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HomeMy WebLinkAbout1991 CableCITY OF ITHACA 1O8 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY • FAX: (607) 272-7348 July 10, 1991 TELEPHONE: (607) 274-6504 Richard L. Greenburg, Esq. 121 E. Buffalo St. Ithaca, NY 14850 Re: American Community Cablevision Dear Mr. Greenburg: Chuck Guttman referred your recent letter to our office regarding American Community Cablevision to me. I have been negotiating with John Fogarty of ACC on some questions regarding the City franchise agreement with ACC. Tom Terrizzi, who is the Chair of the City's Cable Commission, is out of town on a six-week vacation, but he is the person most knowledgeable about the workings of ACC's franchise with the City. I will discuss the issues you raised with Jim Ferwerda, one of the other members of the Cable Commission,. and then we will get back to you. Very truly yours, Patricia M. Kennedy Assistant City Attorney C, 'An Equal Opportunity En, o'o}er •;,,;n an Athnnal :c Acl,on Program C, Recycled Paper OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MFMaRAMDUM TO: Tom Terrizzi, Cable Commission Jim Ferwerda, Cable Commission FROM: Pat Kennedy, Assistant City Attorney DATE: July 10, 1991 SUBJECT: Franchise Fee TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Attached is a letter dated June 21 from John Fogarty to Attorney Rich Greenburg who represents the Town of Newfield and Rich Greenburg's response. As you will see, the subject is a comparison of the franchise fees collected by ACC. Would you look these two letters over and tell me whether this is what you understand to be happening under our agreement and whether you believe that this is correct. att. "An Equal Opportunity Employer with an Affirmative Action Program" t4 Recycled Paper FROM THE DESK OF Richard L. Greenburg hvc.k rpt J /a�• l 'et p541 -1(A_ ;t 17,9/k ((Al44047 41,1 4 (Imp. Alta AeJe, cwUkiGite (4- less' Whit did ritd litmk,7 kola tuoittorwriti:s.47.4s403).146, C off' Item$PPlG The evrInwn Board, Dallas, Texas 752660429 Y 121 E. Buffalo Street Ithaca, New York 14850 (607) 277-2111 RICHARD L. GREENBURG Attorney at Law June 26, 1991 John E. Fogarty, Esq. Associate General Counsel American Television & Communications Corporation 300 First Stamford Place Stamford, Connecticut 06902-6732 16 Shaffer Road Newfield, New York 14867 (607) 277-2111 RE: Town of Newfield - American Community Cablevision Dear Mr. Fogarty: I have received your letter of June 21, 1991 and reviewed it with my client. I think we understand what ATC is saying. When a municipality in Tompkins County imposes a franchise fee on ATC, ATC thereupon tacks a separate charge on the bill of each subscriber within that municipality representing a percent equal to the franchise fee on that subscriber's service and/or equipment rental. Thereafter ATC pays that amount over to the municipality. The amount of. franchise fees can vary. If Municipality X has a 3% franchise fee, the customer .is charged 3%; if Municipality Y has a 5% franchise fee, the customer is charged 5%. In other words, the charge imposedby ATC has nothing to do with the cost of service used or purchased, but only to do with matching a particular localfranchise fee. A customer would thusly pay more in Municipality Y than Municipality X for the exact same service or equipment and same general overhead costs of ATC. If I truly understand all of this, in my opinion, ATC is running some sort of "shell game" of the worst sort. As far as I am concerned, it is immoral. We may indeed also find out if it is illegal before we finish. In any case, your response is not acceptable to me or my client. Instead of John E. Fogarty, Esq. June 26, 1991 Page 2 paying a legitimate franchise fee, which should be a general company cost, ATC makes another charge which penalizes its customers based upon what their elected officials charge ATC! Section "Sixth" of the franchise agreement as amended, inter alia provides that ATC should pay an annual fee of 5% of its gross revenues derived in Newfield. This would be paid by reducing each subscriber's bill by 5%. I do not believe your election not to impose a 5% charge is at all the same thing. I now want toknow the following: 1. amended, Town of much? Prior to the effective date of paragraph "Sixth" as was there a 'special franchise fee in effect in the Newfield and if so, for what services and for how 2. Please furnish me with the amounts or percentage of any franchise fees imposed upon subscribers for each municipality in Tompkins County from January 1, 1985 to date indicating any charges imposed in such rate during, that period. 