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HomeMy WebLinkAboutITEM IV-BInteroffice Memorandum Information Services WASHINGTON To: Public Works Committee Members Municipal Services Committee CC: Mayor Lewis Shelley Coleman Dennis Dowdy Dan Heid From: Lorrie Rempher Date: December 2, 2009 Re: Comcast Cable Franchise Extension For the past several months, we have been working on final language for a franchise extension with Comcast Cable. Information Services, Legal, Finance, Public Works and Administration have all been involved in review of the agreement and recommend it be the basis for approving the extension of Comcast's Cable franchise for an additional five years. The intention of this negotiation was to keep the previous franchise in place and extend the length. Due to the changes in the technical environment over the past few years, there are some items that needed addressed in the extension language. The final extension agreement is outlined in three documents: Ordinance 6284, Resolution 4530 and Resolution 4531. Following is a summary of the provisions in those documents. Extension timeframe: Resolution 4530, page 4 of 10, Section II The franchise is extended for five years from the date of execution of this resolution. Technical Audit: Resolution 4530, page 5 of 10, Section III, F. This section requires Comcast to certify their technology each year. PEG Support & Channel Locations: Resolution 4530, page 6, 7 of 10 Section IV This institutes a $.35 per subscriber per month fee that will pass through to City of Auburn to support capital expenditures related to public, education and government access television including but not limited to hardware upgrades, software upgrades, cameras, studio work, conduit related to government access TV. It is anticipated that this can be used to pay for the fiber between the current and new City Hall as there will be `studio' features in a conference room in that facility. Page 1 of 2 AUBURN * MORE THAN YOU IMAGINED This section also discusses Comcast's support of transitioning the City of Auburn channel 21 to digital technology at no expense to the City. Annexations: Resolution 4530, page 8 of 10, Section VI Provides for a 12 month window in which Comcast must begin to serve any of our annexation areas. Cable to Public Buildings: Resolution 4530, page 8 of 10, Section VII This adds cable service to M&O Facility and the new VRFA fire station. It clarifies the language on Jail cable service and requires that we get a separate commercial service for the purpose of providing inmate television services. Competitive Equity: Resolution 4530, page 9, 10 of 10, Section IX Comcast has requested this language to ensure that new franchisees are required to provide the same level of service and PEG support as they are. Per our Franchise Attorney, this is industry standard. Institutional Network (I-Net): Resolution 4531 This removes the I-Net fiber network from the franchise and creates a separate lease agreement that leases the infrastructure to City of Auburn for $1 per year for 50 years. This was at our request to eliminate the possibility of franchise law changing and the franchisee having the opportunity to take what they determine is "fair market value" of this infrastructure out of our future franchise fees. Gross Revenue: Ordinance 6284 This is a clarification of how gross revenue is calculated. Our Finance Director and Legal Department have reviewed and agree with this language. Page 2 of 2 AUBURN * MORE THAN YOU IMAGINED crnr or # WASHIM4GTOM Agenda Subject: Resolution No. 4530 AGENDA BILL APPROVAL FORM Date: December 8, 2009 Department: Attachments: Budget Impact: Information Services Resolution No. 4530 Administrative Recommendation: City Council to adopt Resolution No. 4530 Background Summary: Resolution No. 4530 extends the Comcast Franchise agreement for an additional five years from date of execution. It also institutes the requirement for a yearly technical audit by Comcast, defines PEG support and Channel locations, provides provisions for Annexations, cables to public buildings and includes language for competitive equity. T1221-2 Reviewed by Council & Committees: Reviewed by Departments & Divisions: ❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O ❑ Airport ® Finance ❑ Cemetery ❑ Mayor ❑ Hearing Examiner ® Municipal Serv. ® Finance ❑ Parks ❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning ❑ Park Board ®Public Works ® Legal ❑ Police ❑ Planning Comm. ❑ Other ® Public Works ❑ Human