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HomeMy WebLinkAbout1990 Cable CorrespondenceMailincL_Address: 519 . W. State Street Ithaca, N.Y. 14850 AMERICAN CO.MMUNITY CABLEVISION Tom Terrizzi, Chair Ithaca City Cable Commission City Hall 108 E. Green St. Ithaca, NY 14850 Dear Tom: Studio Address: 612 W. Green Street Ithaca:N.Y. 14850 7-272-7272 December 18, 1990 Channel 53, a government / educational access channel, was activated on December 13. It is presently set up to accomodate live cablecasting from the Common Council chambers of City Hall. The December 19 Budget & Administration meeting will be the first to be cablecast on Channel 53. This meeting will also be taped. for cablecast on December 29 on CABLE 13, as originally scheduled. Future meetings, however, will be shown exclusively on Channel 53, and will be cablecast live, as requested by the City. Several new elements have been added to the planning for scheduling on Channel 53. First, there is the intention which Peter Hess expressed to ACC on behalf of the Cable Commission at its October 18 informational meeting on the new channel. Peter said that the City intended to cover the committee meetings not covered by ACC, so that all Common Council committee meetings would be covered every month. Second, the Tompkins County Board of Representatives is now in the preliminary stages of planning for live coverage of its meetings, and has requested cablecasting time for 1991 on the new channel. In addition, the configuration of the channel may be changed during the year as our research into equipment options and institutional interests is completed. It is possible for other educational or governmental users to request time on this channel during the coming year. We are researching options for accomodating taped programming on Channel 53 in the future, which may spark further requests for channel time. Given these variables, it is essential to plan cablecasting time on the new channel well in advance. ACC's planned coverage of City Hall meetings in 1991 are listed below. I need to know, as soon as possible, any requests for cablecasting time the City would like to make in addition to these dates. 66eE� evisi�s%, � Ii ' gr B :.r h County" '+L ACC's coverage of City Hall meetings in 1991 are listed below. Committee meetings are selected on a rotating basis. The regular monthly dates were given to us by the City Clerk's office. January: Common Council Meeting Planning & Development Mtg Human Services Mtg February: Common Council Meeting Charter & Ordinance Mtg Budget & Administration Mtg March: Common Council Meeting Planning & Development Mtg Human Services Mtg First Wednesday, January 2, 7pm Third Monday, January 21, 7:30pm Fourth Monday, January 28, 4:30pm First Wednesday, Second Thursday, Third Wednesday, February February February 6, 7pm 14, 7:30pm 20, 7:30pm First Wednesday, March 6, 7pm Third Monday, March 18, 7:30pm Fourth Monday, March 25, 4:30pm April: Common Council Meeting First Wednesday, April 3, 7pm Charter & Ordinance Mtg Second Thursday, April 11, 7:30pm Budget & Administration Mtg Third Wednesday, April 17, 7:30pm May: Common Council Meeting Planning & Development Mtg Human Services Mtg First Wednesday, May 1, 7pm Third Monday, May 20, 7:30pm Fourth Monday, May ?, 4:30pm* * May 27 is Memorial Day: please advise on actual mtg. June: Common Council Meeting Charter & Ordinance Mtg Budget & Administration Mtg July: Common Council Meeting Planning & Development Mtg Human Services Mtg August: Common Council Meeting Charter & Ordinance Mtg Budget & Administration Mtg September: Common Council Meeting Planning & Development Mtg Human Services Mtg October: Common Council Meeting Charter & Ordinance Mtg Budget & Administration Mtg First Wednesday, Second Thursday, Third Wednesday, June June June date 5, 7pm 13, 7:30pm 19, 7:30pm First Wednesday, July 3, 7pm Third Monday, July 15, 7:30pm Fourth Monday, July 22, 4:30pm First Wednesday, August 7, 7pm Second Thursday, August 8, 7:30pm Third Wednesday, August 21, 7:30pm First Wednesday, September 4, 7pm Third Monday, September 16, 7:30pm Fourth Monday, September 23, 4:30pm First Wednesday, October 2, 7pm Second Thursday, October 10, 7:30pm Third Wednesday, October 16, 7:30pm November: Common Council Meeting First Wednesday, November 6, 7pm Planning & Development Mtg Third Monday, November 18, 7:30pm :Human Services Mtg Fourth .Monday, November 25, 4:30pm December: Common Council Meeting First. Wednesday, December 4, 7pm Charter & Ordinance Mtg Second Thursday, December 12, 7:30pm Budget & Administration Mtg Third Wednesday, December 18, 7:30pm Please notify us of any changes in these meeting dates or times. Please note also that we are only able to cover meetings held in Common Council Chambers, as that is where the feed to Channel 53 is located. All meetings are presently scheduled for that room, but I know that they are sometimes relocated to another meeting room. Before such rescheduling occurs in the future, committee chairpersons should be made aware that such changes make it impossible for live coverage on Channel 53 to take place. In addition, when other users begin cablecasting, meeting changes may make live coverage impossible due to prior cablecasting reservations by other users of the channel. I will forward updated copies of Channel 53 reservations to the City Clerk as changes occur, so that committee chairpersons can easily check on such potential conflicts. If you have questions regarding use of channel 53, particularly insofar as the productions the City is planning to undertake are concerned, please feel free to contact me. Cordially, Laure • Commun y Acc CAB E13 a for cc: Callista Paolangeli, Ithaca City Clerk Richard Booth, Chair, Budget and Administration Comm. Dan Hoffman, Chair, Planning and Development Comm. Carolyn Peterson, Chair, Charter and Ordinance Comm. John Johnson, Chair, Human Services Comm. Mayor Ben Nichols, Common Council Liason to Cable Commission Barbara Lukens, ACC General Manager Greg Bowman, CABLE 13 Portable Video Unit Director ro MEMORANDUM TO: Pat FROM: Chuck DATE: December 20, 1990. SUBJECT: Cable Commission I was contacted by Attorney Jack Fogarty who is the attorney who