3. Please furnish me with the amounts billed to subscribers and itemized by service (e.g. basic, HBO, etc.) for the period March 1, 1985 to date in the Town of Newfield, including installation and other charges as well. 4. Furnish me with the amounts specifically used to reduce subscriber's bills in Newfield after charges for the period March 1, 1985 to date (not some special charge you decided not to impose). I will look forward to receiving this information promptly. I see absolutely no point in scheduling any meetings until I can review it with my client and research the. matter, etc. Should you have any case or administrative law citation where your practice has been sustained in a situation involving similar language in a franchise in New York State, kindly advise with a copy or citation. Since your client's way of paying a franchise fee seems to now be to simply pass it on dollar for dollar to the consumer without regard to actual operating costs or services sold, I am sure, the Newfield Town Board will take a new and harder look at the request your firm has for a future franchise in John E. Fogarty, Esq. June 26, 1991 Page 3 our community and how it will be charged. That part of it is their concern as the local legislative body, not mine. Very truly yours, f RICHARD L. GREENBURG RLG/dl cc: James Drader, Jr., Town Supervisor Charles Berggren, Town Councilman David S. Palmer, Town Councilman Frederick Kippola, Town Councilman Evert Lampila, Town Councilman Lois Minteer, Town Clerk bc: Charles Guttman, Esq. John E. Fogarty Associate General Counsel 203 328-0629 June 21, 1991 Richard Greenberg, Esq. 121 E. Buffalo Street Ithaca, NY 14850 Dear Mr. Greenburg: I am sorry this reply has taken so long, but it was important that we research this fully and respond as accurately as possible: We have now assembled the facts from our records which clearly indicate that ACC has complied with the amended sixth section of its franchise agreement with the Town of Newfield. Under that amended section, adapted in 1985, the Town and ACC agreed that the franchise fee in Newfield would be a 5% (the maximum permitted by the 1984 Federal Cable Act). However, the Town and ACC also agreed that this amount would not be collected, but would be retained by the subscribers, thus making each subscriber's total payment 5% lower than if the franchise fee had been collected. fJ13N:��77�}} 2 rrt �g 2•• 3u 9 w■Mi■■ ®vim■ American Television & Communications Corporation A Time Warner Inc. Company Corporate Headquarters 300 First Stamford Place Stamford. CT 06902-6732 203 328-0600 ACC has, in fact, complied fully with the terms of the amended Section 6. The Newfield customers have been paying 5% less than customers in other communities in our system (e.g. the City of Ithaca) where a 5% franchise fee had been collected. A comparison of the bill of a theoretical Newfield customer and the bill of a theoretical City of Ithaca customer receiving the same services demonstrate this. Mr. Newfield subscriber beginning balance $36.57 payment -thank you 36.57 - basic service 12.68 HBO/Cinemax 21.00 Remote 2.89 Balance Due $36.57 Ms. City of Ithaca subscriber beginning balance $38.37 payment -thank you 38.37 - basic service 12.68 HBO/Cinemax 21.00 Remote 2.89 Franchise fee 1.80 Balance Due $38.37 Providing entertainment and information choices ACC has not char ' ed it mers a franchise fee And ACC did not raise the rates for its services in the Town of Newfield to a higher level than those in other communities in the system so that the total paid by a Newfield customer for cable service would be equal to