Resources M Information Services Action: Committee Approval Council Approval: Referred to Tabled ❑Yes ❑No ❑Yes ❑No Call for Public Hearing Until Until / / Councilmember: Cerino Staff: Rempher Meetinq Date: December 21, 2009 Item Number: Am= RESOLUTION NO. 4 5 3 0 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE ADDENDUM IV TO THE CABLE FRANCHISE AGREEMENT BETWEEN THE CITY OF AUBURN AND COMCAST OF WASHINGTON WHEREAS, the City of Auburn entered into a Non-Exclusive Franchise Agreement with TCI Cablevision pursuant to Resolution 2409, approved on May 3, 1993; and WHEREAS, certain provisions of Section 5 and Section 8 of the Franchise were amended in Addendum I to the Franchise which was approved June 15, 1998 pursuant to Resolution 2972; and WHEREAS, the date for construction and operation of a public access facility was extended from July 1, 1999 to September 1, 1999 in Addendum II to the Franchise which was approved June 21, 1999 pursuant to Resolution 3096; and WHEREAS, this date was further extended to February 1, 2001 in Addendum III to the franchise which was approved November 1, 1999 pursuant to Resolution 3122; and WHEREAS, Comcast of Washington IV, Inc. ("Comcast") is the successor in interest to TCI Cablevision and currently holds the above Franchise; and WHEREAS, the Franchise expired on midnight June 30, 2008; and Resolution No. 4530 December 9, 2009 Page 1 of 11 WHEREAS, the City and Comcast have continued to operate under the Franchise while they have been in discussions regarding the terms under which the Franchise could be extended; and WHEREAS, the City Council finds that the terms set forth in the attached Addendum III to the Franchise, which extends the Franchise for an additional five years, are in the best interest of the City and its citizens, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, HEREBY RESOLVES as follows: Section 1. The Mayor and City Clerk of the City of Auburn, Washington, are hereby authorized to execute Addendum IV to the Non-Exclusive Franchise Agreement Between the City of Auburn, Washington and Comcast of Washington IV to Operate a Cable Television System Within the City of Auburn, Washington, a copy of which is attached hereto, marked as Exhibit "A" and incorporated herein by this reference. Section 2. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directives of this legislation. Section 3. That this Resolution shall take effect and be in full force upon passage and signatures hereon. Resolution No. 4530 December 9, 2009 Page 2 of 11 Dated and Signed this day of , 2009. CITY OF AUBURN PETER B. LEWIS MAYOR ATTEST: Danielle E. Daskam, City Clerk APPROVED AS TO FORM: Daniel B. Heid, City Attorney Resolution No. 4530 December 9, 2009 Page 3 of 11 ADDENDUM IV TO THE NON-EXCLUSIVE FRANCHISE AGREEMENT BETWEEN THE CITY OF AUBURN, WASHINGTON AND COMCAST OF WASHINGTON IV TO OPERATE A CABLE TELEVISION SYSTEM WITHIN THE CITY OF AUBURN, WASHINGTON This ADDENDUM IV regarding extension of the Franchise Agreement and making various changes to the Agreement between the City of Auburn, Washington, and Comcast of Washington IV, and approved by the City Council pursuant to Resolution No. 2409 on May 3, 1993 and amended on June 11, 1998, and further amended on June 15, 1999, is hereby entered into between the CITY OF AUBURN, a Washington municipal corporation, hereinafter referred to as the "CITY" and Comcast of Washington IV, Inc. a Washington corporation, hereinafter referred to as "OPERATOR." NOW, THEREFORE, the parties agree as follows: Section I. For purposes of this Addendum IV, "Franchise" shall mean the Franchise Agreement approved by the City Council pursuant to Resolution No. 2409, as amended by Resolution No. 2972 and Resolution No. 3096. Section II. Section 2, Length of Franchise, of the Franchise is hereby amended to read as follows: Section 2 Length of Franchise. This Franchise will be continued for five (5) years following the execution date this Addendum IV. Section III. Section 5, Future Provision, of the Franchise is hereby amended to read as follows: Section 5. Future Provisions. A. The CITY and the OPERATOR acknowledge that the CITY should be provided with a cable system that has the same Resolution No. 4530 December 9, 2009 Page 4 of 11 general capabilities and capacity as those provided other cities served by the OPERATOR in the King-Pierce-Snohomish County area of the State of Washington. B. The CITY may, at its discretion, require that the OPERATOR provide such interactive services as