wrote us the recent letter on this. His number is 203-328-0629. He was panicky. The background of his panic was that Tom Terrizzi told Barbara Lukens that there was a meeting of the Cable Commission but that it was going to be .in executive session. because of potential. litigation. Barbara took this to mean that they were getting served with a summons next week and, therefore, Fogarty called up in a panic. I told him that we were not going to be suing him next week. The reason we were discussing potential litigation was so we could discuss this in executive session. I told him there are issues we are concerned about and that you were researching these matters and would be discussing it at our Council meeting 'in.Januar y and deciding w a o o. a ai a s ter we 1 hadis" cuss it he would like us to contact him. He was hopeful that the issues could be resolved by negotiation rather than litigation. Sounds like he clearly wants to negotiate this and come up with some amicable resolution to both sides. An issue he mentioned which I had not previously heard about was that there are four ACC employees who work on public access. That's required in the franchise agreement. Apparently they go to ACC employee staff meetings and some of the Access people are not happy about that. I told Fogarty that it was a brand new issue for me and I didn't know anything about it. Anyway, I told Fogarty that after our Council meeting we would come up with a list of what the issues are and we can start negotiating. I told him that very likely the negotiations would be between him and you. SENT BY : ATC HEADQUARTERS December 17, 1990 07 -DU 18:51 , Charles Guttman, Esq. Cit.y Attorney I.y of I Lh.-ica 10s East Cr-'F'n 1-nreeC it hacar New York 14850 ,_= eiT: 14.r . Guttman: ATC HEADr UAR;11- 607 272 7$48;# 2/ 3 Amm Amerman Television Communications Col potation Cor ate 1lhedquavz,; 300 rITst RamInni FIaae 3tai wd, Cannec:irtt 96902 6[ 2 203 228 0300 This will respoIid on behalf o1: American OClrim u1y i. ty C ib1evlsio:ri ('ACC") to your letter dated November 6, 1990 i o Sarbar a Luk€ns. ACC has designated channels els '.3, 53, 54, 55, 545 57a `!A, 59, and 60 11 PEG channels which are available, �. de,:, , for Lit3e, by New York ',tate,, 1or.:a1 governments, edat::e - _ r w , ;1-,,etuLions and the general community a eealcational and -!•' i� ,envie* programs, municipal tiervices and local expre ~asiodi , To on! y Channel 13 hai been u ed for PIG proyrams: i_he of PEG prog/glias has 1r1Crea ied and about half the Lim.7,2 cr Pt&inzV.:1 Is now u, ed Icor PEG access, ACC will begin t t®.i26115t4A tQt. the educat).ona.t awJ governmental ,; Ce o Cianr e.i 13 will remain as the public access channel, if a need for any additional dfasignat,ciA channels develops ;_I' i:, L{ C 1.o accomodate PEG programming, ACC will make mor6 ois c.y)e 6,_r=,igilat chan els avai1a1a3_e`?However, aie demand fcit: �t ,,,J-2._iLability of PEG programming its not F E3ff icin;t.e t. to luEa[:. s _o;,) ',:sYny;ring fId1/ of the other deeq-l-ynate,3 channels cs tilt l..}'.1i.`.:} L1: our be t knowledge, 1co one who has ,you ght to exhibit L, ci I;lmiIPg on the sy tice'm has ever been denied c `ti'r=s e ..:iaCC 8 channels s :.ire aVw-111 s?b i t '.!.'s ci 'S.l.L's•.. <'.,ne, haoiand there is no charge to anyone desiring to use them, By designating these channels and oa uir:t1 time ava_ l,ibi e t:o anyone who wishes to l's`a' e them, ACC is clearly iri compliance with its franchise obligations as Vien as the Rule and R&tjr..'.ic:it;ono of the New York State Commission on Cable Tele iE,ign. Section 14.1(C)(3) of the F1,alicrii`Jaq Agreement t.,ites hcit all access equipment is eovcred by 1 -,ho prof, is, or:r of subsection. Ph.ira si:11 sec1iori tha,l". the coat of purchase and replacement of the equipment ehould be Covered h j the 2% of the grog -is revenues ea;+.rrltnaI:ked for i cce e c:,l?-1i ta,1 To response to your poitlt_ that the two percent funds °°CoIn8 in over a period of time" and, thus, could not be used to buy a larg amount of equipment: at once, 1 would note that the rr c l i se agteement require -6 that ACC pioviG;F' this money on 'tali Pitniiny cnterlainmerd flntt if10 matlon enulc?: SENT BY:ATC HEADQUARTERS ;%' X17-50 ;` 18 52 ; ,ATC'HEADQUAR S- 607 272 7348;# 3/ 3 average annual basis This allows for flexibility to respond to the varying requirements for equipment in different years. In response' to your question regarding the rebuild, the rebuild was completed on or about May, 1989. While we think it's clear that ACC is in full compliance with the terms of its rranchise Agreement for the reasons stated above, we're certainly willing to discuss these issues at the City's convenience. Sincere I Joh/ Ep Po c arty ,J1Fz jbf SENT BY:ATC HEADQUARTERS 17-90 ' 13:51 ; ATC HEADQUAR S-' 607 272 7343;# 1/ 3 Facsimile Cover Sheet b c:•�-ry J"'{ `i lea.. - Date: � i[ v i i g o To: (1,1\64-1,e-,- 6.7-(s)..M-ron I ro rr.; c)-(4\11 AWM BW IoW Winamemi Fri mY0 i1Ye AMMInYMrera Esq61.141 Mamma/ MC0M RMPi �m�n s III American Television & Communications Corporation Corporate Headquarters 300 First Starnford Place Stamford, Connecticut 06902-6732 Phone 203 328.0600 FAX 203 328.0690 (0692) Fax Number: ( ( ` ` -� -734-R Number of Pages, Inducting This One: ` • ------------ Ea (7omfnents: In case of proble resp call( ca (203) 328- ,' 0. Providing entertainment and inforenatian ohoIcea. OFFICE OF CITY ATTORNEY CITY OF ITHACA 10B EAST GREEN STREET ITHACA, NEW YORK 14850 CONFIDENTIAL MEMORANDUM TO: John Johnson, Alderperson FROM: Chuck Guttman, City Attorney DATE: December 20, 1990 SUBJECT: Cable Commission TELEPHONE: 272-1713 CODE 607 GOR)EMT\L I have been meeting with Tom Terrizzi who is the Chair of the Cable TV Commission. There are several issues that are being disputed between the Cable Commission and ACC. The first of these is with regard to how many public/education/governmental stations should be open. The franchise agreement has certain requirements on this although, between you and me, there is some vagueness on this issue. The second issue, which is more of a dollars and sense issue, regards the "two percent money." The franchise agreement provides that two percent of the gross revenues