that paid by, a customer for cable service and franchise fees combined in a community where franchise fees are collected. As the example above demonstrates, the total amount paid by a Newfield customer was less than that paid by a customer in the City of Ithaca, just as franchise Section 6 intends. In practice, the subscribers in Newfield have been given a slight advantage beyond that actually contemplated in the franchise agreement. They have paid a full 5% less as if absolutely no franchise fee, was paid on revenues from Newfield, when in fact, ACC has paid the yearly fee of the New York State Commission on Cable Television based on revenues from Newfield. The Town of Newfield, of course, has no power to waive the payment of the state fee. I believe that the City of Newfield's concern about ACC's compliance has arisen because of a change in the. format of our bills when ACC switched billing service providers in1989 Prior to the switch, each Newfield customer bill carried a message stating that the bill reflected a 5% franchise fee discount from the Town of Newfield to customers in Newfield. The new billing format eliminated that message and may have raised the concerns of the Town. The actual billing practice did not change, however, and Newfield customers continue to pay 5% less than if the Franchise fee were collected. ACC would be willing to agree t e a similar message in future bills to Newfield customers in order to settle the matter. If you wish to discuss this matter further please call me at your convenience. Sincerely, (J LM John E. Fogarty cc: Barbara Lukens M _. Ai0, :li * 6,064.54 8,286.59 8,97a-77 9,537.99 1,721 _18 -0- -0- J Basic Install 6,918.83 7,.84.45 6,306_29 6,847.73 5,507.81 7,251.46 4,215_92 Equipment 13,351.74 20,051.89 22,671.42 21,705.75 29,554.35 26,394.25 12 ,051.77 Tier 16,578.73 30,873.07 32,825.08 44 ,009.37 46,149.51 51,821.87 23,30838 TOW OF NE3FIELD, NY MOVES 3;85 - 12/85 1986 1987 1988 1989 1990 1/91 - 5191 Basic Service $ 60,896.83 $ 84,.10.83 $ • 88,463.55 $102,516.88 $126,236.85 • $144,553.84 5 66,646_39 Pay Service 47,630.25 60,468.21 64,900.00 72,73a.81 87,122_22 83,548.83 32,344.55 0. PPV -0- 1,632.03 3,599_50 _ 5.089-30 4,229.70_ 5,988.25 4,284.29 $251,440 _92 $212,604.07 $227,744.61 $262,445 _83 $291,521.62 $319,563.55 $142 ,851 _70 Uncollected Franchise D.fees $ 7,572.05 $1Q,630.20 $11,387.23 $13,122.29 $14,576.08 $15,978.18 $ 7,142.59 *System discontinued A/0 and FR charges after 3/89. 91-027SJT 1 NO I IVN ON 14L 166LEQE 'ON XVJ CITY OF ITHACA CITY HALL • 108 EAST GREEN STREET • ITHACA, NEW YORK 14850 • PHONE (607) 272-1713 DATE L—J-1-1-1 y 1,T-4-9-94 We have had another request for the City Franchise agreement with...... AGG—I-4a e—not--ccpt tr-a-ck—a —thc number of requests we receive but we—have sen -t nume-r-ou-s fopies o -u -t. io you thin.-c—we—s-h-o i-l-d—e-s-t-a-b-1 .-s-h a_.policy for sending these. to o f har—mum. i-c—i p -a -n t as—GT s h -o -u-1 d we continue to honor all requests? B Item IGFi'r3TR¢'Drawing Board, Dallas, Texas 75266-0429 © Wheeler Group, Inc., 1982 INSTRUCTIONS TO SENDER: 1. KEEP YELLOW COPY. 2. SEND WHITE AND PINK COPIES INTACT. -z( C' k-tio SIGNED INSTRUCTIONS TO RECEIVER: 1. WRITE REPLY. 2. DETACH STUB, KEEP PINK COPY, RETURN WHITE COPY TO SENDER. _ mil CITY ®F lir HACA 1O8 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY May 31, 1991 John Fogarty ACC Corp. 300 First Stanford Plaza Stanford, CT 06902-6732 Re: ACC Franchise Agreement Dear Mr. Fogarty: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Attached to this letter are my letters to you of April 8 and May 7. I have received no response to either of them. The City of Ithaca is still interested in meeting to discuss the issues raised in these letters, but your lack of response is very troubling. We have, therefore, determined to seek an opinion from the New York State Cable Commission on one of the issues raised in my May 7 letter. That is, the question of who should pay for putting new access channels on line. I will be writing to the New York State Cable Commission on June 7 to seek this opinion. In essence, we will be asking