addressability, security, computer interaction, banking, shopping, voice and transmission, High Definition Television (HDTV), fiber optic and other such features, as well as upgrades capable of carrying at least fifty-four (54) channels, within the CITY within twenty-four (24) months of the time the OPERATOR provides any of the same services identified above to a preponderance of a system; 1. Within the City of Seattle system, or; 2. Within any adjacent community, or; 3. Within Forty percent (40%) of the municipalities in the King, Pierce, and Snohomish Counties. C. Notwithstanding the above provisions, the OPERATOR shall in any event complete the upgrade to fifty-four (54) channels and have the capability of implementing these enhanced services within forty-eight (48) months from the effective date of this AGREEMENT. D Prior to implementation of any such service, the OPERATOR may request a public hearing by the City Council to discuss the benefits of said features to the citizens of the CITY. Upon a finding by the City Council that such features are reasonably required to meet community needs, taking into consideration the expense of providing such services and the potential costs to subscribers, the City Council may require the implementation of such features in accordance with the provisions of this AGREEMENT. If the Council deems it necessary, it may, at its own option by a majority vote, extend the time requirements established in this section. E. Additionally, the OPERATOR, upon completion of the upgrade or by the expiration of the forty-eight (48) month period as prescribed herein, shall provide, maintain and operate a public access studio within a radius of eight (8) miles of the City Hall, or at a location mutually agreeable by all parties. Such facilities shall be subject to approval by the CITY as suitable. Such approval shall not be unreasonably withheld. F. OPERATOR shall annually provide to the City a certification signed by its Vice President of Engineering for the State of Washington, or other senior engineer as agreed upon by the City, certifying that its policies and procedures comply with all applicable laws and codes and that all known maintenance issues have been repaired in compliance therewith. Resolution No. 4530 December 9, 2009 Page 5 of 11 Section IV. Section 6, Access Channels, of the Franchise Agreement is hereby amended to read as follows: Section 6. Access Channels A. Upon completion of the upgrade conditions, the CITY shall be provided with three (3) access channels, one of which shall be capable of broadcasting live from City Hall. The CITY may initially share a common public access channel with other communities; however, the CITY may elect, at its option, to provide programing over an individual public access channel for the CITY's sole use. B. Additional channels over and above those referenced above shall be made available for CITY purposes when any of the three (3) designated channels is in use for access purposes with programing during fifty percent (50%) of the hours between 10:00 A.M. and 10:00 P.M., during any consecutive ten (10) week period. The OPERATOR shall within six (6) months following a request by the CITY, subject to the restrictions above, provide another designated access channel for this purpose. C. The OPERATOR shall continue to provide additional channels under the same conditions. Programing on additional channels shall be distinct and non-repetitive of the previous channel. If additional channels are designated for community use but after one year such channel(s) are not utilized at least twenty- five percent (25%) of the hours between 10:00 a.m. and 10:00 p.m. with programing, the access users will, within six (6) months of receiving written notice from the OPERATOR, group their programing into one contiguous block of time of their choosing. The remaining broadcast time on such channel shall then revert to the OPERATOR for its unrestricted use within the terms and conditions of this AGREEMENT. D. PEG Support. Upon the effective date of this Addendum IV, the OPERATOR shall collect and remit to the CITY on a quarterly basis, at the same time as the franchise fee, $0.35 per subscriber per month (the "PEG Fee") for PEG capital purposes from all subscribers paying for cable service. To the extent permitted by applicable law, the PEG Fee may be itemized on Subscriber on Subscriber billing statements. The PEG Fee shall not be treated as franchise fees for purposes of 47 U.S.C. § 542 or any other purpose, and shall