and to the other basic cable service channels. There is a need and
interest in retaining the government access channel on the Channel
6 location in Walnut Creek. There is a need and interest in not
allowing subsequent changes in channel positions without the
approval of the Agencies.
• There is a need and interest in having activated, reliable upstream
capacity available throughout the community to enable PEG users
to originate and cablecast programming live from remote locations.
• There is a need and interest in having activated, dedicated bi-
directional connections (or activated connections that function and
can be upgraded and used as easily and cost-effectively as
dedicated bidirectional connections) available from the access
production facilities and playback centers for public, for
educational and for government use, including the community
media centers with sufficient capacity activated in both directions
to enable those managing the PEG channels to (a) receive signals
intended for retransmission on the subscriber network from the
institutional network and from remote locations; (b) review
signals before they are transmitted to subscribers; (c) select signals
for retransmission, and to transmit and route those signals onto
14
appropriate channels on the subscriber network, or on the
institutional network, without the assistance of the applicant;
receive upstream transmissions from subscribers for any
interactive PEG programs; and (e) monitor the signals as they are
being transmitted to subscribers. The connections should include
all routers, modulators, demodulators, transceivers and other
equipment required to provide this functionality so that PEG
signals can be transmitted and routed to their destination without
significant degradation.
• PEG facilities and equipment should be available to the user at no
charge from the cable operator.
• There is a need and interest in ensuring that the PEG channels are
provided and publicized in a way so that they are easily
identifiable to subscribers, and provided using channels that can
deliver PEG signals without significant degradation.
• There is a geed and interest in ensuring that cable service is
available to all public and non-profit private schools (including
institutions of higher learning), community media centers and all
government buildings (including libraries), so that these entities
can receive the important educational and governmental
information carried over the cable system. There is a particular
need and interest in assuring that PEG channels are provided to
these locations. There is a need and interest in free drops and
activated outlets that will make cable available throughout these
facilities, with limited exceptions.
• The need to coordinate PEG use (including PEG use of the
institutional network) will present particular issues if and when a
second provider enters the community. The franchise must
therefore include provisions that require the incumbent to
cooperate with new entrants to ensure that PEG and I-Net
obligations are satisfied cost-effectively, and that, under
appropriate circumstances, permit the Franchising Authority to
modify obligations as appropriate so that it can comply with the
requirements of state law for competitive franchises, to the extent
applicable.
3. Facilities and Erb mp ent to Support an Institutional Network. An
Applicant must submit a proposal that at a minimum satisfies the needs and interests below.
* The institutional network needs to support voice, data, and video
(one and two-way) transmissions. The term "institutional
network" ("I-Net") refers to that portion of the cable system.
15
generally available only to subscribers who are not residential
subscribers. We do not mean to suggest, however, that an I-Net is
only for the benefit of institutions. It is in fact the intent of the
Franchising Authority to use the I-Net in a way that will improve
educational services in the community, and that will allow
government to provide information and serve the community more
effectively. It is also the intent of the Franchising Authority to use
the I-Net to improve public safety by, for example, making it
easier to train police and fire personnel without removing them
from service and by improving multijurisdictional communications
and operational capabilities. The I-Net should also permit the
Franchising Authority to cut expenses, without reducing services.
Thus, the capacity on the institutional network should be provided
in such a way as to minimize the costs to the end user, and to
maximize end users' ability to use the equipment that is now in
place. The subscriber network and the I-Net can be within the
same cable and there is a need and interest in a bridge between
them. It is intended that residential subscribers may be able to
send signals to I-Net users and vice versa, subject to the control of
I-Net users. There is also no requirement that any I-Net serve only
Franchising Authority facilities and other public buildings.
• The I-Net should have the characteristics and functionality
identified in the CTC I-Net Report.5
• The I-Net needs to link Franchising Authority facilities, schools,
educational institutions, libraries, public safety facilities and other
governmental and educational facilities with each other and with
facilities in neighboring jurisdictions via highly reliable capacity
on the I-Net for a variety of two-way video, voice and high-speed
data communications selected by the users, and evolving over
time. There is a need and interest in being able to use the I-Net for
any purpose that is not lawfully prohibited by the Cable Act. By
way of example, and not limitation, restrictions on use that limit
the ability of libraries to connect computer terminals through the I-
Net to the Internet would not meet community cable-related needs
and interests.
• The I-Net should be available throughout the Franchising
Authority to locations designated by I-Net users, and should be
5 To the extent the reports may be read to require a particular transmission technology in
violation of the Cable Act, the Franchising Authority clarifies that the requirement adopted here
is to provide an I-Net that will function equivalently.
16
able to meet the needs and interests in governmental and
educational use (and public use, if proposed by the Applicant)
throughout the community. The I-Net should also be
interconnected with I-Nets serving the other Consortium members,
and to any I-Net provided by a competing cable operator serving
the Franchising Authority.
• There should be sufficient capacity provided to support user
requirements over the franchise term. This requires that the
capacity be highly reliable, flexible, scalable, and expandable as
needed without substantial additional cost. It should be secure as
needed and support a wide variety of applications, minimizing end
user costs.
« The I-Net should be designed so that it can be extended to new
locations without deterioration in system capabilities, and I-Net
users should be able to expand the system to additional locations,
as well as upgrade capacity and functions at particular locations.
« The I Diet should be designed and constructed to support standard
interfaces such as conventional NTSC analog, M-peg, and J-peg
digital video, telephone "T" carrier services (DSI, DS ), Ethernet
interconnection (10 Mbps, 100 Mbps and Gigabit platforms), and
other similar commonly used interfaces; it should be designed and
constructed so that it is capable of supporting existing and future
Franchising Authority network protocols (Ethernet, Fast Ethernet,
ATM)without substantial plant construction.
« I-Net users must be able to access the network in a variety of ways
— not just through direct physical connections. For example, the
Franchising Authority may wish to attach wireless devices to
control traffic signals and receive telemetry data, among other
things. There is a need and interest in connecting the I-Net to other
networks inside and outside of the Franchising Authority,
including the Internet.
• There must be sufficient capacity available for educational and
government (and if proposed by the Applicant, public) use of an I-
Net, and all required network switches and other equipment so that
there is sufficient throughput to allow I-Net locations
simultaneously to use the system, without meaningful interference
with their applications. In addition, capacity must be provided in
such a way so that users operating at different transmission speeds,
or using different media can cost-effectively use the I-Net.
17
+ The Franchising Authority should be able to centrally monitor and
control the capacity from any point on the network.
+ The Franchising Authority must be able to review the plan for
providing I-Net capacity and the I-Net design on an appropriate
schedule, and to require changes to the plan or design if it does not
meet the needs and interests of the community. In particular, the
Franchising Authority must be able to ensure adequate capacity is
being delivered to each site.
• The I-Net needs to be tested to ensure that it operates as required to
support mission-critical applications. The I-Net needs to be
properly maintained and the operator needs to take the required
steps to restore service promptly and consistent with the mission-
critical nature of the applications involved.
• It is possible that there may be more than one operator in the
Franchising Authority, so any I-Net proposal should allow the
Franchising Authority to integrate facilities from other providers
cost-effectively, and so that any I-Net capacity provided by one
applicant operated seamlessly with any I-Net capacity provided by
another provider.
+ The I-Net should be completed within 24 months of the grant of a
franchise to the Applicant.
+ I-Net capacity should be provided and be available at no charge to
the users.
B. Model: System Characteristics
Based on the needs, interests and requirements identified in the Report and above, the
following model is proposed for the cable system generally, including both the subscriber
network and the institutional network.
The model assumes that the cable system will be planned and designed in accordance
with the highest standards of the industry. Hence, the model described below assumes that the
Applicant's cable system will include components of high quality and reliability, and will be
designed and constructed in accordance with the highest standards of the industry and applicable
law, including the Cable Ordinance and Franchise.
1. General System Design. An Applicant must provide a cable system that
meets the requirements set forth below. If the Applicant demonstrates that its current system
meets the requirements of the model, no rebuild is required. Otherwise, the Applicant must
rebuild,upgrade, or otherwise modify its system to meet the requirements of the model. As used
in this RFR:P, the term "rebuild" refers to any such rebuilding, upgrading or modification.
18
Nothing in this section is intended to require an Applicant to use a particular transmission
technology, so long as the cable system to be provided will have characteristics that in all
relevant respects meet or exceed the characteristics of the model. If an Applicant does not
propose to rebuild its cable system as described in the model, it must prove that the design it
proposes in fact will have functional characteristics that in all relevant respects meet or exceed
the characteristics of the model. Without limitation, this means that the proposed system must:
be as reliable or more reliable; be able to deliver upstream and downstream signals with greater
or equal speed, and as effectively for the user; have adequate, initial activated capacity and
additional capacity that can be activated without the addition of active components to or
construction of additional cable in the plant to deliver cable services, including the most
advanced cable services, to and from each subscriber location in a format responsive to
subscriber needs and interests; be designed so that it can be configured to deliver additional
bandwidth to and from each subscriber, without substantial delay or construction; be able to
respond to changing consumer needs and interests with the minimum delay or disruption; be
designed so that power outages affect, to the extent possible, only those consumers who are not
receiving power at their home; be designed so that the amount of required maintenance, and the
mean time to repair, is minimized; and be designed so that there will be no negative impact or
additional cost of any kind on PEG uses (including I-Net uses) of the cable system under the
proposal, as compared to the model.
(a) Applicant must provide a cable system: constructed so that all
active and passive components on the subscriber network have a
rating of no less than 750 MHz (860 MHz in non-rebuilt areas).
Equipment and facilities should be installed and activated so that
the subscriber network is capable of transporting at least one
hundred fifty(150)video programming channels (which could be a
combination of digital or analog channels), not including PEG; or,
alternatively, Applicant may comply by activating at least 750
MHz (or 860 MHz) of capacity. These requirements must be
satisfied no later than the date for completion of any rebuild,
except as otherwise provided herein. All parts of the cable system
must be tested to support the full loading of the cable system.
(b) The system must at all times utilize a flexible architecture that will
permit additional improvements necessary for high-quality and
reliable service throughout the term of the franchise. The system
must utilize facilities and equipment generally used in high-
quality, reliable, systems of similar design (except where
inconsistent with the specific requirements of the franchise). The
system must have the level of reliability required to support a high-
quality,broadband two-way cable service. Additionally, it must be
at least as reliable as systems being built to the best industry
engineering standards at the time of construction.
(c) Any cable system rebuild must use a fiber-to-the-neighborhood
node design, or a design that brings fiber closer to the subscriber
19
location than a fiber-to-the-neighborhood node design. A
maximum of 500 dwelling units may be served by the distribution
system fed from each node service area. The cable system must be
designed so that it can be easily segmented without substantial
additional construction so that a maximum of 250 dwelling units
may be passed by the distribution system fed from each node
Service area.
(d) The system must be fully two-way activated and must include the
facilities and equipment required to support broadband interactive
cable services through the cable system.
(e) There must be reliable, continuous, auto-start back-up power at the
headend and continuous auto start-up back-up power at all hubs or
OTIvT's. Standby power shall be provided to all active components
on the subscriber and institutional networks to carry their
individual loads for a minimum of three hours. The company must
have adequate mobile generators, monitoring systems and
personnel so that it can detect outages and place mobile generators
before loss of fixed back-up power in cases where subscribers have
power.
(f) The cable system must include the facilities and equipment
required to provide full system status monitoring of power supplies
at the nodes as activated. The status monitoring equipment must,
at a minimum, permit Applicant to identify when a power outage
affecting a node has occurred, which node is affected and that the
cable system has switched to battery back-up power supplies.
(g) Applicant must install and maintain facilities and equipment
(including but not limited to modulators, antennae, amplifiers and
other electronics) that permit and are capable of passing through the
signals received at the headend without substantial alteration or
deterioration (thus, for example, the system shall include
components such that a signal received at the headend in color may
be received by a subscriber in color, and a stereo signal in stereo).
Facilities and equipment should be installed and operated so that
subscribers (and particularly persons with disabilities) can receive
closed captioning and secondary audio. Applicant shall also comply
with all applicable laws and regulations concerning system
compatibility with subscribers` television receivers and/or
videocassette recorders. Applicant shall provide the facilities and
equipment necessary to make its services (including its customer
services) reasonably accessible to persons with disabilities. For
example, Applicant should employ TTY or similar technologies to
20
permit communication between the hearing-impaired community and
cable system representatives.
(h) The system facilities and equipment must be capable of continuous
twenty-four hour daily operation, without severe material
degradation of signal, except during extremely inclement weather,
or immediately following extraordinary storms which adversely
affect utility services or which damage major system components.
(i) The company must undertake a comprehensive field audit of the
drop cables connecting subscribers to the cable distribution system.
Where necessary, the company shall replace the subscriber drops
and associated components with new materials.6 All parts of the
system, including drops, must be brought into conformity with the
current versions of applicable safety codes and good construction
practices.
(j) The term. "interconnection" is used to refer to links to other
communications networks and other cable systems. The cable
system must be designed, and facilities and equipment must be
installed to provide interconnections with all other cable systems
and open video systems in the Franchising Authority, to permit the
seamless exchange and control by users of institutional network
and PEG signals -- whether video, data or voice signals -- across
networks. Interconnections must be provided upon request to other
communications networks in the Franchising Authority, and to
cable systems in the Franchising Authority and adjacent
jurisdictions for these purposes. The interconnections must be
controllable by the persons who wish to exchange information,
without the assistance of the Applicant.
(i) Unless otherwise permitted by the Franchising Authority,
all interconnections shall be bi-directionally activated fiber
links, or the functional equivalent. Capacity should be
provided on the interconnections on demand, and sufficient
activated capacity must be provided so that the capacity is
available without delay.
6 Alternatively, the company may establish a clear and enforceable program for replacing drops
based on the physical characteristics of the drops that is designed to accurately identify those
drops that will be unable to reliably deliver the services that can be provided over the cable
system to subscribers. This program should also identify and repair or replace drops that are
improperly grounded or otherwise not in compliance with applicable safety codes.
21
(ii) Applicant may obtain relief from an interconnection
requirement where Applicant shows to the satisfaction of
the Franchising Authority that it is technically infeasible to
perform, and where the Applicant proposes a reasonable
alternative, in light of the purposes to be served by the
interconnection. Applicant may also obtain relief from the
interconnection requirement where the interconnection
requires a contract between the Applicant and a third party
(an affiliate of Applicant is not a third party), and the third
party and Applicant are unable to agree upon
interconnection terms. In such a case, Applicant must
promptly notify the Franchising Authority that it has been
unable to reach an interconnection agreement; must present
the interconnection agreement that it proposed and any
proposal by the third party; and must explain the reasons
why the parties have been unable to reach agreement. The
Franchising Authority may specify the terms and
conditions under which Applicant must interconnect, and if
the third party is willing to accept those terms, or may be
required to accept those terms by the Franchising
Authority, the Applicant promptly must complete the
interconnection.
(k) Applicant must install and maintain an emergency alert system that
can override audio and video on all channels to provide an
emergency alert to the Franchising Authority. The Cable System
shall be designed so that the emergency alert can be received only
by subscribers in the Franchising Authority. The emergency alert
system must be designed and maintained so that local officials
designated by the Franchising Authority can activate the system
remotely without the assistance of Applicant, using a telephone
and secure password or by such other technical means as the
Franchising Authority may approve. The system must be designed
and maintained so that the designated officials (i) can activate a
pre-recorded voice and video message; and/or(ii) directly override
the audio and transmit a video signal override via the institutional
network or other upstream capacity provided for PEC use. The
emergency alert system must be reasonably upgraded over time
upon request to permit appropriate officials to take advantage of
alternative methods of activating the system. It should be
integrated to the extent possible with other emergency alert
systems the Applicant is required to provide under federal or state
Law.
(1) Applicant must provide devices that permit parents to lock out
audio and video on any channel that they consider to contain
22
inappropriate programming. In addition, any system for ordering
movies or ether pay-per-view programming must be designed,
through use of systems such as PIN number systems, to prevent
children from ordering programming without parental consent.
(m) Applicant must have sufficient trucks, tools, testing equipment,
monitoring devices and other equipment and facilities and the
trained and spilled personnel required to enable the Applicant to
comply with each and every requirement of applicable law,
including applicable customer service requirements, technical
standards, maintenance standards and requirements for responding
to system outages. This includes the facilities, equipment and staff
required to: (i) properly test the system and conduct an ongoing
and active program of preventive maintenance and quality control;
and (ii) be able to quickly respond to customer complaints and
resolve system problems.
(n) The company must install and maintain equipment necessary to
measure its performance with applicable customer service
standards that the Franchising Authority may adopt from time to
time.
(o) Applicant must ensure that its headend has adequate space, and is
otherwise properly designed in order to accommodate the
equipment and facilities necessary to meet its obligations under the
franchise. The Franchising Authority must be able to place
equipment at the headend and on the Cable System as necessary in
order to take full advantage of the institutional network,
interconnections and other capacity dedicated for PEG use, and
must have access to that equipment.
(p) In addition to the foregoing,the Franchising Authority may require
Applicant to upgrade or improve its system under the following
circumstances.
With respect to the general system design:
(i) If the Franchising Authority determines, after hearing, that
system improvements are required in order to stay apace of
developments in the industry itself as evidenced by
improvements in similar systems elsewhere in the country,
and are reasonable to make in light of the cost thereof.
(ii) If the Franchising Authority determines, after conducting a
review of the adequacy of the system to meet the
Franchising Authority's cable-related needs and interests,
23
that upgrades or improvements are required to reasonably
meet those needs and 'interests, and the upgrades and
improvements are reasonable,in light of the cost thereof.
(iii) If the Franchising Authority establishes upgrade or
improvement requirements, Applicant may object by
notifying the Franchising Authority, in writing, within
thirty days. If Applicant is not willing to comply with the
Franchising Authority's requirements, the Franchising
Authority may shorten the franchise term so that it expires
not less than thirty-one months after the decision is made to
shorten the franchise term.
With respect to PEG and I-Net:
(i) If the Franchising Authority determines a modification is
necessary in order to permit PEG and I-Net users to take
advantage of the capabilities of the Cable System; and
determines, after hearing, that the modification is
reasonable in light of the costs, compared to the benefits or
potential benefits to the Franchising Authority or the
public.
(ii) If the Franchising Authority determines a modification is
necessary in order to balance PEG and I-Net obligations of
Applicant and any other franchise cable operator who
enters the market.
The reviews permitted by this section may be initiated by the
Franchising Authority after the first three years of the franchise
term.
(q) The cable system must meet or exceed the technical standards set
forth in 47 C.F.R. § 76.601 any other applicable standards, as
amended from time to time, including any such standards as
hereafter may be adopted by the Franchising Authority; provided
that, nothing in this provision is intended to permit the Franchising
Authority to exercise any authority that it is prohibited from
exercising under applicable federal law.
(r) Existing system PEG facilities and equipment must be provided
and maintained until the Franchising Authority determines that
those facilities and equipment are no longer needed, except as
otherwise provided herein; but for no longer than 24 months from
the effective date of the franchise if Applicant is in compliance
with its PEG obligations. Existing 'interconnections, links and
24
upstream channels for PEG use must be provided and maintained
until and unless replaced by links under the other provisions of this
franchise.
2. Downstream PEG Capacily n Subscriber Network.
(a) Generally. During the franchise terra, Applicant shall provide
PEG channels to each subscriber in accordance with this section.
Channels shall be provided on the basic service tier or if there is no
basic service tier, as part of the service provided to any subscriber,
except as provided below. If program choices are selected by a
menu, PEG programming choices must be prominently displayed.
(b) Management and allocation of channels. The Franchising
Authority may designate an entity or entities to manage PEG
facilities, equipment and channels (the "Designated Access
Entity"); it may designate channels for public, educational,
governmental or combined use. The Franchising Authority shall
be the Designated Access Entity until or unless another entity is
designated; provided that, Applicant may be responsible for
managing one or more of the channels for a transition period (not
to exceed 24 months), as further described herein.
(c) Capacity. Applicant must provide at least six (6) channels for PEG
use at all times during the franchise term. Upon request, up to a
total of eight percent(8%) of the total capacity of the cable system
should be available for PEG access use. Additional analog
channels up to that limit shall be provided if the triggers specified
in subsection(d)-(g) are satisfied. The standards do not need to be
satisfied in order to require the Applicant to activate capacity
pursuant to subsection(h). So long as Applicant is providing basic
service to subscribers in an analog format, each channel must be at
least 6 MHz. Applicant shall, upon request, activate such
additional capacity as may be required to support the transmission
of a video signal of a quality comparable to commercial analog
signals carried on the subscriber network. Upon request, Applicant
must activate capacity sufficient to provide a PEG audio service.
(d) Additional public use channels, Applicant must provide an
additional public access channel whenever the channels set aside
by the Franchising Authority for public access programming are
programmed with qualified programming at least eighty percent
(80%) of the cumulative time of sixty hours per week over a
consecutive sixteen (16) week period. All qualified programming
will count in this measurement for the actual running time shown.
Repeat programs are qualified programming only to a maximum of
twenty-five percent(25%) of total qualified programming.
25
(e) Additional educational use channels. Applicant must provide an
additional analog educational access channel whenever the
channels set aside by the Franchising Authority for educational
access programming are programmed with qualified programming
at least eighty percent (80%) of the cumulative time of sixty hours
per week over a consecutive sixteen (16) weep period. All
qualified programming will count in this measurement for the
actual running time shown. Repeat programs are qualified
programming only to a maximum of twenty-five percent (25%) of
total qualified programming.
(f) Additional government use channels. Applicant must provide an
additional analog governmental channel whenever the channels set
aside by the Franchising Authority for governmental programming
are programmed with qualified programming at least eighty
percent (80%) of the cumulative time of sixty hours per week over
a consecutive sixteen (16) week period. All qualified
programming will count in this measurement for the actual running
time shown. Repeat programs are qualified programming only to a
maximum of twenty-five percent (25%) of total qualified
programming.
(g) Definitions. For purposes of this channel trigger, the term "repeat
program" means the running time of any program only to the
extent it is shown more than four (4) times during the test period.
In addition, the term "qualified programming" means any material
carried on the access channels, except for "bulletin beard" material
where the same text (or video and text) screen is sent
simultaneously to all system subscribers. Finally, the term
"qualified programming" includes bulletin board material if the
material consists of multiple and different text (or video and text)
screens transmitted to different subscribers simultaneously or
where the content of the bulletin board can be selected by a viewer,
even if the resulting message is then available to all viewers of the
channel.
(h) Additional capacity. Once Applicant activates the digital capacity
on its system, it shall make such capacity available for PEG use,
upon request. Such digital capacity shall be subject to the 8% of
total capacity requirement set forth above. Any digital capacity
provided for PEG use must be of a type and quality comparable to
that provided for commercial channels; and be configured in such a
way to enable PEG users to deliver video programming and other
information services, as desired. Digital capacity provided under
section(h)does not need to be provided as part of the basic service
26
tier, unless other channels on the basic service tier are also being
delivered in a digital format. To the extent that the resources that
determine access to and use of Applicant's system are not
expressed solely in terms of channels (for example, in storage
capacity on video and computer servers), Applicant shall provide
up to eight percent (8%) of the system's maximum capacity in
such other resources.
(i)
Conversion to digital.
(i) The cost of the equipment required to provide a digital PEG
signal feed, and to compress the digital PEG signals to
deliver them to Subscribers, will be borne by the
Franchising Authority if the Franchising Authority opts to
use digital PEG Channels before all other basic service
programming is delivered in a digital format by Applicant.
At such time as all other basic service programming is
delivered in a digital format by franchise, however,
Applicant will become responsible for the costs associated
with providing PEG Channels in a digital format. So long
as the Franchising Authority remains responsible for digital
conversion costs, it may implement any digital compression.
ratio it deems appropriate, provided, however, the
Franchising Authority shall coordinate with Applicant to
attempt to minimize any perceptible adverse effects on the
performance of Applicant's Cable System, and shall take
no action causing Applicant to be unable to satisfy the
performance requirements specified by the Franchise.
(ii) The company may convert PEG channels required to be
carried on the basic service tier to digital format at any
time, at its sole cost provided these channels can be viewed
by a subscriber to the basic service tier without equipment
other than the equipment that subscriber would require to
receive other basic service channels. However, the channel
capacity required under(c) will continue to be available for
PEG use, so long as the total capacity dedicated to
downstream PEG use on the subscriber network does not
exceed eight percent(8%) of total system capacity.
(j) No limitation on use. A PEG user may use PEG capacity to deliver
video or non-video information subject only to limitations on use
lawfully established by the Cable Act. Applicant must carry the
entire PEG signal and deliver it to the subscriber so that it is
useable by the subscriber, without the need for any equipment
other than that required to receive similar commercial signals. The
27
Applicant may not, by way of example and not limitation,
eliminate information carried in the blanking interval. If a PEG
manager wishes to convert all or part of an analog channel to
digital, it may do so, at its expense. A PEG manager may combine
channels to carry a single signal, or subdivide and compress
channels to carry multiple signals.
(k) Aro distortion. Applicant may not designate channels for PEG use
that suffer from interference or distortion. In addition Applicant
shall ensure that the transmission quality for each PEG channel
delivered over the subscriber network is the same as or better than
the transmission quality of any other channel carried on
Applicant's basic service tier.
(1) Interactivity. If the system provides any interactive services, it
shall be designed so that subscribers may use interactive PEG
services.
(m) Applicant will have six months to activate channel capacity after a
request is made for it. Applicant may use any PEG channel
capacity that is not being used for the purposes designated,
pursuant to rules and procedures prescribed by the Franchising
Authority. Applicant will cease such use in accordance with rules
and procedures prescribed by the Franchising Authority.
1pstream Capacity for PEG use.
(a) Applicant shall provide and maintain bi-directional links between
the headend and (i) the origination point of the Franchising
Authority's government access programming; (ii) any educational
access programming origination sites located within the
Franchising Authority's boundaries including public school
districts and institutions of higher education; and (iii) any public
access origination point located within the Franchising Authority.
Such links may be dedicated fiber optic links, or they may be
provided over the institutional network. The links to the headend
may be indirect; that is, all links may go to a designated access
center or other location which is directly linked via a bidirectional
connection to the headend. In addition, if the Applicant does not
propose to allow the I-Net to be used for public access, it must
provide a means for originating programs at sites throughout the
Franchising Authority and transmitting them to the Community
Media Centers for routing to the appropriate PEG channel (or to
the I-Net), as needed. The bi-directional links must have sufficient
capacity activated in both directions to enable those managing the
PEG channels to (a) receive signals intended for retransmission on
the subscriber network from the institutional network and from
28
remote locations; (b) select signals for retransmission, and to
transmit and route those signals onto appropriate channels on the
subscriber network, or on the institutional network, without the
assistance of the applicant; (c) receive upstream transmission from
subscribers for any interactive PEG services. The connections
should include all routers, transceivers, modulators, demodulators,
and other equipment required to provide this functionality. The
locations must be able to send signals to and from one another, so
that one location may function as a central playback facility for
PEG programming. If any origination site designated pursuant to
this Section (a) is moved or replaced, Applicant shall transfer the
bi-directional, fiber-optic link(s) to the new location (including,
without limitation, moving terminal equipment and splicing fiber,
as necessary).
(b) Applicant shall permit PEG users to utilize the upstream capacity
on the system to originate programming from remote locations,
transmit that programming to any of the locations described in (a),
so that the programming may then be retransmitted on the
subscriber network or institutional network, as appropriate.
(c) The obligations under this section (a) — (b) can be satisfied by the
Applicant through its proposal for an institutional network;
provided that, (i) the upstream capacity required for PEG use
under this Section 3 must be constructed and provided at no
charge, (ii) the obligations can be met within 90 days of a request
by the Franchising Authority so that the links are available on a
time schedule so that the entity responsible for programming a
channel can program the channel at the time it is activated, or if
later, the date the entity becomes responsible for programming the
channel. Links must be provided to the studios required under this
franchise no later than the date the studios are required to be
completed., even if no request is made. Notwithstanding the
foregoing, the Applicant may, pursuant to a plan approved by the
Franchising Authority,provide temporary connections to a location
from which a channel is being or is to be programmed and make
other resources available to provide functionality similar to that
required under (a)-(b) in order to permit permanent links to be
completed in conjunction with the system rebuild. The
Franchising Authority will not unreasonably withhold approval of
such a plan.
(d) Applicant shall continue to provide and maintain any upstream
links that were required under its prior franchise, until it is notified
by the Franchising Authority that those links are no longer
required.
29
(e) There shall be no charge by the Applicant for the provision or use
of the capacity provided under Section 2-3, except as expressly
provided herein.
4. Institutional network.
(a) Institutional nett ork required. Applicant shall construct an
institutional network. The institutional network need not be
completely physically distinct from the subscriber network, so long
as the I-Net is designed to provide the functionality required to
serve I-Net users reliably.
(b) Capacity for educational and government use. Capacity will be
provided on the institutional network for educational and
government use by dedicating fibers or, if appropriate, capacity on
the Applicant's network, for use by educational and governmental
entities designated by the Franchising Authority (including by way
of example and not limitation schools, libraries, Franchising
Authority and County agencies and departments), and (if
proposed) for public access purposes; and by providing sufficient
funding to activate and upgrade the I-Net over the franchise term.
The fibers or network capacity may be used to transmit video, data
or voice, and may be used for any educational or governmental (or
public) purpose except to the extent such use is prohibited by the
Cable Act. The Applicant must provide a design for provision of
this capacity satisfactory to the Franchising Authority. The system
design should result in an I-Net that has the characteristics and
functionality described in the CTC I-Net Report and the Buske
Report, and which can be activated and used cost-effectively.
(c) Fiber model and alternative. The CTC I-Net Report notes that in
the I-Net Operational Concept Document prepared by a consultant
for Comcast's predecessor, a detailed design was presented for
building a discrete I-Net relying on dedicated fiber optic lines to
serve all of the designated sites. An Applicant may propose to
build a network based on the concept document design if it
chooses. Such a network would meet the needs and interests
described in the Buske Report and the CTC I-Net Report. The
CTC I-Net Report, however, describes a design model intended to
describe the network functionality required to meet user needs.
The model in the RFRP therefore calls for an I-Net that meets the
functional requirements described in the CTC design model, and
provides I-Net services at each of the sites identified in Attachment
I to the CTC I-Net Report, but without requiring dedicated fiber
optic connections to each site. The CTC model establishes three
categories of I-Net sites, and defines the requirements for capacity,
30
logical connectivity, and user interface at each type of site. The
characteristics of the three types of sites are as follows.
Type A Sites. Type A sites are likely to have critical
communications needs, and most will support some degree
of centralized services for a number of other sites.
Therefore, communications for these facilities must be
highly reliable and support the high-level of capacity found
within existing local network connections. Additionally,
the communications must provide symmetrical capacity bi-
directionally for hosting central client/server applications,
and should allow for scalability as local requirements and
central services are expanded. Initial connectivity to the
backbone network must support high-speed data for the
transfer of bi-directional information that is time delivery
critical, meaning that capacity and Quality-of-Service
(QoS) must be deterministic. Services that may be
provided include,but are not limited to:
• Two-way interactive full-motion video; such as high
quality videoconferencing;
• High resolution images and large data files, such as
Geographic Information System(GIS) files; and
• Two-way voice communications, including IP
telephony, traditional circuit-based telephony and PBX.
trunks, and public safety radio system trunking.
The network connectivity for all Type A sites must meet
certain minimum QoS parameters to effectively support
interactive applications, such as Voice-over-IP (VOIP) and
videoconferencing. The following parameters shall be met
for all network traffic up to the maximum rated bandwidth
for links providing connectivity for Type A sites.
• End-to-end, one-way transmission latency shall not
exceed 100 ms from any Type A site to any other Type
A or Type B site;
• Peak packet jitter shall not exceed 40 ms for
transmissions from any Type A site to any other Type
A or Type B site;
• Packet loss shall not exceed 1% for transmissions from
any Type A site to any other Type A or Type B site;
If aggregate transmission requirements exceed the capacity
of the link provided for a Type A site, then QoS
mechanisms must be implemented over the network
31
connection to meet the minimum QoS parameters for user
specified applications. QoS mechanisms employed over I-
Net connections must provide standards-based methods for
traffic identification and must be supported by County
network equipment at Type A sites, including IEEE 802.Ip
frame tagging and IP Precedence ToS field marking. A
wide range of network technologies and physical interfaces
are acceptable, including Ethernet, SONET (OC-3), and
ATM. Both fiber optics and spread spectrum digital
microwave (licensed) technologies might be acceptable
backbone communications mediums for Type A
requirements. The following are the minimum capacity
projections for Type A sites:
• Near term(3-5 years): 50 - 100 Mbps, bi-directional
• Long-term.(5-10 years): 200 - 500 Mbps,bi-directional
Tempe B Sites
Type B sites represent low-capacity network client entities
requiring access to external network resources, but would
not typically hast central services for other facilities. Most
communications will occur "downstream" from other
network resources, including central County services and
the Internet, to Type B sites. However, connectivity to the
backbone network must support some level of"upstream"
capacity for bi-directional applications, including time
delivery sensitive services, such as videoconferencing and
IP telephony. Services that may be provided include, but
are not limited to:
• One-way reception of full-motion video;
• Two-way interactive video of a quality suitable for
videoconferencing and training applications;
• One-way reception of high resolution images and large
data files, such as Geographic Information System
(GIS) files; and
• Two-way voice communications, including IP
telephony.
The network connectivity for all Type B sites must meet
certain minimum QoS parameters to effectively support
interactive applications, such as Voice-over-IP (VoIP) and
videoconferencing. The following parameters shall be met
for all network traffic up to the maximum rated bandwidth
for links providing connectivity for Type C sites:
32
• End-to-end, one-way transmission latency shall not
exceed 100 ms from any Type B site to any other Type
A or Type B site,
• Peak packet jitter shall not exceed 40 ms for
transmissions from any Type B site to any other Type B
or Type A site;
• Packet loss shall not exceed 1% for transmissions from
any Type B site to any other Type B or Type A site;
If aggregate transmission requirements exceed the capacity
of the link provided for a Type B site, then QoS
mechanisms must be implemented over the network
connection to meet the minimum QoS parameters for user
specified applications. QoS mechanisms employed over I-
het connections must provide standards-based methods for
traffic identification and must be supported by Consortium
network equipment at Type B sites, including IEEE 802.1 p
frame tagging and IP Precedence ToS field marking. A
wide range of physical interfaces and network technologies
are acceptable, including Mbps Ethernet, Digital Subscriber
Line (DSL), cable modems, St3NET and ATM. Fiber
optics, coaxial cable, spread spectrum digital microwave
(licensed or unlicensed) technologies, and a variety of
twisted-pair copper wire appear to be acceptable
communications mediums for Type B sites. The following
are the minimum capacity projections for Type B sites:
Near term (3-5 years): downstream 10 Mbps, upstream
2.5 Mbps
• Long term (5-10 years): downstream 100 Mbps,
upstream 20 Mbps
Type C Sites
Type C sites represent typical network clients requiring
high-capacity access to central resources at Type A
facilities, and may require high-capacity access to other
Type C facilities. Type C facilities are directly linked to a
central network facility, or hub, (usually a City IT center)
through a point-to-point connection via dedicated cable
infrastructure (fiber or copper) or an alternate wireless
transport system providing standards-based network
interfaces. Type C sites are not candidates for provisioning
connections over any form of shared network infrastructure
lacking guaranteed performance attributes, although Time
33
Division Multiplexed (TDM)-based permanent virtual
circuits (PVC) over a connection-oriented backbone, such
as ATM or SONET, could be considered acceptable.
Communications between other sites on the network are by
way of the connection to a central network hub (Type A
site). Type C sites are likely candidates for the increased
deployment of two-way communications services, and may
be utilized to host some portion of distributed network
services, thereby requiring symmetrical bi-directional
capacity. Initial connectivity to the backbone network must
support high-speed data for transferring bi-directional
information that is time delivery critical, meaning that
capacity and QoS must be fairly deterministic. Services
that may be provided include, but are not limited to:
• Two-way interactive full-motion video; such as high
quality videoconferencing;
• High resolution images and large data files, such as
Geographic Information System(GIS)files; and
• Two-way voice communications, including IP
telephony, traditional circuit-based telephony links, and
public safety radio sites.