the Cable Commission to clarify its Order granting ACC a franchise. I had hoped that we could deal with this matter without asking the New York State Commission to intervene, but in view of your lack of response to my inquiries, I see no alternative. PMK/a att. cc: Tom Terrizzi John Johnson Barbara Lukens Very truly yours, Patricia M. Kennedy Assistant City Attorney 1 "An Equal Opportungy Emp'oyer ,; ;a an A9^mauve Action Pronram" CJ Recycled Paper ti CITY OF ITHACA CITY HALL • 108 EAST GREEN STREET • ITHACA, NEW YORK 14850 • PHONE (607) 272-1713 TO Dm==,, s.,,,, , , F u , - DATE MAY 2 8 !gg( DATE — LQ - / / J. 1 Aif k i -d- it if % , / Item # NR73 The Drawing Board, Dallas, Texas 75266-0429 © Wheeler Group, Inc., 1982 INSTRUCTIONS TO SENDER: 1. KEEP YELLOW COPY. 2. SEND WHITE AND PINK COPIES INTACT. SIGNED INSTRUCTIONS TO RECEIVER: 1. WRITE REPLY. 2. DETACH STUB, KEEP PINK COPY, RETURN WHITE COPY TO SENDER „ .. A/�' m'® ,, . n 'r ,..s, "1...'�F.u•.�"�Mkr y . �/.s��. A �[ V� y it�t V� • • `'• 4,?:'43 t.'. n .ro l %` > 1ft• : .A`':• -P ° om'N'S . t' � � Ty.; • C rt •6•- •".., • -.5 •.:- Soy vL. L�'4' g, +.'.t f ,i.'? ».: ^, [„`_i-.-4 -.'.., n..kx°'.pS-,., L� ©.:leiNG ,t,`"0"(—; rftz ` g , { q� Et_ ISSUE DATE (MM/DD/YYI ) 1 KV4, 4 4.'"';4744 5 ( "�'�! {nc )�. `Y 'r'�y` 4if .P,^ 06/01/91 `Cg�4: 1+ )., i�ir. K.. '+-y�*rf'k-.h S. ���I7'r'G:�';,i ;•. 1. fir. }�� K' PRODUCER L , .:, 60 . •,...._, , MARSH & McLENNAN, INC. 1166 AVENUE OF THE AMERICAS NEW YORK, NY 10036-2774 • . THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE COMPANY A AETNA CASUALTY & SURETY COMPANY LETTER COMPANY B STANDARD FIRE INSURANCE COMPANY LETTER INSURED TIME WARNER INC. • .,,,-AMERICAN - TELEVISION • COMM. CORP ' .AND •ALL SUBSIDE, INCLUDING: - , AMERICAN COMMUNITY CABLEV I S I OSI - - 519. WEST, cSTATE STREET I THACA q NEW YORK 14850 COMPANY C FARMINGTON CASUALTY COMPANY LETTER . COMPANY LETTER D COMPANY LETTER E , AL -`e . Yw.Ydk�:fb.'1 �'^va�IMVlL, 9"F`.6 . .. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN _.'Pn, 4itv,`�f?.nt. ,�.'. 5:y4n„ XY{ii4a.:0,1 .a 3:L'h., axs*�aYY;�.�.:,.5�i. n iF,.,111 BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE IMM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 001 GL5003774SUA 01 LG900233SUA (CANADA) 06/01/91 06/01/92 GENERAL AGGREGATE $ 6,000,000 X PRODUCTS-COMP/OP AGG. $ 3,000,000 CLAIMS MADE X OCCUR. PERSONAL & ADV. INJURYS $ 2,000,000 OWNER'S & CONTRACTOR'S PROT. EACH OCCURRENCE $ 2,000,000 FIRE DAMAGE (Any one fire) $ 1,000,000 MED. EXPENSE (Any one person) $ 10,000 A AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILTY 001 FJ 980967SUA 001 FJ 980968SUA (TX) 01 AO 900229SUA (CANADA) 06/01/91 06/01/92 COMBINED SINGLE LIMIT $ 2,000,000 X BODILY INJURY (Per person) $ BODILY INJURY (Per accident) $ PROPERTY DAMAGE $ C EXCESS LIABILITY UMBRELLA FORM OTHER THAN UMBRELLA FORM EACH OCCURRENCE $ X AGGREGATE $ B B C B WORKER'S COMPENSATION AND EMPLOYERS' LIABILITY 001 CH 324872SSS (A/0) 001C 324866SSS (CA) OO1C 324867SUF (DED) 001CH 324873SSS (NJ) 06/01/91 06/01/92- . STATUTORY LIMITS EACH ACCIDENT $ 2,000,000 DISEASE -POLICY LIMIT $ 2,000,000 DISEASE -EACH EMPLOYEE $ 2,000,000 C OTHER WC/EL CONTINUED 01C 324892SUF (NY) DESCRIPTION OF OPERATIONSILOCATIONSNEHICLES/SPECIAL ITEMS CER' IFIC;AI'.EEllCjIs :-CI • 108 I T1 +tn a C (;D !.� ._,.�. . DE is k., 4. ,i "° r 16 TY OF I THACA q NY E. GREEN. ST. -{ACA H NY 14850 y {q -a SHOULD EXPIRATION MAIL LEFT, LIABILITY 'NCE ` T ON ANY OF THE DATE 60 DAYS WRITTEN M-A-AYNt y,.¢ ; '7;;;MSSTABIRNM ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. BUT FAILURE OF ANY KIND AUTHORIZED REPRESENTATIVE Al • . �� .. yy y . •c .- ,4p 25 S { 1.90j! K � ., =,fin _rS.....y, vSr ...0 J3 .. `t'di-f nv;:k'ew +y-,..kr-fi . VP* rr t ;f- QR.°.•,...0 !^, AJJO ,l990� •�{.a .� ..0. 