of ACC be applied for public access equipment. The local access people are taking the position that this entire two percent money should go for programming equipment.ACC is taking the position that this two percent money should pay not only for the programming equipment but also for the "hub" equipment that is needed to set up the downstream channels. I have met with Tom Terrizzi regarding this and have spoken with the attorney for ACC in Connecticut. Both Pat Kennedy and I are doing research on this issue. I would request that this be put on the January Human Services agenda as a topic to be discussed in executive session. Pat and I would like guidance from Council as to how they wish us to proceed in this matter. It is appropriate to discuss this in executive session because of the potential for litigation. Tom Terrizzi has told me that he would like to be present at that Human Services Committee meeting. I would like, at that meeting, to come up with a complete list of all of the issues that exist regarding ACC and hopefully get some authority so that Pat and/or I can begin negotiating with ACC so we can get this resolved. no Ewa! Orta,.. E'':: ^• an A!Actwn Program' Of course, please-feel free to give me a call to discuss this in greater detail at your convenience. xc: Pat Kennedy, Tom Terrizzi OFFICE OF CITY ATTORNEY CITY OF ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 14650 December 18, 1990 Tom Terrizzi Prisoner's Legal Services 102 W. State St. Ithaca, NY 14850 Dear Tom: TELEPHONE: 272-1713 CODE 607 Enclosed please find a copy of a letter I received from John Fogarty from American Television & Communications Corporation. Please look this over and discuss it with me at your convenience. It appears to me that the next question we have to resolve is how hard we want to push ACC regarding this and whether we want to do it through the Cable Commission, my office or directly through Council. Maybe we're talking about having a meeting of the Cable Commission to discuss this matter. Inasmuch as it involves potential litigation, that meeting could be held in Executive Session. CG/a enc. Very truly yours, Charles Guttman City Attorney An Equal Oppor!uni!v Er,r10)e, ;.';h dna A!!vma!ive AChon Pron am December 17, 1990 Charles Guttman, Esq. City Attorney City of Ithaca 108 East Green Street Ithaca, New York 14850 Dear Mr. Guttman: i i r American Television & Communications Corporation Corporate Headquarters 300 First Stamford Place Stamford, Connecticut 06902.6732 203 328 0600 This will respond on behalf of American Community Cablevision ("ACC") to your letter dated November 6, 1990 to Barbara Lukens. ACC has designated channels 13, 53, 54, 55, 56, 57, 58, 59, and 60 as PEG channels which are available, if needed, for use by New York State, local governments, educational institutions and the general community for educational and public service programs, municipal services and local expression. To date, only Channel 13 has been used for PEG programs. Since the number of PEG programs has increased and about half the time on this channel is now used for PEG access, ACC will begin to use Channel 53 for the educational and governmental .access programs. Channel 13 will remain as the public access channel. If a need for any additional designated channels develops in order to accommodate PEG programming, ACC will make more of the designated channels available. However, the demand for and availability of PEG programming is not sufficient to justify programming any of the other designated channels at this time. To our best knowledge, no one who has sought to exhibit PEG programming on the system has ever been denied access. PEG access channels are available on a first-come, first- served basis and there is no charge to anyone desiring to use them. By designating these channels and making time available to anyone who wishes to use them, ACC is clearly in compliance with its franchise obligations as well as the Rules and Regulations of the New York State Commission on Cable Television. Section 14.1(C)(3) of the Franchise Agreement states that all access equipment is covered by the provisions of the subsection. This subsection indicates that the cost of the purchase and replacement of the equipment should be covered by the 2% of the gross revenues earmarked for access capital costs. In response to your point that thetwo percent funds "come in over a period of time" and, thus, could not be used to buy a large amount of equipment at once, I would note that the franchise agreement requires that ACC provide this money on "an Providing entertainment and information choices. average annual basis". This allows for flexibility to respond to the varying requirements for equipment in different years. In response to your question regarding the rebuild, the rebuild was completed on or about May, 1989. While we think it's clear that ACC is in full compliance with the terms of its Franchise Agreement for the reasons stated above, we're certainly willing to discuss these issues at the City's convenience. JEF: jbf arty ACC AMERICAN COMMUNITY CABLEVISION December 7,1990 The Honorable Charles Gutman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Gutman: Enclosed please find the Asbuilt maps for the City of Ithaca per the franchise agreement between the City of Ithaca and American Community Cablevision , Section 18.5.B. Since ely yours, Mary Kre ter Administrative Assistant enc. 519 West State Street afpn',.f146 /1 (iq4°) Ithaca, New York 14850 607-272-3456 OFFICE OF CITY ATTORNEY CITY OF ITHACA 10B EAST GREEN STREET ITHACA. NEW YORK 14850 November 6, 1990 Barbara Lukens General Manager American Community Cablevision 519 W. State St. Ithaca, NY 14850 Dear Ms. Lukens: . TELEPHONE: 272-1713 CODE 607 I have reviewed the Franchise Agreement between the City of Ithaca and American Community Cablevision and have met with members of the City of Ithaca Television Cable Commission. Apparently there are concerns and potential problems regarding ACC's responsibility to provide access channels and services. In Section 14 of •the Franchise Agreement, ACC specifically agreed to provide nine downstream channels designated for public, governmental and educational