A wide range of network technologies and physical
interfaces are acceptable, including 100 mops Ethernet,
SCINET, and ATM. Both fiber optics and spread spectrum
digital microwave (licensed and unlicensed) technologies
appear to be acceptable backbone communications
mediums for Type C requirements. The following are the
minimum capacity projections for Type C sites:
• Near term(3-5years): 22 Mbps,bi-directional
• Long-term(5-1Oyears): 100 Mbps,bi-directional
A different configuration that has the same flexibility and
performance characteristics would also satisfy the model. so long as
it has the functionality and characteristics described in the CTC I-
Net Report. Any configuration must, among other things,
minimize total end user costs and provide the users with the
flexibility to dedicate capacity to particular uses( , transmission
of video) in order to provide maximum flexibility to take
advantage of existing facilities and equipment.
Applicant may be required to interconnect the I-Net to other
systems in accordance with the interconnection provisions of the
franchise. The Franchising Authority may require the I-Net to be
34
constructed to points within the Franchising Authority where it can
be connected to other networks,including the Internet.
For the sites listed in Attachment A to the CTC I-Net Report that
require fiber optic connections, the fibers should be brought into
each of the buildings at a point designated by the site user. The
fiber should terminate at a termination block within the building,
and should use standard connectors properly marked.
The entire I-�Net must be completed and activated in 24 months.
Links for PEG use must be provided in accordance with the time
schedule specified in the PEG section of the model.
(d) Expansion. Upon request, Applicant must extend the I-Net
promptly to serve additional locations not listed in Attachment A
of the CTC I-Net, place additional fiber to existing locations; or
provide diverse routing for particular locations in a design
acceptable to the Franchising Authority. The time for completion
will depend on the work required to be performed.
(e) Standard connections. The institutional network should be
designed and constructed to support standard interfaces such as
conventional NTSC analog, M-peg, and 3-peg digital video,
telephone "T" carrier services (DS 1, DS3), Ethernet
interconnection (10 Mbps, 100 Mbps, and Gigabit platforms), and
other similar commonly used interfaces; it should be designed and
constructed so that it is capable of supporting existing and future
Franchising Authority network protocols (Ethernet, Fast Ethernet,
ATM)without substantial plant construction.
tfj Charges for I-Net. There shall be no charge for the provision or
use of the I-Net capacity provided herein by Applicant to any user,
except as specifically provided above.
(g) Notice. Applicant must notify the Franchising Authority at least
sixty (60) days in advance of the installation of any fiber optic
capacity not contemplated by the initial design of the System, so
that the Franchising Authority may take advantage of this
construction to have additional fiber installed economically.
(h) The Franchising Authority may also itself connect the I-Net to
other locations and to other networks. The Franchising Authority
may attach such devices to the I-Net or upgrade I-Net equipment
(whether provided by the Franchising Authority or by Applicant)
as it deems appropriate, provided that the devices do not unduly
affect the technical integrity of the cable system.
35
(i) Response to complaints. Applicant must maintain (and respond to
complaints about) the I-Net so that there is no significant
degradation of the signals carried, and so the system operates at a
reliability of 99.99%measured over the course of any year. It shall
respond to I-Net outages at least as quickly as it responds to the
most critical outages on its Cable System. The institutional
network must be designed so that it fully supports one and two-
way video, one and two-way high-speed data transmissions, and
voice grade communications, and other functions identified in the
CTC I-Net Report.
0) No interference. If the Franchising Authority and other I-Net users
authorized by the Franchising .Authority to use the network do not
have exclusive use of the entire capacity of the institutional
network, it shall be the Applicant's obligation to ensure that the
use by others does not interfere with the use of capacity provided
for PECK use. The Franchising Authority shall have the sole
authority to resolve any disputes regarding allocation of I-Net
capacity for PECK use. The I-Net must include the facilities and
equipment required to guarantee secure communications over the
I-Net.
5. Access Facilities and Equipment.
(a) Facilities and Equipment. Applicant shall provide the facilities,
and the equipment packages specified in the fiuske Report,
including, without limitation, those described below. The facilities
and equipment shall be available for use by the entity responsible
for managing the channels and by PEG users at no charge.
(i) Two Community Media Center facilities:
(a) A 10,000 square foot facility, properly configured
to provide for:
(i) two three-camera production studios
(ii) studio control rooms
(iii) "hotline studio"
(iv) training and multi-purpose meeting rooms
(v) playback/master control room
(vi) studio set, equipment, and materials storage
(vii) video editing and dubbing booths
(viii) offsite space
(ix) equipment maintenance area
(x) field production equipment check-
out/storage area
(xi) Computer/Internet lab
36
(b) A "satellite" Facility, approximately 5,000 square
feet, similar to the larger Facility, but with a single
production studio and correspondingly smaller
support areas.
Each Facility should be provided at a location satisfactory
to the Franchising Authority, in consultation with other
Consortium members, which location must be easily
accessible to residents of the community, must have
adequate parking, and must be expandable. The
Franchising Authority will not unreasonably refuse to
approve a proposed Facility site. The facility must have
adequate heating, air conditioning, ventilation and other
infrastructure required to support access operations; and
must have security systems to prevent theft or vandalism of
all equipment, mobile and fixed. The staff of the entity
responsible for managing access must be able to have
access to the facility 24 hours a day.
The design of each Facility is subject to the review and
approval of the Franchising Authority, in consultation with
other Consortium members, and must be timely provided
so that the facilities can be completed and operational no
later than 18 months after the effective date of the
franchise, unless the Franchising Authority, in consultation
with this Consortium, provides for a longer period.
(ii) Applicant shall provide the equipment packages set forth in
the Buske Report for use by government access channel
staff to produce programming. Applicant should also
upgrade or replace equipment used by existing educational
access facilities.
(iii) Applicant shall provide for the replacement of equipment
that the designated access provider identifies as not
functioning properly or as out-dated during the franchise
term.
(b) Alternatively, Applicant may propose to provide facilities and
equipment to allow the Franchising Authority or any Designated
Access Entity to meet the community's needs for public,
educational and governmental access programming,as described in
the Buske Report and the Joint Report. To meet this requirement,
the Applicant must construct one or more studio facilities within
the Franchising Authority, and provide equipment and other
37
facilities comparable in function and capabilities to those described
in the Buske Report.7
(c) As a third alternative, Applicant may propose to satisfy its
obligations under this section (5)(a)-(d) by providing the
Consortium mernbers, including the Franchising Authority, with
capital grants to support PEG access and construction of the I-het,
in addition to the franchise fee. The capital grants shall be payable
to the Franchising Authority and other Consortium members,
apportioned on the basis of the number of subscribers in each
jurisdiction, or to such entities as the Franchising Authority in
consultation with the Consortium may designate to be responsible
for the management of PEG, in accordance with the following
schedule. A proportionate share of the amount of$700,000 shall
be payable to the Franchising Authority or to a Designated. Access
Entity on the effective date of the Franchise, which amount is
intended to cover some of the costs of initial PEG equipment or
facilities. Beginning on the effective date of the franchise,
Applicant shall pay to the Franchising Authority, or such other
entity as the Franchising Authority may designate, the amount of
three percent (3%) of Appl'icant's gross revenues annually, which
will be available for PEG and I-Net uses (the "Annual Grant").
For purposes of this grant, gross revenues shall be computed in the
same manner as in computing the franchise fee. Applicant shall be
entitled to a credit against future payments of the Annual Grant in
the event that any funds are not expended or committed for a
specific purpose by the Franchising Authority or a Designated
Access Entity within 36 months of payment by the Applicant.
Payments shall be made on the 15th day of every month, based
upon the number of subscribers on the last day of the preceding
calendar month.
(d) To provide for a smooth transition to Designated Access Entities,
selected by the Franchising Authority, Applicant shall continue to
provide any facilities and equipment it was providing for PEG use
for a period not to exceed 24 months from the effective date of the
Franchise.
7 Because this RFRP is being issued by a single Franchising Authority, Applicant is not required
by this RFRP to provide individual facilities and equipment packages to each member of the
Consortium. If the Applicant chooses to submit a single joint response, however, it should
address the needs and interests of the Franchising Authority, as well as of the other Consortium
members.
38
6. Miscellaneous PEG Requirements.
(a) PEG channel assignments, once made, should be maintained.
Except with the consent of the Franchising Authority, access
channel assignments may not be changed unless the change is
required in order for the Applicant to comply with federal law
requirements. By way of example, a change might be required
based on a must-carry request that could not lawfully be
accommodated without changing the channel. To the extent that
changes in channel number are required for any reason, Applicant
shall compensate any Designated Access Entity for any costs of
such change, including but not limited to reasonable public notice
and advertising as to the change.
(b) The Franchising Authority, or the entity that manages a PEG
channel (other than Applicant), may adopt reasonable rules
regarding the use of that channel pursuant to Section 61l(d) of the
Cable Act, 47 U.S.C. § 531(d). The Franchising Authority shall
have the authority to resolve any disputes regarding allocation of
PEG channels.
(c) Applicant shall not exercise any editorial control over the content
of programming on the designated PEG channels (except for such
programming as Applicant may produce and cablecast on such
channels) except as lawfully and expressly authorized by the Cable
Act.
(d) The PEG channels and the programming carried on there shall be
carried on any channel listing offered by Applicant.
(e) If Applicant makes changes to its cable system that necessitate
modifications to PEG facilities and equipment (including but not
limited to the upstream paths), Applicant shall provide any
additional facilities or equipment necessary to implement such
modifications within 30 days of the date that the system changes
are made, so that PEC facilities and equipment may be used and
operated as intended, including, among other things, so that live
and taped programming can be produced and cablecast efficiently
to subscribers. By way of example, and not limitation, should the
cable system deliver signals in a digital format to subscribers, it
will provide the facilities and equipment necessary so that PEG
signals can be delivered in a digital format. If the standard format
for television signals is "high definition" the Applicant shall
provide such additional equipment as may be necessary to carry
PEG signals in a high definition format.
39
(f) If Applicant begins offering video-on-demand for commercial
purposes, it shall provide, or provide access to the facilities and
equipment, including the storage and forwarding equipment
required to permit the provision of PEG programming on demand,
without cost to the Franchising Authority, the public school
districts or any other PEG channel user, by any entity managing or
operating a PEG channel, or the PEG programmer.
(g) The downstream and upstream channels provided pursuant to part
(3) may be subdivided or compressed at the sole discretion of the
entity responsible for channel management.
(h) Without limiting the requirements of part (3), Applicant must
ensure that digital PEG communications are receivable and useable
by any subscriber to any digital cable service, except as otherwise
designated by the Franchising Authority. This includes, but is not
limited to the obligation to ensure that a subscriber using
Applicant's cable modem can access public, educational and
government information, and can take full advantage of that
information. By way of example, and not limitation, Applicant's
system should not prevent a user from effectively accessing a
streaming video from. the Franchising Authority, or prevent real-
time interaction (because of latency problems created by the
manner in which Franchising Authority facilities connect to the
network). The Applicant must ensure that the Franchising
Authority can send PEG signals in a scrambled form or another
form so that the signals are only intelligible to persons authorized
to receive them.
(i) The facilities, equipment and capacity provided for PEG use
(except as expressly provided with respect to the institutional
network) shall be available at no charge to users, including but not
limited to the Franchising Authority,the public school districts and
any entity that manages a PFG channel.
7. Cable Drops and Outlets for Public Facilities.
(a) .Applicant shall, upon request by the Franchising Authority and
without charge, provide and maintain the following to each public
and non-profit private school (including institutions of higher
learning), and each government facility (including, but not limited
to County facilities and library facilities) and each Community
Media Center and satellite facility within the Franchising
Authority:
(i) at least one activated subscriber network drop and outlet;
40
(ii) all terminal equipment necessary to receive all subscriber
service tiers that include any PEG use programming.
Applicant shall, at no cost to the Franchising Authority, or any
entity entitled to a drop and service outlet, provide and install all
inside wiring necessary for the service connections required under
this Section. The Franchising Authority shall be deemed to have
requested the cable drop and outlet for all schools and government
buildings that were receiving free service as of January 1, 2004.
(b) Each location may itself extend service from the drop to additional
outlets. Applicant shall ensure that all signals are provided at the
connections specified above with sufficient strength to supply the
site (e.g., the signal must be strong enough at a school drop that it
can be further amplified to distribute it throughout the school).
I11. CONSTRUCTION TIMETABLE AND CONSTRUCTION CONDITIONS
A. Needs and Interests
The Cable Act permits a franchising authority to "establish and enforce" "construction
schedules and other construction-related requirements, including construction-related
performance requirements of the cable operator." 47 U.S.C. §552(x)(2). It is the Franchising
Authority's view that most or all such requirements can be established unilaterally. However, as
a matter of caution, we list below certain of the needs and interests for construction that seem
closely related to facilities and equipment requirements. Applicant is required to submit a
proposal that, at a minimum, satisfies these needs and interests.
• There is a need and interest in having cable service available to all in the
community (including to businesses, non-profit organizations, and to residences,
as well as to schools and government agencies). To that end, Applicant should be
required upon request and on a timely basis to extend its system to provide service
to any potential subscriber in the Franchising Authority. Further, there is a need
and interest in requiring the Applicant to extend its system into new
subdevelopments as they are being developed, to minimize disruption and ensure
that service is available as potential subscribers enter the area. Given these needs
and interests and, among other things, the density of the community, there is a
need and interest in the operator extending its cable system to provide service
without any line extension charge to any potential subscriber. Notwithstanding
the foregoing, with respect to subscribers located in unincorporated portions of
8 The Cable Ordinance and the draft Franchise each contain several provisions that may affect
the construction of the Cable System, and Applicant's cable system would be subject to those
requirements, in addition to the requirements below.
41
Contra Costa County, except with respect to Locations already served or passed by
the Applicant's distribution system, the Applicant may charge for extension of its
distribution system where an extension of (a) more than 400 feet is required to
reach the point from which the potential subscriber can be served by a drop; and
(b) less than 15 commercial outlets are requested per linear-mile. In that instance,
the potential subscriber may be required to help share in the cost of the extension;
but the subscriber share should be just that: a reasonable share. There also is a
need and interest in having free drops and services to schools and government
buildings as discussed above. No extension charge should be levied for schools
or government buildings, whether leased or owned. The term "line extension"
refers to an extension of the distribution plant to the point from which a potential
subscriber may be served by a drop.
• There is a need and interest in rebuilding any portions of the system within the
Franchising Authority that have not been rebuilt to the minimum standards set
forth above. Any such portions of the system should be rebuilt by within 2 years
of the grant of the franchise renewal.
• There is a need and interest in assuring that, if a rebuild is required, it should be
performed pursuant to a construction plan that is reviewed by the Franchising
Authority for compliance with the requirements of the franchise. There is a need
and interest in having the plans for any rebuild of the system ensure that the
rebuild is completed with minimum disruption of the rights-of-way or service.
• There is a need and interest in ensuring that Applicant has plans in place that are
designed to ensure that it complies with local standards for construction; that
ensure that construction errors are promptly corrected; that ensure that restoration
of property affected by the system is completed in accordance with Franchising
Authority requirements; and that ensure compliance with requirements for use of
the rights of way (including permitting requirements).
• If a rebuild is required, there is a need and interest in providing for testing of the
system to determine whether the rebuild has been successfully completed and in
providing for ongoing testing to identify and resolve problems and measure
performance.
• There is a need and interest in ensuring that the franchise includes the right for the
Franchising Authority to require that Applicant adopt a maintenance plan; that it
follows that plan (subject to regulations and applicable law), and periodically
reviews and updates the plan. The plan should ensure that all parts of the system
are properly maintained in a way that is designed to prevent failures.
• There is a need and interest in ensuring that the Applicant cooperates and
coordinates in joint trenching, and complies with the requirements of the
Franchising Authority with respect to joint trenching and undergrounding.
42
• There is a need and interest in ensuring that Applicant's employees, contractors
and subcontractors are competent and well-trained, and will abide by the
requirements of the franchise and applicable law, as if the work were being
directly performed by the Applicant.
BModel: Construction Standards
1. Timetable for Construction Construction flan.
(a) Construction of the institutional network and any rebuild of the
entire cable system must be completed within two years of the
grant of the franchise renewal..
(b) Applicant must submit and follow an approved construction plan.
The construction plan shall include a timetable for construction
that provides for orderly commencement and completion of all
work that is required for any rebuild of the subscriber network and
institutional network consistent with the end date specified in (a).
The plan also shall show the steps Applicant intends to take in
order to ensure that local requirements, including permitting
requirements, are satisfied, and that any rebuild is completed with
minimum disruption of the right-of-way or service. The Applicant
must submit a detailed distribution system design plan to the
Franchising Authority. The system design should be on maps of
industry standard scale using standard symbols, and should depict
all electronic and physical features of the plan, including the
proposed routing for the system for facilities above the nodes, the
dimensions, noise levels, emissions, power supplies and power
supply connections associated with all active components and
equipment cabinets. In addition, the Applicant should provide a
detailed explanation of any changes made to the system design or
construction plan, or the subscriber cut-over plan submitted with
the RFRP. Applicant must submit an updated construction manual
that properly reflects the procedures that Applicant is required to
follow under its Franchise and applicable law.
Finally, Applicant should submit information adequate to
demonstrate that any rebuild (1)will satisfy all the requirements of
the Franchise and applicable law, (2) will result in cable service
being available to all in the community (including to businesses,
non-profit organizations and to residences, as well as to schools
and government agencies) within the time period specified above
in subsection (a); and (3) will not result in provision of service to
areas of the Franchising Authority for any period of time on a
discriminatory basis based upon income or race.
43
(c) The Franchising Authority shall have thirty(30) days from the date
it receives the design and construction plan to submit comments on
it. If the Franchising Authority objects to the plan, Applicant must
submit a revised plan and a written response to the comments
within twenty (20) days of the date it receives the Franchising
Authority's comments. The Franchising Authority reserves any
rights it might have under the Franchise Agreement or applicable
law, including rights to impose penalties or terminate the Franchise
if it determines that the revised plan is not adequate.
2. Local Construction Standards: Joint Trenching. Applicant shall have in.
place a plan designed to ensure that it complies with all local standards for
construction and that erasures that construction errors are promptly
corrected. In addition, it must comply with the Franchising Authority's
requirements for joint trenching and undergrounding in order to minimize
disruptions to the rights-of-way.
3. Maintenance flan. Applicant shall adopt and submit to the Franchising
Authority a comprehensive maintenance plan, which shall include plans
for preventative maintenance. It must demonstrate that the Applicant is
able to comply with applicable laws, including permitting requirements.
Applicant shall follow its maintenance plan (subject to regulations and
applicable law), and periodically review and update the plan. The plan
must ensure that all parts of the system are properly maintained in a way
that is designed to prevent failures.
4. Franchise Area.
(a) Applicant's franchise area shall be the corporate boundaries of the
Franchising Authority, as the same may be expanded or
contracted in the future.
(b) Applicant must extend its cable system to provide service to any
entity, in any part of its franchise area and must extend its system
on a timely basis, as required under applicable customer service
standards adopted by the Franchising Authority.
(c) Except as provided below, Applicant must extend its system to
provide service upon request without requiring the potential
subscriber to pay for that extension. Upon request, Applicant
shall extend its system without a line extension charge into new
subdevelopments as they are being developed, to minimize
disruption and ensure that service is available as potential
subscribers enter the area. Except with respect to locations
already served or passed by the Applicant's distribution system,
the Applicant may charge a pro rata share of the cost for line
extension where an extension of(a)more than 400 feet is required
44
to reach the point from which the potential subscriber can be
served by a drop; and (b) less than 10 commercial outlets are
requested per lineal mile. The line extension charge shall not be
applied to government buildings.
(d) The term line extension refers to an extension of the distribution
plant to the point from which a potential subscriber may be served
by a drop.
5. Economic Redlining. Applicant shall extend its system to low income
areas at least as quickly as it is extended to higher income areas.'°
6. Subcontractors. Any contractor or subcontractor used for work or
construction, installation, operation, maintenance, or repair of system
equipment must be properly licensed under laws of the State of California,
and all applicable local ordinances, where applicable, and each contractor
or subcontractor shall have the same obligations with respect to its work.as
Applicant would have if the work were performed by Applicant.
Applicant must ensure that contractors, subcontractors and all employees
who will perform work for it are trained and experienced. Applicant shall
be responsible for ensuring that the work of contractors and subcontractors
is performed consistent with the franchises and applicable law, shall be
fully responsible for all acts or omissions of contractors or subcontractors,
shall be responsible for promptly correcting acts or omissions by any
contractor or subcontractor, and shall implement a quality control program
to ensure that the work is properly performed.
7. Initial and Continuing Tests. Applicant shall perform all tests necessary to
demonstrate compliance with the requirements of the franchise and other
performance standards established by law or regulation, and to ensure that
system components are operating as expected.
8. Inspections during Construction. The Franchising Authority may conduct
inspections of construction areas and subscriber installations, including
but not limited to, inspections to assess Applicant's compliance with
construction and installation requirements. Inspection does not relieve
Applicant of its obligation to build in compliance with all provisions of the
franchise. Applicant shall be notified of any violations found during the
9 This provision applies only to locations located in unincorporated portions of Contra Costa
County.
vee 47 U.S.C. § 541(a)(3).
45
__
course of inspections. Applicant must bring violations into compliance
within the fallowing time periods after it receives notice of the violation:
(a) for safety violations, as promptly as possible and within forty-eight
hours, and
(b) for other violations, as directed or within thirty days if no time is
specified.
Where it is impossible to correct a violation within the specified time
periods, even with the exercise of all due diligence, Applicant shall
promptly so notify the Franchising Authority and may request an.
extension of time to perform; which extension request must specify the
deadline for completion and the steps that will be taken to protect the
public in the interim. The Franchising Authority will not unreasonably
refuse to consent to the request; but it may condition any extension, and
may exercise any other remedies it has under the Franchise and applicable
law for the violation. After the specified time period or any extension,
Applicant must submit a report to the Franchising Authority describing the
steps that it has taken to bring itself into compliance.
9. Performance Tests. Applicant shall conduct tests as follows:
(a) acceptance tests on each newly constructed or upgraded segment,
if any, prior to subscriber connection or activation;
(b) proof of performance tests on the system at least once every six
months or as required by FCC rules, whichever is more often,
except as federal law otherwise limits Applicant's obligation. Such
test results shall be included in Applicant's public file;
(c) special tests when subscriber or user complaints indicate tests are
warranted; and
(d) special tests at the Franchising Authority's request subject to any
limitations on the Franchising Authority's authority under federal
law.
10. System Maintenance.
An Applicant may intentionally interrupt service on the cable
system only for good cause and for the shortest time possible and,
except in emergency situations or to the extent necessary to fix the
affected subscriber's service problems, only after a minimum of
forty-eight hours' prior notice to subscribers and the franchising
Authority of the anticipated service interruption; provided,
however, that the minimum prior notice period shall be twenty-
four hours, rather than forty-eight hours, for planned maintenance
46
that (i) does not require more than two hours` interruption of
service; and (ii) occurs between the hours of 1:00 a.m. and 6:00
a.m. On any day when the Applicant interrupts service on the
cable system and the interruption continue for more than 30
minutes, the Applicant shall automatically provide a credit on the
subscriber's bill for the entire day without the need for the
subscriber to request the credit.
47
IV. OTHER FRANCHISE TERMS AND REGULATORY CONDITIONS
As painted out in the Introduction to this RFRP, any renewal franchise will be embodied
in a Franchise Agreement based on the attached Madel Franchise. A renewal franchise will also
be subject to the Franchising Authority's local code, which is to be amended as indicated in the
draft Cable Ordinance, and which may otherwise be amended pursuant to applicable law. A
renewal franchise will thus be subject to terms and conditions in addition to than those
specifically set forth in this RFRP. Please refer to the instructions for directions for commenting
on the draft Cable Ordinance and the Model Franchise." We note that the Model Franchise
reflects a policy determination that there is no reason to include any type of"level playing field"
clause in the Franchise, because the state legislature has already addressed the issue of
competing systems.12
11 See, e.g., Cal. Gov. Cade § 53066.3.
12 See, e.g., Cal. Gov. Code § 53066.3.
48
V. APPLICATION FORMS
INSTRUCTIONS ANIS VERIFICATION
A. Instructions
All questions must be answered, and all requested information supplied in the order set
forth in the application. Consistent with the Cable Act, there is no requirement under this RFRI'
that Applicant submit a proposal for specific, or broad categories of video programming or other
information services. A form is included in this section regarding such services in the event any
are proposed. if Applicant makes no such service proposals, it may return blank pages. The
application must be verified by signing and returning the Application Form and Affidavit
included in Section V.C.,Applicant's Affidavit.
Applicant may use the forms provided. 'Where that is impractical, forms of Applicant's
design may be substituted if all requested information is clearly displayed.
Applicant should begin a new page wherever indicated. Applications shall be as concise
as possible without sacrificing clarity and completeness.
The financial pro forma information submitted must be based upon the requirements
specified in this document. If Applicant deviates from those requirements, an additional separate
pro forma (which is based on the deviations and explains their impact, in detail) must be
submitted.
Applicant must clearly differentiate between those elements in a proposal that it is willing
to include in any final franchise; those needs and interests which it intends to satisfy through
contractual agreements with others; and those which it expects to provide, but which it is not
willing to commit to provide.
49
B. Identification of Applicant
Name of Applicant:
Address of Applicant:
(Street)
(City, State, Zip Code)
Telephone:
(Area Code and Number)
Date:
Please provide the name and telephone number of a principal to whom inquiries should be made:
Name:
Telephone:
(Area Code and Number)
Authorized Signature:
(Name and Title)
Date:
50
C. Applicant's Affidavit
1. This application is submitted in response to the Joint Request for Renewal
Proposal issued by the Franchising Authority, in conjunction with the other members of the
Contra Costa Cable Consortium. Applicant has read and reviewed the RFRP in preparing its
response.
2. The Applicant attests that it has reviewed and checked the information presented,
as necessary to determine its accuracy, and represents that it is true, accurate and complete, as
required to ensure that the representations explicitly or implicitly made are not misleading.
3. The Applicant recognizes that all representations are binding on it and that failure
to adhere to any such representations may, at the Franchising Authority's option, result in
revocation of any franchise that may be granted as a consequence of and in reliance upon this
application.
4. The Applicant hereby gives the Franchising Authority permission to inquire into
the legal, technical, financial and other qualifications of the Applicant by contacting any persons
or organizations named herein as references, or by any other appropriate and lawful means.
5. The undersigned has been duly authorized to make these representations on behalf
of the Applicant.
Firm Name:
Affiants Signature:
Official Position:
Date:
Attest:
51
FORM I. BACKGROUND AND LEGAL QUALIFICATIONS
FORM I.A. LEGAL QUALIFICATIONS.
1. Applicant shall answer the following questions "yes" or "no." For
purposes of Subsections I(d)-(f),the term "Applicant" refers to: the Applicant; its
principals; any entity which owns or controls, is owned or controlled by, or is
under common ownership with the Applicant; and any entity which is expected to
control or be responsible for, through any arrangement, the management and
operation of the cable system serving the Franchising Authority. The term
franchise refers to a cable franchise, however nominated, or an open video system
franchise, however nominated. The Applicant need not report any case or
proceeding where final judgment was rendered ten years or more prior to the date
this RFRP was issued. Additionally, the Applicant need not report any franchise
revocation that occurred ten years or more prior to the date this RFRP was issued.
a. Is the Applicant authorized under California law to operate a
business, including a cable television business,in the State?
b. Does the Applicant hold all federal and state licenses required for
the operation of the system?
C. Does federal law prohibit the Applicant from holding the
franchise?
d. Has the Applicant been found by a court or other entity of
competent jurisdiction to have violated state or federal laws or regulations
regarding, or to have engaged in acts which constitute: discrimination on
the basis of race, sex or religion or any other prohibited ground; fraud;
embezzlement; taxx evasion;bribery; extortion;jury tampering; obstruction
of justice (or other misconduct affecting public or judicial officers'
performance of their official duties); false or misleading advertising;
perjury; violations of laws prohibiting anticompetitive conduct or unfair
trade practices (including, but not limited to, violations of the Sherman
Act and state consumer protection laws); or racketeering or conspiracy to
commit any of the foregoing offenses?
e. Has the Applicant ever had a franchise or FCC license revoked for
cause where the revoked franchise or license was not reinstated?
f. Has the Applicant ever been found by a court or other entity of
competent jurisdiction to have made misleading statements to a public
body?
52
2. If the answer to any of questions l(d)-(f) is "yes," the Applicant must
specifically describe the facts and circumstances concerning the acts or omissions
which led to the decisions,revocation, or findings specified in questions 1(d)-(f). It
shall identify with specificity each case, revocation, or finding which led the
Applicant to respond affirmatively to questions l(d)a(f). If the Applicant believes
the acts or omissions described in response to l(d)-(f) should not be considered in
determining whether to grant or deny it a franchise, it shall explain in detail the
basis for this contention. In reviewing the information, the Franchising Authority
shall consider: facts and circumstances which show that the acts or omissions are
unrelated to the consideration of the Applicant's willingness to operate a cable
system in accordance with lawful requirements; whether the Applicant has fully
corrected all harms which flowed from the act or omission; whether the act or
omission involved principals of the Applicant, and whether the Applicant has taken
adequate steps to ensure that the act or omission will not recur. Particular weight
will be given to any failure to correct harms flowing from any past misconduct.
3. As discussed elsewhere, Seren Innovations, Inc. has been granted
franchises by three Consortium members. California Government Code § 53066.3
provides in part that when a franchising authority grants an additional franchise in
an area where another franchise has already been granted, the additional franchise
shall contain the same PEG access requirements as the existing franchise. The
Applicant must explain whether its proposal meets the requirements of the
California Government Code. If the Applicant believes that its proposal complies
with the statute, but the terms of the proposal are not identical to those of a
franchise granted to Seren, the Applicant should explain why the terms are
equivalent. If the Applicant believes that its proposal is not equivalent to a Seren
franchise, then the Applicant shall explain whether the Franchising Authority may
lawfully grant a renewal franchise in light of Cal. Gov't Code § 53066.3, and the
basis for any such conclusion.
53
FORM I.B. APPLICANT'S HOLDINGS AND PRESENT SUBSCRIBER RATES
1. Please list all present holdings (franchises and systems) in which the Applicant or any
principal* owns 5 percent or more of equity interest. (If additional pages are needed,
please reproduce this form). An Applicant that already holds a franchise need only list
(1) systems where the franchise was renewed in the last three years; (2) systems now
being upgraded or rebuilt, and (3) systems where the franchise is scheduled to expire in
the next three years.
Location of System
Date of Most Recent
Franchise.Award
Plant Miles of
System
Date First
Subscribers
Served**
Date Construction
Completed***
Percentage of
System Ownership
Held
Holder of
Controlling
Ownership Interest
Current Subscriber
Rates
Name and Address
of Local
Government
Officials
Responsible for
Cable Operations
* For purposes of this form, „principal"means any officer or director of Applicant, and any
person, firm, corporation, subsidiary,joint venture or other entity, that owns or controls 5
percent or more of the voting stock (or any equivalent voting interest of a partnership or
joint venture) of Applicant.
54
** In a case of upgrade or rebuild, date first subscriber served by upgraded or rebuilt system.
*** In case of upgrade or rebuild, date upgrade or rebuild completed.
2. Please list other investments or affiliations, direct or indirect, with any media, entertainment
or telecommunications enterprise serving the Franchising Authority in which the Applicant
or any principal owns 5 percent or more of equity interest.
55
......... ........ . ...
. ........_. ._........._... ......... ......... ......... ...... .. .
_.._. ......... ......... ......... ......... ......... ......_..
.............................................................................................................
.......................................................
FORM II. OWNERSHIP DISCLOSURE
FORM H.A. OWNERSHIP INFORMATION
1. Organizational Structure
® Sole Proprietorship —Joint Venture
—Partnership —Unincorporated Association
Corporation —Other(explain)
Officers (if Corporation):
President
Vice President
Secretary
Treasurer
If Sole Proprietorship, list:
Owner
If Partnership, list:
General Partners
Limited Partners (if applicable)
2. Business Structure
a. If the Applicant is a corporation, please list all members of
the Board of Directors,their principal affiliations and their addresses:
b. If the Applicant is a partnership, please list all members of
any governing body or management committee, their principal affiliations
and their addresses:
56
FORM II.B. O)NNERSHIP DISCLOSURES
Please fully disclose:
(1) the names and positions of all Franchising Authority officers and employees
known to the Applicant to have any interest in the entity submitting the application, and
the extent of such interest;
(2) the names of all officers of the Applicant (if not fully disclosed on Form II.A.)
and the names and last-known addresses of all persons who have acted as attorney,
broker, consultant, or agent of the Applicant with respect to the franchise application;
(3) the names and last-known addresses of all persons who own or control any
interest in the Applicant; in the case of a partnership, joint venture or syndicate, the
names and last-known addresses of all partners or participants; in the case of a
corporation having fewer than two hundred stockholders, the names and last-known
addresses of all stockholders; in the case of a corporation having more than two hundred
stockholders, the names and last-known addresses of two hundred stockholders who own
or control the greatest percentage of voting and ownership interest in the Applicant,
except that corporations having more than two thousand stockholders, and whose stock is
traded on a national stock exchange, shall disclose only those stockholders owning a
stock interest of ten (10) percent or more. For purposes of this disclosure requirement, a
person holding any ownership interest as trustee shall not be deemed to be an individual,
and all persons who may have any interest under the trust, whether vested or contingent,
shall be included in the required statements;
(4) the names and last known addresses of all holders of debt of the Applicant, other
than stockholders or suppliers of goods and services paid on a current account, in excess
of five thousand dollars ($5000) or one percent of the total outstanding indebtedness of
the Applicant, whichever is greater; and
(5) the name and position of each. Franchising Authority officer, employee or
immediate family member of any officer or employee to whom or on behalf of whom the
Applicant, officer or board member of Applicant; any person in a senior management
position for Applicant; and the person or persons who are primarily responsible for the
operations of Applicant within the Franchising Authority, has made any gift, donation or
political contribution of one hundred dollars ($100) or more within three years preceding
the filing of the franchise application, the name of the donor, and the amount or value of
the gift, donation or political contribution. As to elected city officials, this requirement
includes disclosure of donations to their "principal campaign committees" and
"authorized committees,"as defined by 2 U.S.C. §431.
57
FORM H.C. STOCK INFORMATION
Please answer the following if the Applicant is a corporation.
I. Is the Applicant aup blicly held corporation as defined by the rules and regulations of the
Securities and Exchange Commission?
[ ] Yes [ ] No
2. Stock of Corporation:
Class Vote No.
of Par per No. Shares No. Shares Shares Total No.
Stock Value Share Authorized Issued Subscribed Stockholders
3. Does the Applicant have any other obligations or securities authorized or outstanding
which bear voting rights either absolutely or upon any contingency?
[ ] Yes [ ] No
If so, submit a statement of(a) the nature of such securities, (b) the face or par value, (c)
the number of units authorized, (d) the number of units issued and outstanding, (e) the
number of units, if any, proposed to be issued, and (f) the conditions of contingency upon
which securities may be voted.
4. Is the Applicant corporation directly or indirectly controlled by another corporation or
legal entity?
[ ] Yes [ ] No
If"yes," please explain.
5. Nationality and State of Incorporation:
58
FORM ILD. OWNERSHIP DISCLOSURE
The Applicant must fully disclose all agreements and understandings with any person,
firm, group, association or corporation with respect to the franchise from the Franchising
Authority or Applicant's cable system in the Franchising Authority. This includes
agreements between local investors and national companies. This includes but is not
limited to agreements to lease or sell part of the systems to any person; or to build or
install facilities for others in conjunction with the construction of the cable system.
Please append copies of any written agreements made regarding the ownership or control
of the proposed system.. Please outline any oral agreements or understandings regarding
the ownership or control of the proposed system.