6 '�3. s? .y ..x+.5 ,. yz `SCC f AMERICAN COMMUNITY CABLEVISION Ms. Callista Paolangeli City Clerk City Hall, 108 E. Green St. Ithaca, New York 14850 May 21,1991 Dear Ms. Paolangeli: This is to inform you that the CNBC purchase of the Financial News Network has been approved. By the end of this week, FNN and CNBC will be integrated. ACC will notify you of the definitive date of integration as soon as we have a firm date. CNBC/FNN will replace FNN on cable channel 19 in Candor. CNBC/FNN will replace FNN on cable channel 20 in Newark Valley. CNBC/FNN will appear on cable channel 27,and we areinvestigating options for a possible replacement cable service for cable channel 42 on the Ithaca lineup. It is CNBC's intention to combine the best of CNBC and FNN --the best ticker, talent, features and programs. The integrated service will be called CNBC/FNN during the business day and CNBC at night and on the weekends. The integrated business will continue to provide our customers with financial news programming, consumer programming during the week and talk programming on weekends. ae: a4/ 519 West State Street _ Ithaca, New_York 14850 more... RE 8 111AY2 ? 1991 CITY CLEWS OFFICE ' Lc Iiaca, N. Y. 607-272-3456 ACC AMERICAN COMMUNITY CABLEVISION CNBC/FNN To help assure a smooth transition, CNBC has set up an 800. question and answer line (1 -800 -SMART -TV). This will help to serve our customerswho may have questions since it's unclearhow much advance notice and promotion will be possible. On the day of the integration CNBC will continually communicate to our customers all programming format changes so the information they are accustomed to receiving will be simple to find. CNBC will promote the 1 -800 -SMART -TV number on -air on the combined service continuously for the first several weeks.. ACC will inform cable customers of this change via stuffers in their June billing statements and on -air messages in accordance with New York State rules and regulations, and in keeping with Cable Association Standards. A press release to all media will be mailed immediately. Christos er J. Doyle Marketing/Operations Manager cc Mayor/Supervisor NYS Cable Commission Ithaca Cable Commission EFFECTIVE MAY 20, 1991 QVC IS CARRIED ON CABLE CHANNEL 35/41 IN ITHACA;40 IN NEWARK VALLEY;23 IN CANDOR. THIS CHANGE WAS MADE BY THE OWNER OF THE CHANNEL. THE CHANGE WAS NOT MADE BY JC PENNEY OR YOUR LOCAL CABLE COMPANY. ACC IS REQUIRED BY SEPARATE CONTRACTS TO CARRY QVC AS REPLACEMENT OF JC PENNEY. IN ITHACA, ACC IS REQUIRED TO CARRY QVC ON CHANNELS 35 AND 41. THEREFORE, IN ITHACA, CHANNEL 35 WILL DUPLICATE THE QVC PRO- GRAMMING ON CHANNEL 41 UNTIL LATE SUMMER WHEN, WE ARE TOLD, THE PROGRAMMING WILL BE REPLACED WITH A DIFFERENT PRODUCT. 519 West State Street Ithaca, New York 14850 ___ 607-272-3456 SCC FST AMERICAN COMMUNITY CABLEVISION May 6, 1991 Ms. Callista Paolangeli City of Ithaca City Hall 108 E. Green St. Ithaca, NY 14850 Dear Ms.Paolangeli: I want to call your attention to a special problem American Community Cablevision has and to provide you with advance information on how we intendito deal with it. The problem is theft of cable service. It is draining thousands of dollars in lost revenues from our cable company in City of Ithaca each year. Part of the problem is that many people don't think of stealing cable signals as a crime. But under New York law, it is just like shoplifting. And, when somebody steals, somebody else pays. We're going to alert our subscribers to this fact through a'public education campaign during the month of May. During our "awareness -period" those who may be taking cable or some of our servicesfor free can turn themselves in without fear of reprisal. After that period, we intend toundertakea comprehensive audit of our system using the latest in advanced technology which will enable us to pinpoint where problems may exist. If we find them, we intend to see that the law is enforced. Our interest is in assuring that our friends and neighbors who subscribe to cable services aren't having to pay for the spy down the block. It costs us money, it costs them money and it costs the City of Ithaca money from lost franchise fee revenues. Because of your leadership position within our community, we thought you'd want to know about our program. If you have any questions about it, don't hesitate to call me. Sincerely, �G2i[,(� tiff BarbaraL. Lukens General Manager 519 Wes State Street Ithaca, New York 14850 607-272-3456