access. Any P.E.G. access channels unused by the City three years after the rebuild was complete would revert to ACC, provided that if community needs subsequently required the use of any such channels, ACC would return the channels to the City six months after. receiving written notice if ACC had a use for the channel and immediately if there was no use for the channel. I also note 9 NYCRR Section 595.4, Minimum Standards for PEG Access clearly seems to state that in our situation there must not only be one full-time channel for public access but at least one additional channel for government and educational use. Therefore, ACC is not at present even complying with the minimum state -required standards. Furthermore, ACC is clearly not complying with the requirement of the Franchise Agreement that nine downstream channels be designated for PEG access and that those channels be availablefor use. As City Attorney I must insist that ACC meet its contractual obligations. It is my further understanding that disputes have arisen regarding whether the costs for the equipment for -bringing these channels on line is to be paid by ACC out of your general revenues or paid out of the two percent of gross City revenues (Over) 'An EQu Em' are• n :". an:.!!,-,af..o Acl en Frr•nr+!m• ..which, under Section 14.1(C)(3), you have agreed to put aside for ;equipment -replacement and expansion. It appears clear to me that the necessary equipment..to open up the nine channels'should come out of the ACC general revenues and not out of these two percent funds. In the first place, pursuant to the Franchise Agreement, ACC -was to immediately designate the nine downstream channels and 02have them available for use. Accordingly, the necessary equipment would have to have been purchased immediately. The two percent funds obviously come in over a period of time and could not buy that equipment. On the contrary, the two percent funds clearly seem to be intended for local programming leads. I also note in the Franchise Agreement that there are references to when the rebuild is complete. I would appreciate you informing me as to when ACC considers the rebuild to have been completed so that we will have a firm agreed-upon date. If you wish to discuss this matter further, please feel free. to contact ` ie.�, Otherwise, please advise me at your earliest convenience asto what steps ACC is taking to comply with its contractual obligations under the Franchise Agreement and under New York State law. Very tru ��haLrleGuttman City Attorney CG/a cc: Tom Terrizzi, Chair City of Ithaca TV Cable Commission OFFICE OF THE CONTROLLER TO: FROM: DATE: RE: CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM Chuck -Guttman City Attorney Steven P. Thayer Deputy Controller October 5, 1990 ATC Franchise Fee Payments OCT1990 9 OCT 9 TELEPHONE: 272-1713 CODE 607 The following represent to -date Franchise Fee payments received from ATC: DATE AMOUNT DESCRIPTION * 8/21/90 $24,831.12 for 4/90, 5/90, 6/90 * 5/29/90 25,864.27 for 1/90, 2/90, 3/90 A). 2/9/90 26,151.44 for 10/89, 11/89, 12/89 * 11/29/89 21,179.21 for 7/89, 8/89, 9/89 A) 8/10/89 23,102.66 for 4/89, 5/89, 6/89 A) 5/3/89 26,099.85 for 1/89, 2/89, 3/89 A) 2/6/89 27,143.63 for 10/88, 11/88, 12/88 A 11/10/88 23,986.66 for 7/88, 8/88, 9/88 A) 11/10/88 15,626.06 for. 2/88, 3/88,.4/88, 5/88, 6/88 (Additional 2% fee) A) 7/26/88 53,376.93 for 7/87, 8/87, 9/87, 10/87, 11/87, 12/87, 1/88, 2/88, 3/88, 4/88, 5/88, 6/88 * Currently msising documentation A) Please see attached for further documentation. "An Equal Opportunity Employer with an Affirmative Action Program" CITY O F,? ITIACA CITY HALL • 108 EAST GREEN STREET • ITHACA, NEW YORK 14850 • PHONE (607) 1 MESSAGE REPLY Item - e Irawing Board, Dallas, Texas 7j'66-0429 © 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 ' 0 . e,--/i/eiti L`\\ OCT Q 1990 -I -%d /4 - j c --76 DATE r r/- 6 /! L'/J / / �� / I✓ �,/ / ----7"--7,-.../.._, /-mJ 7/ /e -,3 _.. y D, -` fit. ee-4.&`T' t 1 • Cu_ Ae.1 ys( ,z,c— 7, fl � / /'✓l ' +/ ( /• Item - e Irawing Board, Dallas, Texas 7j'66-0429 © 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 • PERFORMANCE BOND 19 S 100648302-90-515 BCA KNOW ALL MEN BY THESE PRESENTS, That we, American Community Cablevision, as Principal, hereinafter called Principal, and The AEtna Casualty and Surety Company, a Connecticut corporation, as Surety, hereinafter called Surety, are held and firmly bound unto City of Ithaca, as Obligee, hereinafter called Obligee, in the amount of Twenty -Five Thousand and No/100--- Dollars ($25,000.00), "fpr the payment of which sum, well and truly to be made, the said Principal and Surety bind themselves, and their heirs, executors, administrators, successors and assigns, jointly and severally, firmlyby these presents. WHEREAS, Principal has entered into a written agreement with the Obligee dated November , 1988, with the Obligee for a Cable TV Franchise under Section XXI 21.1 A through I of the Franchise Agreement, which agreement is by reference made a hereof. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That if theabove bounden Principal shall well and truly keep, done and perform, each and every, all and singular, the matters and things in said contract set forth and specified to be by the said Principal kept, done and performed at the time and in the manner in said contract specified, and shall pay over make good and reimburse to the above named Obligee, all loss and damage which said Obligee may sustain by reason of failure or default on the part of said Principal, then this obligation shall be void; otherwise, it shall remain in full force and effect. PROVIDED, HOWEVER, It shall be a condition precedent to any right of recovery hereunder, that in the event of any default on the part of the Principal, a written statement of the particular facts of such default shall be, within thirty (30) days, delivered to Surety at its Home Office in Hartford, Connecticut by registered mail. This obligation may be terminated by the Surety by. thirty (30) days advance written notice to the Obligee, such notice to be sent by Certified Mail. Such termination shall not affect liability incurred under this obligation prior to the effective