If Applicant or any affiliate has sold or leased any part of the system, or capacity on the
system to any person, it should identify what has been sold or leased; to whom, and for
what purposes.
If Applicant or any affiliate has had any discussions regarding the sale of the system or
lease of the system, or capacity on the system to any person, it should disclose these
discussions, and describe the status of those discussions.
59
FORM II.E. LIMITED PARTNERSHIP
If the Applicant is a limited partnership, please describe the structure of the partnership
and identify the general and limited partners and their principals.
60
FORM ILF. ADDITIONAL OWNERSHIP DISCLOSURES
If, in response to Forms II.B.3 or II.E,., the Applicant listed other partnerships or
corporations that are owned, controlled or managed by another corporation or
partnership, then additional forms for II.B.3 and ILE shall be provided for such
corporations and partnerships. The same shall be done for each partnership or
corporation identified in these additional forms and so on until the ultimate parent of all
such entities is identified. Information previously provided on Form 11.13 need not be
repeated here.
61
FORM 111. FINANCIAL QUALIFICATIONS AND INFORMATION
An important element of any response to this RFRP is an adequate demonstration of
financial capability to perform. Clear, complete and documented financial information is
required for the Franchising Authority to determine the qualifications of the Applicant.
FORM III.A. SYSTEM FINTANCING PLAN
Please attach a detailed description of the financing plan for any cable system
construction proposed during the period covered by your response to this RFRP. Indicate the
source and amount of financing required to complete the construction in each of these categories,
including internally generated funds, newly issued equity, newly issued debt, and any other
sources. Identify the issuer, and the anticipated terms of any new debt and equity to be issued.
In describing the terms of financing, include interest rates, collateral, guarantees, terms and
conditions. Documentation must be submitted which corroborates the commitment of funds
(where applicable) and lists the name, address, title and telephone number of the appropriate
contact person for each organization involved in funding debt or equity. Copies of financing
agreements are to be submitted or otherwise made available for inspection at the location
indicated in the Instructions. Attach separate pages as necessary.
62
FORINT HLB. APPLICANT'S FINANCIAL STATEMENTS
(1) Please attach audited financial statements, including statements of income,
balance sheets and cash flow statements, together with any notes necessary to the
understanding of the financial statements, for the last five fiscal years for the
Applicant's cable system within the Franchising Authority. If audited
information is not available, unaudited information is to be provided, and certified
as correct by the Applicant's Chief Financial Officer. In addition, Applicant
should provide separate information for any affiliate or parent company where
necessary to understand the statements for Applicant's system in the Franchising
Authority, or where the debt, interest or other obligations or assets or revenue or
expenses of such affiliate or parent company are in any way allocated to
Applicant's system in the Franchising Authority. Any compensation received by
Applicant's owners or related parties from the Applicant—whether in the form of
salary, dividends, in-kind payments, fringe or personal benefits, stock options, or
otherwise—should be disclosed as to type and amount in each year.
(2) For the last five fiscal years and for each of the entities indicated above, to
the extent not provided in the statements identified above, identify:
(a) revenue by type (e.g., basic service, other tier
service, pay service, pay-per-view service, equipment rental, installation,
advertising, itemized franchise fees or other fees, etc.) and expenses by
type (e.g., programming costs, plant maintenance and technical expenses,
marketing expenses, customer service expenses, franchise fee expenses,
etc.)
(b) distribution plant miles, homes passed, subscribers,
listed separately, for each service tier, and pay units (at year end and at
previous year end if not already included).
As part of your response to this Form, please provide the historical financial data requested
above in the same format used in your response to Form III.C.
63
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS
The Applicant shall furnish tables following the format below and shall provide the
requested pro forma projections for the Applicant's operations within the Franchising
Authority for the proposed franchise term (see Form XI), assuming franchises for the
13
territories specified in this RFRP are awarded on January 1, 2005. If the system's
assumed revenues or expenses will reflect an allocation of assumed expenses or revenues
for some other entity, including, but not limited to, overhead allocations and management
fees, pro forma projections for such other entity should be provided as well. The pro
forma projections should include approximately the same line-item level of detail
indicated on the attached forms, but particular details of presentation may differ if the
Applicant believes that alternatives are more appropriate given its internal accounting
practices.
Key assumptions supporting the projections should be documented and submitted as
notes to the pro formas. In particular, assumptions regarding upgrades, PEG
requirements, franchise fee expenses, and any other franchise requirements should be
clearly identified and treatment of associated costs or revenues in the financial
projections should be highlighted or explained.
Financial pro formas must be based upon RFRP requirements. If the application deviates
from those requirements, submit separate and additional pro formas showing the financial
impact of each difference.
13 The Franchising Authority recognizes that the franchise will not be awarded on January 1,
2005. In part we chose that date for purposes of convenient analysis. In addition, the term
proposed is based on the needs and interests of the Franchising Authority now, assuming the
franchise issued immediately. The longer the renewal process takes, the shorter the term should
be.
64
F0RTM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Please provide the following financial projections for each year of the proposed franchise term.
I. REVENUES YEAR I 2 3 jto end of term]
Households in franchise area:
- total
homes passed
Beginning subscribers
Net subscriber growth
Penetration percentage
New subscriber connects
Household reconnects
Subscriber disconnects
Number of basic subscribers
Number of subscribers for other tiers
Dumber of premium units
Number of pay-per-view units sold
Revenue per subscriber:
Basic
Other tiers
Premium.
Number of subscribers for each premium service offered
Monthly rate for each premium service offered
Pay-per-view
Converter/remotes
Extra outlets
Installation
FM
Advertising
Home Shopping*
Other(Specify )
TOTAL
65
F+DIZM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Revenue(annual $total): YEAR 1 2 3 [to end of terms
Basic
Other tiers
Premium
Pay-per-view
Converter/remotes
Extra outlets
Installation
FM
Advertising
Home Shopping..
Other(Specify )
TOTAL
Attach information explaining the assumptions upon which these projections are made.
66
FORM III.C. PRO FORMA FINANTCIAL PROJECTIONS (continued)
2. STATEMENT OF INCOME YEAR 1 2 3 [to end of terml
Revenues
Operating Expenses
Programming
Technical&Plant
Marketing
Administration&General.
Other Operating Expenses
TOTAL OPERATING EXPENSES
Operating Income
Less
Depreciation
Amortization
Interest on Debt to Corporate Parent/related entities
Other Interest
Other Expenses/(Income)
Net Income before Income Taxes
Income Taxes
Income Tax Credit
After-Tax Net Income
Attach information explaining the assumptions upon which these projections are made.
67
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
3. BALANCE SHEET YEAR 1 2 3 [to end of terml
Current Assets
Cash
Cash Equivalents(specify)
Accounts Receivable
Inventory
Prepaid Expenses
Other(specify)
Sub-Total
Property, Plant&Equipment
Land
Buildings
Leasehold Improvements,
Furniture, Fixtures
Cable Plant
Equipment
Other(specify)
Less Accumulated.Depreciation
Sub-Total
Other Assets (specify)
TOTAL ASSETS
68
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Current Liabilities YEAR 1 2 3 (to end ofterml
Accounts Payable
Accrued Liabilities
Subscriber Prepayments,Deposits
Notes Payable—Corporate Parent
Notes Payable—Other
Other(specify)
Sub-Total
Long-term Debt—Corporate Parent
Long-term Debt—Other
Other Liabilities(specify)
Stockholders' Equity
TOTAL LIABILITY AND EQUITY
Attach information explaining the assumptions upon which these projections are made.
69
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
4. STATEMENT OF CASH FLOWS YEAR. 1 2 3 fto end of terml
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization
Changes in current assets and liabilities (non-cash)
Other(specify)
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures for property and equipment
Other(specify)
Net cash provided by investing activities
Cash flows from financing activities:
Proceeds from borrowings—corporate parent
Repayment of borrowings—corporate parent
Proceeds from borrowings—unrelated third parties
Repayment of borrowings—unrelated third parties
Proceeds from issuance of stock or other equity
Dividends
Other(specify)
Net cash provided by financing activities
Net change in cash
Beginning cash
Ending cash
Supplemental disclosures:
Cash paid for interest
Cash paid for income taxes
Attach information explaining the assumptions upon which these projections are made.
70
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
5. ANTICIPATED CAPITAL YEAR 1 2 3 lto end of terml
EXPENDITURES
Antennas, Towers, Microwave Facilities
Headend and Hubs/Nodes
Cable Plant-- Subscriber Network
Distribution Plant
Rebuild/Upgrade of Distribution Plant
Extensions
Replacement
Subscriber drops
Cable Plant-- Institutional Network
Distribution Plant
Rebuild/Upgrade of Distribution Plant
Extensions
Replacement
Drops
Interface Equipment
Converters
New
Replacements
Buildings and Land
Leasehold Improvements, Furniture & Fixtures
Program Origination
Local Origination
Access Facility
Other Access Equipment
Test Equipment, Spares, Tools
Vehicles
Data Processing Equipment
71
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Other(specify) YEAR 1 2 3 to
end of term]
Capitalized Overhead
TOTAL
Attach information explaining the assumptions upon which these projections are made.
72
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
6. DEPRECIATION SCHEDULE YEAR. 1 2 3 [to end of terml
Antennas, Towers and Microwave Facilities
Headend and Hubs/Nodes
Cable Plant-- Subscriber Network
Distribution Plant
Rebuild/Upgrade of Distribution Plant
Extensions
Replacement
Subscriber drops
Cable Plant--Institutional Network
Distribution Plant
Rebuild/Upgrade of Distribution Plant
Extensions
Replacement
Drops
Interfaces
Converters
New
Replacements
Buildings and Land
Leasehold Improvements, Furniture &Fixtures
Program Origination
Local Origination
Access Facility
Other Access Equipment
Test Equipment, Spares, Tools
Vehicles
Data Processing Equipment
73
.......................... .. ....................
.... .. .... .....
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Other(specify) YEAR 1 2 3 Lto end of
term
J
Capitalized Overhead
TOTAL
Attach information explaining the assumptions upon which these projections are made.
74
FORM III.C. PRC} FORMA FINANCIAL PROJECTIONS (continued)
7. PROGRAMMING EXPENSES YEAR I 2 3 jto end of terml
Salaries
Payroll Taxes
Overtime
Benefits
Buildings/Rent
Maintenance
Vehicle Expense
Premium Programming Expenses
Expanded Basic Programming Expenses
Basic Programming Expenses
Royalty Payments
Program Guides
Other Programming Expenses (specify)
TOTAL
Attach information explaining the assumptions upon which these projections are made.
75
__
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
8. TECHNICAL AND PLANT YEAR 1 2 3 [to end of terml
OPERATIONS
(Include data for the subscriber network
and the institutional network).
Salaries
Payroll Taxes
Overtime
Benefits
Contract Labor
Buildings/Rent
Maintenance
Vehicle Expense
Repairs& Maintenance
Pole Rentals
System Power
Small Tools& Test Equipment
Other Plant Expenses(specify)
TOTAL
Attach information explaining the assumptions upon which these projections are made.
76
FORINT IILC. PRO FORMA FINANCIAL PROJECTIONS (continued)
9. MARKETING YEAR 1 2 3 fto end of term]
Salaries
Payroll Taxes
Overtime
Commissions
Benefits
Outside Marketing
Buildings/Rent
Maintenance
Vehicle Expense
Advertising& Promotion
Other Marketing Expenses (specify)
TOTAL
Attach information explaining the assumptions upon which these projections are made.
77
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
10. ADMINISTRATIVE AND GENERAL YEAR 1 2 3 [to end of term]
Salaries
Overtime
Payroll Taxes
Benefits
Data Processing
Buildings/Rent
Maintenance
Vehicle Expense
Utilities
Phone
Light, Heat/AC
Power
State and Local Taxes
Franchise Fee
Postage
Stationery& Supplies
Training, Travel &Entertainment
Professional Services
Services Purchased
Insurance
Bad Debts
License & Permit Fees
78
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
Management Fee: YEAR 1 2 3 to
end of term]
By Recipient
By Parent
Corporate Allocation
Other(specify)
TOTAL
Attach information explaining the assumptions upon which the projections are made.
79
FORM III.C. PRO FORMA FINANCIAL PROJECTIONS (continued)
11. OTHER OPERATING EXPENSES (specify)
Attach information explaining the assumptions upon which these projections are made.
80
FORM III,C. PRO FORMA FINANCIAL PROJECTIONS (continued)
12. EMPLOYEE ESTIMATES
List by category, by title, and by year the total estimated number of employees that will be
employed to provide service in the Franchising Authority. If these employees will also provide
service to other franchise areas, identify these areas and the number of subscribers in each.
Identify any plans to increase the number of employees during any rebuild or upgrade of a
system serving any of these listed franchise areas.
For example:
EMPLOYEES, BY CATEGORY YEAR 1 2 3 [to end of term]
Technical and Plant
Operations
Plant Manager
Trunk.Technicians
Other(specify)
Administrative and General.
Customer Service Representatives
Other(specify)
Attach information explaining the assumptions upon which the projections are made.
81
FORM IIID. FINANCIAL GOALS
A. Attach a brief narrative describing the Applicant's financial goals for the
cable system in the Franchising Authority. If the system does not meet these
goals, describe how the Applicant will improve financial performance. Any
discussion should include, at a minimum, operating assumptions such as rate
increases, interest rates, sources of revenue,marketing, and operational changes.
Include in the narrative your historical rates of return on investment for the
system, your target rates of return on new cable system investments, and your
target rate of return for your investment in the system. Explain how these rates
were arrived at, and the methodology that you will use in comparing the actual
results to these targets. Attach separate pages as necessary.
B. Identify any plans that Applicant or its parent companies has to dispose of
the cable system directly(by sale of the system) or indirectly (by merger, spin-off,
or any other mechanism that results in a change in control of Applicant or its
parents).
82
FORM III.E. APPLICANT'S ACCOUNTANTS
Each Applicant shall provide the name, address, title and telephone number of an
appropriate contact person for Applicant's internal financial staff involved in preparing
the historical and projected financial statements, as well as any outside accounting firm
utilized by the Applicant in preparing the statements.
83
FORM IV. GENERAL QUESTIONS REGARDING TECHNICAL QUALIFICATIONS
The Applicant should submit information responsive to the questions below, and such
other information as may show that the Applicant is capable of constructing and
operating a system that, consistent with the requirements of this RFRP and the Cable Act,
meets the needs and interests of the community.
FORM IV.A. PREVIOUS EXPERIENCE
1. Has the Applicant ever operated a cable system of the type that it proposes to provide in
accordance with this RFRP? If the answer is "yes," please describe that previous
experience by identifying the location of the system and a person who can answer
additional questions regarding that system.
2. In light of the operational and construction problems identified in the Report prepared by
the Franchising Authority, please explain why Applicant believes it should be found to
have the requisite technical expertise to operate the system. After providing this
explanation, explain in detail:
(a) What steps Applicant has taken, if any, to inspect system drops on a
comprehensive basis to determine whether those drops need to be replaced.
(b) What procedures, rules, and customer service quality controls were in
place on January 1, 2004.
(c) Whether such procedures, rules and quality controls have changed.
(d) If there has been a change,when was the change and what was the change.
(e) What PEG management rules and procedures were in place on January 1,
2004.
(f) Whether such procedures, rules and quality controls have changed.
(g) If there has been a change, when was the change and what was the change.
(h) What work Applicant or any affiliate has performed within the public
right-of-way (including without limitation any excavation and any parking
of trucks other than in locations where parking is authorized for all
vehicles) within the Franchising Authority affiliate relating to the cable
system during the past two years, including date of the work, location and
general description.
3. Please provide copies of the last two FCC technical standards tests conducted, and if not
shown clearly on the report, state the date the tests were conducted; provide information
84
showing what steps the company had taken to ensure the testing equipment was accurate,
and the date these steps were taken; and provide information concerning the system
sufficient to support Applicant's claim that the system is a 750 MHz system (or other
applicable standard).
85
FORM W.B.1. MANAGEMENT OF ACCESS FACILITIES
Does the Applicant intend to directly manage the provision of access facilities, services
and equipment it proposes to provide in accordance with this RFRP? if the answer is
"no," and the entity that would provide access would be an other than an entity selected
by the Franchising Authority, please identify the entity or entities that would be
responsible for managing the provision of access services, facilities or equipment; state
how the Applicant will ensure that each such entity is qualified to manage the provision
of access services, facilities and equipment; and indicate Applicant's timetable for
reaching an agreement with each such entity on provision of access services,
86
FORM IV.B.2. MANAGEMENT OF ACCESS FACILITIES/
SUMMARY OF ACCESS OPERATIONS
If the Applicant proposes to manage the provision of access facilities, equipment and
services itself, or through a designee, please state why it believes it (or its designee) is
technically qualified to manage the access facilities, equipment or services proposed by
describing l) the skills it believes are required to successfully manage the access
resources; and 2) how it or its designee will supply those skills. In light of the Joint
Report, explain precisely how Applicant proposes to manage access, the number of
people who will work on PEG; other job responsibilities for those persons; hours,
facilities and equipment will be available, and total line item budget for PEG operation.
If the Applicant leaves it to the Franchising Authority to manage access facilities and
equipment directly,or through another designated entity to be selected by the Franchising
Authority, it need not complete these forms for the future, but it should provide the
information for the last two years, and it should specify the support, if any, that it
proposes to provide to the entity responsible for managing PEG access for each year of
the renewal term(not including amounts that would offset the cable franchise fee owed to
the Franchising Authority).
87
FORM W.B.3 SUMMARY OF ACCESS OPERATIONS 14
Please provide information
a. Overview of Funding Sources and Levels for the Operations for the last two years, and
projected for the next two }rears. (Please specify). If this information is for access
operations that jointly serve other franchise areas and the information cannot be
segregated by franchise area, please list all of the other relevant franchise areas served by
the operations. If this information is for access operations that are jointly operated with
other affiliates of the franchisee,please describe how revenues and expenses are allocated
among the affiliates for accounting purposes and please provide and/or describe any
agreements between the affiliates for joint operations. If this information is for access
operations that are jointly operated with local origination operations, please describe how
revenues and. expenses are allocated between these two types of operations and, to the
extent feasible, segregate the revenues and expenses between these two types of
operations.
Operating Budget
Cable Company
Government
Contributions
Grants
Other(Please List)
Total Operating Budget
Total Value of Production Equipment
b. Programming Statistics - Two Most Recent Years Each Channel Managed (Specify
years)
(1) Channel Type
(i.e., Public Access, L.O., etc.)
Channel No. on System
(a) Total number of hours (including replays, excluding character generation).
Local origination programming hours should be stated separately from
PEG access programming hours.
14 Please review the introduction to the RFRP for instructions for the submission of joint PEG
(and I-Net)proposals.
88
(b) Number of locally produced 1 st run hours (local origination programming
hours should be stated separately from PECK access programming hours).
(c) Number of imported program. 1 st run hours
89
FORM IV.B.3 SUMMARY OF ACCESS OPERATIONS (continued)
(d) Total number of hours(including replays, excluding character generation)
(e) Number of locally produced I st run hours
(f) Number of imported program I st run hours
C. Do you have information, which compares the number of hours of
available equipment time to the number of hours of use by category of
equipment?
—Yes —No
If yes, please provide information, as follows, for the two most recent years of operation
(Specify). Project the information requested below for the next two years. This
information should include only PEO access programming, not local origination
programming.
Studio(s)
Number of studio(s)
Hours available-per studio for access
Hours used-per studio for access
Comments:
Editing
Number of editing systems
Hours available -per system for access purposes
Hours used-per system for access
Comments:
Portable- Single Camera
Number of units
Hours available -per unit for access purposes
Hours used-per unit for access
Comments:
90
FORM IV.B.3 SUMMARY OF ACCESS OPERATIONS (continued)
Portable-Multiple Camera
Number of units
Hours available - per unit for access
Hours used-per unit for access
Comments:
d. Training Services Provided
(1) Do you provide training in video skills?
Yes i No
(2) If answered "yes," please provide the following information.
(a) List Training Classes offered in the two
most recent years of operation,the length of each class, the number
of sessions,the average number of enrollees per class, and the total
number of people trained in 2002 and 2003.
Average#
#of Classes Enrollees Per Total # of People
Class Hours Per Class Offered 2002 Class Trained 2002
a.
b.
c.
d.
e.
f
9.
91
Average ##
#of Classes Enrollees Per Total#of People
Class Hours Per Class Offered 2003 Class Trained 2003
a.
b.
C.
d.
e.
9.
e. Please provide a copy of your most recent operating policies and procedures.
92
FORM IV.B.3 SUMMARY OF ACCESS OPERATION'S (continued)
f. Access Users
Please estimate the number of organizations, schools, universities and divisions of local
government that have used the access programming resources and services in the
community reported upon in the two most recent years of operation. (Specify years)
2002 2003
g. tither Access Services
Please briefly describe other access services you provide, such as out-reach, newsletters,
program promotion, etc. and attach a copy of examples of such services (such as a
newsletter), as available and appropriate.
h. If Applicant contends that it has improved its access operations so that the
historical data is no longer representative, Applicant should identify in detail the
changes made and when they were made and additionally provide the usage
statistics requested above from the date the change occurred to the present.
93
FORM IV.C. DESCRIPTION OF MANAGEMENT AND ORGANIZATIONAL
STRUCTURE
I. Describe the proposed management structure, organizational structure and
operations for the Applicant(including an organizational chart). Emphasis should
be given to the proposed method for translating local needs into corporate
decisions throughout the term of the franchise. Include a description of the
proposed relationship between local management and the head office or parent
company, if applicable.
2. Identify the supervisory personnel who will be responsible for maintaining
the system and describe their technical qualifications. State whether the company
will maintain the system itself or through a subcontractor. If the company, in
whole or in part, will maintain the system, describe the minimum qualifications
for each position involved in the maintenance of the system. If a subcontractor
will maintain the system, in whole or in part, name the subcontractor, and
describe its role and its qualifications.
3. a. Describe how day-to-day customer service will be provided; by
whom; and where the entity responsible for providing the service will be
located for each of the following activities:
(i) answering phones;
(ii) service installer;
(iii) repairs of plant;
(iv) repair on customer premises
(v) disconnects
b. Will the company have a customer service office or
offices? If so, where will the office or offices be located, how will the
office or offices be staffed, what will be the hours of operations and what
business can customers transact there?
4. Describe the training for all categories of employees, contractors and
subcontractors associated with the construction, operation or maintenance of the
cable system. The answer should describe (a) what training is given, and what
materials are used for the training; (b) whether the training is certified by an
independent body, and if so, by whom; and (c) how the Applicant assures its
contractors and subcontractors are well trained. An Applicant should also provide
a description of the job contractors and subcontractors are hired to perform, or are
expected to perform during or as part of any construction/rebuild of the system.
94
5. Please provide a copy of the Applicant's:
a. EEC}policy;
b. Policy with respect to hiring minority consultants and contractors;
C. Policy with respect to persons with disabilities;
d. Privacy policies.
6. List all affiliates that are involved in any of the following aspects of operating
the cable system and a description of the involvement. if any of the following
services are provided by non-affiliates, list each of these entities and the affiliate
that the entity contracts with (if other than Applicant) and describe the services
provided.
a. Ownership of cable system facilities.
b. Local and/or regional advertising sales of "ad inserts" or other
advertising placed on the cable system by the Applicant or its
affiliates. Please describe the basis on which the revenues are returned
or allocated to the Applicant.
c. National advertising sales of "ad inserts" or other advertising placed
on the cable system by the Applicant or its affiliates. Please describe
the basis on which the revenues are returned or allocated to the
Applicant.
d. Home shopping network revenue collection. Please describe the basis
on which the revenues are returned or allocated to the Applicant.
e. Contracting with programmers. Please describe the basis on which
payments for carriage of programmers channels on the cable system
("launch fees" and similar payments) are returned or allocated to the
Applicant.
£ Customer service
g. Accounting
h. Billing
i. Construction
j. Financing
k. Any other services
L The collection of any other payments to affiliates of Applicant relating
to the operation of the local cable system. Please describe the basis on
which the revenues are returned or allocated to the Applicant.
95
FORM V. PROPOSAL FOR SYSTEM DESIGN AND CONSTRUCTION
FORM V.A. FRANCHISE TERRITORY/SERVICE OBLIGATION
Where necessary,please attach sheets and respond to the following questions or requests.
I. Identify the franchise area for which a franchise is being sought.
2. If the franchise area is less than the entire Franchising Authority, please provide a
map showing the precise franchise boundaries.
3. Describe the schedule for any construction in the Franchising Authority. Attach
as an appendix to this application a map indicating the areas of the Franchising
Authority to be constructed or built in each three-month period from the
beginning of construction to completion of construction. Such map shall be
provided both in hardcopy (at a scale so that the map representation is no smaller
than 500 feet per inch) and in a CAD or other electronic format approved by the
Franchising Authority.
4. Describe in detail the line extension policy proposed for access to the system
within the Franchising Authority, and in any areas added to the Franchising
Authority's jurisdiction in the future.
5. Attach a timetable showing the percentage of occupied dwelling units within the
Franchising Authority that will be capable of receiving cable service at the end of
each year following the beginning of any construction.
6. Please state whether any old cable plant to be replaced under Applicant's plans,
both underground and aerial, would be removed or abandoned in place, and
explain in detail the potential cost of such removal.
7. Does the company propose to provide service to any entity that requests service?
a. If not, describe precisely who the company will serve on request, and
identify categories of users it will not serve on request.
b. If the company will serve any entity on request, but will charge to extend
its plant to serve that entity, identify when the line extension charge would
apply and how it would be calculated.
4. Describe the company's policies with respect to charging for drops.
9. Identify any location to which the company proposes to provide free drops and
outlets.
96
FORM V.B. CONSTRUCTION OR REBUILD SCHEDULE BY AREA
Referencing census tract data, show the proposed schedule of any system construction by census
tracts.
Month Census Tract Numbers
3
6
9
12
NOTE: Month 1 begins on the date the franchise is awarded.
97
FORM V.C. NEW CONSTRUCTION OR REBUILD SCHEDULE BY MILEAGE
Category Month 3 Month 6 Month 9 Month 12 Month 15
a. Aerial plant miles
b. Under ground plant
miles wl conduit
c. Underground plant
miles w/o conduit
d. Total plant miles
(for month
specified)
e. Cumulative plant
miles completed
(inception to date)
f. Cumulative
percentage
completed
(inception to date)
NOTE: Month 1 begins on the date the franchise is awarded. Applicant should provide the
information requested for every three months to the scheduled date for system completion.
Total Construction Period: _months from date the franchise is granted, but no later than
The Applicant shall submit a large-scale map for the subscriber network and the institutional
network which identifies the locations of proposed (or current) headend facilities, hubs or nodes,
antennas, and microwave facilities. This map shall be provided both in hardcopy (at a scale so
that the map representation is no smaller than 500 feet per inch)and in a CAD or other electronic
format approved by each city. In addition, Applicant shall submit a list of these locations in an
electronic database form approved by the Franchising Authority.
98
FORTH V.D. CONSTRUCTION PRACTICES
1. Construction flan; Timetable
a. Does Applicant intend to submit a construction plan that complies with the
requirements set forth in the Model. Construction Standards section of the RFRP
at points 1-3? If not,please describe precisely the steps that Applicant will tape to
ensure construction of the rebuild proceeds in an orderly way.
b. Will construction of any rebuild be completed within two years of the grant of a
renewal franchise? Will construction phases be completed by the time required
under the RFRP?
C. Please describe any plan or procedures Applicant has in place or will put into
place to ensure that Applicant's employees, contractors and subcontractors are
competent and well trained and will abide by the franchise and applicable law, as
if the work were being directly performed by the Applicant.
2. System Construction
a. Will construction be undertaken by contractors?
[ ] Yes [ ]No
b. If"yes:"
(1) Have the contractors been selected?
[ ] Yes [ ] No
(2) Who are the contractors`?
(3) Have subcontractors been selected?
[ ] Yes [ ]No
(4) Who are the subcontractors that have been selected?
**Applicant must submit a copy of the draft contract to the Franchising Authority prior to execution.
99
3. Discuss the availability of work crews and equipment to ensure compliance with the
construction schedule. Detail outstanding agreements with construction companies or
equipment suppliers. Supply copies of any commitments regarding this particular
project. Please also explain how construction will be completed with minimum
disruption to the rights-of-way or service.
4. List construction codes which will be followed, and the steps you will take to comply
with them.
5. Please describe any plan in place to ensure compliance with the Franchising Authority's
joint trenching requirements.
(a) Has Applicant contacted any utilities or other entities about their plans to trench
in the rights-of-way?
(b) If yes, which utilities or other entities have been contacted?
6. Describe the Company's plans for ensuring proper grounding of all subscriber drops,
including existing drops.
too
FORM V.D. CONSTRUCTION PRACTICES (continued)
7. List or describe the standards to be followed regarding tower construction, marking and
lighting.
8. Do you have a manual of construction practices to be followed by construction crews?
[ ] Yes [ ]No
If"yes," attach a copy of the manual as an appendix to this application.
9. If the answer to question 7 was "yes," when was your manual of construction practices
last updated?
10. Please describe Applicant's plan for testing of the system to determine whether any
rebuild has been successfully completed and to identify problems and resource
performance on an ongoing basis.
101
FORM V.E. SYSTEM DESIGN AND CHANNEL CAPACITY
1. The Applicant shall describe the design of any system it proposes to build or
operate (including but not limited to the subscriber network and institutional
network) and include, at minimum, the following information:
a. Channel capacity on the subscriber network
(1) Downstream:
Frequency Spectrum
Channel Capacity
Channel Capacity initially activated
Type of transmission(digital, analog)
(2) Upstream:
Frequency Spectrum
Channel Capacity
Channel Capacity initially activated
Type of transmission(digital, analog)
b. Channel Capacity on the institutional network
(1) Number of single-mode fibers to each site (attach list)
(2) Backbone fiber count
(3) Subscriber network capacity allocated to the I.-Net
Attach (i) maps showing the distribution of fiber counts in the backbone and hubs, and (ii) maps
showing the fiber routing from hub sites to all user sites. Maps shall be provided both in
hardcopy (at a scale so that the map representation is no smaller than 500 feet per inch) and in a
CAD or other electronic format approved by each city.
C. Proposed timetable for making additional downstream and upstream
capacity available on both the subscriber network and the institutional
network.
d. Proposed method, channel capacity, equipment, and timetable to be used
to link access facilities and the headend and to permit routing of signals to
the subscriber network.
C. Proposed method, channel capacity, equipment and timetable to be used to
link public facilities to the institutional network..
102
FORM V.E. SYSTEM DESIGN AND CHANNEL CAPACITY(continued)
f. Describe any additional upstrearn system capability from public facilities
to access facilities and/or the headend.
g. Subscriber Network and I-Net Design Type
Fiber backbone and coaxial distribution design
Number and location of hubs or fiber optic transition nodes
Number of fibers (from hubs to each node; from headend to hubs)
Type of fiber optic interface equipment(e.g., manufacturer, model,
characteristics)
Maximum number of subscribers that would be served through the
coaxial distribution segment of a fiber optic node service area
Average number of subscribers that would be served from each
node on the subscriber network
Upstream and downstream transmission capacity
Reserved dark fiber to be installed at time of upgrade
Number of fibers from each hub to each 1-':Tet location
Network technology and physical interfaces for each type of I-Net
site
Capacity to be provided to serve each type of I-Net site
h. Distribution system, including coaxial cable, fiber, and equipment to be
used. (Provide manufacturer, type of equipment and model number, and
physical and technical specifications, and include cable, fiber, active
electronics, and passive electronics).
i. Use (if any) and capabilities of converters proposed, and conditions under
which converters will be made available. The Applicant should
specifically indicate whether any converters used are capable of allowing
subscribers to simultaneously receive one video signal, and record
another. Include input capabilities, (RS-22, R3-11, F-Connector, etc.),
technical specifications including noise figures, and throughput (lines of
resolution).
j. Plans to operate or contract for transmission services using the following
services. common carrier; Cable Television Relay Service (CARS);
Multipoint Distribution Service (MDS); other(please specify).
k. Plans to operate or contract for satellite earth stations, including
appropriate technical specifications (e.g., size of antenna; manufacturer of
antenna; low-noise amplifier make, model number and noise figures;
receiver make, and model number; standby power; etc.)
103
1. Service level separation--tier isolation and pay isolation. Describe design
specifications for delivery of any pay cable services, including methods of
security. If more than one service tier is to be provided, describe how
lower tier subscribers will be isolated from receiving upper tiers of
programming. Additionally, please explain whether converters or other
terminal equipment will be necessary to receive (i) the basic service tier;
or(ii)the next highest tier of service.
in. Headend design and reception facilities, including make and model
number of antennas, signal processors, modulators, demodulators, etc.,
and any plans to bring traditional analog and digital broadcast channels in
over fiber or coaxial cable rather than over the air, availability of space at
the headend for PEG use.
n. Plans for standby power at the headend, hubs nodes, and satellite
terminals. Provide the make and model number of equipment, as well as
reserve capacity.
o. The type of system status monitoring system to be used and extent to
which it will be used to monitor critical systems operating parameters.
P. The Emergency Alert System proposed, including: make and model
numbers of equipment; whether the system will override all audio and
video channels or only audio channels; how the system will be activated
and from where; and how the system will be configured so that the
Franchising Authority can transmit a message solely within its borders;
and whether and to what extent the system will be configured so that
emergency messages can be transmitted to other adjacent communities.
q. The type of audio leveling equipment to be used, including make, model
number, and technical specifications.
r. The type(s) of channel blocking and security technologies that will be
employed (e.g., interdiction, traps, scrambling).
S. Expected performance characteristics of the subscriber network and the
institutional network, including,but not limited to:
i. the specification of minimum performance standards of voice,
video and data (including maximum bit error rate, carrier-to-noise,
carrier to composite disturbances, hum modulation) upstream and
downstream from origination points (regardless of whether the
point of origin is the headend or some other location); and
ii. temperature ranges under which the subscriber network and
institutional network will be designed to operate without
104
substantial signal degradation; catastrophic failure; or irreversible
performance changes; and
t. Longest amplifier cascade in the system (number of amplifiers, number of
miles,type of cable/fiber).
U. Provide design maps for the system. The system design shall be shown on
maps using standard symbology in the format of each city's tax maps, and
shall depict all electronic and physical features of cable plant. Such maps
shall be provided both in hardcopy (at a scale so that the map
representation is no smaller than 500 feet per inch) and in a CAD or other
electronic format approved by each city.
V. Provide a cut-over plan which shows how the Applicant will minimize
disruption to subscribers during any construction.
W. To the extent not already explained, plans for interconnecting the cable
system with other broadband communications networks in the Franchising
Authority, and in adjacent jurisdictions. The plan should show: (1) the
proposed manner in which interconnection would be accomplished; (2) to
what extent and how the interconnect would permit transmission of
information to and from the institutional network proposed by the
Applicant and any other institutional network in the Franchising Authority
or adjacent jurisdictions; and (3) to what extent and how the interconnect
will permit transmission of information to and from channels designated
for PLG use to and from other cable systems in the Franchising Authority
or adjacent jurisdictions
X. If Applicant proposes to provide a fund for construction of the I-Net
please identify the funds that will be provided; what the funds may be
used for; and what other charges educational and government I-Net users
would be required to pay. If the I-Net is also to be used for public access
purposes, charges applicable to those uses should also be identified.
Y. Quality of service parameters to be met by connections serving each class
of I-Net site.
105
FORM V.F. PERFORMANCE STANDARDS AND TESTING
1. Please describe the Applicant's testing program for the institutional network and
the subscriber network, including a summary of procedures for initial proof of
performance tests, acceptance tests, continuing tests, tests in response to
subscriber complaints, and other tests planned. Test procedures should be
submitted for all parameters to be tested.