at no time be offset or deducted from franchise fee payments made to the CITY under this franchise or applicable law. In the event any payment required by the above paragraph Resolution No. 4530 December 9, 2009 Page 6 of 11 is not made on or before the required date, the OPERATOR, during the period such unpaid amount is owed, shall pay additional compensation and interest charges computed from such due date, at an annual rate of ten percent (10%). Any interest or penalties imposed hereunder shall not be treated as franchise fees for purposes of 47 U.S.C. § 542 or any other purpose, and shall at no time be offset or deducted from franchise fee payments made to the CITY under this franchise or applicable law. E. Subject to applicable law, so long as OPERATOR's basic service tier is carried in an analog format, it shall continue to cablecast the City's PEG channels in both an analog and digital format. If OPERATOR opts to eliminate its analog cable service and carry PEG channels solely in a digital format, it shall maintain, at no cost to the CITY, all transmission equipment, decoders, and electronic switching necessary to transmit the CITY's PEG video signals from the CITY to OPERATOR and OPERATOR shall assume all other costs necessary to ensure that PEG signals can be transmitted on OPERATOR's digital service tier. OPERATOR will use reasonable efforts to minimize the movement of CITY-designated PEG Channel assignments and maintain common Channel assignments for compatible PEG programming. If OPERATOR proposes to change the channel designation, for the CITY-designated PEG channel, OPERATOR will provide at least three (3) months notice to the CITY prior to implementing the change. If OPERATOR makes changes in the System and related equipment and facilities or in signal delivery technology, which change directly cause the signal quality or transmission of PEG channel programming or PEG services to fall below technical standards under applicable law, OPERATOR shall, at its own expense, provide any necessary technical assistance, transmission equipment and provide necessary assistance so that PEG facilities may be used as intended. PEG channels shall be transmitted in the same quality and format as all other basic cable service channels. Section V. Section 8, Institutional Networks, of the Franchise is hereby deleted. The CITY and OPERATOR have entered into a separate and independent lease agreement regarding the Institutional Network. Section VI. Section 11, Coverage, of the Franchise is hereby amended to read as follows: Resolution No. 4530 December 9, 2009 Page 7 of 11 Section 11. Coverage. The CITY shall be provided with cable television service in the entire franchise area. If such a condition does not now exist, the OPERATOR shall complete such wiring and be in a position to offer cable reception to all residents within twelve (12) months from the effective date of this AGREEMENT. Areas subsequently annexed shall be provided with cable availability within twelve (12) months of Council Approval of the annexation and written notice to the Operator Cable Service, subject to the terms in Section 13 herein. Section VII. Section 15, Public Buildings, of the Franchise is hereby amended to read as follows: Section 15. Public Buildings. The OPERATOR shall provide, without charge for installation or monthly rate, basic service, one outlet, and converter, if needed, at such public buildings and schools as specified in Appendices "B" and "C" which are attached hereto and incorporated herein as well as other such buildings that may be constructed during the period of AGREEMENT that are passed by cable and within one hundred and fifty (150) feet of the trunk or distribution system. The OPERATOR shall install and provide cable service within 180 days of the effective date of this Addendum III, at no cost to the CITY to the M&O Facility for Emergency Operation Center purposes, 1305 C Street SW, Auburn, Washington 98001. Within 180 days following construction completion, OPERATOR shall install and provide cable service at no cost to the CITY to the "Lakeland" Fire Station for Emergency Operations Center purposes, 182nd St. E. and 4t" Ave. E. Upon request through the designated CITY representative, the OPERATOR will voluntarily make available without charge, as long as the parties agree that it is economically feasible, a standard installation and a minimum of one outlet of Basic and Expanded Basic Cable Services to City administrative buildings as designated by the