date of such termination. IN WITNESS.WHEREOF, The Principal and Surety have signed and sealed'this'instrument this lst.day of July , 1990. COUNTERSIGNED BY: `7 Fr RESI ENT AGENT Imo, p.V 1::,.r I �f„ f CT CITY CLEWS OFFICE Ithaca, N.Y. • 1"y l }yet ;cv3Is to istoh Coy iw av ica ices American. Community Cablevision BY: Kathryn M jony, Assist Tree f ATC THE AETNA CASUALTY AND SURETY,COMPANY BY: ) & ©• . Garza, Attorney -1 '- act Ultra • tat a iw. t..d:, rConnectiont 06156 LIFE a. CASUALTY POWER OF ATTORNEY AND CERTIFICATE OF AUTHORITY OF ATTORNEYS) -IN -FACT KNOW ALL MEN BY THESE PRESENTS. THAT 'THE /ETNA CASUALTY AND SURETY COMPANY, a coiporettan du)yorp.nited gilt Woof 1M1 State of Connecticut. and having its principal office in the City of Hartford. County of Hartford. Stat of Connectiwt. hath mei.. constituted end appointed. and does by these Present mike. corh.titut and appoint John T. Gulden, D. J. Robinson, Christopher R. Perrin, Lora L. Cottrell. Scott Palmer, P. J. Mckinnis, Nora 0. Garza, Ellen G. 'Potter, Rebecca L. Schfauecker or Nary Bescher — — of Denver, Colorado • Its tnvs and lawful Attomeyisi-in•Faat widths!' power and authority hereby conferred to sign. execute and acknowledge. at any place within the United States, or. if the following Mn. be filled in. within the area there desig- nated , the following Instrumentlsl: by his/her sole signature and act any and ell bonds. recognizeness, contract of indemnity. and other wridngs obligatory in the nature of a bond,.... recognizance. or conditional undertaking, and any and all consent incidents thereto and to bind THE /ETNA CASUALTY ANO SURETY COMPANY. thereby as fully and to the same extant as if the ums were signed by the duly authorized officers of THE /ETNA CASUALTY AND SURETY COMPANY, and all the acts of said Attorneyfs-in-Fact pursuant to the authority herein given. are hereby ratified and confirmed This appointment Is nude under end by authority Cif the following Standing Resolutions of said Company which Resolutions are now in toll force and effect: VOTED: That each of the following officers: Chairman. Vice Chairman, President Any Executive Vice President, Art./Senior Vice President. Any Vice President Any Assistant Vice President Any Secretary. Any Assistant Secretary. may from time to time appoint Resident Vice President. Resident Assistant Secretaries. Attorneys-in•Fact, and Agents to act for and on behalf of the Company and may give any such appointee such authority u his certificate of authority may prescribe to sign with the Company's name and seal with the Company's seal bonds. recognizsncts. contracts of indemnity. and other writings obligatory in the nature of a bond. recognizance. or conditional undertaking. and any of said officers or the Board of Directors may at any time remove any such appointee and revoke the power and authority given him. VOTED: That any bond, recognizance. contract of indemnity. or writing obligatory in the nature of a bond. recognizance, or conditional undertaking shall be valid and binding upon the Company when (a) signed by the Chairman, the Yip Chairman. the President an Executive Vice President a Senior Vice President. a Vice President an Assistant Vice President or by a Resident Vice President pursuant to the power prescribed in the certificate of authority of such Resident Vice President and duty attested and seated with the Company's seal by a Secretary or Assistant Secretary or by a Resident Assistant Secretary. pursuant to the power prescribed in the certificate of authority of such Resident Assistant Secretary; or (b) duly executed (under seal, if required) by one or more Attorneys -in -Fact pursuant to the power prescribed in his or their certificate or certificates of authority. This Power of Attorney and Certificate of Authority is signed and sealed by facsimile under and by authority of the following Standing Resolution voted by the Board of Directors of THE /ETNA CASUALTY AND SURETY COMPANY which Resolution is now in full force and effect: VOTED: That the signature of each of the following officers: Chairman. Vice Chairman. President Any Executive Vic. President Any Senior VJce President Any Vica President Any Assistant Vice President Any Secretary, Any Assistant Secretary. and the seal of the Company may be affixed by facsimile to any power of attorney or to any certificate relating thereto appointing Resident Vice President. Resident Assistant Secretaries or Attorneys -in -Fact for purposes only of executing and attesting bonds and undertakings and other writings obligatory in the nature thereof. and any such power of attorney or certificate bearing such facsimile signature or facsimile seal shall be valid and binding upon the Company and any such power so executed and certified by such facsimile signature and facsimile seal shall be valid and binding upon the Company in the future with respect to any bond or undertaking to which it, is =ached. IN WITNESS WHEREOF. THE /ETNA CASUALTY AND SURETY COMPANY has caused this instrument to bs signed by it Senior Vice President and it corporate seal to be hereto affixed this 8th day of January ' 19901/ 7 \; THE /ETNA CASUALTY AND URETY COMPANY BY State of Connecticut as. Hartford County of Hartford eph'P . Kiwrnarf nior Vice President On this 8th day of Jenuary .1990 , before me personally came JOSEPH P. KIERNAN , to me known. who. being by me duly sworn. did depose and say: that he/she is Senior Vice President of THE ATNA CASUALTY AND SURETY COMPANY. the corporation described In and which executed the above instrumem: that he/she knows the seal of said corporation; that the seal affixed to the said instrument is such corporate seal; and that ha/she executed the said instrument on behalf of the corporation by authority of his/her office under the Standing Resolutions thereof. CERTIFICATE I, the undersigned. Secretary of THE .ETNA CASUALTY AND SURETY COMPANY, a stock corporation of the State of Connecticut. DO HEREBY CERTIFY that the foregoing and attached Power of Attorney and Certificate of Authority remains in full force and has not been revoked; and furthermore. that the Standing Resolutions of the Board of Directors . u sat forth in the Certificate of Authority. are now, in force. Signed and Sealed at the Home Office of the Company, in the Coy of Hartford. State July 90 ,19 - s: :W"WD t r.