2. Please list the key technical performance standards that will be met by the
institutional network and the subscriber network. Include for bath the forward
and reverse system any parameters for:
Bandwidth
Carrier-to-Noise Ratio
Carrier-to-Cross Modulation
Carrier-to-Composite Triple Beat
Hum
In-Channel Frequency Response
System Frequency Response
Signal Leakage
Signal Levels(peak-to-valley,variation over time)
Color Tests (chrominance-luminance delay inequality)
Digital video specifications(as adopted in industry practice)
106
FORM V.G. SYSTEM MAINTENANCE PROCEDURES
1. Describe the practices and procedures proposed for routine preventive
maintenance, including the type and frequency of system inspection and testing,
and the number and qualifications of technical staff by category (headend, system,
line,universal rep.)and service facilities.
2. Attach any corporate maintenance procedures that the Applicant proposes to
follow during the term of the franchise.
107
FORM VI. PUBLIC,EDUCATIONAL ANIS GOVERNMENT USE
FORM VI.A. PEG USE CHANNEL CAPACITY
Please describe:
1. The number of forward/downstream channels to be provided, channel number and
tier assigned, and date of availability for each PEG channel proposed or, in the
alternative, the percentage of the cable system's maximum channel capacity to be
provided for PEG use (including storage capacity on video and computer servers).
2. The spectrum space to be provided for reverse/upstream access uses, and the
manner in which the Applicant proposes to provide reverse/upstream capability
from locations specified by the Franchising Authority. This description should
also delineate the specific equipment to be provided which is associated with
signal transmission(Le., modulators and demodulators).
3. The method (e.g., fiber or coaxial cable) by which the access facilities and the
headend will be linked. The description should include the channel capacity in
both forward and reverse directions to be provided between the locations; and the
equipment that will be provided to activate the links and to route or switch
signals.
4. The conditions, if any, under which channel location will be changed.
5. The conditions under which additional capacity will be provided.
6. Whether the links and equipment provided will permit the entity responsible for
managing a channel to:
a. view the signal before it is transmitted to subscribers;
b. receive signals originated from distant locations and place these
signals on the proper channel;
C. receive feeds from other locations and select between feeds to
program a channel.
d. send feeds to other entities responsible for programming channels.
7. In detail whether and how Applicant proposes to provide programming feeds to
and from Contra Costa College, Diablo Valley College, Mt. Diablo Adult
Education, Acalanes Adult Education and California State University, Hayward,
Contra Costa Campus.
108
FORM VI.B. ACCESS MANAGEMENT
L Describe the manner in which the Applicant proposes to cooperate and coordinate
with any access management entity or entities designated by the Franchising
Authority(including the Franchising Authority).
2. Please identify any restrictions on PEG or I-Net use demanded by the Applicant
as a condition of providing PEG or l-Net channel capacity, facilities or
equipment.
109
FORM VI.C. ACCESS FACILITY AND EQUIPMENT
1. How much does the Applicant plan to contribute for and in support of facilities or
equipment for access(1) above and beyond any costs associated with constructing
the cable system (including the institutional network and the links between and
among access centers and the headend); and (2) above and beyond the franchise
fee?
2. If the Applicant does not propose a capital contribution above and beyond the
franchise fee:
a. Describe any access facility or facilities proposed by the applicant
including: location; size (square footage); proposed layout of and type of
work areas within a. facility (i.e., studio, control room, editing suites,
office space, etc.); availability of parking; handicapped accessibility;
ability to expand in the future, if needed; and any other information which
will clearly and concisely describe the facility or facilities proposed for
any PEG use by the Applicant.
b. Describe any equipment packages that the Applicant proposes to provide
for PEG purposes. The Applicant must set forth the proposed capital
equipment budget for the initial equipment package and a budget outlining
the replacement schedule for equipment during the terram of the franchise.
The Applicant should provide detailed equipment lists, and indicate
whether the equipment is new or used. If used equipment is proposed,
provide the age of the equipment, and a certification from an independent
engineer as to the condition of the equipment.
3. When would the support identified above be provided?
4. Describe the conditions under which the Applicant would agree to be bound to
provide additional channels, facilities or equipment for PEG use.
110
FORM Vi.D. ACCESS SERVICES
1. This RFRP does not require the Applicant to provide access services, but the
Applicant may wish to do so. Please describe the access services the Applicant
proposes to provide, if any, or any contribution that Applicant proposes to make
to support PECK operations. The Applicant should separately identify each access
service it proposes to provide (e.g., training, facilitation, outreach, etc.); who will
provide the service; the staff devoted to the service; and the times the service
would be available. The description should include any annual budget for the
delivery of any access services. The Applicant should assume any such services
will be provided in addition to, and not as a part of, the franchise fee paid to the
Franchising Authority. If the Applicant proposes to provide funding in lieu of
these services, the Applicant should also assume that such payments will not be
subject to offset against franchise fees.
111
FORM VII. LEASED ACCESS
1. Please describe how the Applicant intends to comply with the leased access
requirements of the Cable Act (including pricing policies to be followed by the
Applicant and the records it will keep so that compliance can be confirmed).
2. Does the Applicant desire to propose to lease channels for other than commercial
use, as that term is used in the Cable Act: If the answer is yes, the Applicant
should describe the proposal.
112
FORM VIII. VIDEO AND INFORMATION SERVICES
If the Applicant desires to promise to provide certain broad categories of video and other
information services to subscribers as part of its proposal, or demonstrate the manner in
which it proposes to deliver a greater variety of programming, it should describe those
categories here.
113
FORM IX. INTERACTIVE SERVICES
If the Applicant desires to promise to provide certain broad categories of interactive cable
services to residential and business subscribers, it should describe them here.
114
FORM X. NARRATIVE SUMMARY OF RESPONSIVENESS TO LOCAL NEEDS AND
INTERESTS
I. Describe in narrative form your concept of the cable system (subscriber network
and institutional network) proposed for the Franchising Authority, including
anticipated system development over the life of the franchise or franchises.
Describe and emphasize particularly those features which are not included in any
other section of the Request for Renewal Proposal which the Applicant desires the
Franchising Authority to consider in evaluating the proposal.
2. If the Applicant proposes to provide any other service, facility or equipment
which the Applicant may wish to contend is relevant in determining whether the
Applicant's proposal meets the cable-related needs and interests of the
community„ it should describe the service, facility or equipment in complete
detail; describe how it will be provided, under what circumstances and for what
charge.
3. Emphasis should be given to explaining why the Applicant believes its proposal is
reasonable to meet the cable-related needs and interests of the community, taking
into account the cost of meeting such needs and Interests.
4. Is the Applicant proposing to provide a system that conforms to the model in this
RFRP? If not, identify each and every deviation from the model and the specific
reasons for each deviation.
5. Please identify any need and interest identified in the Report or RFRP which
Applicant was required to satisfy which Applicant has not satisfied, or explain
why Applicant believes that need and interest does not need to be satisfied. If
Applicant bases its decision in whole or in part on the cost of meeting the need
and interest, it should start the cost of satisfying the need and interest; explain
why the cost is too high; and provide supporting documentation.
115
FORM XI, FRANCHISE TERM
In the space below, the Applicant should: (1) state the franchise term it seeks; and (2)
describe why it believes the proposed franchise term is appropriate, considering expected
changes in cable technology. If the Applicant claims that the franchise term it proposes is
required for financial reasons, it should describe in detail those financial reasons, and
provide any documentation required (including, for example, financial projections and
depreciation schedules) to substantiate that claim. If the Applicant has already provided
the documentation in Form III, it may reference that information.
116
FORM XII. MISCELLANEOUS INFORMATION
FORM XII.A. CAPACITY USED FOR NON-CABLE SERVICES
The Applicant should state whether any infrastructure or capacity will be constructed for
use in providing telecommunications or information services in conjunction with the
rebuild of the cable system.. Note that Contra Costa County will neither require nor
prohibit the provision of telecommunications or information services as part of the
franchise agreement or the regulation of the cable system. This information is solely for
the purpose of determining outside the context of cable television whether non-cable
related permits may be required.
117
FORM XILB. ANALYSIS AND STUDIES OF DEMAND FOR CABLE SERVICES
The Applicant should attach copies of any analysis, evaluation or study of demand for
cable service in the Franchising Authority, and any analysis, evaluation or study of
demand for cable services elsewhere which the Applicant believes is relevant to
evaluating whether its proposal is reasonable to meet the future cable-related needs and
interests of the community, taking into account the cost of meeting those needs and
interests.
118
FORM XII.C. SURVEYS
The Applicant should attach a copy of any survey of Franchising Authority
residents, businesses or subscribers conducted within the last three years
regarding cable services, facilities or equipment; or regarding subscriber
willingness to pay for any cable service, facility or equipment (including access
services, facilities or equipment). The Applicant should also attach any reports,
analyses, studies or other documents regarding such a survey.
119
FORM XILD. COMPLIANCE
Inas the Applicant been informed that it is out of compliance with any provision of an
existing franchise with the Franchising Authority?
_Yes _No
If the answer is "yes," will the Applicant take steps to bring itself into compliance?
_Yes s No
If the answer is "yes," describe those steps.
If the answer is "no," please explain in detail why Applicant believes its request for
renewal should not be denied, based upon past performance, and provide supporting
documentation.
120
FORM XILD►. RENEWAL PROCEDURES AND ADDITIONAL INFORMATION
Please answer the following questions.
1. Is the Applicant seeking franchise renewal pursuant to the provisions of 47 U.S.C. §
546(a)?
Yes No
2. If the answer to the foregoing is "yes" and the Franchising Authority should decide
preliminarily to deny renewal, does the Applicant desire the Franchising Authority to
commence administrative proceedings under 47 U.S.C. § 546(c)(1)?
Yes No Undecided
3. If the Applicant answered "yes" to question #1, please provide a copy of the notice that
the Applicant filed with the Franchising Authority for the purpose of activating the
formal procedures of 47 U.S.C. § 546(a) - (g). If this notice was not given during the
period that began thirty-six months prior and ended thirty months prior to the then-
scheduled expiration of the franchise, the Applicant should explain why it believes it has
properly activated the formal renewal procedures.
Please attach any additional information necessary to respond to the RFRP.
END OF APPLICATION FORMS
121
RESOLUTION NO.
A RESOLUTION OF THE [COUNCIL/BOARD] OF THE
[NAME OF AGENCY] ADOPTING CERTAIN CABLE-
RELATED NEEDS AND INTERESTS OF THE COMMUNITY
AS IDENTIFIED IN THAT CERTAIN STAFF REPORT DATED
[ , 20041 AND RELATED REQUIREMENTS SET FORTH
THEREIN; AUTHORIZING THE ISSUANCE OF A REQUEST
FOR A RENEWAL PROPOSAL FOR CABLE FRANCHISE,
AND CLOSING THE INITIAL STAGE OF FORMAL
FRANCHISE RENEWAL PROCEEDINGS
WHEREAS, [Name of franchisee], currently operates a cable system for the provision of cable
service in the [Name of Agency] (the company and predecessor companies providing
cable service are referred to collectively as "Comcast"); and
WHEREAS, the Franchising Authority commenced a proceeding to review the past performance
of the cable operator, and to ascertain the future, cable-related needs and interests of the
community; and
WHEREAS,the Franchising Authority Administration has prepared and the Franchising
Authority [Council/Board] has received a"Joint Report on Cable-Related Needs and
Interests and Operator Past Performance," dated [ , 2004], ("Joint Report")
identifying the cable-related needs and interests of the community, and recommending
requirements to be included in a request for renewal proposals for a cable franchise,
consistent with federal law; and
WHEREAS, on [ ], the [Council/Board] held a public hearing on the Joint Report in
order to consider the Joint Report and obtain public comments related thereto; and
WHEREAS, the Joint Report describes the past performance of Comcast, and finds several
instances where there has been a failure to comply with the terms of the cable franchise
and/or local laws; and
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE Franchising Authority
AS FOLLOWS:
1. The Franchising Authority [Council/Board] concludes that the cable related needs and
interests of the Franchising Authority are accurately identified by the Joint Report.
2. The Joint Report is hereby adopted by the Franchising Authority [Council/Board] as its
ascertainment of the cable-related needs and interests of the community. The City
Council/Board further adopts the requirements as set forth in the Joint Report.
122
3. The Franchising Authority [Council/Board] concludes that the cable operator's
omissions to perform identified in the Joint Report are omissions under the franchise.
4. The assessment of the past performance of Comcast contained in the Joint Report is also
accepted by the Franchising Authority [Council/Board]. The Manager/Administrator is
authorized to issue such notices as may be required to comply with federal law and the
franchise.
3. The Franchising Authority [Council/Board] hereby closes the ascertainment of cable-
related needs and interests and the review of the past performance of the operator
contemplated by 47 U.S.C. §546(a).
5. The Franchising Authority [Council/Board] hereby establishes that the deadline for
submission of responses to the Request For Renewal Proposal for cable franchise shall be
I b
ADOPTED this day of , 2004, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
[NAME,TITLE]
ATTEST:
[NAME, TITLE]
93'4 8\o2\WAH02215.D0C
123
JOINT REPORT O►N CABLE-RELATED
NEEDS ANIS► INTERESTS
ANIS► OPERATOR. PAST PERFORMANCE
June 17, 2004
Contra Costa County
City of Clayton
City of Concord
City of Martinez
City of Pleasant Hill
City of Walnut Creek
Town of Danville
Town of Moraga
TABLE OF CONTENTS
LEXECUTIVE SUMMARY................................................................................................ I
A. Overview. .............................................................................................................. I
I3.
Key Community Cable-Related Needs And Interests. ...........................................2
1. State of the Art System. .............................................................................2
2. Public Educational and Government Access.............................................3
3. Institutional Network..................................................................................4
4. Customer Service........................................................................................4
5. Mitigation of Construction Impacts............................................................5
6. Correction.of Safety V,iolations. ................................................................. 5
C. Purpose of Report and Action Requested...............................................................5
II. BACKGROUND AND PURPOSES OF THIS REPORT..................................................7
A. The Contra Costa Cable Consortium. .................................................................... 7
E. The Cable Ot)erator. .............................................................................................. 8
1. Background................................................................................................. 8
2. The Cable System Rebuild..........................................................................9
3. The AT&T-Comcast Merger ................................................................... 10
4. Comcast Today One Year After the Merger........................................... 11
5. Status of the Franchises. ........................................................................... 12
6. Competitive Situation in the County...............................................I......... 13
C. Purpose and Scope of Joint Staff Report.............................................................. 13
D. Why Renewal Is Important,And Why This Report Is Being Submitted.............. 14
1. Backpround............................................................................................... 14
2. The Formal Renewal Process. .................................................................. 16
E. Structure of the Report. ....................................................................................... 19
III. IDENTIFICATION OF FUTURE CABLE-RELATED NEEDS AND
INTERESTS ....................................................................................................................20
A. How the Ascertainment Was Conducted, and How We Arrived
At Our Conclusions on Cable-Related Needs and Interests. ................................20
B. General System Design. ......................................................................................24
1. Developments in the industry. ..................................................................24
2. The Consortium's Ascertainment. ...........................................................29
C. Su port for Public Educational and Government Access Use............................. 35
1. General trends in other communities........................................................ 36
2. The results of the ascertainment regardin&PEG access
channels..................................................................................................... 38
—i—
D. Support for Institutional Networks. ...................................................................... 50
1. General trends in other communities........................................................ 50
2. The results of the ascertainment regarding I Nets.................................... 52
E. System Construction and Extension Issues........................................................... 56
1. Time for completion. ................................................................................ 56
2. System extension. ..................................................................................... 56
3. Supervision of construction. ..................................................................... 57
4. Coordination of construction. ................................................................... 58
F. Other Issues........................................................................................................... 59
IV. FRANCHISE CONDITIONS AND OTHER REGULATORY ISSUES ........................ 60
1. Term.......................................................................................................... 61
2. Franchise Fees........................................................................................... 61
3. Scope of Grant.......................................................................................... 62
4. Transfers ...................................................................................................62
5. Local Exercise of Police Powers and Modification of
Applicable Rules and Ordinances............................................................. 63
6. Compliance with Am)licable Laws...........................................................64
7. Severability............................................................................................... 64
8. Insurance Re uirements• Indemnification,• Bonds,• Letters
of Credit: No Recourse ............................................................................. 64
9. Liquidated Damages ................................................................................. 65
10. Termination............................................................................................... 65
11. Relationship of Remedies......................................................................... 65
12. Abandonment............................................................................................ 65
13. Conditions on Use of Public Rights-of-Way............................................ 66
14. Customer Service Provisions.................................................................... 66
15. Rate Re ulation......................................................................................... 66
16. Reports and Records................................................................................. 67
17. Non-Discrimination.................................................................................. 67
18. Siynatories................................................................................................. 67
V. PAST PERFORMANCE.................................................................................................. 67
1. Comcast has violated applicable safely codes .........................................68
2. Comcast has violated various franchise requirements ............................. 68
3. Comcast has not provided reasonable customer service .......................... 71
LISTOF EXHIBITS..................................................................................................................... 72
—ii—
JOINT REPORT ON CABLE-RELATED NEEDS
AND INTERESTS AND
OPERATOR PAST PERFORMANCE
I. EXECUTIVE SUMMARY
A. Overview.
Cable systems have evolved from simply being a way to get better broadcast television
reception into perhaps the most important communications media in our community. Our
citizens use cable systems not only for entertainment,but also to take classes, shop,participate in
the democratic process, learn about government and the community, communicate with each
other and forge a community identity.
Cities and counties have the responsibility to ensure that cable systems meet the needs
and interest of their citizens. Federal law requires cable operators to obtain franchises from local
agencies. Federal law also establishes a process for local agencies to ascertain the community's
cable-related needs and interests and to incorporate into franchise agreements provisions
designed to meet those needs and interests. Key franchise issues include assuring that the cable
system is state-of-the-art,customer service standards, requirements for public, educational and/or
government access channels and making communications capacity available to local agencies for
use as an institutional network.
Comcast currently operates almost all of the cable systems in the Bay Area, including
systems throughout Central Costa County. Most of Comcast's franchises in Central County
expired at about the same time. Comcast requested that Contra Costa County, Clayton, Concord,
Danville, Martinez, Moraga, Pleasant Hill and Walnut Creek(the "Agencies") all renew their
franchises with Comcast. Staff for these Agencies realized that it would make sense to work
together on the franchise renewals because all were served by Comcast, all share similar cable-
related needs and interests, and it would be more efficient to work together. As a result, staff for
these Agencies formed an ad hoc group,the Contra Costa Cable Consortium,to work together in
negotiating new franchise agreements. The Consortium retained a team of consultants that
includes Miller&Van Eaton to provide legal advice, The Buske Group to help ascertain
community needs and interests, and Columbia Telecommunications Corporation to provide a
technical assessment of the cable system. The Consortium and its consultants used a wide range
of techniques to gather information, including workshops, focus groups,telephone surveys, and
public hearings, among others.
The purpose of this report is to summarize and supplement the reports issued by the
consultants relating to cable-related needs and interests. By adopting this report,the Board of
Supervisors will be making findings that the report and the documents it references reflect the
community's cable-related needs and interests. Each of the Agencies is considering the adoption
of this report. The report forms the basis for a Joint Request for Renewal Proposals (the"Joint
RFRP")to be issued to Comcast. Staff anticipates that each Agency that adopts this report will
adopt the Joint RFRP, and participate in joint proceedings to review the Joint RFRP. In any
event,the Board of Supervisors will subsequently have the opportunity to approve or disapprove
the proposal submitted by Comcast in response to the Joint RFRP. The Board of Supervisors can
deny Comeast's request for renewal if it finds, among other things, that the proposal is not
reasonable to meet the community's needs and interests (taking into account the cost), or that the
operator has failed to comply with the franchise in the past.
Concord and Walnut Creek have granted cable franchises to an additional operator, Seren
Innovations,which is operating under the brand name of Astound. The County has also granted
Seren a limited franchise allowing Seren to serve residents of unincorporated areas near Concord
and Walnut Creek. State law requires that these agencies impose the same public, educational
and governmental ("PFG") access requirements on Comcast in the relevant areas in order to
create a level playing field.' As a matter of fairness, staff believes that it is appropriate to apply
other similar requirements contained in the Seren franchises to Comcast in order to create a level
playing field. In addition, because the Seren franchises address many issues in a manner
consistent with the needs and interests of the County, Walnut Creek and Concord, staff believes
that they also provide guidance for addressing the community needs and interests not only of
those communities, but of the other Consortium.Agencies as well.
B. Key Community Cable-Related Needs And Interests.
A more complete description of the community's cable-related needs and interests is
discussed below. The following are some of the highlights of what Comcast should do in order
to meet the community's needs and interests.
1. State of the Art System..
Cable systems vary widely in their technological capabilities to provide services. The
capacity of a cable system is comparable to the diameter of a water pipe;the fatter the cable
system's"pipe",the more channels and other services that can be delivered to residents. Most
state of the art cable systems deliver services over optical fibers that run from the"headend"of
the system to neighborhood node boxes and over coaxial cables that run from the nodes to homes
and businesses. The optical fibers generally have much greater capacity than coaxial cables. As
a result,the overall capacity of the system can be more easily upgraded by having nodes that
serve a smaller number of subscribers because there is in essence greater existing capacity deeper
into the system. The overall capacity of the system is expressed in megahertz(MHz). State of
the art cable systems are at least 750 MHz systems,with better systems reaching 860 MHz or
more. The Seren systems in Central County are all 860 MHz systems, each node serving 500
homes or less. Comcast has recently rebuilt most of its systems in Central County to reach a
capacity of 750 MHz or 860 MHz,using nodes serving an average of 700 to 750 subscribers. In
view of this, staff is not recommending that Comcast be required to further upgrade all of its
systems to 860 MHz, but Comcast should be required to take steps to ensure that the quality of
service is not harmed by excessive node sizes. For any system that has not already been rebuilt
to at least 750 Mhz, Comcast should be required to rebuild the system to an 860 Mhz and 500
homes per node standard.
Cal. Gov't Code § 53066.3.
—2—
In addition, because of the long term of any potential renewal franchise,provision should
be made to keep up with changes in technology. The Agencies have a need and interest in a
system that will continue to provide subscribers with access to the full range of potential
services,throughout the term of the franchise. Consequently,the Comcast system should be
designed to permit the flexibility to respond to increased customer demand and the introduction
of new services. Comcast should also be required to upgrade the system periodically to ensure
that it maintains a state of the art system.
2. Public Educational and Government Access.
Most Americans receive their news by watching television. Yet when it comes to
television coverage, Central County is largely ignored by broadcast media that focus on San
Francisco and Oakland. As a result, many Central County residents know much more about the
issues and events in San Francisco than those in their own community.
Federal law provides a mechanism for the distribution of community-based information
by authorizing local agencies to require cable operators to provide public, educational and/or
government("PEO")access channels and the facilities for the community to create local
programming. Public access programming is produced by the general public. Educational
programming consists of college and other courses offered over the air as well as other
educational programming. Government programming typically focuses on government
meetings, government services, and community events and issues.
Generally,the existing franchises in the Consortium area require Comcast to manage
PEG operations. (The exceptions are the County and Concord,which both manage government
access but not public or educational access.) Comeast's performance in this regard has been
highly inadequate, and Comcast has violated the PEG requirements in some of the Agencies'
franchises. Comcast only provides one channel for the County and Concord and one channel for
general PEG access. Very little programming appears on the PEG access channel. Comcast puts
very limited resources into PEG access. Diablo Video Arts,the organization representing many
of the community access producers in the Consortium area,has stated that relations with
Comcast are poor and that Comcast shows little interest in supporting PEG access.
The Seren franchise agreements in Concord, Walnut Creek and portions of the County
provide for a number of additional channels. These franchise agreements also provide
considerable funding for PEG access facilities and equipment for a PEG operation to be run
either by the Agency, a nonprofit and/or Seren. As discussed above, these Agencies are required
by State law to apply the same requirements to Comcast in order to create a level playing field.
The Consortium area operates as an integrated region,with residents regularly crossing
into other parts of the area to work, shop and go to school, and with many of the charities,
utilities and government agencies operating throughout the region. As a result, a great deal of
community programming that could be produced locally would be of interest throughout the
Consortium area. For this reason, as well as to create economies of scale, there is an interest
among Consortium agency staff to explore creating regional studios for the production of PEG
programming. At the same time, creating such a regional approach will require time to develop,
and will depend upon the resources that are available and the interests of the Agencies.
—3 —
Accordingly,there is an interest in creating a flexible approach, similar to the Seren franchise
agreements,that will require Comcast to either fund regional facilities, fund individual facilities
for each Agency,or upgrade its own PEG operations at the discretion of each Agency. Comcast
should also be required to initially provide six PEG access channels, with additional channels
made available if needed. It is likely that one of the channels would be used for the County
channel, one used for other government access purposes,three would be used by the educational
community(which is strongly interested in providing a great deal of programming), and one
would be used for public access.
3. Institutional Network.
Federal law also authorizes local agencies to require operators to provide "Institutional
Networks"("I-Nets"), which are communications networks separate from the subscriber network
that delivers services to subscribers. I-Nets are most commonly used to connect various
government buildings. I-Nets can dramatically improve the internal communications capabilities
of agencies, while saving taxpayers money by making it less necessary for local agencies to
purchase communications services. California schools currently have a particular need for a high
capacity I-Net for the delivery of educational programming as part of the statewide Digital
California Project.
The Seren agreements in Concord, Walnut Creek and the County require Seren to
construct an I-Net, including both optical fiber and equipment,to connect numerous government
facilities. Pursuant to these agreements,the Seren I-Net is being constructed to connect most of
the Concord and Walnut Creek-owned facilities and a few County facilities,but does not satisfy
the need and interest in connecting all government facilities. Accordingly, even in these
communities there is a continuing need and interest for an I-Net. Dedicated capacity on I-Nets is
a subset of the federal law provisions regarding providing PEG access. Accordingly, State law
also requires Concord, Walnut Creek and certain County franchises to create a level playing field
by applying the same I-Net requirements to Comcast.
Comcast should be required to construct,maintain and operate an I-Net that connects
designated facilities of each Agency,the public school districts,PEG access origination sites,
and local fire districts, at no cost to the Agencies. The I-Net should include both dedicated
optical fiber and the equipment needed to operate the system. The I-Net should support voice,
video (including digital and analog video) and high-speed data communications. The I-Net
should be interconnected with the Seren I-Net and any other similar networks operated by the
Agencies.
4. Customer Service.
Local agencies are given the primary responsibility under federal law for ensuring that
cable operators provide adequate customer services. Each of the Agencies has established
customer service standards that largely reflect the suggested customer service standards issued
by the Federal Communications Commission. There are indications that Comcast has routinely
violated these standards for many years. For example, the telephone surveys conducted by the
Buske Group indicate that nearly two-thirds of subscribers feel that they have been kept on hold
for excessive periods when calling the cable company. The most common violations have been
—4—
placing customers who call with service or billing questions on hold for excessive periods of
time. The efforts of Agency staff have not been effective in resolving the larger problems.
Accordingly, staff believes it is important to establish additional remedies for violations of
customer service standards, including liquidated damages or civil penalties. These remedies may
be established either unilaterally through amendments to local cable ordinances or pursuant to a
franchise agreement.
5. Mitigation of Construction Impacts.
The rebuilding of a cable system is a huge construction project with significant noise,
aesthetic,and traffic impacts and damage to public and private property. System upgrades
required to keep up with the state of the art can create comparable problems. Rebuilds and
upgrades also can entail significant service interruptions to subscribers whose service is taken
offline for significant portions of the day while lines connecting their homes or businesses are
worked on. The community has a strong need to minimize these impacts. Any time Comcast is
engaged in a construction project of any size, Comcast should be required to follow a
construction plan that is designed to minimize these impacts. Among other things, the plan
should minimize construction times in particular locations and for the entire project, establish
construction techniques that minimize noise and traffic impacts,minimize the aesthetic impacts
of above-ground pedestals, and provide for automatic credits for service outages.
6. Correction of Safety Violations.
A technical evaluation of Comcast's systems determined widespread safety violations. In
particular, a number of the"cable drops" (i.e. the lines running from the cables in the streets to
subscriber homes)that were inspected were not properly grounded, indicating a common
problem in the systems. Inadequate grounding can cause the build-up of voltage in the system
and can result in damage to subscriber equipment and fires. Inadequate grounding was found in
both the rebuilt and unrebuilt portions of the systems. The evaluation also disclosed inadequate
"guying"(i.e. physical support for aerial cables)throughout the systems,which also presents a
safety hazard. Comcast should be required to properly ground all new and existing cable drops
and install proper guying. Comcast should submit a plan for inspecting and performing the
grounding work.
In addition, Comcast has a number of locations where overhead drops are not in
compliance with the vertical clearance standards of CPUC General Order 95 and Article 230 of
the National Electrical Code. Comcast should submit a plan for inspecting and correcting these
violations.
C. Purpose of Report and Action Requested.
Comcast has asked each of the members of the Consortium to issue it a renewal cable
franchise.2 Each Agency must decide whether to grant or deny this request. To that end, staff
2 The actual franchisees providing service to Consortium members are Comcast of California I,
Inc.; Comcast of California IV, Inc.; Comcast of California VIII, Inc.; Comcast of California IX,
Inc.; Comcast of California, Massachusetts, Michigan, and Utah, Inc.; Comcast of
—5 —
has prepared this summary of the community's future cable-related needs and interests, and an
evaluation of the past performance of Comcast. This report refers to several studies
commissioned by the Consortium,which also discuss and identify many of the needs and
interests of the community, and evaluate the existing cable system. These are: the Community
Needs Assessment—Ascertainment and Recommendations Regarding Community Cable-
Related Needs and Interests for the Contra Costa Cities and County Cable Consortium;the
Contra Costa Cable Consortium Cable Television Systems Technical Evaluation;the Contra
Costs I-Net Requirements Update; and the Contra Costa Cable Consortium Cable Television
Systems Updated.Technical Evaluation. Staff believes that these reports are accurate, and this
report adopts the needs and interests identified in those reports.
In addition to identifying needs and interests, as part of the preparation of this report staff
has developed certain renewal requirements, consistent with the Cable Act. Also as
contemplated by the Cable Act, staff has prepared a document that requests that Comcast submit
a proposal, showing how it intends to satisfy the future cable-related needs and interests of the
Agencies in any renewal term. The requirements that staff recommends for adoption are
reflected in that request for renewal proposal ("RFRP"), which is attached to this document. In
the RFRP,the operator is asked to explain why it believes it should be granted franchise renewal,
and is required to provide certain information that the Consortium members will use in
evaluating any proposal.
In connection with the issuance of this report, staff asks the Board to take two actions:
1. Adopt the findings of this report(and the Consortium-commissioned studies
referenced in it) and the draft RFRP with respect to the needs and interests of the
community, and the past performance of Comcast. Once this is done, staff asks
that the Board close the first stage of the cable renewal proceedings, which is
described below.
2. Authorize the issuance of the RFRP as attached to this report with a deadline for
response of October 5,2004. Confirm that the requirements and model system set
forth in the RFRP are the requirements and the model system that the Board
believes will help meet the needs and interests of this community.
California/Colorado/Florida/Oregon, Inc.; Comcast of California/Colorado, L.L.C.; Comcast of
California/Colorado/Texasl\Vashington, Inc.; Comcast of East San Fernando Valley, LP; and
Comcast of Contra Costa, Inc., but all of these companies are controlled by Comcast.
Consequently, references to Comcast should be understood to refer to corporate management or
to the respective individual franchisee, as the context may require. Similarly, Comcast operates
multiple cable systems in the Consortium area, but is in the process of reorganizing and
consolidating those systems. References to the "system" or "systems" should be understood to
refer to the system or systems serving Contra Costa County now or during the term of any
renewal franchise.
—6—
II. BACKGROUND AND PURPOSES OF THIS REPORT
A. The Contra Costa Cable Consortium.
With an estimated population of 975,532,3 Contra Costa County is the ninth most
populous county in the state of California. The County contains 19 incorporated cities and
covers about 733 square miles from the northeastern shore of San Francisco Bay to San Joaquin
County. The County's western and northern shorelines are largely industrialized.,while the
interior sections are suburban/residential, commercial and light industrial in nature.4
Contra Costa.County boasts one of the fastest growing work forces in the Bay Area.5
With its high-wage skilled jobs, Contra Costa County achieves excellent rankings among all
California counties on a variety of income measurements.6 The County is also home to several
institutions of higher education,including St. Mary's College,John F. Kennedy University, and
the Contra Costa Extension of California State University Hayward, as well as three community
colleges: Diablo Valley College,Los Medanos College, and Contra Costa College. 86.9%of
Contra Costa County residents over the age of 25 have graduated from high school and 35%
possess a Bachelor's Degree or higher.7
For well over a decade,Contra Costa County,the Cities of Clayton, Concord, Martinez,
Pleasant Hill and Walnut Creek, and the Towns of Danville and Moraga(jointly,the"Agencies"
and each, individually, an"Agency")have worked together on cable related issues. In 1999,the
Agencies informally established the Contra Costa Cable Consortium in an effort to combine their
resources and work together to their mutual advantage in connection with the renewal of their
cable television franchises! The Agencies recognized that they shared many concerns regarding
the operation of their cable television franchises,and that a joint effort was not only to their
financial benefit,but could be used to identify the cable-related needs and interests of the
individual community represented by each Agency, as well as the larger County-wide
community. The Agencies also recognized that they shared many of the same concerns
regarding the past performance of their cable franchisees.
U.S. Census Bureau at htt /Auickfacts.census.gov/qfd/states/06/06013.html
4 Contra Costa County World Wide Website at htto://contra.napanet.net/
5 Id.
b U.S. Census Bureau at http•//guickfacts census g_ov/gfd/states/06/06013.htt l (see, e.g., median
household money income, 1999; per capita money income, 1999; and persons below poverty,
percent, 1999.)
7 idly
8 The City of Antioch also participated in early meetings of the Consortium; franchise renewal
was not imminent in that community, and Antioch did not participate directly in the
ascertainment or the preparation of this Report. The Cities of Lafayette and Orinda did
participate at various stages of the ascertainment process, but chose not to participate in the
preparation of this Report.
—7—
B. The Cable Operator.
1. Back round
When the Consortium was formed,the cable franchises in all of the Agencies were
controlled by AT&T Corp. ("AT&T"), and the respective franchises had either expired or were
nearing the end of their terms.9 In February 2003,with the merger of Comcast Corp. and AT&T
Broadband,control of the franchises was transferred to the new Comcast Corp,which is now
providing service under the name"Comcast."
Comcast itself does not directly hold the various franchises under which it provides cable
service to subscribers located within the Agencies. For approximately 10 years,however, all of
the cable systems and their legal owners have been controlled by the same corporate entity.
Control of the systems was first consolidated by Tele-Communications, Inc. ("TCI")in the early
1990's. TCI was acquired by AT&T Corp. in 1999. Throughout this period,all of the systems
and franchises have largely been operated under a single, common set of corporate policies, and
the individual Agencies have been told that local management of their particular systems was
under common control and subject to the needs and priorities of the larger corporate entity.
Consequently, from the perspective of the Agencies,there has effectively been a single operator
in the County since the early 1990's.
Within the Consortium area,Comcast serves approximately 135,000 subscribers and
operates approximately five cable systems,based on the number of headends. These cable
9 The original expiration dates of the various franchises are:
Contra Costa County: April 24, 1999 (Contra Costa Cable franchise)
April 24, 1999(Crocker Cable Systems Inc. franchise)
Nov.1, 1997 (Televents, Inc. South franchise)
July 12, 2004 (Televents, Inc. Clyde franchise)
Nov. 29, 1997 (Televents, Inc.North franchise)
July 12, 2004 (Century Cable of No. CA franchise)
July 12, 2004 (Tele Vue Systems, Inc. franchise)
July 12,2004 (TCI Cablevision of WC franchise)
July 12, 2004 (Concord TV Cable franchise)
July 12,2004 (Bay Cablevision franchise)
Dec. 39, 1997 (Televents of East County franchise)
Clayton: Nov. 6,2004
Concord: Feb. 2, 2003
Danville: Aug. 18,2001
Martinez: June 30,2002
Moraga: Aug. 31, 2000
Pleasant Hill: June 11, 2002
Walnut Creek: Feb. 18, 2001 (UACC Midwest, Inc. franchise)
June 28, 2003 (Televents, Inc. franchise)
—8—
_.