CITY (whether they are owned or leased), and fire station(s), police station(s), libraries, Access facilities and K-12 public School(s). The recipient of the service will secure any necessary right of entry. The Cable Service will not be used for commercial purposes, and the outlets will not be located in jail cells or areas open to the public, except for one outlet to be located in public lobbies in CITY buildings that will be used by the public for viewing. The CITY will take reasonable precautions to prevent any use of the OPERATOR's Resolution No. 4530 December 9, 2009 Page 8 of 11 Cable System in any manner that results in inappropriate use, loss or damage to the Cable System. If additional outlets of Cable Service are needed within such buildings, only the OPERATOR is authorized to complete the Cable Service expansion to support the outlet installation(s) and the building occupant will pay the standard installation fees; provided however, the CITY may construct and maintain additional outlets beyond OPERATOR's required outlet in accordance with OPERATOR specifications that OPERATOR will supply when requested by the CITY. Section VIII. A new Section 24, Modification, is hereby added to the Franchise to read as follows: Section 24, Modifications. No provision of this Franchise Agreement shall be amended or otherwise modified, in whole or in part, except by an instrument, in writing, duly executed by the Franchising Authority and the OPERATOR, which amendment shall be authorized on behalf of the Franchising Authority through the adoption of an appropriate resolution or order by the Franchising Authority, as required by applicable law. Section IX. A new Section 25, Competitive Equity, is hereby added to the Franchise to read as follows: Section 25, Competitive Equity. A. Any franchise granted pursuant to Chapter 13.36 of the Auburn City Code shall be nonexclusive and shall not preclude the CITY from granting other or further franchises or permits or preclude the CITY from using any roads, rights-of-way, streets, or other public properties or affect its jurisdiction over them or any part of them, or limit the full power of the CITY to make such changes, as the CITY shall deem necessary, including the dedication, establishment, maintenance and improvement of all new rights-of- way and thoroughfares and other public properties. The CITY reserves the right to grant one (1) or more additional franchises. The CITY shall amend a franchise, as requested by the OPERATOR, if it grants additional franchises or similar authorizations that contain material terms or conditions which are substantially more favorable or less burdensome to the competitive entity than the material terms and conditions herein. A word for word identical franchise or authorization for a competitive entity is not required so long as the regulatory and financial burdens on Resolution No. 4530 December 9, 2009 Page 9 of 11 each entity are generally equivalent taking into account any difference in the number of subscribers served, the number of PEG channels and aggregate support provided, the level of fees and taxes imposed, the term of the franchise, and all other circumstances affecting the relative burdens. B. Notwithstanding any provision to the contrary, at any time prior to the commencement of the OPERATOR's thirty-six (36) month renewal window provided by 47 U.S.C. § 546, that a non- wireless facilities based entity, legally authorized by state or federal law, makes available for purchase by Subscribers or customers, Cable Services or multiple channels of Video Programming within the Franchise Area without a franchise or other similar lawful authorization granted by the CITY, then the OPERATOR shall have a right to request Franchise amendments that relieve the OPERATOR of regulatory burdens that create a competitive disadvantage to the OPERATOR. In requesting amendments, the OPERATOR shall file a petition seeking to amend the franchise. Such petition shall: (1) indicate the presence of such wireline competitor; and (2) identify all material terms or conditions which are substantially more favorable or less burdensome to the competitive entity. The CITY shall act on the petition within 120 days. DATED THIS DAY OF , 2009 City of Auburn Comcast of Washington IV, Inc. Peter B. Lewis, Mayor By: Its.. Attest: By: Danielle E. Daskam. City Clerk APPROVED AS TO FORM: Daniel B. Heid, Resolution No. 4530 December 9, 2009 Page 10 of 11 City Attorney Resolution No. 4530 December 9, 2009 Page 11 of 11