+ -, t rr, I S•1922•Fj IM19(81 Connecticut Dated this 1St day of W. Welch tary PRINTEr IN U S A 11 .. ..�, .,�. .» ,w amu...>, s .n .v:.,�•�.,..,n , ��-��,�. .�2d.....� ,.. .,,•d -. n.. we. .� .. ...M•.f,+a.m+...• J •� A .-i�.,i.ral - LAY,, .u.ruLL <+r.�la,.r-.��7�'p Y.Y AMERICAN COMMUNITY CAI3LEVISION August 23, 1990 AUG 2 9 1990 Anne Dalton, Municipal Consultant NYS Commission on Cable Television Tower Building - Empire State Plaza Albany, NY 12223 Dear Ms. Dalton: I just wanted to inform the commission that American Community Cablevision will be increasing rates for new installations and service activation from $20.00 to $40.00 effective September 1, 1990. This change, while not fully covering actual costs, is a more reasonable reflection of those costs. It affects new customers only and includes up to 2 outlets per transaction. Effective October 15, 1990 there will be some additional changes which I've. outlined below and - which•• will affect - existing - customers. New rates: was will be Outlet relocation $20 $40 Additional outlet installation/activation $20 $40 . VCR hookup $20 $10 (free at the time of connection - no change) If you have any questions regarding these, please call me Sincerely, A4. Barbara L. Lukens General Manager cc: Town and Village Clerks Callista Paolangeli, City of Ithaca -C - Carolyn Roberts, Town of Candor Pat Osborn, Town of Caroline Don Kenyon, Town of Covert (Supervisor) Carol Sczepanski, Town of Danby .Susanne Lloyd, Town of Dryden 519 West State Street Ithaca, New York 14050 607-272-1/1Fr, P • Collene Pierson, Town of Groton Jean.Swartwood, Town of Ithaca Bonnie Boles, Town of Lansing Joe Hutchinson, Town of Newark Valley Lois Minteer, Town of Newfield Marsha,Georgia, Town of Ulysses Gina Currie, Village of Candor Anne Krohto, Village of Cayuga Heights Mary Jane Neff, Village of Dryden Liz Brennan, Village of Freeville Charles .Rankin, Village of Groton Sylvia Smith, Village of Lansing Margaret Cornwell, Village of Newark Valley Dolores Chase, Village of Trumansburg AMERICAN COMMUNITY CABLEVISION July 19, 1990 a [11\itt JUL2 1990 GIIY COI'S 6fF!CE Ithaca, U.T. \� Cookie Paolangeli, City Clerk City of Ithaca • 108 E. Green St. Ithaca, NY 14850 Dear Cookie: Enclosed you will find a new performance bond from Aetna Casualty and Surety Company. I would appreciate it if you could forward this to the proper department. It's important that the release form be signed and returned to me as soon as possible. Should you have any questions, please feel free to contact me at (607) 272-7875. Thanks for your help. Sincerely, Administrative Assistant >azar,,_ .2,-e," .-72L4( (-74GV 519 West State Street Ithaca, New York 14850 607-272-3456 t July 11, 1990 To Whom It May Concern: .1- 0PA- iiilam American Television & Communications Corporation A Time Warner Inc. Company ATC — Denver 160 Inverness Drive West Englewood, CO 80112 303 799-1200 The enclosed surety bond issued by The AEtna Casualty and Surety Company is being delivered to you as a replacement bond for the National Union (AIG) bond currently in your possession. We are requesting that an exchange of the bonds be made (the AEtna bond for the National Union (AIG) bond), and that you sign the attached National Union (AIG) release form. If for whatever reason you are unable at this time to return the National Union (AIG) bond or sign the National Union (AIG) release form, we request that you accept the AEtna replacement bond. A cancellation notice has been issued by National Union (AIG) on each National Union (AIG) bond and will be effective 30-90 days after receipt of the cancellation letter. We appreciate your cooperation in this matter. If we can answer any questions, please contact Lorraine Cachet or myself at (303) 799-1200. Sincerely, Kathry M. Corr, Assift t Treas KMC/jmm Enclosure Pli)VI(10n{1 enl1:ri,wuncul .end 111lorrn,Uun choices PERFORMANCE BOND 19 S 100648302-90-515 BCA KNOW ALL MEN BY THESE PRESENTS, That we, American Community Cablevision, as Principal, hereinafter called Principal, and The AEtna Casualty and Surety Company, a Connecticut corporation, as Surety, hereinafter called Surety, are held and firmly bound unto City of Ithaca, as Obligee, hereinafter called Obligee, in the amount of Twenty -Five Thousand and No/100--- Dollars ($25,000.00), fpr the payment of which sum, well and truly to be made, the said Principal and Surety bind themselves, and their heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. WHEREAS, Principal has entered into a written agreement with the Obligee dated November , 1988, with the Obligee for a Cable TV Franchise under Section XXI 21.1 A through I of the Franchise Agreement,' which agreement is by reference made a part hereof. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That if the above bounden Principal shall well and truly keep, done and perform, each and every, all and singular, the matters and things in said contract set forth and specified to be by the said Principal kept, done and performed at the time and in the manner in said contract specified, and shall pay over make good and reimburse to the above named Obligee, all loss and damage which said Obligee may sustain by reason of failure or default on the part of said Principal, then this obligation shall be void; otherwise, it shall remain in full force and effect. PROVIDED, HOWEVER, It shall be a condition precedent to any right of recovery hereunder, that in the event of any default on the part of the Principal, a written statement of the particular facts of such default shall be, within thirty (30) days, delivered to Surety at its Home Office in Hartford, Connecticut by registered mail. This obligation may be terminated by the Surety by thirty (30) days advance written notice to the Obligee, such notice to be sent by Certified Mail. Such termination shall not affect liability incurred under this obligation prior to the effective date of such termination. IN WITNESS WHEREOF, The Principal and Surety have signed and sealed this instrument this 1st day of July ,.1990. COUNTERSIGNED BY: RESI ENT AGENT 