_... .._
.......................................
systems are operated by at least ten different franchisees. All of the systems are managed by the
same management team, and the operations of all of the franchisees are likewise controlled by
the same team. The table below shows which franchisees operate in which communities:
Community Cable Operator
Contra Costa County Comcast of California I, Inc.
Contra Costa County Comcast of East San Fernando
Valley, L.P.
Contra Costa County Comcast of Contra Costa, Inc.
Contra Costa County Comcast of California IV, Inc.
Contra Costa County Comcast of Califomia/Colorado/
Texas/Washington, Inc.
Contra Costa County Comcast of California/
Massachusetts/Michigan/Utah,Inc.
Contra Costa County Comcast of California IX, Inc.
Contra Costa County Comcast of California/Colorado,
LLC.
Contra Costa County Comcast of California IV, Inc.
Clayton Comcast of California IX, Inc.
Concord Comcast of California IX, Inc.
.Danville Comcast of California I,Inc.
Martinez Comcast of California I, Inc.
Moraga Comcast of California I,Inc.
Pleasant Hill Comcast of California I, Inc.
Walnut Creek Comcast of California I,Inc.
Walnut Creek Comcast of
California/Massachusetts/Michigan/
Utah, Inc.
Unless otherwise indicated,references to "Comcast"or the "cable operator"in this staff report
include corporate management, and the entities that actually hold franchises, as the context
requires.
2. The Cable System Rebuild.
When AT&T bought TCI, it acquired the antiquated and ill-maintained systems that were
serving the Consortium area. The systems were served by multiple headends and were not
capable of providing state-of-the-art services. The channel capacity of the systems was also
limited. AT&T began the process of upgrading the systems to a capacity of 750 MHz using a
hybrid fiber-optic/coaxial cable design. As of the date of this report,most of the Consortium
area has been rebuilt to a capacity of either 750 MHz or$60 MHz. The systems serving Clayton,
Concord, Danville, Martinez, Moraga,Pleasant Hill, and many of the unincorporated portions of
the County have been rebuilt. Work has not yet begun in Walnut Creek. In addition, AT&T
consolidated several headends. Currently, Comcast operates headends at Arroyo (Walnut
Creek), Pittsburg and Pinole, and may eventually consolidate further.
—9—
3. The AT&T-Comcast Mercer
In December 2001, Comcast Corp. and AT&T Corp. announced plans to combine their
cable systems into a new company. The terms and conditions of the transaction are set forth in
an Agreement and Plan of Merger dated as of December 19, 2001 (the"Merger Agreement").
The merger of the first(AT&T) and third(Comcast)largest cable companies in the United
States,which was completed on November 18, 2002,was accomplished through a stock-for-
stock transfer and the assumption or refinancing of existing AT&T Broadband debt. The
companies stated in their Application and Public Interest Statement filed before the FCC on
February 28, 2002 (the"Application"),that the merger would, among other things:
• permit faster implementation of upgrades necessary to offer broadband and
therefore "accelerate the deployment of facilities based high-speed Internet
services and other broadband services;"
• result in"scale and scope efficiencies and cost savings"which would"increase
the incentive and ability of the merged firm to invest in, and assume the risks
associated with, developing and deploying a variety of innovative services and
features, such as high definition television(HDTV), video-on-demand, and other
interactive television(interactive TV) services;"
• "bring benefits in the form of long-awaited local telephone competition,
particularly for residential customers;"
• "bring benefits to consumers by stimulating the production and delivery of local
and regional programming;"and
• "allow the two companies to draw on their respective expertise in community
outreach efforts, including initiatives to connect classrooms to the Internet."
Application at 2-4.
On May 8,2003, Comcast reported the following results for the first quarter of 2003
(the first quarter after the merger) as compared to the first quarter of 2002: (1) pro forma
Comcast Cable revenue increased 10.0%; (2)pro forma operating income before depreciation
and amortization(EBITDA) increased 35.8%; (3)pro forma high-speed Internet service revenue
increased 57.5%; (4)pro forma cable phone revenue increased 27.9%; and(5)pro forma
advertising revenue increased 8.3%. In addition,the company reported a 52.3% increase in its
customer base and a 4.3%increase in average revenue per subscriber. Comcast Press Release,
Comcast Reports First Quarter 2003 Results (May 8,2003).
In the same press release, Comcast also stated that: (1)the company is preparing"to
expand its robust On-Demand offering across many more markets; "(2) "The Company expects
that, over time,repackaging and re-pricing will result in significant improvement in the
profitability of the Digital Cable offering in the newly acquired systems;" (3) "Comcast Cable
continued to enhance its Digital Cable offering as it expanded the availability of video-on-
_ 10—
demand(VOD)and high-definition television(HDTV);"r°(4)"More than 79% of the homes in
Comcast's footprint, or 31.1. million homes, now have access to high-speed Internet service;"and
"Comcast Cable upgraded over 12,200 miles of plant to end the quarter with more than 86%of
its footprint upgraded to provide two-way digital and high-speed Internet services. The newly
acquired systems are now nearly 80%upgraded to deliver two-way digital cable and high-speed
Internet service,up from 73% at December 31,2002."l1
4. Comcast Toda: One Year After the Mgmer
A little over a year after Comcast completed its takeover of AT&T Broadband, it appears that the
merger has been a resounding success. Comcast reports annual revenues of$18 billion.12 In
February 2004, Comcast released its results for 2003, and made the following statements.
"In 2003, our Operating Cash Flow grew by $1.9 billion or 42%driven by significant
operating efficiencies in the acquired cable systems,the continued strong performance of
our historical cable systems and the benefits of our increased size."r3
"The cable systems we acquired last year are now 93%upgraded. This is a dramatic
improvement from 73%a year ago. The progress of our upgrade allowed us to extend
the availability of Digital Cable and High-Speed Internet services during 2003. Demand
for new services remained strong during the year as we added more than 1 million new
digital cable customers and nearly 1.7 million new high-speed Internet customers."14
"In 2003, we reduced debt by$7 billion and have significant cash and non-strategic
investments that provide added financial flexibility and strength."15
"For 2004, Comcast Cable expects to deliver revenue growth of approximately 10%.
Comcast Cable is reiterating its guidance for operating cash flow growth between 15%
and 17%."16
"VOD is now available to 11 million subscribers and HTV is now available to more than 9
million subscribers."
11 Moreover, "The Company expects to comfortably meet its target of upgrading approximately
46,000 miles of cable plant this year at a total cost of approximately $1.3 billion with 94%of the
total cable plant upgraded to provide two-way digital and high-speed Internet services."
22 Comcast Press Release, Comcast Full Year and Fourth Quarter Results Meet or Exceed all
Operating and Financial Targets Vetting Stage for Continued Growth in 2004(Feb 11, 2004).
23 Id.
14 Id
is Id.
16 Comcast Press Release, Comcast Provides Financial Outlook for 2004(Feb. 11,2004).
— 11 —
"Reflecting the Operating Cash Flow improvement, OCF margins at the acquired cable
systems grew from 19.5%for the year 2002 to 32.3%for 2003."1?
"Comcast Cable expects capital expenditures between$3.3 and$3.4 billion in 2004, an
approximate$750 million decline form the$4.1 billion in cable capital expenditures in
2003. The reduction in cable capital expenditures reflects the substantial completion of
Comcast Cable's upgrade plan."18
"Reflecting Comcast's guidance for significant operating cash flow growth and the
reduction in cable capital expenditures as the company completes the upgrade of its cable
systems, Comcast reiterates that it expects to generate consolidated Free Cash Flow in
2004 of approximately$2 billion."19
In other words, Comcast is at the verge of a period in which it will require less capital for
investment purposes, and will continue to increase its revenue growth from cable service and
other services delivered over its cable systems. 'Phis would appear to be a recipe for greatly
increased profits in the coming years.
5. Status of the Franchises.
As described above,most of Comcast's franchises have expired. Since late 2000,the
Agencies have been engaged in informal renewal negotiations with Comcast, and the Agencies
have generally granted extensions of the franchises while the informal negotiations were
pending. In Walnut Creek, Comcast had two franchises covering different parts of the City. One
of the franchises (the"tJACC Midwest franchise")expired on February 18,2001. The City and
Comcast agreed to one extension that expired on August 18, 2001. The other franchise (the
"Televents franchise") expired on June 28,2003. The City of Martinez initially extended its
franchise to June 30, 2003, and subsequently granted another extension that is due to expire on
June 30, 2004. The County has extended those franchises that have expired until December 3,
2004. On April 27, 2004,the City of Concord extended its franchise to May 4, 2005.
In addition,most of the Agencies had the right under their franchises to review and
possibly withhold consent to the AT&T-Comcast merger,because the transaction resulted in a
change of control of the respective franchisees. For the most part, the Agencies did not formally
object to the merger; in some cases,the terms of their franchises did not grant certain Agencies
the authority to review the transfer. The County,however, formally withheld its consent.
Consequently,by completing the merger and allowing Comcast to assume control of the cable
systems serving the County,the various franchises operating under County franchises violated
their Franchises. For the same reason, Comcast is operating those systems without lawful
authority.
17 Id.
18 Id
19 Id.
— 12—
6. Competitive Situation in the County
Comcast faces no competition from ether cable operators in most of the Consortium area.
Seren Innovations, Inc., however, has been granted franchises by the Cities of Concord and
Walnut Creek. Seren has completed construction of an 860 MHz system in Concord, and has
been offering service there since March 2000. Construction in Walnut Creek was completed in
late 2003, and Seren is now serving a small number of subscribers in Walnut Creek. Seren had
applied for franchises in Clayton,Danville, Pleasant Dill, and the County,but withdrew those
applications in 2002. The County has granted Seren limited authority to operate in order to
transport signals between Walnut Creek and Concord, and to serve residents of unincorporated
areas adjacent to the two cities.
The presence of Seren in Concord and Walnut Creek affects Comcast's obligations under
state lave with respect to any renewal franchise granted by those Agencies. California
Government Cade Section 53066.3 sets forth procedures and requirements governing the
granting and terms of additional cable franchise in areas where a franchise has already been
granted. Among other things,the statute states that any additional franchise"shall contain the
same public, education, and governmental access requirements that are set forth in the existing
franchise." Cal. Gov't Code § 53066.3(d). For ease of reference,the franchises granted by
Concord and.Walnut Creek to Seren are attached as exhibits to this Report.
Comcast also faces limited competition in the Consortium area from Direct Broadcast
Satellite providers.
C. Purpose and Scope of Joint Staff Report
As mentioned above, the staff of each Agency has recognized that under the conditions in
which cable service is provided in the County and the cable systems are operated,the various
cable franchises in the Consortium area are effectively a single operation,run by a single
operator. In addition, staff believes that the individual Agencies share many needs and interests
with respect to the cable company, and that circumstances within one jurisdiction very often are
relevant to conditions in another jurisdiction.
The latter point is especially important, because,as will be discussed further below, one
of the key considerations in the grant of a renewal franchise is whether an operator is able to
meet"future cable-related community needs and interests." Thus, although each Agency has its
own political identity, at the same time all of the Agencies are interrelated socially and
economically. The Agencies are contiguous; many of the incorporated jurisdictions are directly
contiguous, all share boundaries with the County, and all receive certain services from the
County. People residing within one jurisdiction travel freely throughout the Consortium area,
whether commuting to work, for leisure and entertainment, shopping,making social visits,or
engaging in other day-to-day activities. The different parts of the Consortium area also present
comparable socioeconomic profiles. The Agencies are thus all part of a larger economic unit.20
20 As an example of the way the Agencies operate as part of a larger economic unit, the Contra
Costa Economic Partnership was formed a number of years ago as a partnership of government,
business and educational institutions designed to promote the economic vitality of the region.
— 13 —
Most or all of the agencies are served by the same utilities and special districts, including the
Central Contra Costa Solid Waste Authority, Contra Costa County Consolidated Fire District,
Contra Costa Transit,the Central Contra Costa Sanitary District,East Bay Municipal Utility
District, Contra Costa Water District,PG&E and SBC. The Contra Costa Times provides local
news coverage of the Consortium area. Efforts at regional planning are coordinated through the
Contra Costa Transportation Authority and the"Shaping Our Future"regional planning
initiative. Diablo Video Arts, Inc. is a non-profit corporation composed of public access
producers from throughout the Consortium area. The Agencies are especially interrelated in
another fundamental way as well: their residents are served by a total of 18 K-12 school
districts,with school district boundaries that frequently overlap the jurisdictional boundaries of
the Agencies.21 Similarly, Contra Costa Community College District,the Contra Costa Campus
of California State University, Hayward, and other higher educational institutions serve residents
of Agencies throughout the Consortium area. In addition,the Contra Costa County office of
Education provides educational services to schools and students throughout the Consortium area.
For these reasons, staff believes that a single,joint statement of needs and interests is valid for
the Consortium as a whole.
D. Why Renewal Is Important,And Why This Report Is Being Submitted.
1. Background
Cable television systems operate pursuant to franchises issued by local governments. A
franchise authorizes the operator to provide cable service, and to occupy public rights-of=-way for
that purpose. The franchise sets out the terms and conditions under which service is to be
provided As discussed above,the franchises granted by the individual Agencies are now
controlled by Comcast,and the respective cable systems are operated by Comcast.
When a franchise is about to expire,a local franchising authority has a rare opportunity to
review the performance of the cable operator,and ensure that the operator will meet the needs
and interests of the community for the future. The opportunity is rare because franchises are
issued for periods of years. At the time of renewal, an agency can establish requirements for
system upgrades,to ensure that the community has adequate infrastructure. Agencies also can
ensure that everyone has real opportunities to originate as well as receive programming. And,
Agencies can ensure that service will be reliable,and that the company will be in a position to
bring the benefits of advances in cable technology into our homes, schools and businesses. This
report is intended to look to the past, and to identify what is needed for the future; based on this
information,each Agency may ultimately determine whether or not Comcast may continue to
operate within its respective boundaries.
Overall, staff has concluded that(1)the community represented by each Agency—as
well as the larger community represented by the Consortium—has been underserved for many
21 For example, the Mt. Diablo Unified School District serves all or parts of Concord, Pleasant
Hill, Clayton, Martinez, Walnut Creek and unincorporated areas of the County. Acalanes Union
High School District serves all or part of Orinda, Moraga, Walnut Creek and unincorporated
areas of the County.
— 14—
years; and(2)the individual cable franchisees and their successive corporate owners have failed
to satisfy their obligations to the Agencies. Inspection and testing bey CTC demonstrated that
portions of the system are not in compliance with safety standards
As another example,there is a great deal of demand in this community for channels,
facilities and equipment that will permit members of the public, educational institutions and
government agencies to produce and disseminate programming. This type of programming—
so-called"public, educational and government access"(or"PEG access"), serves critical public
interests. While most Americans receive most of their news from television,there are no
network television stations licensed to operate in the Consortium area, and news in the
Consortium area does not receive extensive coverage by Bay Area television stations. Access
requirements also help eliminate the danger that our society will be sharply divided between
information"haves" and"have-nots." As the National Telecommunications and Information
Administration(NTIA)has noted,"[b]ecause information means empowerment--and
employment—government has a duty to ensure that all Americans have access to the resources
and job creation potential of the Information Age."23 Our review shows that the cable operator is
not providing adequate support for PEG programming.
Finally, both customer complaints on file with the Agencies, and the findings of The
Buske Group, indicate that customer service provided by the operator has been substandard, and
has not been reasonable in light of community needs. By adopting this report,the Agencies will
be making it clear that changes in the level and quality of service provided by the operator need
to occur, and will dictate what sort of changes are necessary.
Comcast has also not satisfied certain obligations under the existing franchises. Among
other things, Comcast has violated customer service standards, failed to comply with community
access requirements, violated safety codes, violated right-of-way permitting requirements,failed
to comply with requirements for transferring control of franchises, and failed to submit various
reports. These violations are discussed in further detail in Section V below.
Cable systems once served merely to retransmit broadcast television signals. They have
now,however,become"a dominant nationwide video medium,"24 with many companies
rebuilding or poised to rebuild their systems into"electronic information highways." In fact,
even though the broadcast networks' audience share had steadily declined, cable network
viewing shares have continued to increase.25 The development of these electronic highways has
22 See discussion of the technical performance review in the Past Performance in, a Part V.
23 National Telecommunications and Information Administration, The National Information
.infrastructure: Agenda for Action at 1 (September 1993) ("NTIA Information Infrastructure
Report").
24 H. Rep. No. 862, 102d Cong. 2d Sess. at 50, reprinted in 1992 U'.S.C.C.A.N. 1231, 1232
(1992).
25 Jay Sherman, Study: Broadcast Ad Cash on the Rise; Spending Is Projected to Increase
Through 2007, Television Week, Aug. 11, 2003 ("[Vliewership continues to tilt toward cable,
— 15 —
the potential to significantly change the way people live, work, and interact with each other by
providing users access to vast quantities of information, services and entertainment in a variety
of forms. As a result, a local government has a compelling interest in ensuring that a cable
system is adequately designed and constructed to help satisfy the community's cable-related
needs and interests; that good service is provided for the price paid;that services are available to
all; and that the flow of information is not monopolized by the companies that own the cable
networks. These interests are reflected in federal, state and local law.26
The foregoing interests are particularly strong because, in order to operate, cable systems
must occupy scarce and valuable public property—property that the public effectively pays to
acquire and maintain. Comcast's cables are on poles and underground in rights of way
throughout each Agency. Each Agency,as a trustee of the public's interest in this property,has a
compelling interest in ensuring that the companies use this public property in a way that benefits
the entire community. This means, among other things, that each Agency must ensure that
public property is used in optimal ways, and that the public receives fair compensation—in the
form of franchise fees and other conditions—for the use of its public property to provide cable
service.
As a matter of state law, recognized and modified by federal law,these interests and
others are protected, in part,through the franchising process.
2. The Formal Renewal Process
Many in the community no doubt want the Agencies simply to put the franchise up for
competitive bid,and then award franchises to the best operator. That, however, is not an option.
In 1984,the federal government passed a law that was intended to provide cable operators with a
fair opportunity to obtain renewal. To that end,the 1984 federal law—the"Cable Act,27_
establishes two possible ways a community can respond to a request for a franchise renewal:
informal renewal negotiations and the statutory formai renewal process.
with network prime-time audience shares falling to 52 percent in 2002 from 62 percent in the
1995-96 season).
26 For federal law, see, e.g., 47 U.S.C. §§ 544 (requiring facilities and equipment);
§ 546(c)(1)(D) (satisfying community's cable-related needs and interests); § 543 (ensuring
reasonable rates); § 541(a)(3) (anti-redlining); § 531 (access channels). For state law, see, e.g.
Cal. Govt. Code §53066(b)(award of franchise may be based on quality of service,rates, income
to the city, experience of the applicant, and any other consideration that safeguards the local
public interest); §53066.2(a) (anti-redlining); §53066.3(4) (City shall assure that additional
franchises granted in areas where a franchise has already been granted shall require build-out and
service in sequence that does not discriminate against lower income and minority residents, and
shall contain same PEG obligations as existing franchise); §53066.4 (parental control
lockboxes).
27 47 U.S.C. Section 521, et seq.
— 16—
Under the informal process, Congress contemplated that a franchising authority and a
cable operator will meet informally and attempt to resolve franchise issues through negotiation.28
If the issues are resolved a local agency can, after providing the public with an opportunity for
comment, adopt a renewal franchise. An informal proposal can be rejected at any time.
Alternatively, either the operator or the local agency can invoke the more formal renewal
procedures set out at 47 U.S.C. Section 546(a)-(g). These"formai"procedures give the operator
the opportunity for a fair hearing on its renewal proposal. At the same time,the procedures
insure that an agency can deny renewal if an operator has performed poorly in the past, or is not
qualified, or is not willing make a reasonable proposal for meeting the community's needs and
interests for the future. Under the formal process, local governments are given broad authority to
define what the needs and interests of the community are. It is up to the operator to then submit
a proposal that is reasonable to meet the community's cable-related needs and interests, taking
into account the costs of meeting those needs and interests(the focus is the entire community,
not just the individual subscribers currently receiving service).
The legislative history of the 1984 Cable Act explains:
The ability of a local government entity to require particular cable
facilities (and to enforce requirements in the franchise to provide those
facilities)is essential if cable systems are to be tailored to the needs of
each community [and the legislation] explicitly grants this power to the
franchising authority.29
More specifically, the formal renewal process under the Cable Act is a four-stage
process.
In the first stage, a local agency must conduct a proceeding to identify future, cable-
related needs and interests of the community, and to review the past performance of the cable
operators serving the community.30
In the second stage, once the initial proceeding is complete,the agency may issue a
request for renewal proposals ("RFRP"). Because each renewal proposal is evaluated on its own
28 47 U.S.C. Section 546(h).
29 H. Rep. No. 934, 98th Cong. 2d Sess. at 26, 1984 U.S.C.C.A.N. at 4663 ("1984 House
Report"). Congress intended that: "the franchise process take place at the local level where
[local] officials have the best understanding of local communications needs and can require cable
operators to tailor the cable system to meet those needs."Id, at 24, 1984 U.S.C.C.A.N. at 4661.
However, the Cable Act does not give local governments unlimited authority to impose
conditions on cable operators. For example, it limits local authority to require an operator to
carry a specific programming service.
30 47 U.S.C. Section 546(x).
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merits, this RFRP cannot simply be a competitive bidding document.31 The Cable Act specifically
allows an agency to establish the following requirements in an RFRP:
(1) "that channel capacity be designated for public, educational or government use,
and channel capacity on institutional networks be designated for educational or governmental
use, and may require rules and procedures for the use of channel capacity designated...." 47
U.S.C. §531(b).
(2) "for facilities and equipment." The legislative history explains that this includes
requirements for institutional networks, studios, equipment for public, educational and
government use,two-way networks, and so on. 57 U.S.C. §544.
The Cable Act also states"A franchising authority may establish and enforce customer
service requirements of the cable operator, and construction schedules and other construction-
related requirements, including construction-related performance requirements, of the cable
operator." Staff believes that this language permits each Agency to establish these requirements
unilaterally in a franchise(or through a regulatory ordinance), along with various other
requirements established pursuant to each Agency's police and other powers.
In the third stage of the renewal process, the operator submits a renewal proposal in
response to the RFRP. "Any such proposal shall contain such material as the franchising
authority may require.,,32 If an operator submits a timely and proper response,33 the franchising
authority has four months to evaluate the proposal, and decide whether to grant renewal based on
the proposal, or to preliminarily deny renewal. 47 U.S.C. Section 546(c).
Finally, if renewal is preliminarily denied, and an operator desires it, an agency must
commence an administrative proceeding. The four issues that are considered at that proceeding
are whether.
(A) the cable operator has substantially complied with the material terms of the
existing franchise and with applicable law;
(B) the quality of the operator's service, including signal quality, response to
consumer complaints, and billing practices,but without regard to the mix or
quality of cable services or other services provided over the system,has been
reasonable in light of community needs;
(C) the operator has the financial, legal, and technical ability to provide the services,
facilities, and equipment as set forth in the operator's proposal; and
31 47 U.S.C. Section 546(b).
32 Id.
33 The proposal must be submitted by a deadline established by the franchising authority. If the
operator fails to do so,then its rights are ended.
— 18—
(D) the operator's proposal is reasonable to meet the future cable-related community
needs and interests, taking into account the cost of meeting such needs and
interests.
For the reasons discussed above, staff believes that the Agencies have common cable-
related needs and interests, and that this joint report fairly states those common needs and
interests. The courts have ruled that local legislative bodies are entitled to considerable
deference in the area of determining a community's needs and interests,because the grant of a
franchise is a legislative act. Union CATV, Inc. v. City ofSturgis, 107 F.3d 434, 441 (6th Cir.
1997). Consequently, staff believes that if the Board concurs with the view that this joint report
represents the needs and interests of Contra Costa County,then the Board's adoption of this
report is also entitled to deference.
At the same time, this staff report calls for adoption of franchise terms that recognize the
commonality of interests shared by the Consortium members. These include, for example, I-Net
connections for the schools, I-Net connections for government offices not already served by an I-
Net, interconnection of the I-Nets serving each Agency, and a joint approach to the provision of
PEG access support. Indeed, the Agencies have identified such joint solutions and approaches as
a community need and interest in and of themselves. Accordingly,the RFRP calls for a single
response from Comcast that will address the shared needs and interests of the Consortium
members. In doing so,the response will also address the individual needs of each Agency.
With the submission of this joint report,the Agencies should be prepared to end the first
stage of the formal process. This report reviews the past performance of the cable operator, and
concludes that it has failed to comply fully with existing franchises or provide reasonable past
service. The report identifies cable-related needs and interests.
The accompanying RFRP asks the company to submit a renewal proposal that meets
these needs and interests, and identifies the requirements that must be satisfied in a renewal
proposal. In addition to restating some of the key points of this report, the RFRP identifies a
"model system"that could satisfy the requirements that staff recommends should be established.
While this report identifies needs and interests broadly,not every need and interest
identified has been translated into a requirement that is included in the RFRP. That is because
the federal law includes some limitations on what may be required in an RFRP.
E. Structure of the Report.
The remainder of this report is divided into several parts. In the next part,we summarize
the ascertainment process conducted by the Consortium,the community's key future, cable-
related needs and interests that have been identified, and,where appropriate,the requirements
that are associated with those needs and interests. In the third part of this report,we discuss the
past performance of the operator. Attached to this report are the draft request for renewal
proposals, a Model Franchise, and a Model Cable Ordinance. Staff also has prepared a separate
volume of materials that include the CTC and The Buske Group reports, a report on distance
_ 19_
education in the Consortium area, an I-N Tet concept design prepared for AT&T with input from
the Consortium, and the franchises granted to Seren by Concord and Walnut Creek.34
111. IDENTIFICATION OF FUTURE,CABLE-RELATED NEEDS AND INTERESTS
A. How the Ascertainment Was Conducted, and How We Arrived At Our
Conclusions on Cable-Related Needs and Interests.
As part of the renewal process,the Consortium commissioned several studies,which
were prepared by the Buske Group and by CTC.
The Buske Group developed the "Community Needs Assessment-Ascertainment And
Recommendations Regarding Community Cable-Related Needs And Interests for the Contra
Costa Cities and County Cable Consortium"(the"Buske Report). A draft of the Buske Report
was originally prepared in July 2000, and additional work was performed in late 2003 and early
2004 to update the original findings. The findings of both the original ascertainment work and
the update are included in the Buske Report. The Buske Report incorporated the results of an
extensive needs assessment process,which included, among other elements,the following: (i)
the results of ten focus group workshops conducted by The Buske Group in 1999; (ii)a
telephone survey commissioned by The Buske Group and performed by Group W
Communications,L.L.C., in 1999(the"1999 Survey"); (iii) a second telephone survey of
Consortium area residents conducted in late 2003 (the"2003 Survey"); (iv)a telephone survey of
residents of Concord and Walnut Creek(the"Concord/Walnut Creek Survey"); (v)the results of
four public meetings held in January 2004 with members of the general public and
representatives of community organizations and public agencies(the"2004 Public Meetings");
and(vi)a review of the technology plans of various agencies The Buske Group Report also
discussed the results of an inspection of PEG facilities and equipment in the Consortium area
which was conducted in January 2000 and updated in February 2004.
Columbia Telecommunications Corporation prepared three reports. In April 2000, CTC
prepared the Contra Costa Cable Consortium Cable Television Systems Technical Evaluation;"
this report was supplemented by an Addendum in June 2000. The two documents are jointly
referred to as the"CTC Technical Report." In preparing the CTC Technical Report, CTC
conducted physical inspections of the plant of the existing cable systems, and conducted
electrical tests of the systems. CTC concluded that the system serving subscribers should be
rebuilt,with most existing equipment being replaced. The second report prepared by CTC is the
Contra Costa Cable Consortium Cable Television System Updated Technical Evaluation,which
was prepared in March 2004 (the"CTC Technical Update"). This report was designed to update
the CTC Technical Report,in light of the fact that in the interim AT&T and Comcast have
largely rebuilt the cable systems serving the Consortium Agencies. In the 2004 Technical
34 These are not all the documents the Consortium collected or reviewed as part of the
ascertainment, but instead are those documents particularly important to understanding this
Report and the RFRP. For example, The Buske Group Report contains more detailed
discussions of the needs and interests summarized in this Report.
—20—
Report, CTC found that many of the problems identified in the CTC Technical Report regarding
the connection of the cable system at subscriber locations had not been corrected as part of the
intervening rebuild of the cable systems. In March 2004, CTC also submitted its third report,the
Contra Costa County I-Net Requirements Update(the"I-Net Report"). The I-Net Report
proposes a model for development of an institutional network serving the Consortium Agencies.
In the course of preparing this report, staff has reviewed its conclusions with The Buske
Group and CTC and sought clarifying information where necessary. Representatives of the
Consortium also,met with and consulted with superintendents and information technology
personnel from the school districts,gathered information from subscribers through phone calls
and letters, and reviewed the CTC and The Buske Group findings in light of their own familiarity
with the community. In addition, staff conducted a series of interviews with IT personnel and/or
cable administrators from Consortium members regarding the use of the cable system by their
jurisdictions for public, educational, and governmental use, and conferred with the Corporation
for Education Network Initiatives in California regarding the infrastructure needed by the
individual Agencies and schools to take advantage of this advanced statewide digital network
project. The Consortium also conducted its own institutional network needs assessment, in
which representatives of the information technology departments of most of the member
Agencies, led by Torn Whittington of Contra Costa County,met to discuss how the cable
company could meet the communications needs of the Consortium members. Staff further
reviewed a series of forward-looking vision studies conducted by various State and local
agencies. CSUH conducted a survey on CableNet and CCTV. Finally, the City of Concord,
which conducts an annual survey of its residents regarding City services, included in its 2004
survey questions regarding the quality of cable service in Concord.
The Agencies also have conducted hearings on cable renewal which yielded information
relevant to the ascertainment. The Buske Report includes summaries of hearings conducted by
the following Agencies.
• Walnut Creek(Feb. 1, 2000)
• Danville (Feb. 15,2000)
• Martinez(Mar. 15,2000)
• Contra Costa County(Apr. 4, 2000)
• Concord(Apr. 11, 2000)
Information relevant to the ascertainment was also gathered at a hearing before the Pleasant Hill
City Council on May 6, 2001.
Staff also gathered information from subscribers through phone calls, letters, and
electronic correspondence. A large percentage of these subscriber-initiated communications
dealt with customer service issues; poor signal quality,missed appointments,long delays in
phone response time,repeated service calls with no resolution of the problems. In addition, Staff
reviewed the CTC and Buske Group findings in light of its own familiarity with the community.
Further, staff reviewed a series of forward-looking vision studies conducted by various bodies.
These studies include"Distance Education in Contra.Costa County,"prepared in January 2004
by the Contra Costa Educational Television Consortium.
—21 —
Staff also conferred with the representatives from the Corporation for Education Network
Initiatives in California to discuss the Digital California Project, a statewide initiative to bring
advanced digital learning tools to the K-12 schools via an advanced services network backbone
that reaches into each of the State's 58 counties; and to ascertain the infrastructure the Agencies
and schools would need to develop so that the students attending local schools could benefit
from these resources and applications.
Staff also inspected records of customer complaints and service issues. Additionally,
staff gathered information about jurisdictions across the country which have positioned
themselves to take advantage of advanced cable technology, in order to determine how these
jurisdictions are utilizing such benefits as institutional networks, and to determine whether it was
reasonable to seek such a benefit for the Agencies. Finally, staff considered information on
developments in the cable industry both to help identify cable-related needs and interests and to
determine whether it was reasonable to expect the operators to meet those needs and interests.
Under federal law, following the submission and preliminary denial of an operator's
proposal,the franchising agency is required to conduct a hearing to consider, among other
things, whether the operator's proposal is reasonable to meet the future cable-related community
needs and interest,taking into account the cost of meeting such needs and interests. While at the
current stage of the process the Agencies are not required to consider costs, staff nevertheless did
consider some of the general cost implications of meeting community needs and interests.
Among the reasons that we took this approach—as opposed to simply costing out each of the
requirements—are the following:
1. Only Comcast's rates for basic service and equipment are regulated under FCC
rules. While Comcast may argue that the costs of meeting new PEG and I-Net
requirements will push rates higher,rates in the Consortium area have been equal
to or higher than the rates that are being charged in some communities where the
operator has provided substantial PEG and I-Net benefits. For example, in
Concord and Walnut Creek, Seren offers a Basic Plus package of 79 channels at a
price of$35.95 per month. On a per channel basis, Seren charges $0.45 per
channel. Under its franchises in both cities, Seren has agreed to build an I-Net
and provide substantial financial support for PEG access. Yet Seren is charging
far less per channel than Comcast in either community. In Concord, Comcast's
rate for standard service (consisting of 71 channels) is$42.62, or$0.60 per
channel. In Walnut Creek the 62 channel standard service costs $38.65, or$0.62
per channel. Therefore, staff believes that it is possible to provide an advanced
cable system and also meet the costs of PEG access and I-Net requirements
without imposing any additional burden on subscribers.
2. A strict cost analysis ignores the fact that improvements to the cable system create
opportunities for the cable operator to generate new streams of revenues and can
eliminate or reduce existing costs by, for example, reducing the amount of
maintenance required. These revenue streams could be substantial. For example,
Comcast has estimated that it generates about$100 per year in cash flow for each
—22—
digital customer. Four years ago, based on its customer base at the time of one
million digital subscribers, that translated into $100 million in revenues from the
digital offering alone—which the president of Comeast's cable unit noted was just
the"tip of the iceberg" considering the variety of new services that can be offered
through a fully digital plant, such as video-on-demand, e-mail, instant messaging,
and telephony.35 The continued roll-out of digital service enables cable operators
to substantially lessen the impact of competition from satellite multi-channel
video programming(DBS)providers.36 Subscriber revenue growth in the cable
industry is expected to nearly double over the period from 2001 to 2007—from
36.1 billion to 67 billion.37 Most of this growth will come from new interactive
services, such as cable telephony and high speed Internet access. For example,
interactive service revenue(including video-on-demand, cable telephony and
high-speed Internet)will be $8.1 billion in 2003. Id. The results announced by
Comcast for the first year after the AT&T merger,discussed above,bear this out.
It now appears that Comcast is in a position to reap enormous cash flows from its
rebuilt systems, including those serving the Consortium area. Comcast expects
revenue to grow by approximately 10%in 2004, and operating cash flow to grow
between 15%and 17%. Revenues from the many new services Comcast can now
provide and will presumably continue to roll out in the Consortium area will
dwarf the cost of meeting PEG and I-Net needs.
3. The PEG access channels described below would not be broadcast,nor would
they likely be carried by direct broadcast satellite(DBS)providers. The surveys
conducted by The Buske Group demonstrate that there is high demand for PEG
channels. As a result,providing the PEG channels and facilities may provide
Comcast a competitive advantage over DBS providers, thereby increasing
subscribership and revenue.
35 Mike Farrell,.MSO Chiefs Say:Keep on Modernizing, Multichannel News, October 10, 2000.
36 For example, Comcast has reported that its rollout of digital services has enabled it to grow its
subscriber base "l to 2 percent in the face of very aggressive marketing spending by satellite
providers." Comcast's cable unit's president estimates that in markets where Comcast offers
digital service, Comcast is `winning over DBS 80 to 90 percent of the time." Farrell, Mike,
MSO Chiefs Say: Keep on Modernizing, Multichannel News, October 2, 2000. In a survey
commissioned by the General Accounting Office, about one-third of respondents stated that the
availability of cable modem Internet service would make them "moderately likely" or "much
more likely" to consider cable over DBS. One-fifth said cable modem service was a major
reason for considering cable. Telecommunications Issues in Providing Cable and Satellite
Television Services, GAO-03-130, General Accounting Office (Oct. 2002), at 2, 7.
37 Allied World, Despite Industry Turmoil CATV Services Revenue to Continue Strong Growth
Aided by Services, According to Allied Business Intelligence, (Aug. 7, 2002),
www.alliedworld.comlabiprdisplay2 isp?)ressid-28. Revenue in 2004 will be $58.2 billion.
Allied World, Interactive Services Remains the Critical Element for Growth of Cable
Subscribers Says Allied Business Intelligence, (Oct.23,2002),
www.alliedworid comlabi dis s1ay2 js pressid=103.
—23 —
In this Part III of the report, we examine developments, and identify needs and interests,
in the following general categories: system design; support for PEG access use; support for I-
Nets; system construction and extension issues; and a few miscellaneous issues.
B. General System Design.
1. Developments in the industry..
The cable industry has changed dramatically in the last few years, and continues to
evolve. What was once an industry primarily focused on delivering television signals to the
home is developing into an industry that is providing a critical part of the"information highway"
that is changing the way the people receive information, shop and communicate. Cable now
delivers a wide variety of two-way cable services through modern,upgraded cable systems. And
according to the California Cable Television Association,throughout the nation, including
California,cable operators are upgrading their systems to provide new services and products to
customers,including"digital cable, local and long distance telephone service,high-speed data
communications, improved signal reliability, better pictures, superior two-way transmission
capability, and better customer service."38
The potential impact of an advanced cable system on a community cannot be
overestimated. For example, in schools, accessing the internet via an advanced cable system's
"superior bandwidth"allow students and teachers to download information at speeds"50 to 100
times faster than telephone-based modem technologies."39 The benefits of this technology are
not just confined to the schools.
A two-way cable system may provide a vehicle for providing new cable services that
permit small local businesses to interact at high speeds with local governments and other
institutions in ways that save time and cut costs.New programming services are developing
every year. According to the NOTA, in 1996 there were approximately 145 national cable video
programming networks; by 2002,there were over 300.40
In order to provide all these new services, companies such as Comcast have had to
upgrade their networks to increase capacity,reliability, and responsiveness. Deployment of
future services will require additional new upgrades. Today's cable systems take advantage of
"fiber optic"technology,which is the ideal medium for transmitting vast amounts of
information,including video,at high speed. The National Cable and Telecommunications
38 See CCTA's website, at Lttp://www.caleable.or2/whatsnew.htmi.
39 NOTA,"High Speed Internet Access,"h •/Ltp /www ncta com/Docs/PageContent.cfrn?PaaeW 0:
Stanley A. Miller II, Wired or Wireless, Users Love Broadband,Milwaukee Journal Sentinel,
Mar. 30, 2003 ("[T]ypically it takes about six minutes to download a 1-megabyte file using a 56
kbps modem,but a high-speed Internet connection (running at about 700 kbps)would take about
12 seconds").
40 NCTA, Cable and Telecommunications Industry Overview 2003 Year-end(2003), at 13.
—24—
Association reports that as of the end of 2003,more than 90% of homes with access to cable
television were passed by a system with a capacity of at least 750 MHz, and 95 million homes
were passed by activated two-way systems capable of delivering interactive services.41 The next
step in cable system technology will probably be the deployment of fiber-to-the-home.42
This does not mean that fiber must immediately be brought directly to every building and
home. For residential service, most cable systems being built today use fiber trunk lines to carry
signals into neighborhoods, to a point called a"node." At the node, signals are routed onto
coaxial cable, from which individual locations are served. While it is considered cost-effective
to use fiber as a"backbone"for cable systems,there is a significant question as to whether it is
currently necessary or cost effective to use fiber to carry signals from the trunk all the way to the
home. So long as the distance the coaxial cable must carry the signal is limited(so that the
system does not use many amplifiers), a system using a combination of coaxial and fiber can
deliver high-quality signals to the home, and if properly designed, can provide enough two-way
capacity to send video and data from the home to various locations on the cable system. Many
modem cable systems being built today have limited node size, in anticipation of future
consumer demand for advanced services requiring increased bandwidth. For example, Seren has
constructed cable systems in Concord, Walnut Creek, and certain unincorporated areas that have
a capacity of 860 MHz and serve fewer than 500 homes per node. Cablevision Systems Corp. is
rebuilding its systems to 860-Mhz, with two-way plant, averaging about 380 homes per node 43
Charter Communications is deploying six fibers to each node, and claims it can split nodes down
to 60 homes per node if demand for bandwidth by consumers dictates.44 Before the Comcast
merger,AT&T had tested a"mini-fiber node" systems in Salt Lake City, "in anticipation that
we're going to get millions of subscribers for our advanced services,"because"if we do,the
current architecture—where 600 households are served from a fiber node--may not be the best
approach. 45 While the amount of capacity available is less than that of an all-fiber system, it
will still allow other uses, including reliable transfers of data at speeds much faster than are
supported by existing coaxial cable networks. The residual coaxial links on a fiber-coaxial
41 Id. at 2.
42 A report issued by the Fiber-to-the-Home Council predicts that there will be a million homes
passed by fiber-to-the-home systems by the end of 2004. See
hgp://www.ftthcouncil.org/jif,wsroom.ipl?id=1.04015700226899.
43 In late 2003, Cablevision Systems Corp. announced that it had finished upgrading its entire
system to at least 750 MHz, and in highly concentrated population areas to 860 MHz.
Cablevision: We're 750 .MHz Throughout, Multichannel News, Dec. 4, 2003. In 2002, the
Connecticut Department of Public Utility Control suggested that the state-of-the-art was 860
MHz. In ate Comcast Cablevision of Middletown, Inc., 2002 WL 31967535 (Conn. D.P.U.C.
Aug 28, 2002).
44 Matt Stump,Allen's MSCI Takes Digital Lead, Multichannel News, October 16, 2000.
45 Fred Dawson, AT&T IAC's Salt Lake HFC Trial ,Seeks More Than Low Casts, Multichannel
News, July 12, 1999. The Salt Lake trial was successful, and cost effective for AT&T and it
later deployed the same architecture in Dallas and Miami. Craig Kuhl,AT&THC Ties Oxiom to
Cut Upgrade Costs, Multichannel News, May 28,2001.
—25—
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. ....................................................
hybrid system may be upgraded to fiber later. In addition, using coaxial cable lines to individual
homes enables those customers who use cable solely to receive traditional television service to
avoid paying for the special and potentially expensive devices that would be required in all-fiber
systems.46
By contrast, it makes sense to bring fiber all the way to any building containing high-
volume users, and to eliminate any coaxial cable when the capacity available on coaxial links is
inadequate to satisfy the location's known needs. Thus,trends in the industry suggest that, for
now, it makes sense to build high-capacity fiber systems to neighborhood nodes; to serve
residences from those nodes using coaxial cable; and to serve other high-demand users from the
node using fiber optic cable.4
This is not to say,however,that the state of the art of cable technology has reached its
peak. Just as the last 10 years have seen remarkable changes in technology and the types of
service available to subscribers,the next 10 years may do the same. Thus, although a system
with a capacity of 860 MHz may be the state-of-the-art today, in a relatively short time it may
not be. Cable operators may find that they need to increase their system capacities, or install
fiber to the home. Thus, any franchise granted today should take this possibility into account.
In addition to being upgraded to incorporate fiber,the cable industry has concluded that
systems need to be two-way activated. Comcast has already done this in the rebuilt portion of its
system in the Consortium area. Two-way activation is required for providers to be able to
readily offer many advanced, interactive television services—services in which the set top
interacts with a server.48 Cable companies are developing interactive television services which
rely on two-way activation, including Interactive Program Guides; Personal Video Recorders
which will deploy features offered by companies like TiVo into the cable set-top box;Video on
Demand; Enhanced TV Services which allow consumers to obtain more information about
programs and commercials they are watching, for example; access to the internet over the
television set; and locally-oriented interactive sites which"offer customers information which is
not available on the Internet but which provides an"internet-like"interactive experience."
46 Adding new services can be relatively easy on a fiber-based system, at least in part because the
fiber optic systems can be constructed with the capacity and capability to operate as several
different "networks." Cable companies can install cable with several individual fiber strands
bundled together. Each strand can carry more video channels than are currently being delivered
to subscribers in the Consortium area. This means that, assuming the operator takes the
necessary technical and legal steps to do so, on completion of its cable system, a cable company
could have a number of unused strands that could be used to deliver more programming services;
to transmit data to and from various locations within a franchise area; to provide certain types of
advanced services; and so on. This type of design allows the cable system to be used cost-
effectively to serve the needs of both residential and non-residential subscribers.
47 Where the high-capacity user also wishes to receive more traditional cable services, it may
make sense to provide a fiber drop and a traditional coaxial drop to that user.
48 Ellis,Leslie,In-Band, Out-of-Band, Whatever it Takes, Multichannel News, May 28, 2001.
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................... ..... _.
_._. .........
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Interactive television provides a unique opportunity for PEG providers to better serve the
community, as well. In fact, because of the very nature of PEG—public access allows viewers
to actively participate in creating programming; government access allows for increased citizen
involvement and participation in government; and educational access involves participation by
students in learning--PEG and interactive television"compliment each other because both focus
on a specialized interactive community of specific interests in a specific geographic area."'49 One
application is the interactive public meeting, which allows viewers at home to participate in
meetings by text,voice, or video link, depending on technical capabilities. Other applications
include GIS mapping services and enhanced interactive distance learning, as well as enhanced
interactive service for government information that is not available on the Web. Interactive
television functionality can be provided for analog or digital television channels, and if the
technology is present on the system(which Comcast indicates is available in nearly 80%of the
former AT&T Broadband systerns)50 then PEG programmers can use the technology to enhance
the services they provide to their communities.
Higher capacity systems are also required to meet subscriber demand for analog and
digital services, and in order to prepare for high definition television. Traditionally, television
has been delivered via an analog signal. However,there are significant advantages to delivering
video in a digital format. It allows delivery of brilliant signals of substantially better quality than
the signal delivered to today's televisions. A digital signal can also include multiple layers of
information that a viewer can select and manipulate as desired—for example, a video news
program could carry with it additional text information on a story that could be called up
interactively. A viewer could order desired products instantaneously. The FCC views
digitization as so important that it is requiring all broadcasters to begin delivering digital services
on an accelerated schedule.51
There is also a growing interest in higher-quality signals—so-called "high definition
television"or"HDTV." HDTV signals are much sharper than standard television signals;
HDTV programs are more expensive to produce, and the equipment required to receive HDTV is
more expensive than standard equipment. It now takes more bandwidth to deliver an HDTV
signal than to deliver a standard television signal—which means that more cable system capacity
is required to accommodate HDTV signals than would be required to accommodate the same
number of standard TV channels. However, there is clearly growing consumer interest in
44 Afflerbach, Andrew, Interactive PEG: A Technical Strategy for Implementation, Community
Media Review, the Journal of the Alliance for Community Media, Winter 2000.
sa Comcast Press Release, Comcast Reports First(quarter 2003 Results (May 8, 2003) ("Comcast
Press Release") at 3.
s' 47 C.F.R. § 73.624. The Commission has reiterated the mandate to "speed the transition" of
DTV and provided "incentives" for commercial broadcasters to accomplish the transition by
December 31, 2004. Review of the Commission's Rules and Policies Affecting the Conversion to
Digital Television, Report and Order and Further Notice of Proposed Rulemaking, MM Docket
No. 00-39, 16 F.C.C.R. 5946 (2001).
—27—
HDTV, and growing programming choices.52 Sales of HDTV-capable sets are expected to reach
4 million in 2003, compared to 2.7 million in 2002. Over the next franchise term,the cable
systems serving the Agencies will need to have the bandwidth(and facilities and equipment)to
be able to carry a broad range of HDTV signals if they are to respond to consumer demand.
Comcast has stated that HDTV is now available to more than 9 million subscribers. Comcast
Press Release at 3.
Finally, many local governments have recognized that it is important to ensure that cable
systems within the community are interconnected, one to the other, and to cable systems in
adjacent communities. Interconnections can allow communities to exchange PEG programming,
and institutional network transmissions. That is important, among other reasons,because
communities may be facing regional issues that should be addressed on a regional basis, and
because agencies, schools and colleges may serve areas that extend beyond a particular local
government's boundaries. The following are examples of interconnections in other communities.
• Portland. Oregon: The Mt. Hood Cable Regulatory Commission(MHCRC) is responsible
for regulating five cable television franchises in Multnomah County, Oregon, including the
County and the City of Portland. The Commission oversees two community access
organizations,which together provide PEG programming that is available to all subscribers
in each of the MHCRC jurisdictions. The various cable systems have been interconnected
for more than fifteen years in order to allow for the PEG programming to be carried on all
systems. At one time,there were nine franchise jurisdictions and six different operators, all
of which provided a physical interconnection to allow this shared PEG programming.
Comcast is now the only operator and the company has consolidated the systems using super
headends.
• Chicago: Chicago does not interconnect with any neighboring cities. However,the City
sloes have five different franchise areas and three different operators. All systems in the City
are interconnected for the purpose of allowing the City's five PEG channels to be shown on
all systems. The interconnections are made by different methods, depending on the operator,
including hardwire connections to the other operator's headend and the use of bi-directional
cable. The City's franchise ordinance and agreement require that all cable operators within
the City be interconnected.
Cable systems in the Consortium area are being upgraded consistent with the foregoing.
As discussed above, AT&T(now Comcast)subsidiaries have installed cable systems in most of
the Consortium Agencies that incorporate fiber optics, are two-way activated,and have a
bandwidth of 860 MHz. The systems employ electronic equipment capable of supporting a
bandwidth of at least 750 MHz; in some areas the electronic equipment supports a bandwidth of
860MHz. Comcast has interconnected some of the systems and consolidated headends, and staff
understands that Comcast intends to interconnect all of the systems at some point. Comcast's
52 Eric A. Taub, Technology: HDTV's 4cceptance Picks up Pace as Prices Drop Networks Sign
On,N.Y.Times, Mar. 31, 2003, at Cl.
53 Mike Snider,,4 DefiningMoment,for TV,USA Today,Jan. 7, 2003, at D1.
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nodes, however, are larger than those in many advanced systems today. Comcast's rebuilt
systems in the Consortium area serve an average of 700-754 subscribers.¢
Finally, franchising authorities in many communities are taking advantae of the
advances in technology to require operators to provide "institutional networks" and to devote
significant two-way capacity for public,educational and government use of the system. These
requirements can include requirements, for example, for linking schools, libraries and
government agencies together, and providing links to the Internet. The goal is not simply to
allow these agencies to communicate more effectively internally(or with one another). The goal
is to obtain the resources required to provide better services to the public.56
In summary,general industry trends suggest that that there is a need and interest in
having a high-capacity, reliable, high quality, fiber-based(or equivalent)cable systems, with
activated, interactive capabilities. Further,because of the importance of these systems, a
community would be remiss if it did not insure that all of its citizens have an opportunity to take
advantage of system benefits. As discussed below,the benefits made possible by an advanced
cable system include an institutional network, a significant amount of capacity for public,
educational and government use, and interconnection to other local cable systems and the
Internet.
2. The Consortium's Ascertainment.
The Consortium's work in ascertaining cable-related needs and interests confirms these
points. Indeed,the ascertainment confirms that there is a great need and interest in having
advanced cable systems providing service throughout the participating communities.
The CTC Technical Report found that, as of April 2000,the cable systems in the
Consortium area needed to be rebuilt. At the time,AT&T had begun its rebuild, but most
subscribers in the Consortium area were still served by antiquated systems. The CTC Technical
14 CTC Technical Update at 1.
55 Institutional networks are communications networks constructed by cable operators to serve
primarily non-residential customers.
56 In Mountain View, California, for example, the cable system was upgraded to 750 MHz. At
the same time the subscriber network was upgraded, the operator constructed an institutional
network at a fixed price — below estimated marginal cost — that will link schools, libraries and
public buildings. The institutional network can be used for internal communications, for
communications with the public, and for connections to the Internet. Finally, the operator is
providing channel capacity for PEG access—four channels will be provided on demand, and two
additional channels will be provided if specific triggers are met. Moreover, the franchise
includes commitments for a portion of the cable system's capacity. The operator also agreed to
make digital channel capacity available for PEG use. PEG channels can be used to send video
and non-video information to the home.
57 Ruske Report at 37, 71-72, 130, 136-137. Many of these services could be provided, in part,
by using institutional network capacity.
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Report also found that a significant proportion of subscriber drops were improperly grounded,
and that in many places guy wires needed to support the aerial plant were missing or improperly
installed. Inadequate grounding and guying create safety problems and typically constitute
violations of local electrical and safety codes. In the CTC Technical Update, CTC again
inspected the grounding of service drops in March 2004. CTC reexamined some of the earlier
sites, and some new sites. This review disclosed that despite the overall system rebuild,many of
the earlier grounding violations had not been corrected. The CTC Technical Update did not
reexamine guy wires.
The CTC Technical Update also discusses the general state of cable technology,
confirming that in order to deliver such services as digital cable and HDTV, a modem system
should have a bandwidth of at least 750 MHz, and preferably 860 MHz. The Buske Report
recommends upgrading all of the systems in the Consortium area to at least 860 MHz. Staff has
concluded that given how recently most of the systems in the Consortium area have been rebuilt,
it would probably not be cost-effective to require Comcast to upgrade all of its systems to 860
MHz, as long as the systems serving the Consortium area are all capable of providing the full
range of advanced services. It appears, however,that Corncast's node sizes may be larger than
the optimal size. Those portions of the Consortium area that have not been rebuilt yet—
consisting primarily of Walnut Creek—should, however,be rebuilt. Furthermore,there is a need
and interest in ensuring that the cable systems remain at the state-of-the-art throughout the
franchise term.
The Consortium's needs assessment studies found significant levels of interest in two-
way educational and governmental services, including the ability to obtain permits and licenses
electronically; the ability to access library resources; the ability to communicate with
government officials and educators;the ability to obtain access to local government and school
documents; the ability to obtain public safety information; and the ability to participate in
distance learning from the home.57
Participants at the focus groups were quite clear that there is a significant need and
interest in an advanced cable system,in PEG use of the system, and in an institutional network.
An analysis of the input received through the focus group discussions resulted in the
identification of six key communications challenges for public agencies, community and civic
groups,and schools. Those areas include: (1)inadequacy of available communications media;
(2)communicating with diverse groups; (3)the need for new education and skill sets; (4) lack of
cooperation and collaborations; (5) cost barriers; and(6)more and better managed information
needed.5s
Participants indicated that there are now cost and other barriers that prevent them from
communicating effectively.59 Participants concluded that the cable system could be used to
address many of the problems facing the community.
58 Buske Report at 43-46.
59 Id.
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Testimony before the Board of Supervisors,the Danville Town Council, and the City
Councils of Concord,Martinez, and Walnut Creek, as described in the Buske Report, echoed the
comments made during the focus groups. Studies by school district and other local agencies
illustrate the importance of ensuring that the Consortium area is served by an advanced cable
system.60
The Buske Report describes the need and interest in requiring the cable operator to
construct an I-Net, and devoting capacity on that network for educational and governmental use
(the I-Net could also be used cost-effectively for PEG access transmission and related purposes).
The I-Net Report elaborates on this need and interest by proposing a general system level design
model for an I-Net. We will address the details of the I-Net ascertainment further below; at this
point it suffices to say that an advanced cable system is needed to support an effective I-Net.
The ascertainment process further establishes that there is a need and interest in requiring
the cable system to interconnect with other communications networks. An interconnected
institutional network is needed for governmental purposes,but also because the 18 school
districts serving residents of the Agencies do not follow jurisdictional boundaries. These
districts cross jurisdictional boundaries repeatedly. The County is served by all 18 school
districts;the cities of Concord, Pleasant Hill, Clayton and Danville are each served by two
different school districts;the cities or Orinda, Moraga and Martinez are each served by three
different school districts; and the City of Walnut Creek is served by five different school
districts. In order to have good communication both within individual districts and among
districts, connectivity for PEG signals is important. The Contra Costa Campus of California
State University,Hayward, also serves the residents of the Agencies. Thus, interconnection to
systems in neighboring jurisdictions is essential to provide seamless educational and distance
learning opportunities throughout the school districts.
To participate in the Digital California Project("DCP")it may be necessary to
interconnect with neighboring communications systems. The DCP's plan is to extend is
infrastructure background into each county in the state via primary and 'secondary access nodes.
Such a node will be located somewhere in Contra Costa County,but to take advantage of the
applications available, any institutional networks serving the Communities will have to connect
to the node either directly, or through an interconnection with another jurisdiction's
communications network that is connected to the node.61
In addition to the needs and interests described above, the ascertainment identified the
importance of being able to use the cable system to notify the public about localized
emergencies. This would require some form of remotely activated, secure channel override, that
would permit an authorized official to send an emergency video and audio message to the
60 See, e.g., "Distance Education in Contra Costa County," prepared by the Contra Costa
Educational Television Consortium(January 2004).
61 Corporation for Education Network Initiatives in California: Digital California Project.
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community via the cable system overriding both video and audio on all channels.62 In addition,
an interconnected network would allow emergency information to be transmitted on a County-
wide basis, when required.
The needs and interests with respect to general system design are summarized below.
The recent system rebuilds have addressed many of these points. As discussed in the CTC
Technical Update,however,many subscriber service drops need to be replaced or properly
connected, even in rebuilt areas. Furthermore, there remains a need or interest in rebuilding the
remainder of the systems,primarily in Walnut Creek. Accordingly, all of the systems should be
rebuilt or otherwise modified to include the facilities and equipment required to meet the
following needs and interests.
• The system should be state-of-the-art,with substantially greater capacity,
reliability and flexibility to respond to changes in cable television that could be
expected over a new franchise term. A system that will meet this need and
interest would have the characteristics of a 750 MHz or greater system(860 MHz
in areas that have not been rebuilt), with fiber to the node, small nodes, and
minimum active components in any cascade, or a system with similar
characteristics that is capable of providing the level of functionality described
below.63
• The system should provide substantially greater channel capacity than is provided
on the unrebuilt portions of the cable system. The entire system should be
capable of responding to subscriber demands for channels delivered in various
formats without substantial additional upgrades, and should be designed so that it
62 Federal law establishes regional and national emergency alert requirements for cable systems.
However, these requirements do not provide adequately for local emergency alerts. The FCC
allows these requirements to be established through a franchise.
63 As we explain above, a capacity of at least 750 MHz—and preferably 860 MHz—is needed if
the cable systems serving the communities are to have sufficient capacity to provide reliable one-
and two-way cable services to meet cable-related needs and interests for the future. Without that
minimum capacity, Agencies may not be in a position to take advantage of the enormous benefits
an advanced cable system can offer. It is expected that as more and more advanced services are
offered on the system,the number of subscribers taking advantage of these services will increase.
Indeed, according to the National Cable and Telecommunications Association ("NCTA"), the
number of subscribers nationwide taking a digital tier reached 21.5 million at the end of 2003.
NCTA, 2003 Year-end Industry Overview(2003), at 6. Indeed, a capacity of 860 Mhz appears to
provide greater capacity and flexibility to handle that increased demand in the future. Hogan,
Monica, Managing Bandwidth Emerges as Hot Topic, Multichannel News, July 17, 2000; Iler,
David, Overbuilds Could Be Test Beds for Very High Speed Rall Guts, Multichannel News,
July 17, 2000. The reliability of a network is directly affected by the number of active
components in a cascade. Each active component is a potential failure point; limiting the number
of components increases reliability. In addition, the number of elements in a cascade can affect
signal quality, and may impede or add to the cost of providing advanced,two-way services.
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will be capable of responding to technological developments (e.g.,high definition
television and interactive television)promptly. The system should include
equipment and facilities typical of a well-designed,modern cable system, and
which will maximize consumer choices.
The system should provide substantially better signal quality and system
reliability than is provided by the unrebuilt portions of the cable system. The
system should have a minimal number of failure points between signal sources
(headend) and each individual subscriber.
• The system should provide two-way activated facilities and equipment with ample
bandwidth upstream and downstream to support broadband, advanced cable
services, and the institutional network and PEG uses we describe below. The
ascertainment suggests that there is a need and interest in taking advantage of
cable's potential for interactivity for both commercial and non-commercial
purposes. Staff recomrnends that the operator be required to provide the facilities
and equipment necessary to meet this need and interest.
• Facilities and equipment should be sufficiently flexible to respond to increases in
consumer demand over the franchise term #so that as subscriber demand
increases,the system's upstream and downstream capacity to subscribers can be
rapidly and efficiently expanded through such techniques as "node splitting"
without the need for major cable plant construction or modification. Further,the
need for future node splitting should be reduced by requiring nodes of limited
size, e.g., limiting node size to 504 homes per node. There is also a need and
interest in having the system include equipment and facilities typical of well-
designed,modern cable systems, and the equipment and facilities required to
maximize consumer choices. Staff recommends that the operator be required to
provide the facilities and equipment necessary to accomplish this;
The system should satisfy all applicable technical standards for system
performance over the franchise term.
The system should permit the operator to respond quickly and effectively to
outages,requests for service, and customer complaints.Y
64 The NOTA reports that as of year-end, 2003, an estimated 21.5 million homes subscribed to a
digital cable tier offering extended channels and CIS-quality music. NOTA, 2403 Year-end
Industry Overview(2003), at 6. decent articles indicate that there is a growing consumer interest
in high definition television. ,dee discussion supra p. 27.
65 Indeed, as discussed elsewhere in this report, the majority of customer calls and
correspondence reviewed by staff are for poor service, missed service calls, and repeated service
calls with no resolution of the problem.
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* The system should allow subscribers to receive signals in substantially the same
form in which they were received by the operator from the programming source,
e.g., color television signals should be received by subscribers in color, stereo
signals should be received by subscribers in stereo, secondary audio signals
should be receivable, and closed captioning signals should be receivable on
television sets capable of decoding the closed captioning signal;
• The system should allow parents to control viewing by children, with only minor
modification of adult viewing options.66
• The system should allow that the services (including, by way of example,
customer service support)provided by the operator be reasonably accessible to
the hearing-impaired and other persons with disabilities.67
• The system should provide service to residential and non-residential locations
throughout the incorporated portions of the Consortium area. This includes the
downtown areas of each of the Cities and Towns. In the case of the County, it
may be appropriate for Comcast to charge a"line extension fee"in some parts of
the County—essentially requiring the subscriber to pay part of the cost of building
the system to the point where service can be provided to a location. But, given
the density and nature of the incorporated areas,potential subscribers in those
areas should not be charged line extension fees.
• The operator should interconnect all of the cable systems with each other and with
other communications networks inside and outside each Agency so that signals
can flow back and forth across the systems.68 Staff recommends that the operator
be required to interconnect each cable system with other networks, and that the
operator be required to provide the facilities and equipment necessary to
accomplish this. The operator also should be obligated to interconnect its cable
system to systems in adjoining jurisdictions, so that PEG signals (including
institutional network signals) can be effectively transmitted to and from each
system seamlessly, without substantial deterioration or degradation.69
66 California law supports this need and interest. See Cal. Govt. Code 53056.4 (requires cable
franchisees to offer a lockbox —which enables the subscriber to prevent the viewing of any pay
channel offering adult programming—for a small monthly charge, and specifies that a city is not
precluded from requiring, as a condition to the grant of a franchise, that the franchisee make
lockboxes available to subscribers without a charge).
67 According to the Hearing Society of the Bay Area, nearly 10% of all Americans suffer from
hearing impairment. Hearing Society of the Bay Area World Wide Web Site at
www.hea,ringsocieiy.om!Unl/information/index.html.
68 School districts serving the Consortium members do not follow jurisdictional boundaries.
65 As discussed earlier, interconnection to systems in neighboring jurisdictions is necessary to
support educational access programming. The need and interest for the system to be capable of
interconnecting to other systems within each Agency stems from the fact that two Consortium
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• The system should provide useable emergency alert capabilities that allow the
Agencies to remotely and securely override the audio and video portion of all
channels in the event of an emergency. This system should permit each Agency
to send out a local emergency alert throughout that community, and should also
fimction effectively as part of a regional, state, and national emergency alert
system. Staff recommends that the operator be required to provide the facilities
and equipment necessary to accomplish this.
+ The system needs to keep pace with technological developments over the
franchise term. Staff recommends that the operator be required to provide the
facilities and equipment necessary to accomplish this.
The staff recommends that the RFRP requirements be adopted for facilities and
equipment consistent with the above and the needs and interests identified in the CTC and The
Buske Group reports.
C. Support for Public,Educational and Government Access Use.
PEG requirements take several forms.70 Franchising authorities can require operators to
designate channel capacity for public, educational and governmental use in an RFRP.
Franchising authorities can establish requirements for equipment and facilities---for example,
requirements for studios and cameras. Franchising authorities can establish rules for the
management and use of the facilities and channels devoted to PEG use. Franchising authorities
can enforce promises for services made by an Applicant. In any event, before issuing a franchise,
a franchising authority can insist that the operator"provide adequate public,educational, and
governmental access channel capacity, facilities or financial support. 1" This section will focus
on what our needs assessment shows with respect to specific requirements for channel capacity,
facilities and equipment, and operating support for PEG use, in addition to those network
requirements described above. It will also discuss what the ascertainment shows with respect to
management of the PEG resources. Finally, it will discuss the need and interest in an
institutional network.
members, Concord and Walnut Creek, already have competing cable systems operating within
their boundaries. The owner of those systems, Seren has expressed interest in serving other
Consortium members as well. Thus, it is important that all of the Agencies plan now for the
multiple cable system scenario. Each Agency needs to be in a position to ensure that in that
scenario, PEG and I-NET responsibilities are coordinated between the providers, so that all
residents can benefit,regardless of which provider they choose.
70 1984 House Report at 68, 1984 U.S.C.C.A.N. at 4705 (franchising authorities may require,
among other things, "satellite earth stations, uplinks, studios and production facilities, vans and
cameras for PEG use").
7147 U.S.C. §541(a)(4).
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The ascertainment showed that there is a high priority need and interest in PEG use of the
cable system. The I-Net is also a high priority; among other things, it will facilitate the use of
the system for PEG purposes, especially educational and government uses.
1. General trends in other communities.
As Congress noted when it first passed cable legislation.
One of the greatest challenges over the years in establishing
communications policy has been assuring access to the electronic media
by people other than the licensees or owners of those media. The
development of cable television,with its abundance of channels, can
provide . . .the meaningful access that . . . has been difficult to obtain.
Almost all recent franchise agreements provide for access by local
governments, schools, and non-profit and community groups over so-
called"PEG" (public, educational and governmental) channels. Public
access channels are often the video equivalent of the speaker's soapbox or
the electronic parallel to the printed leaflet . . . PEG channels also
contribute to an informed citizenry by bringing local schools into the
home and by showing the public local government at work.?
While there are certainly many communities that have no PEG channels, communities
that have concluded that PEG requirements serve important community needs and interests often
require three or more channels. That is because the programming interests of the public,
educational and governmental entities that use the channels are diverse. Separating the channels
by use allows different user groups to schedule and develop programming of a particular type,
and ensures that viewers have a general idea as to the type of programming that will be available
on each channel. In addition,providing for adequate access from the outset avoids potential
subscriber disruption that could occur if a community begins with too few channels, and must
displace channels in order to obtain adequate capacity. If it turns out that there is not enough
programming,the cable operator can use the PEG channel capacity for its own purposes.
There are several substantial PEG access operations in California, serving communities
of various size and character. To take one example, Mountain'view California,a community
with approximately 17,500 subscribers,has four channels guaranteed and may obtain additional
analog channels if certain triggers are met. Mountain View can also obtain the right to deliver up
to six distinct digital channels to each subscriber for PEG purposes. The channels can be used to
transmit video and non-video signals to subscribers. There are other communities in which
operators have devoted substantial capacity to PEG use located across the country. Larchmont,
New York, a former AT&T system serving approximately 9,000 subscribers,has three PEG
channels, and an option for one more. Vancouver, Washington,has seven PEG channels;
Spokane,Washington, six; Multnomah County, Oregon, eight; Austin, Texas, eight; and
12 1984 House Report at 30, 1984 U.S.C.C.A.N. at 4667.
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Portland, Oregon, five. The experience of these and other communities suggests that substantial
channel capacity should be devoted to PEG use.
It is also generally recognized,however, that channels alone are not enough. Resources
roust also be available to enable potential users to produce programming. The channels need to
be publicized;potential users needs to be trained; equipment and facilities need to be available to
produce good quality programming(audio and video must be satisfactory); equipment and
facilities need to be available to edit programming; necessary facilities and equipment need to be
in place in order to send signals to the headend from origination points, and then to subscribers
via the headend. It is difficult for access to succeed without these resources. Many franchise
agreements contain commitments by cable operators to provide support for PEG access in
addition to providing a 5%franchise fee to the community. In Mountain View, California, for
example,the operator provides funding each year for capital support. Moreover,the Mountain
View franchise contains a provision which permits an operator to escape its capital funding
obligations if it is providing adequate support to an independent,third-party non-profit that runs
PEG operations;the company did enter into a contract with a non-profit and under that contract,
provide funds to the non-profit that can be used for operational or capital purposes, as best meets
the need of the community. Even with these benefits, and a 5% franchise fee,the rates per
channel in Mountain View were in fact less on a per channel basis in 2003 than the rates being
charged by Comcast in Walnut Creek.73
Recently, Comcast entered into new franchise agreements with the cities of Santa Maria
and Lompoc,which have a total of approximately 25,000 subscribers. Comcast agreed to
provide initial PEG access funding of$828,000 plus$355,000 annually. A summary of support
for PEG access provided by cable operators in a number of other communities can be obtained at
http://w-ww.buskegroup.com/OutcomesofRecentCableFranchiseRenewal s2003 v2.pdf.
PEG use is changing as cable technology changes. Access centers originally were
primarily concerned with the provision of video programming,just as cable operators primarily
focused on the provision of video programming. This was partly the result of technological
system limitations. However, PEG use has not been restricted to video programming. Several
access centers have long had interactive bulletin boards. Subscribers could use these interactive
boards to call up information about particular community events. Sacramento has had a PEG
radio service since 1987. But, with advances in computer and communication technologies, a
number of access centers are evolving into community media centers,which will provide people
in the community opportunities to take advantage of cable's new technical capabilities to
provide diverse, interactive multimedia information to the home(and thus provide everyone in
the community the opportunity to participate in the Information Age as an originator and
recipient of information). Franchise negotiations in several cities (such as Santa Rosa and
73 Staff calculates that the monthly per-channel cost for the basic and expanded basic tiers in
Mountain View, including PEG fees and charges, is currently $0.52, while the monthly per-
channel cost in both Walnut Creek and Martinez is $0.62.
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Mountain View)have secured the right to use the cable system to transmit video, data and voice
PEG communications. Several centers are combining traditional cable and Internet functions.74
In sum,the developments in communities that have determined that PEG access can
serve important community needs and interests suggests that(a) system capacity sufficient to
support multiple channels should be devoted to PEG use; (b)operators should provide
substantial support for PEG access, in addition to the franchise fee; and(c) PEG access
requirements should be structured to enable the community to take full advantage of advances in
cable technology, including advances in interactivity and in digital capacity. In addition, as The
Buske Group has pointed out, many of the most successful PEG operations are run by non-profit
groups designated by the franchising authority. In almost every case,the PEG resources and
channels are available for use at no charge from the cable operator.
2. The results of the ascertainment regarding PEG access channels
The ascertainment was conducted over a very long period. It began in 1999, when the
Buske Group began work,and essentially extended into 2004 when the Buske Group completed
updating the previous work. The updating process largely confirmed the findings of the original
assessment, and thus emphasizes the accuracy of the initial findings over time. Furthermore,
with respect to those areas where there is some divergence between the original and updated
findings,the range of views represented in the Buske Report seems to represent a fairly narrow
range of views, and it seems fair to conclude that the community's needs and interests at any
given time probably fall somewhere within the scope of the Buske Report's findings.