1\j71C'1"icv i ,t(f u +Sion C'c.rn n' n iCci-icns American Community Cablevision BY: `T I(X i 41, , Kattxtim ony, assist ireaLoi ATC THE AETNA CASUALTY AND SURETY COMPANY BY: CIALa \9641-%t. . Garza, Attorney fact 041? on S.1 111t *.INA (...AJUALI T ANL/ bunt T t.utrtr his/ F+r*fed. Connecticut 06156 LIFE IL CASUALTY POWER OF ATTORNEY AND CERTIFICATE OF AUTHORITY OF ATTORNEY(S)-IN-FACT K NOW ALL MEN BY THESE MESE NTS. THAT THE &Tata CASUALTY AND SURETY COMPANY. • corporation**, '/panned under ter taws of the State of Connecticut. and having its pnnapal office in the City of Westford. County of Hanford. State of Connecdcv. hath made. constituted and •cepa/ntad• six' does be thew presents nalka• taxsmuta esti "'point 'John T. Gulden, 0. J. Robinson, Christopher A: Perrin, lore L. Cottrell, Scott Palmer, P. J. RcKimis, Nora 0. Garza, Ellen 6. Potter, Rebecca L. Scheuecker or Nary Beecher - - • of Denver; Coloredo . Its true and rtwtu+ Anorney!"Fie•Fact with An Borer end authority hereby conferred to sign, execute and acknowledge. at any piece within the United States. or. If the following line. be Bled In. within the area then desig- nated • the browing malum erats3: by his/her sole signature and act any and all bonds. recognizance'. coetrecb of indemnity. and other writings obigstory in the nature of a bond. recognizance. or conditional undertaking. and any and ail consents indents thereto and to bind NE /ETNA CASUALTY ANO SURETY COMPANY. thereby as fully and m the same inerts es If the arms were signed by the duly authorized officers of THE /ETNA CASUALTY ANO SURETY COMPANY, and al dumas of said M ormeyfs)•ln-Fact pursuant to the authority Mrein given, an hereby ratified and confirmed. This appointment is made under and by authority of the following Standing Resolutions of said Company which Rasoiutions are now in full forts and effect: VOTED: That each of the following officers: Chairman. Vice Chairman. President. Any Ex.cutivs Vk. Pr.sidwtt Any Senior Vim President Any Was President. Any Assistant Vic. President Any Secretary. Any Assistant Secretary. may from time to time appoint Resident Vice Presidents. Resident Assistant Secretaries. Anorneys-in•F.e . and Agents to act for and on behalf of She Company and Maly give any such appointee such authority as his certificate of authority may prescribe 10 sign with the Company's name and sear with the Company's seal bonds, recognizance'. contracts of indsmniry. and other writings obligatory in Ohs nature of a bond. r. ogniunca or conditional undertaking, and arty of said officers or the Board of Directors may et any dm* /.move any Judi appointee and r.rob Os power and authority given tun - VOTED: That any bond. recognizance. convect of indemnity. or writing ob6gstory In The nature of s bond. r.00gnirsnce. or conditional undertaking shall be valid and binding upon the Company when Is) signed by. the Chairman. the Vice Chairmen. ter President. an Executive Vice President a Senior Vice ►resident a Via President an Assistant Vie* President or by a Residers Vice Prs.id.nt pursuant 10 the power prescribed in the certificate of authority of such Resident Vic. President and duly attested and sealed with the Company's sea by a Secretary or Assistant Secretary or by a Resident Assistant Secretary. pursuant to the power prescribed in the certificate of authority of suds Resident Assistant Secretary; or Oil duty executed funder 'eel. if required) by one or more Anorn.ys-in•F.a moment to ter power prescribed in his or their certificate or certificates of 'uthonry This Power of Attorney and Certificate of Authority is signed and seated by faaimie under and by.uttority of the folowing Standing Resolution voted by the Board o1 Directors of THE /ETNA CASUALTY ANO SURETY COMPANY whist Resolution i now in full force and effect: VOTED: That the signature of each of the following officers: Merman. Vico Chairmen% President Any Executive Vlcs President, Any Senior Vas president, Any Vice President, Arty Assistant Vas President Any Secretary. Any Assistant Secretary. and the SOW of the Company may b. aK1x.drby " facsimile to any power of attorney or to any certificate relating thereto appointing Resident Vera Prvaidenta. Resident Assistant Secretaries 0, Attorneys -in -Fact for purposes only of waning and attesting bonds and undertakings and od»rwrl ing' obligatory in the nature thereof. and any such power of attorney or protests bearing such facsimile signature or tspimile seal shell be valid and binding upon the Company and any such power so executed and certified by such facsimile signature and facsimile sant shall be valid and binding upon the Company in the future with - respect to any bond or undertaking to which it 1 attached. IN WITNESS WHEREOF. THE /ETNA CASUALTY ANO SURETY COMPANY has caused this instrument t0 be signed by its sena Vice President , 1!� • . and its corporateseal to be hereto affixed this Bth January State o1 Connecticut 1 as Hanford County of Hartford on this Bth day of January .1f190 , before me personally came JOSEPH P. KIERNAN to me known, who. being by me duly sworn. dr/ depose and say: that ha/she is Senior Vice President of THE /ETNA CASUALTY AND SURETY COMPANY, the corporation described in and whidh executed the above Ineaument: then he/she knows the seal of said corporation; that the seal affixed t0 the said instrument s suds corporate seal; end that he/she exerted the said instrument on behalf of the corporation by authority of his/her office under the Standing Resolutions thereof. CERTIFICATE 1. the undersigned. Secretary of THE /ETNA CASUALTY ANO SURETY COMPANY. a stock corporation of the State of Connecticut. DO HEREBY CERTIFY that the foregoing and attached Forret of Attorney and Certificate of Authority remains in full force and has not been revoked; and tunhermon. that the Standing Resolutions of the Board of Directors. M set forth in the Certificate of Authonty. are now in force. Signed and Sealed at tie Horne Office of the Company, in the City of Hertford. Stats • 19 90 - July iS ' 9::-r. n.a 91r I Cam r, Connecticut Dated Ohio W. Welch tare 1st day of PRINTED IN US A sv July 2, 1990 National Union Fire Insurance Company of Pittsburgh, PA c/o Vivienne Douglas