PEG Access in General. In response to all three surveys conducted by the Buske Group,
over two-thirds of the subscriber-respondents said it is either"important" or"very important"to
have cable channels that feature programs about local residents, organizations, events, schools
and government.75 In the Buske Group focus groups, 84%of cable subscribers who participated
said that they had seen or would be interested in seeing local cable television programs about
Consortium area citizens, organizations, community events, schools, or local govern7ment.76
74 The Grand Rapids Community Media Center ("GRCMC") in Grand Rapids, Michigan
provides an interesting example of this development. GRCMC has developed into a multi-media
center, with community computer facilities, as well as facilities designed to assist in the creation
of community video. The organization provides services that range from the high-tech
(providing access to the Internet to people who otherwise could not obtain it) to the more
mundane—a weekly"adopt-a-pet"segment ruin by the local Humane Society. The GRCMC also
operates the "Mobile Learning Lab for Information Education" or MoLLIE. MoLLIE is a van
with laptop computers and video equipment that travels to low income neighborhoods and
schools to provide computer training,Internet access and video production training. Audio, video
and computer data can be routed back to the GRCMC for possible transmission on FM radio,
cable television and streaming on the Internet. See GRCMC World Wide Web Site at
http://mollie.grcmc.org.
?5 Buske Report at 136-137.
76 Buske Report at 10.
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Ninety percent of these respondents said that they had watched programs on either their system's
public access channel, or on the County's government access channel, CCTV.77 Of this group,
97%had watched the channel(s) at least once during the previous month, and 40% said that they
had watched more than five times during the previous month.78 Further, about two-thirds of the
focus group survey respondents (63%) felt it was very important, and another 33%thought it was
important,to have cable channels featuring pro ams about local schools, colleges,
organizations, local government, and residents.F9 Participants in the 2004 public meetings were
not asked to replicate the earlier focus group survey, but they did state that there are numerous
uses for which PEGS access facilities could be used, and that there is a need for PEG access
channel capacity, equipment and facilities.80
When they were asked how much of their monthly cable bill should go to support such
programming, the average of all responses in the 1999 Survey was$1.08. In the 2003 Survey,
this figure was $0.81, and in the Concord/Walnut Creek Survey it was$0.78. It is also important
to note that the cable operator is not required to recover all of the costs of meeting PEG and I-
Net needs by increasing its rates. It is not at all uncommon for a business that faces an increase
in the cost of production of a good or service to refuse to pass on the increase to its customers.81
Because a cable franchise constitutes a grant of the right to use public property in a business
venture,payment of PEG and I-Net related expenses is a form of rent for the use of the public
rights-of-way,just like the franchise fee. It is therefore perfectly permissible for Comcast to
absorb some or all of the cost of meeting such requirements by reducing its profit margin. As
discussed elsewhere, staff believes that Comcast could do so and still make a healthy profit.
Public Access. There is also a substantial need and interest in the operator providing
additional facilities and equipment that will be available for the public to produce such
programming. The Buske Report indicates that public access facilities are currently shared with
the cable company's local organization production operations, and availability of equipment and
studio space is limited. For example, only 23%of focus group residents who had helped produce
a public access program stated that equipment was always available.82 Moreover, the operator
had undertaken only minimal outreach efforts to encourage the use of the Public Access
resources. Indeed, only about half of the focus group respondents knew that local residents
could learn how to use public access production equipment managed by the cable company.83
77 Id. at 11.
78 Id
79 Id. at 21.
"Id at 133-134.
$1 And of course, Comcast is providing certain benefits under the terms of its current franchises,
including operating some PEG channels, which means it is already incurring certain costs.
Comcast would no longer incur those costs under a new franchise. Thus, any PEG and I-Net
related costs arising from a new franchise would not necessarily increase Comcast's total costs,
and even if there were an increase it would not be by the entire amount of the new costs.
s2 Id. at 24.
a3 Id. at 23.
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Moreover,the staff of the public access facilities did not provide any organized training
in the use of the access production equipment to produce programming. At the Walnut Creek
facility,training is available strictly on a one-to-one basis. At the El Cerrito facility,public
access producers have access to editing equipment only during limited hours. At the Martinez
facility, at the time of the Buske Group's original review, applicants were allowed only three
hours of free studio or editing time per month; if they needed more,they had to pay. Today,
Martinez applicants must go to Walnut Creek to use studio or editing facilities, because the cable
company has closed the Martinez facility. In all cases, the operator allocates only a few hours a
week to carrying public access programming on the local origination channels.
The Buske Group inspected the public access facilities and found that the equipment was
old, and the facilities were not adequate to support a successful access program that could meet
the needs and interests of this community. Since the time of the original inspection, Comcast has
made a few modest improvements in the Walnut Creek facility, and has made no improvements
at the El Cerrito facility. And as noted above, the Martinez facility was shut down. Thus,public
access facilities remain inadequate.
The Burke Group's inspection verified the statements made by members of the focus
groups, who complained that existing production equipment was inadequate,the time limits on
its use too restrictive, the available training and support inadequate, and the facility too small to
use.
Government Access. There is also a significant need and interest in additional facilities
and equipment to produce government access programming. The Buske Group Report indicates
that over 88%of the focus group subscriber respondents were very interested or interested in
seeing programming on the cable system about issues facing local government,information
regarding public emergencies, local public safety issues, and coverage of City and County
government meetings. a Additionally, well over half of all focus group participants who filled
out the survey responded positively about the importance of receiving several different types of
government and community information and services over the cable system.$ The Buske Group
also found that 90%of focus group participants who subscribed to cable had watched Contra
Costa Television("CCTV") at least once, and 40%watch it more than 5 times a month.86
The principal sources of government access programming in the Consortium Area today
are CCTV and the City of Concord. CCTV,which has been operating since 1993,also carries
educational programming. CCTV operates out of its own facility and owns its own equipment,
which is funded by the County from franchise fees and other revenues. In 2003, CCTV cablecast
$�Id. at 15.
ss Id. at 16-19. The telephone surveys confirm that a high proportion of Consortium area
residents watch CCTV. In the 1999 Survey, 58.2 % of subscriber respondents said they watch
CCTV at least monthly. Id. at 70. The corresponding figures were 40.1% in the 2003 Survey,
and 46.2%in the Concord/Walnut Creek Survey. Id. at 71.
$�Id. at 11.
—40—
a total of 673 hours of locally produced, first run programming, and supplemented that
programming with another 1800 hours of first-run programs from other sources. CCTV ran a
total of 8760 programming hours on Comcast's system in 2003, and 8760 hours on the Astound
system. Among the programming shown on CCTV in 2003 were:
Board of Supervisors meetings,which were carried live and rebroadcast several
times;
Election forums;
Live coverage of election results
Live call-in health series("Ask the Doctor")
Spanish language series("Vida Sana")
« Senior series ("Senior Information Journal")
+� County information program("At Your Service")
The Concord government access channel produced a total of 675 hours of first-run
programming in 2003, and ran approximately 9,000 hours of programming on Comcast and
Seren/Astound in 2003. Beginning in April 2004,total annual programming hours increased to
14,236 hours when Comcast provided the City of Concord full use of Channel 28. Concord's
expanding government programming justified Comcast making available an entire channel for
the City's use as required by the franchise agreement. Concord now programs 7,118 hours per
year on Comcast Channel 28 and 7,118 hours per year on Seren/Astound Channel 29(19.5 hours
per day per channel)with 675 hours of first-run programming on each channel. First-run live
programs include City Council meetings, Planning Commission,Duman Relations Commission,
and Youth Council meetings, Street Smart(a crime prevention call-in show),Music at Noon,
Thursday Evening Music and Market series, Nigh School Graduations, Kidfest,Fallfest,Mom's
Day in the Park and other specials such as the Housing Element Workshop, General Plan
Workshop, Olympic Torch Run and Fourth.of July Parade. Concord also produces the
Community Bulletin Board and various public service announcements for governmental and
non-profit agency services.
Some of the types of programming currently in production are listed above. A complete
listing of programming types that could be carried on CCTV as well as the government access
channel in each of the other Agencies would include:
• Emergency information. To provide citizens with information and procedures,
emergency information may be shown at any time as emergency dictates (severe
weather, civil emergencies, terrorist alerts, failure of municipal service systems,
hazardous waste, et al).
• Government meetings. To help increase and encourage citizen awareness and
participation in public policy decision making,coverage may include Council and
Board of Supervisors meetings, task force or special project meetings,Commission
meetings, intergovernmental meetings, etc.
• .Programs providing information about local government services. In order to
increase citizen understanding of their government and its services, coverage may
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include programs that illustrate and describe the functions, operations, and services of
local government.
• Programs about local issues and public affairs. Coverage may include local events
and community issues.
• Programs of regional interest. Many issues affect residents countywide. Housing,
transportation,employment, development strategies and the economy of the East Bay
are only a few examples of the types of programming that have a countywide appeal
and relevance.
Sources for such programming would include:
• Live, gavel-to-gavel coverage of meetings in Council and Board chambers.
• Taped replay of meetings held in Council and Board chambers.
• Coverage of meetings and press conferences in Council and Board chambers or other
local government offices.
• Limited coverage of Agency-related meetings/events in other locations.
• Videotext information programming related to Agency business or events.
• Creation of original informational video programs related to Agency business or
events.
• Playback of programming produced elsewhere, imported via videotape, satellite, or
local fiber-optic connection. Such programming is available from State authorities
(legislative coverage from Sacramento, California Department of Forestry, CalTrans),
Federal government(FEMA, GAO, etc.), and other sources.
The specific form of the programming depends on the needs of the viewers. Some
examples would include:
• Daily news programs.
• Newsmagazine format programming with both field and studio segments.
• Public service announcements.
• Interview programs with department heads and elected officials about important civic
projects/initiatives.
• "Town-hall"style meetings with resident participation either live or via remote
connection.
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The equipment available to the Agencies currently limits their capabilities in at least the
following ways, and would need to be augmented accordingly.
• Studio facilities. As noted above, only the County has any separate studio facilities.
In Concord and Walnut Creek, government access programming is produced
primarily in the City Council chambers. Other than CCTV, government access
programming is not even available in the other Agencies.
• Editing capability. Only CCTV has anything approaching adequate editing
capability. Concord has some limited editing capacity.
• Control rooms. Again, only CCTV has a control room of any size. Concord and
Walnut Creek have very small control rooms,and their equipment is largely
antiquated.
• Equipment packages. Nearly all of the existing equipment in Concord,Pleasant Hill,
Walnut Creek and the County Board of Supervisors chamber needs to be replaced,
and all of the other Council chambers need to be outfitted with multiple-camera
remote-controlled systems upon request of the applicable city.
Educational Access. Educational access capability in the Consortium area is currently
extremely limited. The Contra Costa Community College District, California State University at
Hayward, Mt. Diablo Adult Education and Acalanes Adult Education produce locally originated
educational programming,but most of this programming is not available to more than a small
proportion of Corncast's cable subscribers. Most of these institutions have a small studio with
old equipment that is in fair or poor condition. Budget constraints have severely limited the
ability to produce new programming.
The Buske Report identified a need and interest in making channel capacity and
equipment available for use by the public schools and by higher education. The expansion of
government programming on CCTV means more space is needed for educational programming
of all kinds. Both focus group participants and telephone survey respondents stated that there
was a high level of interest in seeing K-12 educational access programming, such as school
board meetings, events and productions held at the schools, and programs about the schools.87
There are 19 school districts in the Consortium area, and over 250 schools. Two more
educational access channels are needed for use by higher education institutions. The Contra
Costa Educational Television Consortium("CCETVC"), which is comprised of the educational
entities mentioned above, has issueda joint report dated January 2004 titled"Distance Education
in Contra Costa County",which details their cable-related needs and interests. Among other
things, CCETVC has called for a minimum of three County-wide educational channels.88
87 Buske Report at 18, 21, 70-71.
s$Id. at 81.
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There is no need to repeat all of the findings in the Buske Report, which discuss the PEG
ascertainment in great detail. We have discussed some of the results of the ascertainment above
that directly relate to demand for PEG use. However, it is worth emphasizing the following:
a. The focus groups and telephone survey showed high support for public channels,
educational channels and government channels.
b. The focus groups and the public testimony presented indicate that there is every
reason to conclude that PEG use is of significant interest to this community. There is thus every
reason to believe that, with the proper support, PEG can be a great success in the community.
However, to meet the needs and interests of this community,there must be facilities, equipment
and operational support, as noted in the Buske Report.
C. There is every reason to conclude that PEG channels will be used in this
community,if adequate support in the form of readily accessible modern facilities and
equipment, and training in how to utilize that equipment, is provided.
d. The channels and other resources available for PEG in this community are not
adequate to satisfy the level of access interest in this community. As pointed out earlier, the
operator currently provides only a limited quantity of equipment, and that equipment is available
only for limited periods. In addition, there is no adequate formal training program provided to
encourage community groups to learn how to produce their own programming for free.
In the RFRP,the Staff suggests that Comcast can satisfy the needs and interests for
facilities and equipment in one of two ways. One way is to provide adequate studios of certain
size, and to provide specific equipment packages and other support. The alternative is to provide
a fund that could be used to pay for PEG facilities and equipment, and to provide the necessary
links and equipment required to perform the PEG functions identified in the Buske Report. The
advantage of this funding approach is that it would allow the City to work with the community to
locate the studios to best meet the community's needs and Agencies.
In addition, some limitations of the PEG access operations in general are the result of the
design limitations of the system. One way to increase coverage of community cultural and arts
events—which focus groups identified as one of the critical ways in which the PEG resources
could be used—would be to have the ability to originate programming remotely from locations
where such events are held. However, because the cable system does not make two-way
capability available for PEG use,this is not currently possible.
In addition, schools and government facilities have a general interest in being able to
receive cable programming, and a special interest in being able to receive PEG programming.
Under the existing franchises, we understand that all K-12 schools are receiving free basic and
expanded basic service,which, among other things,permits the schools to receive not only local
and regional educational programming,but also to receive important educational and public
affairs programming distributed by the cable system. Some municipal buildings and some
County facilities receive service. As a general matter,therefore, Staff concludes there is an
interest in Comcast continuing to provide a free drop, outlets and expanded basic service to those
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locations it is serving now and to extend its facilities to provide a drop and outlet and service to
other governmental and educational institutions upon request.
Based on the foregoing, in addition to the PEG/system design needs and interests already
identified,the PEG needs and interests in this community can be summarized as follows. The
support needed for PEG and for the 1-Net is in addition to the franchise fee.
There is a need and interest in having a sufficient channel capacity provided for
PEC use receivable by all subscribers. The capacity provided for PEG use should
enable schools at various levels,the public,non-profit organizations, and each
Agency to have full opportunities to create and disseminate information. Existing
capacity devoted to PEG use is inadequate. Six access channels should be made
available in each jurisdiction. One public access channel, one K.-12 educational
access channel; one higher education access channel for Contra Costa College—
KCCC; a second higher education access channel for CSU-Hayward; one local
government access channel; and CCTV, the County government access channel.
• There also is a need or interest in having additional channel capacity set aside if
and as the use of the PEG channel capacity grows. To accomplish this,the
operator should make available up to 8%of the total spectrum on the cable system
(including the six channels specified above) for present and future PEG access
purposes. The Agencies should have the right to require Comcast to set aside
additional capacity out of that total amount for PEG use. Moreover, PEG channel
capacity should be available in analog formats and digital formats,if both formats
are provided commercially. If Comcast converts all of its current analog channels
to digital,the PEG channels should also be converted,at Comcast's expense.
PEG programmers should be able to use the capacity provided for transmission of
any information, not just video, subject only to restrictions on use lawfully
established by the Cable Act. Moreover, sufficient capacity should be available
on the network to enable PEC users to take full advantage of advances in cable
technology and system capabilities, including two-way capability that allows PEG
providers and users to take advantage of interactive television services if and as
they become available on the cable system. Among other things,there is a need
and interest in assuring the company's interactive service platforms can be used to
receive and transmit PEG programming,without unreasonable interference,with
appropriate connections to avoid latency and other technical problems. The
system should be designed to either permit programming on each access channel
to be cablecast throughout the Consortium area or to permit different
programming to be cablecast roughly within each City or areas of unincorporated
County. For example,the system should be designed to permit programming of
regional interest to be shown on a government access channel to all Consortium
areas while allowing, for example, one city to cablecast its city council meeting
roughly only to residents within the city.
* There is a need and interest in having PEG capacity managed by a non-profit
"PEG Access Management Entity," one or more public agencies—including
—45 —
CCTV and existing government access operations in Concord--or a combination
of different entities,provided that the management structure is committed to
promoting and qualified to promote the use and development of the channel
capacity.
There is a need and interest in having substantially improved access facilities,
equipment and support so that use of the system can be encouraged, so that
potential users can be properly trained and assisted in production, so that
production facilities are readily available for remote and studio productions(and
post-production work), and so that playback can occur smoothly.
• More specifically,there is a need and interest in having the cable operator
providing one of three alternatives for the provision of PEG access. These three
alternatives are: (1) A regional approach whereby PEG access facilities,
equipment and operations are provided on a regional basis within the Consortium
area under the control of a non-profit organization or other management structure
determined by the Agencies. Under this approach, a main Community Media
Center and a satellite facility would be provided. Existing government access
operations would remain independent and would need to be funded adequately.
(2) An Agency-by-Agency approach,whereby a Community Media Center is
provided within each Agency for its residents' use, with the facility operated by a
non-profit organization or other entity designated by that Agency, including itself.
(3) One or more Community Media Centers operated by the cable operator,
which would provide all of the needed PEG access services, subject to specified
performance standards. Under each of these alternatives,the respective
Community Media Centers would need to provide public and educational access
users with spaces of sufficient.size(and expandability)so that(a)there is
adequate studio space,designed in such a way that it can meet user demands
efficiently; (b)there is adequate space for equipment to playback and control
programming on PEG channels; (c)there is separate and adequate space available
for editing programs and performing other post-production tasks; (d)there is
separate and adequate space available for training,planning meetings and
administrative functions (office space, storage space,bathrooms, and so on); and
(e)PEG facilities and equipment are distributed so that people throughout this
large and diverse community have reasonable access to them, at convenient
locations and times. Each facility should have adequate parking and be fully
accessible to persons with disabilities. Any of the three alternatives would meet
the fundamental needs and interests regarding PEG access facilities; staff believes
Alternative 1 to be the most cost-effective approach. Staff also notes that changes
in the composition of the Consortium would not affect these needs and interests,
or the cost of meeting them. Thus, if one or more Agencies were to leave the
Consortium,the remaining members would still require facilities and equipment—
or funding—to meet them, and the pro rata cost would not necessarily decrease.
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�► There is a need and interest in having high-quality equipments provided for
public use that could be used for producing programming in the field or in the
studio; editing it; and for playing back programming that may be produced
utilizing a variety of formats. This equipment should be replaced and upgraded
over the term of the franchise as needed.
+ There is a need and interest in having high quality equipment provided for
educational use, including playback equipment and equipment permitting
educators to receive and record programming submitted over the channels set
aside for educational use on the subscriber network or the institutional network.
This equipment should be replaced and upgraded over the term of the franchise as
needed.
+ There is a need and interest in having high quality equipment provided for
government use, including cameras and sound equipment for Council and Board
chambers and other rooms used for public meetings, and field and editing
equipment and studio equipment. This equipment should be replaced and
upgraded over the term of the franchise as needed.
+ There is a continuing need and interest in being able to utilize the existing PEG
facilities and equipment made available by the operator until those facilities and
equipment are no longer needed. Any proposal should contain a provision that
ensures that such facilities and equipment will remain available for at least up to
24 months, to allow for continuing PEG operations until the transition to new
facilities is complete.
There is a need and interest in having activated reliable upstream capacity
available throughout the community to enable PEG users to originate and
cablecast programming live from remote locations.
• There is a need and interest in having activated, dedicated bi-directional
connections(or activated connections that function and can be upgraded and used
as easily and cost-effectively as dedicated bi-directional connections)available
from access production facilities and playback centers for public, for educational
and for government use including the community media centers, with sufficient
capacity activated in both directions to enable those managing the PEG channels
to (a)receive signals intended for retransmission on the subscriber network from
the institutional network and from remote locations; (b)review signals before
they are transmitted to subscribers; (c) select signals for retransmission, and to
89 By high-quality, we do not mean to require high-end equipment of the sort that would be used
in a broadcast TV studio. The Buske Group has recommended equipment packages for PEG use
that includes equipment that is sturdy enough for heavy, repeated use indoors and outdoors, and
produces a signal significantly better than that produced by typical home video products. Most
of the equipment recommended by The Buske Group is better characterized as mid-range
industrial quality equipment.
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transmit and route those signals onto appropriate channels on the subscriber
network, or on the institutional network, without the assistance of the applicant;
(d)receive upstream transmissions from subscribers for any interactive PEC
programs; and(e)monitor the signals being transmitted to subscribers. The
connections should include all routers,modulators, demodulators,transceivers
and other equipment required to provide this functionality so that PEG signals can
be transmitted and routed to their destination without significant degradation. °
PEG facilities and equipment should be available to the user at no charge from the
cable operator.
• There is a need and interest in having PEC facilities and equipment available so
that the access channels can be programmed from central locations,without the
assistance of the cable operator.
• There is a need and interest in allowing members of the public, educators and
government representatives to produce programming and transmit that
programming, at no charge from the operator, from suitable distant locations
throughout the City to central PEG programming control site(s), and from there,
through the headend to subscribers,without the assistance of the operator.
• There is a need and interest in providing equipment and facilities for training
programs in production and postproduction of video and related electronic arts
(e.g., graphics and special effects).
There is a need and interest in ensuring that technical changes in the system do
not hamper the use of the system for PEG purposes.
• There is a need and interest in allowing customers to use PEC resources
interactively from the home to the extent interactivity is supported on the system
for commercial applications.
In addition to the foregoing,there are a few miscellaneous PEG needs and interests that
staff believes should be emphasized here(as already indicated,the Buske Report contains a more
detailed description of PEC needs and interests). Staff is advised by The Buske Croup that, in
several communities, access channels are bounced from one channel location to another,thus
making it more difficult for viewers to find and use the channels(and preventing the channels
90 Links should be completed promptly, on a time schedule so that the entity responsible for
programming a channel can program the channel at the time it is activated. For example, if an
additional educational channel is activated, a link between the educational programmer and the
headend will need to be provided. For the joint, public/educational facilities, links will be
required no later than the date the studio facilities are completed. A reasonable alternative for
providing similar ftmctionality on a temporary basis may be acceptable in order to permit
permanent links to be coordinated with system rebuild activities, depending on the schedule and
plan for the rebuild.
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from developing a clear identity). Some channel locations are not as good as others, and are
subject to interference. Placing an access channel so that a good quality signal cannot be
delivered to subscribers is akin to not providing the channel at all. Further, it is important that
the availability of the access resources be publicized. The Buske Group found that, although
CCTV has made great efforts to publicize its activities, in general the access channels had not
been sufficiently publicized. CCTV's efforts are further complicated by the fact that its channel
location varies from system to system in the Consortium communities. Accordingly:
i There is a need and interest in ensuring that the PEG channels are provided and
publicized in a way so that they are easily identifiable to subscribers, and
provided using channels that can deliver PEG signals without significant
degradation.
• There is a need and interest in ensuring that service is available to all public and
non-profit private schools(including institutions of higher learning), and all
government buildings(including libraries), and community media centers, so that
these entities can receive the important educational and governmental information
carried over the cable system. There is a particular need and interest in assuring
that PEG channels are provided to these locations. Accordingly, in almost every
franchise, operators are required to provide free drops (at least one activated
outlet) and free service to similar locations. We conclude there is a need and
interest in free drops, activated outlets and services here that will mare cable
available throughout these facilities, with limited exceptions.
There is a need and interest in having the initial 6 PEG channels contiguous to
each other to the extent permitted under federal law and to the other basic cable
service channels. There is a need and interest in retaining the government access
channels at the channel numbers they are currently assigned. There is a need and
interest in not allowing subsequent changes in channel positions without the
approval of the Agencies.
* The need to coordinate PEG use(including PEG use of the institutional network)
will present particular issues if and when any additional providers enter a
particular community. The franchise must therefore include provisions that
require the incumbent to cooperate with new entrants to ensure that PEG and T-
Net obligations are satisfied cost-effectively, and that,under appropriate
circumstances,permit the respective Agency to modify obligations as appropriate
so that it can comply with the requirements of state law for competitive
franchises,to the extent applicable.
There is a need and interest in publicizing particular PEG access programs and
the day and time they are on the air by, among other things, listing such programs
on any channel guides provided by the operator.
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D. Support for Institutional Networks.
1. General trends in other communities.
Many communities across the country have developed innovative approaches for
pursuing advanced cable system technology for a variety of communications purposes. A few of
the communities that are relying on I-Nets required as part of local cable franchises include.
• Arlington County, Virginia,recently completed construction of a 77-site fiber
topic I-Net. The I-Net links County government offices and the public schools,
and is used not only to carry internal telecommunications, but to provide access to
the Internet and video conferencing and distance learning services to County
agencies.
+ In Montgomery County, Maryland,the government developed a joint venture
with the American Filen Institute (AFI) in its renovation of a classic art deco
movie theater to create a state-of-the-art multi-media facility. The community
benefits from AFI's use of new digital technology for distance learning
applications in its partnership with the local college and public schools using fiber
connections as part of the County's I-Net. The cable system benefits from
enhanced programming planned to be cablecast in conjunction with the AFI
programs.
• Cincinnati, thio, uses its optical fiber I-Net to interconnect its computers and
carry police and fire and rescue operations,land mobile radio feeds, and telephone
services. This directly translates into better protection for the community.
• The City of Tacoma, Washington,uses an I-Net that currently connects many city
government offices,police and fire stations, libraries,park and recreation
facilities, a regional medical center, K-12 schools, and colleges and universities.
The City anticipates that the system will ultimately connect over 300 such sites.
The City currently uses the system primarily for video programming, and some
data transmission,but the platform could also support transmission of voice. The
I-Net is also connected to the local Comcast facilities for the purpose of providing
programming feeds for regional educational access. The I-Net is also connected
to Click Network,the City's municipal broadband system.
+ Closer to home,the City of Santa Rosa operates an I-Net constructed by its local
cable operator, which connects city hall, city office buildings,recreation centers,
the public safety center,the sewage treatment plant, libraries,the local junior
college, and all high schools and middle schools. The system is designed to
transmit video, voice and data. To date,the City is using the I-Net primarily for
data, as well as video for distance learning applications. The I-Net is
interconnected to the I-Net in Petaluma to facilitate the distance learning project.
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• In Monterey,the City has completed an I-Net serving 60 sites, which include
government buildings, libraries, fire stations,recreational centers, K-12 schools,
the regional water and sewer agencies, a state park,the Monterey Bay Aquarium,
the Defense Language Institute,traffic signals, and local colleges and universities:
Chapman University,Monterey Peninsula College,the Monterey Institute of
International Studies, and the Naval Postgraduate School. In addition, Cal State
University at Monterey,which is located outside the city limits,has been
interconnected through an adjacent system. The city is currently using the I-Net
primarily for data transmission and Internet access. However,the I-Net also
supports video applications such as training and video conferencing, in addition to
video origination for PFG purposes.
• The City of Santa Clara has built a 35-site I-Net in conjunction with Comcast.
The I-Net connects city buildings, fire and police stations,parks and recreation
centers, a municipal cemetery,the Chamber of Commerce (which runs the city-
owned Convention Center), and public schools. The City sites are connected to a
server in City Hall,allowing all departments access to internal records, e-mail,
and Internet access via the City's ISP. In addition,the libraries have terminals
connected to the I-Net and available for public use for, among other things,
Internet access. The I-Net is also used as part of the City's emergency network to
supplement telephone communications. Video uses of the I-Net include
municipal training, including live fire video training for firefighters, and live
video origination for PFG purposes.
• In Fremont, an all-fiber I-Net has been operational since early 1996,when it was
constructed for the City at incremental cost by Comcast(then TCI), in
conjunction with its rebuild of the subscriber network. The I-Net is designed to
transmit video,voice and data—current uses by the City involve the voice and
data components. Virtually all city facilities are connected to the I-Net including
government buildings, libraries,police and fire stations, and American Medical
Response, which allows for quicker emergency service response times to 911
calls. Fremont also uses its I-Net to communicate,via lines leased from the local
telephone company,to certain County agencies,including the Alameda County
Water District, county law enforcement agencies, and a regional collaborative
gang task force.
• The Cities of Gilroy,Hollister and San Juan Bautista have recently competed
construction of an I-Net linking 55 locations.
• As previously discussed, in Concord and Walnut Creek, Seren has constructed
fiber I-Nets.
These are only a few examples of communities that have found ways to meet local needs
using institutional networks provided by the cable operator.
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2. The results of the ascertainment regarding;I-Nets.
The Consortium has conducted an extensive ascertainment with respect to an I-Net. This
ascertainment began during the course of informal negotiations with AT&T, when the
Consortium Agencies established an I-Net Working Group to examine the potential benefits and
characteristics of an I-Net serving Consortium members. The I-Net Working Group was chaired
by Tom Whittington,the Chief Information Officer for Contra Costa County. Other agencies,
including the public schools and higher education institutions, also participated. The following
organizations participated in the Working Group:
+ Contra Costa County—CCTV
• Contra Costa County Community College
+ Contra Costa County Office of Education
+ Contra Costa County Department of Information Technology
• Town of Danville
+ City of Martinez
+ Town of Moraga
+ City of Pleasant Hill
+ Moraga Schools
+ Mount Diablo Unified School.District
• San Ramon Valley Unified School District
• City of Walnut Creek
+ Walnut Creek School District
+ Martinez School District
+ City of Concord
+ City of Clayton
The Working Group also met with representatives of the PEG access community to
ascertain how an I-Net could aid in the delivery of access programming. The primary focus of
the Working Group was to establish which educational and governmental sites within the
Consortium area required some level of connectivity. The Working Group thus prepared a site
list, representing all of the sites that would ideally be connected to an I-Net. This list formed the
basis for later work related to I-Net needs.
The I-Net Working Group did not prepare a formal report documenting the needs and
interests it identified; instead, the Working Group's conclusions were incorporated in comments
submitted on a design for an I-Net that was developed by the cable company itself. During
negotiations with the Consortium,AT&T proposed that it develop a conceptual design for an I-
Net based on the needs and interests that were being developed by the Consortium at that time.
Accordingly, the I-Net Working Group met with consultants retained by AT&T to discuss the
Consortium's needs. AT&T's consultant then proceeded to develop a"Preliminary I-Net
Operational Concept Document." That document, which is attached as Exhibit H, addressed the
construction of an I-Net serving 200-225 sites throughout the Consortium area. The concept
document also contained cost estimates for different categories of sites, depending on whether
construction could be done on an incremental cost basis in conjunction with other work being
done by the cable operator,or whether no incremental cost or a reduced incremental cost benefit
—52—
was possible. CTC later reviewed these cost estimates and generally concurred with them.
Although the concept document does not define community needs or interests at any particular
site or type of sites, construction of an I-Net in accordance with the concept document would
meet the needs of the Agencies.
In order to further refine community needs and interests related to an I-Net,the
Consortium asked CTC to prepare a report titled"Contra Costa County I-Net Requirements
Update" (the"I-Net Report"). In preparing the I-Net Report, CTC conducted a workshop with
Consortium representatives, including members of the IT staff of various Agencies. CTC
reviewed the earlier lists of sites developed by the I-Net Working Group and included in the
AT&T concept document, and after consultation with the Consortium determined that there
continued to be a need or interest in providing various types of services at those sites. CTC then
proceeded to develop an approach to providing I-Net services that takes advantage of recent
developments in cable technology. Instead of requiring dedicated fiber optic capacity to serve
each site, as was done in the AT&T concept design,the I-Net Report establishes three categories
of sites and proposes relying on a mix of technical solutions to deliver services at the different
categories of sites. For example, it may be possible to serve some sites using wireless
technology or cable modem technology,rather than dedicated fiber connections. Thus,this
approach would presumably be more cost-effective than the more traditional approach
represented by the AT&T concept design.
In addition,the Buske Report discusses various needs and interests that could be met
through an I-Net.
Accordingly,there is a need and interest in capacity on an I-Net that is devoted to
educational and government use(and public use, to the extent the operator proposes to allow the
I-Net to be used for public use purposes)91 with at least these characteristics:
• The I-Net needs to support voice, data, and video (one and two-way)
transmissions, and must be designed in a way to minimize the cost of end user
equipment and interfaces. The term"institutional network"("I-Net")refers to that
portion of the cable system generally available only to subscribers who are not
residential subscribers. We do not mean to suggest,however,that an I-Net is only
for the benefit of institutions. It is in fact the intent of the Agencies to use the I-
Net in a way that will improve educational services in the community, and that
will allow government to provide information and serve the community more
effectively. The subscriber network and the I-Net can be within the same cable,
and there is a need and interest in a bridge between them. In fact,the I-Net could
include use of capacity on the subscriber network itself. It is intended that
residential subscribers may be able to send signals to I-Net users and vice versa,
subject to the control of I-Net users. There is also no requirement that any I-Net
serve only government facilities and other public buildings.
91 We are using the terms "public, educational and government use" in the same way the terms
are used at 47 U.S.C. § 531. The public use we are referring to is primarily what is often referred
to as "public access."'
—53 —
• I-Net capacity should be provided and be available at no charge to the users.
• Capacity on the I-Net should be provided at least for educational and government
use,to link government facilities and other public buildings (including schools,
libraries,public safety facilities and others)for a variety of two-way video,voice
and high-speed data communications with each other. It is the intent of the
Consortium to use the capacity provided in a way that will improve educational
services in the community, and that will allow government to provide information
to the public and serve the community more effectively. It is also the intent of the
Consortium to use the network to improve public safety by, for example, making
it easier to train police and fire personnel without removing them from service.
The institutional network should also permit the individual Agencies to cut
expenses, without reducing services. Thus,the capacity on the institutional
network should be provided in such a way as to minimize the costs to the end
user, and to maximize end users' ability to use the equipment that is now in place.
The capacity should also be provided so that it can readily expand to meet fixture
increases in Agency needs, both in the capacity of the network and in the number
of sites served by the network. Staff recommends that the Agencies establish
facilities and equipment requirements, and capacity requirements that would
result in the creation of a highly flexible, and reliable, institutional network. The
I-Net should be interconnected with other I-Nets or networks designated by the
Agencies.
• There is a need and interest in linking local government facilities, schools,
educational institutions, libraries,public safety facilities and other governmental
and educational facilities with each other via highly reliable capacity on the I-Net
for a variety of two-way video,voice and high-speed data communications
selected by the users, and evolving over time. There is a need and interest in
being able to use the I-Net for any purpose that is not lawfully prohibited by the
Cable Act. By way of example,and not limitation, restrictions on use that limit
the ability of libraries to connect computer terminals through the I-Net to the
Internet would not meet community cable-related needs and interests.
• The I-Net should be available throughout the Consortium-area to locations
designated by I-Net users, and should be able to meet the needs and interests in
governmental and educational use (and public use, if proposed by the operator)
throughout the community. Comcast does not need to extend the I-Net to
physically connect sites served by Seren's I-Net,but it must interconnect with the
I-Net constructed by Seren. In addition there is a need and interest in replacing
aging equipment on the I-Net constructed by Seren.
• There should be sufficient capacity provided to support user requirements over
the franchise term. This requires that the capacity be highly reliable, flexible,
scalable, and expandable as needed without substantial additional cost. It should
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be secure as needed and support a wide variety of applications,minimizing end
user costs.
• The I-Net should be designed so that it can be extended to new locations without
deterioration in system capabilities, and I-Net users should be able to expand the
system to additional locations, as well as upgrade capacity and functions at
particular locations.
• The I-Net should be designed and constructed to support standard interfaces such
as conventional NTSC analog, M-peg, and J-peg digital video,telephone "T"
carrier services (DS 1,DS 3), Ethernet interconnection(10 Mbps, 100 Mbps and
Gigabit platforms), and other similar commonly used interfaces; it should be
designed and constructed so that it is capable of supporting existing and fixture
Agency network protocols(Ethernet,Fast Ethernet,ATM)without substantial
plant construction.
• I-Net users must be able to access the network in a variety of ways—not just
through direct physical connections. For example, an Agency may wish to attach
wireless devices to control traffic signals and receive telemetry data, among other
things. There is a need and interest in connecting the I-Net to other networks
inside and outside of each Agency, including the Internet.
• There must be sufficient capacity provided for educational and government(and
if proposed by the operator,public)use of an I-Net, and all required network
switches and other equipment so that the there is sufficient throughput to allow I-
Net locations simultaneously to use the system, without meaningful interference
with their applications. In addition, capacity must be provided in such a way so
that users operating at different transmission speeds, or using different media can
cost-effectively use the I-Net.
• The Agencies should be able to centrally monitor and control the capacity from
any point on the network.
+� The Agencies must be able to review the plan for providing I-Net capacity and the
I-Net design on an appropriate schedule, and to require changes to the plan or
design if it does not meet the needs and interests of the community. In particular,
the Agencies must be able to ensure adequate capacity is being delivered to each
site.
• The I-Net needs to be tested to ensure that it operates as required to support
mission-critical applications. The I-Net needs to be properly maintained and the
operator needs to take the required steps to restore service promptly and
consistent with the mission-critical nature of the applications involved.
• It is possible that there may be more than one operator in an Agency, so any I-Net
proposal should allow each Agency to integrate facilities from other providers
—55—
cost-effectively,and so that any I-Net capacity provided by one applicant operates
seamlessly with any I-Net capacity provided by another provider.
E. System Construction and Extension Issues
1. Time for completion.
As already discussed,the cable systems serving the Agencies have largely been rebuilt.
Those portions that have not yet been rebuilt, however, are not close to the state of the art in the
cable industry. Residents of non-rebuilt areas have fewer program choices,receive less reliable
service, and have no opportunity to receive advanced, interactive services from Comcast.
Under federal law,a franchising authority must allow the cable companies a reasonable
time to make the improvements required to upgrade the system.92 As suggested above,the
Agencies have an interest in ensuring that construction and system modifications are completed
expeditiously, so as to minimize any necessary service interruptions, as well as disruption of
economic activity,residents and the rights-of-way. To adequately protect their economic and
property interests,the Agencies must be able to enforce timing and construction requirements.
CTC reviewed the requirements of the proposed RFRP in light of the density of the
community, and the number of underground and aerial miles in the non-rebuilt areas. CTC
concluded that the company could be reasonably expected to complete build-out of a rebuilt
system within 24 months. Because Comcast has commenced planning and design work required
on an upgrade even before a renewal proceeding is completed, we propose to adopt that time
frame, geared to a date certain. In that way, any delays caused by the renewal process will not
affect subscribers. The applicant can reasonably be expected to continue to perform work to plan
and design the rebuild while the renewal proceedings are ongoing, given the existing condition
of the system and the long-standing need for improvements. To satisfy the staff's model,the
entire Consortium area should be rebuilt by a date no later than two years following the grant of
a franchise renewal.
2. System extension.
Even after a cable system is constructed, it will often need to be extended to new
subdivisions and developments. These may be areas within the boundaries of an existing service
area that are not now reachable by the cable system, without extending the network plant to a
point where the home or business can be served by a drop. As already discussed, local
governments and the schools have an interest in being able to deliver information service to the
entire community. And,the ascertainment, as discussed earlier, demonstrates substantial interest
in receiving advanced services via the cable system. To be able to take advantage of cable's
potential,however,the cable system must pass by a potential subscriber's door.
' See 47 U.S.C. § 541(a)(4) Cin awarding a franchise, the franchising authority . . . shall allow
the applicant's cable system a reasonable period of time to become capable of providing cable
service . . .").
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There is a cost to requiring an operator to extend service to all areas of the community.
Parts of the Consortium area are substantially more densely developed than others. Those areas
are generally within incorporated jurisdictions; furthermore,the cable operator has been
operating in those areas for many years and thus already has a considerable infrastructure in
place. For this reason, staff concludes that the company should be required to extend service
promptly upon request of any potential subscriber who wishes to subscribe to the company's
service, whether a residential or non-residential potential subscriber. Moreover,the service
should be extended without line extension charges in all of the Agencies but the County. For
subscribers located in the County but not in an incorporated jurisdiction, service should be
extended without charge where enough potential subscribers are willing to take service.
3. Supervision of construction.
Cable system construction can involve significant disruption in a community. Rebuilds
in some areas of the Consortium and the construction of the Seren systems in Concord,Walnut
Creek and the County have caused considerable noise,traffic and aesthetic impacts along with
damage to street improvements. CTC has advised the staff that its experience in other
communities shows that this type of project should proceed according to a rational plan that
ensures the public is informed,that construction proceeds rationally, and that it is completed on
time. A construction plan can also ensure that the Agency understands what it can expect to be
required to do in order to help an operator move efficiently through the permitting process. It
also permits the Agency and other entities to coordinate and take advantage of street openings.
In addition, of course, the Agency has an interest in ensuring that the system that is being
installed will in fact comply with franchise requirements. By requiring adequate quality control,
and by requiring the operator to describe in detail what it is doing,the operator and the Agency
can be in a position to address problems so that the problems can be resolved before the date
scheduled for the project to be completed. A plan can also reduce impacts by requiring
particular construction techniques, such as constructing underground lines and facilities through
boring rather than trenching.
Setting aside the advice from CTC, the results of the inspection of the physical plant
suggest that there is very good reason for each Agency to ensure that it is in a position to
supervise this project, and to ensure that during the course of the rebuild,problems with the
existing system are in fact cured.93 A plan will also help ensure that there is an acceptable
procedure for notifying property owners along the affected right-of-way as to when the right-of-
way will be trenched, and the expected duration of the trenching.
Moreover, given the current states of the systems, staff believes that there is a need and
interest in assuring that the existing problems, once corrected,do not recur. CTC has advised us
that it would be appropriate to establish requirements for ongoing inspection, maintenance and
testing(as well as compliance with all local codes)in order to protect against future problems. It
also follows,that, because construction work on a cable system, and other tasks, are often
93 The CTC Technical Report found substantial problems with cable drops where they connect
with taps, for example. The CTC Technical Update found that even in rebuilt areas many of
these problems have not been corrected. These problems should be cured.
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performed by contractors or subcontractors,there is a need and interest in ensuring that the
contractors and subcontractors are properly trained, subject to the same rules that apply to the
cable operator, and that the cable operator bears unqualified responsibility for their work.
4. Coordination of construction.
The Public Works Departments of the various Agencies have emphasized the importance
of ensuring that the cable operator is required to coordinate and cooperate with regard to
trenching. The Agencies also wish to improve transportation and preserve and improve the
beauty of the community. Therefore,they must be in a position to require cable operators to
place facilities underground consistent with these goals. Street cuts can limit the life of a
roadway, and are expensive. It is therefore important to minimize cuts and trenching by
coordinating street use, by requiring underground construction where appropriate, and by
requiring companies to cooperate so that facilities can be placed when trenches are open.
In sum., based on the ascertainment,the construction-related needs and interests can be
summarized as follows.94
+► There is a need and interest in having service available to all in the community
(including to businesses,non-profit organizations, and to residences, as well as to
schools and government agencies). To that end, Comcast should be required upon
request and on a timely basis to extend its system to provide service to any
potential subscriber, both residential and business. Further,there is a need and
interest in requiring Comcast to extend its system into new subdevelopments as
they are being developed,to minimize disruption and ensure that service is
available as potential subscribers enter the area. Given these needs and interests
and, among other things, the density of the community,there is a need and
interest in the operator extending its cable system to provide service without any
line extension charge to any potential subscriber within the incorporated portion
of the Consortium area. In unincorporated areas, and except with respect to
locations already served or passed by the Applicant's distribution system,the
Applicant may charge for line extensions where an extension of(a)more than 400
feet is required to reach the point from which the potential subscriber can be
served by a drop; and(b) less than 15 commercial outlets are requested per lineal
mile. In that instance,the potential subscriber may be required to help share in
the cost of the extension; but the subscriber share should be just that. a reasonable
share. There also is a need and interest in having free drops and services to
schools and government buildings, as discussed above. Accordingly, Comcast
should be required to extend its network to serve schools and government
buildings (whether leased or owned), without any line extension charge. The term
line extension refers to an extension of the distribution plant to the point from
which a potential subscriber may be served by a drop.
94 These are in addition to the needs and interests served by the right-of-way provisions that are
included in the draft cable ordinance and in the draft cable franchise.
—58—
+ There is a need and interest in completing the rebuild of the system promptly. All
of the systems serving the Consortium area should be completely rebuilt by within
two years after the grant of a franchise renewal.
+ There is a need and interest in assuring that any rebuild should be performed
pursuant to a construction plan that is reviewed by the affected Agency for
compliance with the requirements of the franchise. There is a need and interest in
having the plans for rebuild of the system ensure that the rebuild is completed
with minimum disruption of the rights-of-way or service.
• There is a need and interest in ensuring that Comcast has plans in place that are
designed to ensure that it complies with local standards for construction;that
ensure that construction errors are promptly corrected; that ensure that restoration
of property affected by the system is completed in accordance with local
requirements; and that ensure compliance with requirements for use of the rights
of way(including permitting requirements).
+ There is a need and interest in providing for testing of the system to determine
whether the rebuild has been successfully completed and in providing for ongoing
testing to identify and resolve problems and measure performance.
+ There is a need and interest in ensuring that the franchise includes the right for an
Agency to require that Comcast adopt a maintenance plan;that it follows that plan
(subject to regulations and applicable law), and periodically reviews and updates
the plan. The plan should ensure that all parts of the system are properly
maintained in a way that is designed to prevent failures.
* There is a need and interest in ensuring that the Comcast cooperates and
coordinates in joint trenching, and complies with Agency requirements with
respect to joint trenching and undergrounding.
+ There is a need and interest in ensuring that Comcast employees, contractors and
subcontractors are competent and well-trained, and will abide by the requirements
of the franchise and applicable law, as if the work were being directly performed
by Comcast.
F. Other Issues
In addition,based on the ascertainment, staff concludes that the community's future,
cable-related needs and interests include the following:
• All parts of an Agency should be served by systems that have similar
characteristics and capabilities. There is a need and interest in having equivalent
facilities available throughout the Consortium area.
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+ Most of the cable plant serving the Agencies has been rebuilt, but significant
portions have not. Given the age of these segments,there is a significant interest
in having all or almost all components in the non-rebuilt areas replaced. There is
a particular need and interest in having all drops replaced as part of the rebuild at
no charge to subscribers. The CTC Technical Update indicates that improper
grounding of drops remains a significant safety problem. Alternatively, Comcast
may propose a clear and enforceable program for replacing drops as part of the
rebuild based on the physical characteristics of the drops that is designed to
accurately identify those drops that will be unable to reliably deliver the services
that can be provided over the cable system to subscribers. To the extent that any
parts of the system are retained,there is a need and interest in having those parts
inspected to ensure that the system will operate properly, and there is a need and
interest in bringing all parts into compliance with the current version of applicable
safety codes, without regard for grandfathering that might otherwise apply. In
those areas where the rebuild has occurred but drops haven't been replaced, all
drops should be replaced or tested to ensure that they are properly grounded and
otherwise satisfy all applicable codes.
+ A franchise should include provisions that ensure that the cable system will stay
apace of developments in the industry over the franchise term,and so that the
community can take advantage of changes in technology. Among other things, an
appropriate provision should permit an Agency to require further upgrades of the
technical capabilities of the cable system(including by construction of additional
two-way links between public buildings), and for additions and improvements to
the facilities, equipment and other support required for PEG use.
+ There is a need and interest in having the cable system designed so that users can
(physically or virtually) "co-locate" facilities or equipment at the cable system's
headend and control centers and major backbone facilities such as hubsites and
optical transfer nodes(OTN). Physical co-location is essential for an operator
that proposes to provide I-Net capacity at marginal cost.
+ There is a need and interest in advanced services, includindigital services. This
need and interest, which is identified in the Buske Report, 5 applies for both PEG
and non-PEG applications.
IV. FRANCHISE CONDITIONS AND OTHER REGULATORY ISSUES
In addition to the matters already discussed, a renewal franchise agreement must contain
a number of provisions in order to ensure that franchise requirements are properly implemented.
In addition,both the franchise agreement and local law must contain provisions to protect an
Agency and its citizens, including cable subscribers, and to enable the Agency to manage its
public rights-of-way fairly and effectively. The Agencies believe that they each have the
95 Buske Report at 147.
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authority to establish these conditions unilaterally. However, it is also the case that these
conditions serve paramount public needs and interests.
The following brief discussion of certain key provisions is intended to elaborate on some
of the reasons underlying those provisions. This discussion is not intended to be comprehensive.
1. Term
The length of the franchise is primarily a function of allowing the operator sufficient
opportunity to earn a return on its required investment,while ensuring that(a)the operator's
performance will be evaluated within a reasonable period of time, so that the operator has
incentives to maintain its performance at a high level, to ensure that its franchise can be renewed;
and(b)to allow the community to reevaluate franchise requirements, in light of changes in
technology. Several recent franchises have been granted for 10 years--for example, the
Comcast franchise in Campbell, California—and staff is not aware of any that exceed 15 years.
A long franchise term does not serve the public interest,both because the system may
become outdated, and because PEG and I-Net requirements may need to be revisited. Changes
in law could require that some obligations be changed. Also, because the Cable Act protects a
cable operator against unfair franchise denial, a shorter term may be more reasonable. Staff
recommends that the Agencies limit the term to 10 years if all the needs and interests identified
in this report are adequately met. However, staff would recommend that the franchise be shorter
to the extent that these needs and interests are not met.
2. Franchise Fees
Franchise fees are imposed to help compensate a local government for use of very
valuable public property—the public rights-of-way—to provide cable services.96 However,
franchise fees are subject to a form of federal"price cap"that prevents agencies from simply
charging the fair value of the property that the cable companies use. Charging less than the
maximum amount allowed by law would effectively mean that everyone subsidizes cable's right
of way use,by allowing the cable operator to use property for less than even the federal price
cap. 'While staff recognizes that some cable subscribers may prefer not to have a franchise fee
because operators itemize the fee on bills, staff also notes the following. First, it is fair to those
who do not subscribe to cable to ensure that the companies pay for the public property that they
use. Second, charging less than the maximum amount permitted does not necessarily mean
subscribers' total bills will be lower. A cable operator can charge whatever it desires to charge
for most of its services and can be expected to charge what the market will bear,whether or not
the Agency charges a franchise fee.97 Thus,we think the best approach to the franchise fee is to
continue to charge the maximum permitted fee, with respect to cable services, and to be sure that
the Agency does not lose rights to charge any other fees or obtain additional compensation. For
96 See, e.g., City ofDallas v. F.C.C., 118 F.3d 393 (5th Cir. 1997).
97 FCC Rate Surveys suggested that there is not a significant difference between rates charged in
communities that levy a franchise fee and those that do not. See, e.g.,Report and Order, App. E,
8 F.C.C.R. 5631 (1993).
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now the maximum cable service franchise fee is 5%of gross revenues derived from the
operation of the cable system to provide cable service. Some of the Agencies,however,
currently charge less than the maximum and may wish to continue doing so.
The experience of the Agencies over the last term suggests that the franchise fee
definition should be clear and broad, and consistent with the federal franchise fee cap while also
making it clear that the fee can be increased, and additional fees and compensation required so
long as federal and state statutory limits are not exceeded. It also further suggests that we should
have the clear ability to review all of the company's financial data and that the company should
be obligated to produce data requested promptly. An Agency should not need to commence a
lawsuit to obtain data it requests.
3. Scope of Grant
Federal law draws a distinction between cable systems and telecommunications systems,
and suggests that to the extent telecommunications systems are authorized and regulated by local
governments, this ought to be done separately from a cable franchise.98 In particular, changes in
the Cable Act made by the Telecommunications Act of 1996 indicate that the federal Cable Act
does not apply to the provision of telecommunications services by a cable operator;that a cable
operator is not required to obtain a franchise under the federal Cable Act for the provision of
telecommunications services, and that a franchising authority may not impose any requirement
under the federal Cable Act that has the purpose or effect of prohibiting,limiting,restricting,or
conditioning the provision of a telecommunications service by a cable operator or its affiliate.99 By
restricting these prohibitions to franchises issued under the federal Cable Act,however, Congress
indicated its intent to permit state and local governments to require appropriate compensation and
authorize use and occupancy of their public-rights-of-way for the provision of non-cable services
through instruments other than cable franchises issued under the Federal Cable Acta00 For this
reason,among others, any renewal franchise for Comcast will only authorize the company to use
the public rights-of-way for the provision of cable service and to provide such other services as are
required to meet its PEG obligations(including PEG obligations related to the I-Net). Describing
the scope of the cable franchise as proposed above does not prohibit Comcast from using and
occupying the right of way to provide other services. It simply means that the cable franchise itself
does not authorize the use and occupancy of the right of way to provide these services. Comcast
would be subject to the rules that apply to other companies should it seek to use the rights of way to
provide other services.
4. Transfers
A decision to grant a renewal franchise is based on the expectation that the entity to
whom the franchise is granted will be the person who will perform the franchise requirements.
98 See, e.g.,47 U.S.C. §§ 3(43)-(46), 522(6)-(7).
99 See 47 U.S.C. § 541(b)(3).
'0' Cf 47 U.S.C. § 253(c) (recognizing state and local governments' right to manage the public
rights-of-way and to require fair and reasonable compensation).
—62—
The grant is often based on a review of the resources available to the nominal franchisee, and its
parent companies. The franchising authority may have chosen to deny a franchise to the
transferee had it applied, or had it been controlled by another entity with different resources.
Thus, each Agency must have the opportunity to review a transfer,to determine the likely impact
on the performance of franchise requirements and the community, and to grant, grant with
conditions or deny the transfer based on the reasonably predicted impact. For similar reasons,
the term"transfer"should be broadly construed to include transactions they may result in the
transfer of all or a portion of the franchisee's interests in the cable system or the franchise,
change in the control of the franchisee itself, or similar results however achieved. The language
of the franchise should be very clear on this point.
This is so because a change of control, as well as a change in the actual holder of the
franchise can have enormous consequences for the community. In some cases,the effect may be
beneficial,by increasing the financial resources available to the community. But a merger could
also have the reverse effect, and could result in the transfer of the franchise to an entity that is
simply not prepared to satisfy its franchise obligations. While an Agency could always seek to
enforce the franchise, a change that effectively increases the cost to the Agency of obtaining its
contractual benefits harms the Agency and subscribers. The Agencies have a substantial interest
in avoiding these adverse effects.
For this reason,the Staff has devised a transfer procedure that uses standards for
measuring changes in control that are consistent with standards that have been used by other
regulatory agencies. In addition, Staff has developed factors that will be considered in
determining whether to grant a transfer which go the basic question of the determining whether
(a)performance is likely to be affected; and(b)whether there is likely to be an adverse impact
on the Agency or the public. The fact that an Agency makes an adverse determination on any
point does not mean a transfer will be denied,but it does mean that the Agency will be in a
position to establish transfer conditions to avoid adverse effects(this might include requirements
for corporate guarantees, for additional bonds, or resolving compliance and non-compliance
issues so that there is no misunderstanding as to what is and is not required). Finally,the
transferee should reimburse the Agencies for all costs incurred in connection with a transfer
request.
5. Local Exercise of Police Powers and Modification of Applicable Rules
and Ordinances
The Agencies have the legal authority to use their police and other powers to secure and
promote the public health, safety, and general welfare of their residents, and to adopt appropriate
regulations of businesses over which they have jurisdiction. In particular, because of the
technical, economic and regulatory volatility of the cable 'industry,the Agencies must have
regulatory flexibility if they are to meet their duty to the public while still granting renewal
franchises. Accordingly, any renewal franchise must preserve local police powers and regulatory
flexibility to the maximum extent possible. Comcast should not be able to avoid or refuse to
comply with an ordinance adopted in the exercise of the police power merely because the
requirement imposes costs in addition to those the company is required to bear under the
franchise, for example. Otherwise, Comcast could hamper the ability of the Agencies to adopt,
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among other things, street cut fees applicable to companies subject to the Agencies'jurisdiction
that are using the rights of way.
6. Compliance with Applicable Laws
Many matters governing the operation and business practices of a cable operator are
addressed by federal, state and local laws and regulations. The grant of any franchise is based on
the assumption that a franchisee would comply with such laws and regulations.
7. Severability
A cable franchisee will enjoy special rights to use the unique public rights-of-way. To
ensure that a franchisee does not essentially convert what is valuable local property to private
purposes,the Agencies should impose conditions on the franchisee's use of the rights-of-way.
This ensures, among other things,that the community at large shares in the benefits which flow
from the franchise grant. The grant would not be made if those benefits were not received.
Therefore, any franchise agreement must include a provision that makes it clear that if material
provisions of the agreement are unenforceable, an Agency can void or reconstitute the franchise.
A cable company should not be able to retain the benefits of a franchise agreement without
providing the corresponding benefits to this community.
8. Insurance Requirements; Indemnification, Bonds, Letters of Credit,No
Recourse
Franchises typically include provisions that are designed to(a) ensure that the franchising
authority and its residents, bear no risk as a result of a franchisee's use of rights-of-way; and (b)
ensure that the franchisee complies with applicable requirements, and if it does not,the Agency
can complete the required work and obtain compensation for the damages caused. As to the first
point, the franchisee can cause damage to public and private property when it is in the streets. It
can create hazards that may lead to lawsuits. It should be clear that an Agency should bear no
risk associated with such suits, and what is more,the Agency has an interest in assuring the
operator has the insurance and other protections in place so that it can be held responsible for the
damage that it causes.
In addition,the Agencies need to enter and use the streets constantly. The use by the
cable company is an important use, but that use is secondary to other uses. If, by reason of
allowing a cable company to use the streets, an Agency were exposed to liability if it caused
damage to the cable company's property,the Agency's potential liability would be enormous and
its ability to use its own property limited. In commercial leases, landlords usually require tenants
to assume all risks that flow from the occupancy of the building: a landlord does not,for
example, agree typically to compensate the tenant for business losses if a roof leaks. The
Agencies cannot afford to assume any risks associated with the use of the rights of way by a
cable company.
Performance guarantees, in the form of letters of credit and bonds, ensure that work that
the operator promises to perform is performed. If an Agency's only remedy is a lawsuit,the
benefits that are promised will inevitably be delayed, and may in many cases be deferred forever.
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By ensuring that there are funds available, an Agency ensures that the benefits promised are
delivered.
9. Liquidated Damages
As a related matter, there are a number of franchise requirements where noncompliance
could significantly reduce the benefits of the franchise, and thus harm an Agency,but where the
amount of damages is hard to estimate. Because of this, it is essential to include liquidated
damages amounts, and to make it clear that those damages apply from the time a breach occurs.
This ensures that the company is not rewarded for non-compliance, and ensures that it does not
adopt a policy of only complying when caught.
10. Termination
An Agency must also have available more serious remedies--revocation or shortening
the term of a franchise—in the event of a serious breach of performance. Any business
relationship depends upon a satisfactory working relationship between the parties; no working
relationship can be established and maintained if the franchisee lies or attempts to deceive,
refuses to comply with key provisions of law or its agreed upon obligations, or repeatedly
violates law or its agreed upon obligations.
At the same time, it is important that subscribers not be disadvantaged if a franchise must
be revoked. Therefore, a cable operator must be required to ensure continuity of service for a
reasonable time until a new cable operator begins to offer service. Any renewal franchise must
be subject to these provisions.
11. Relationship of Remedies
The remedies available under a renewal franchise agreement should not be exclusive.
The public's compensation for harm suffered should be as complete as possible;therefore,
remedies should be available singly or in combination.
12. Abandonment
Any renewal franchise would be granted in return for each franchisee's promise to
provide service throughout its franchise area in accordance with a franchise agreement. Thus, a
renewal franchise must ensure that if for any reason the company stops providing service in
accordance with the franchise over all or a part of its system,the granting Agency is able to take
action to ensure that service continues. In addition, if property is abandoned, an Agency must be
able to ensure that it is either removed, or that the Agency can take ownership of the property.
There is enormous potential risk to the Agency if property remains in the street,it is no longer
subject to a franchise,and the Agency does not have the right to dispose of that property as it
sees fit(during construction or excavation projects, for example).
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13. Conditions on Use of Public Ri is-of-Way
One purpose of the franchising process is to protect public property used by private
entities from harm and to ensure that the property can be used by others. For example, a
franchisee may need to cut open a road or bore under it to install or repair a line. Improper
restoration can leave a permanent bump or depression in the road, or even cause it to collapse.
This is an important public safety issue. Thus, franchises must be subject to conditions regarding
the use of the public rights-of-way. It is essential that a renewal franchise continue to protect
municipal property and make it safe and available for multiple users, including other utilities.
Moreover, use standards and requirements change over time, as do the Agencies' planning goals.
The placement of these private facilities in the right-of-way must not be allowed to interfere with
the implementation of these new standards,or permit cable franchisees to avoid rules or fees that
are imposed in connection with various activities in the rights of way. Finally,the use of the
rights of way cannot be allowed to interfere with any public projects. Accordingly, franchisees
should be required to meet certain minimum standards for use of the rights of way to satisfy
these goals, and the Agencies must have the flexibility to establish new standards and procedures
over time.
14. Customer Service Provisions
The failure of cable operators to provide good customer service received national
recognition in the 1992 amendments to the Cable Act and the minimum customer service
standards adopted by the FCC.101 Those federal standards, however,recognize that additional or
more stringent standards may need to be adopted by particular localities,based on specific
conditions and on the behavior of particular cable companies.102
The record here shows, as discussed earlier,that Comcast has not provided adequate
service. In order to meet the needs and interests of this community, it is necessary and
appropriate to adopt strong customer service standards. Moreover, because customer service
practices and community needs change over time,the Agencies must be able to alter and apply
these altered standards to each franchisee,to protect the public. This,too, is contemplated by the
Cable Act, which permits the establishment of customer service standards by ordinance.
15. Rate Re ullation
In 1992, Congress determined that it was necessary to protect subscribers from
unreasonable rates for cable service and equipment. The current Cable Act, and the FCC's
implementing regulations,place significant limitations on local governments to regulate service
rates. Nonetheless, it is important that the Agencies retain the right to regulate rates, and the
right to pre-approve rates and rate changes, except where the law prohibits them from doing so.
101 See Cable Television Consumer Protection and Competition Act of 1992, sec. 2(b)(4)-(5); 47
U.S.C. § 552; 47 C.F.R. § 76.309.
1oa 47 C.F.R. § 76.309(b).
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(Indeed, while service rate regulation is limited, some charges levied by cable operators—
disconnect rates, for example—may be subject to the control of the Agencies). f03
16. Reports and Records
Franchise compliance cannot be monitored without access to franchisee books and
records. In a new franchise term,the ability of the Agencies to obtain records and reports should
not be in doubt, as it is critical to the effective enforcement of the franchise.
17. Non-Discrimination
The need for provisions prohibiting discrimination among subscribers or persons
requesting service is expressly recognized by federal law.104 Federal law also establishes general
EEO requirements for cable. These provisions not only establish federal standards, but also
permit establishment of additional local requirements. Companies using public property, and
obtaining the sorts of benefits from the public that are being provided through the franchise
should be subject to general rules regarding non-discrimination.
18. Signatories
Federal law requires that a"cable operator"obtain a local franchise prior to offering
cable service. Federal law defines cable operator as any person or"group of persons„
responsible for the management or operation of the cable system. There is a need and interest in
having Comcast Corporation and all of its affiliates that are involved in any way in operating the
local cable systems to be signatories to the agreement in order to comply with Federal law and
ensure that the terms of the franchise agreement and cable ordinance can be enforced.
V. PAST PERFORMANCE
The Cable Act anticipates that in addition to identifying future cable-related needs and
interests, franchising authorities will examine the past performance of the cable operator. Denial
of a renewal proposal by an operator may be based on adverse findings with respect to several
factors, including whether the operator"has substantially complied with the material terms of the
existing franchise" and whether the quality of the operator's service has been reasonable in light
of community needs. The cable operator, must,however,have been given notice and
opportunity to cure any such noncompliance or service quality issue. In addition, Comcast has
not yet submitted a renewal proposal; thus, it would be premature for any of the Agencies to
deny renewal on any basis, including past performance. It would also be inappropriate for an
Agency to deny renewal based on performance deficiencies arising only in other communities.
Accordingly,the purpose of this section of the report is to advise Comcast of the general
103 There is a need and interest in having discounted rates available to senior citizens, persons
with disabilities and the economically disadvantaged. However, while such discounts are
enforceable if promised,the Agencies cannot require them.
1114 See 47 U.S.C. §§ 541(a)(3), 543(e).
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categories of problems that might be cited by one or more of the Agencies in the future, and to
provide notice of specific performance problems that have been identified to date.
The Consortium's review of Comcast's past performance disclosed problems in three
areas. First,the technical inspections conducted by CTC indicate that across the Consortium
area Comcast has a large number of safety code violations related to the condition of its outside
plant. Second,the Consortium Agencies have identified a number of violations of specific
franchise requirements. And third, subscriber complaints and other sources indicate that
Comcast has not provided a reasonable level of customer service.
Staff believes the specific problems identified by CTC should be corrected, and that
Comcast should take additional steps to correct the problems more generally.
1. Comcast has violated applicable safelycodes.
odes.
The CTC Technical Report lists numerous instances in which its inspection of the cable
system revealed violations of applicable safety standards.r°5 The CTC Technical Report was
based on a survey of plant condition at randomly-selected locations, so the problems identified at
those sites probably reflected even broader problems across the system. These problems
included missing or improperly installed guy wires; broken or missing lashings, improper
bonding and grounding of distribution plant and subscriber drops; and improper clearance from
power and telephone cable. Unfortunately,the CTC Technical Update indicates that many of
these problems appear not to have been corrected in the course of the system rebuilds.
Failure to comply with safety code requirements is also a violation of individual
franchises.
2. Comcast has violated various franchise requirements._
The individual Agencies have identified specific areas of non-compliance with their
individual franchises. These include:
+ Comcast has failed to provide studio space, as required under the Walnut Creek
franchise agreement.
+ In the City of Martinez,the company failed to place a dedicated access channel on
a channel numbered in the range of 1-12. The City gave Comcast written notice
of this issue on June 21, 2001. This matter was later resolved, in an Amendment
to License Agreement dated December 12, 2001,but Comcast is not in full
compliance with the new terms, because it has not installed certain wiring and
equipment in the Martinez Police Department.
+ In Martinez, Comcast has failed on several occasions to properly televise City
Council meetings, as required by the franchise.
105 CTC Technical Report, Appendix B.
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• In the County, control of the franchisee was transferred from AT&T to Comcast
despite the fact that the County lawfully denied AT&T and Comcast's application
for approval of the transfer. This matter was recently settled.
• The company has failed to provide required maps and reports to certain
communities.
• The company has failed to submit the following annual reports to the City of
Martinez: updated and accurate construction schedules,permit requests, and
contact lists for their subcontractors. Additionally, Comcast placed parking
equipment on sidewalks and around blind corners without placing appropriate
warning signs;trimmed tree branches without closing the sidewalk; failed to use
proper traffic control procedures on numerous occasions; installed various
facilities without first obtaining the proper permits; failed to call in inspection
requests for issued permits; and failed to update the City on the status of
numerous approved Encroachment Permits.
• In Contra Costa County,the company failed to provide: an annual summary of the
previous year's activities in development; a annual statement of projected
construction, if any, for the next two years;monthly summaries of customer
service calls tracked; and results of tests of the system required by code.
• Walnut Creek Municipal Code section 6-7.24(c)provides in part that telephone
answering time(including wait time) shall not exceed 30 seconds, and that if the
call needs to be transferred,transfer time shall not exceed 30 seconds. These
standards are to be met at least 90 percent of the time, as measured on a quarterly
basis. Comcast has routinely violated these standards. In at least one case, a
subscriber repeatedly tried to call Comcast,but was put on hold for up to 45
minutes each time.
• Federal regulations provide that standard installations will be performed within
seven business days after an order has been placed. This standard must be met no
less than ninety-five percent of the time measured on a quarterly basis. (47 CFR
§76.309.) Comcast has routinely violated these standards in Walnut Creek. In at
least one case, a potential subscriber needing a routine installation was told that
the installation could not be performed for six weeks.
• The Franchise Agreement with Walnut Creek provides in part that the franchise
will not use Channel 6 for any purpose other than for community programming,
local origination programming and the community bulletin board. However,
Comcast has repeatedly used Channel 6 for other types of programming,
including but not limited to advertising and programming that is not local.
• Federal regulations provide that if a cable operator chooses to itemize franchise
fees, it cannot itemize these fees in such a way that indicates they are a charge in
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addition to cable service. Comcast's bills list franchise fees as a charge in
addition to cable service in violation of these regulations.
The Walnut Creek Municipal Code requires Comcast to obtain an encroachment
permit prior to performing most work within the public right-of-way. Comcast
has repeatedly failed to obtain required encroachment permits.
+ The Walnut Creek franchise agreement requires Comcast to provide six 12-hour
training workshops per year to train local residents in producing community
access programming. Comcast has repeatedly failed to do so.
• The Walnut Creek franchise agreement requires Comcast to assist local residents
in producing no fewer than 30 community access programs each year and no
fewer than 35 public service announcements each year. Comcast has repeatedly
failed to do so.
• The Walnut Creek Municipal Code requires that community access programming
be given priority on the community access channel over local origination
programming produced by Comcast. Comcast has violated this requirement by,
among other things, refusing to air the government access program"Walnut
Creek Currents"during prime time despite the fact that very little other
community access programming ever appears on the channel.
• The Walnut Creek Municipal Code requires that community access be given
priority in use of the local community access production studio. Comcast has
routinely violated this requirement by giving priority to its own use of the studio,
making most of the studio completely off limits to community access users and at
times completely preempting community access use.
• The Walnut Creek franchise agreement requires Comcast to conduct an outreach
program for potential community access producers. Comcast has violated this
requirement by failing to conduct a reasonable outreach program.
• On October 8, 2002,the Concord City Council passed Resolution No. 02-62
entitled"A Resolution Finding AT&T Broadband in Default of the Cable
Television Franchise Agreement and Establishing Conditions for Curing the
Default." The default concerned certain customer service issues, including failure
to provide detailed reports regarding customer service for subscribers in the City.
The steps to cure were (1)to submit quarterly reports that meet or exceed
customer service standards and(2)the data in the reports were to be Concord-
specific. To date, Concord has not received any quarterly reports based on
Concord-specific customer service data, and Comcast continues to be in default.
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3. Comcast has not provided reasonable customer service.
In addition to the foregoing,the level of customer service that has been provided by
Comcast has not been reasonable in light of community needs.106 For example, almost two-
thirds of respondents to the 1999 and 2003 telephone surveys who were cable subscribers and
who had telephoned the company in the last year reported that they were put on hold for a
duration that was more than one minute, a finding that warrants further investigation.107
Additionally,very small percentages of these telephone survey respondents (4-15%) indicated
they were on hold for less than 30 seconds.108 Respondents to the 2000 Survey and the
Concord/Walnut Creek Survey gave comparable answers. This data suggests that the company
has failed to satisfy minimum FCC customer service standards.
Further, the customer complaint files maintained by staff are consistent with the findings
of the telephone surveys, indicating customer complaints about telephone answering time, as
well as general lack of responsiveness by the operator. For example, the County has received
numerous complaints regarding unexpected service interruptions, billing problems and
unresponsive customer service representatives. The County's also records show that the
company has failed to comply with the telephone answering time requirements,failed to provide
standard installation within the required seven business days after the order is placed by
subscribers, failed to provide pro-rata refund of prepayment to subscribers who voluntarily
terminate their service, and failed to properly identify the itemization of the franchise fee on
subscribers' bills.
We ask that the Board of Supervisors confirm the staff's judgment on these points by
adopting this report and authorizing staff to provide any notices required by federal law.
106 47 U.S.C. § 546(c)(1)(B).
107 Buske Report at 69.
108 Id.
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LIST OF EXHIBITS
A Draft Request for Renewal Proposals
A-1 Model Franchise
A-2 Model Cable Ordinance
B Buske Report
C CTC Technical Report
D CTC Technical Update
E I-Net Report
F Preliminary I-Net Operational Concept Document
G Distance Education in Contra Costa County
H Franchise granted to Seren Innovations by the City of Concord
I Franchise granted to Seren Innovations by the City of Walnut Creek
J Franchise granted to Seren Innovations by Contra Costa County
9318102\001 OO5b9.DOC
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