Johnson & Higgins of Colorado, Inc. 950 17th Street, Suite 1850 Denver, CO 80202 Re: Principal: American Community Cablevision Obligee: City of Ithaca Bond No.: 02-74-00 Dear Ms. Douglas: The Aetna Casualty and Surety Company Bond No. 19 S 100648302-90-515 BCA, assuming the previous obligations of the captioned PRINCIPAL and its SURETY has been received by this office. In lieu of returning the original bond, please accept this letter as our acknowledgement of the termination of liability under the captioned bond effective July 1, 1990, which is the inception date of the replacement bond. Signature t/A.A Mayor, City of Ithaca Title Obligee July 27, 1990 Date cc: Dan Burton - National Union, Houston Rpt 1,0,4213 CITY OF ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 1.4860 OFFICE OF MAYOR. • June 20, 1990 William Demo Chair, Cable Commission 119 Auburn Street Ithaca NY 14850 Dear Bill: TELEPHONE: 272-1713 CODE 607 I am forwarding your letter to the City Attorney for an opinion on your question concerning the effective date of application of the provision in the ACC franchise. A particular.. question is the franchise provision regarding ACC"s purchase of public access equipment. I would regard that as separate from the question regarding discounts for senior citizens under the new agreement as to who qualifies. As I understand it ACC agreed with the Cable Commission to make that discount retroactive to March 1, 1989 for the new qualifiers. The important thing is to get the discount program started and to publicize it. There is absolutely no desire on my part—or as far as I know on the part of any official in the city—to remove you from the Cable Television Commission. On the contrary I appreciate your willingness toserve the City in a thankless but important position. If you would like to discuss any ways in which the work of the commission could be made more effective, please call me. cc: City Attorney BN/ta f 1-)4 Benjamin Nichols Mayor • t, Lc. IN 3-0,11 4 1 , C 04-r., r� t,cn. Cu...,. (fu , „v„ 14-c4- v1 vu fti � �r ri Sem "An Equal Opportunity Errptoyee with an Affirmative 'Action Program" G� i �� �^n^~«� July 1990 Bill Demo 119 Auburn Street Ithaca, NY 14850 June 14, 1990 Ben Nichols, Mayor Ithaca City Hall 108 East Green Street Ithaca, NY 14850 Dear Ben: On Tuesday, June 12, there was a meeting of the Cable Commission scheduled. Unfortunately, there were not enough members present to consitute a quorum, and therefore no official mdeting was held. However, since Debbie ,Parsons, City Chamberlain, had made a special effort to attend the meeting for the purpose of a follow- up review of the senior citizen discount, I decided that it would be worthwhile to have a discussion involving the two Commission members present (Peter Hess and myself), Barbara Lukens, and Debbie to see if we could come to some resolution on mutually acceptable criteria for income certification. I would then ask Debbie to write up the procedures, and the Commission would then officially review and endorse them at the next Commission meeting, and read then into the record. Bill McCormick, who was also present, raised a question about whether the senior discount should be retroactive to March, 1988, the date of an apparent fee increase approved by the City under an interim agreement it entered into with ACC, following the lapse of the old franchise on January 20, 1988. In response to his rather persistent questioning, I stated the opinion that for the purposes of franchise enforcement the Commission views the franchise provisions as having applicability only during the period following the official adoption of the renewal of the franchise by the State Cable Commission on February 1, 1989. At that point, McCormick became quite agitated and vocal as he very often does, suggesting that the interests of the peopld of the City of Ithaca were being sold out and indicating his intent to propose to Common Council that I be removed as Chair of the Cable Commission. In the first place, if the elected officials of Ithaca wish to remove me as Commission Chair (or Commission member for that matter), it would not be the supreme disappointment of my life. As if the frustrations of trying to get anything accomplished (witness the senior discount) aren't bad enough, there's always McCormick's outbursts to be endured. Frankly, I think his behavior is abusive and totally out of line for a public meeting. How to deal with that kind of behavior is another matter. My assumption is that the issue.concerning when the franchise provisions are considered to have been in force is one that will surface again. I am aware, for example, that at least some members of the Access Advisory Board feel that the franchise provision requiring ACC to provide 2% of gross city revenues for public access equipment also should have retroactive status to January 20, 1988. While I can't speak for all Commission members, I believe that there is a general assumption that the provisions of the franchise have legal standing from the date of its formal adoption. If that is, in fact, the case I don't want to waste the Commission's time with a lot of posturing on an issue that won't stand up legally. Please let me know if it is the position of the City that franchise provisions should have retroactivity to January 20, 1988. If that is the City's position, then the Commission certainly needs to know about it in order to act in accord. I would appreciate it if you or the City Attorn could get back to me on this before the next Cable Commission meeting, scheduled for July 10. Sincerely, 40p --or Bill Demo, Chair Ithaca Cable Commission 0 OFFICE OF CITY ATTORNEY CITY OF ITHACA 10E3 EAST GREEN STREET ITHACA, NEW YORK 14850 May 30, 1990 Mr. William Demo Chair Ithaca Cable Commission 119 Auburn St. Ithaca,NY 14850 Dear Mr. Demo: aoaL TELEPHONE: 272-1713 CODE 607 Enclosed for your files is a copy of correspondence from American Community Cablevision along with a completed survey required by the New York State Commission on Cable Television. CG/a - enc. Very truly_ yours, Charles Guttman City Attorney "An Equar Opportunity Ernplc)- .vola an Affirmative Action Program" SCC \_/ AMERICAN COMMUNITY CABLEVISION May 21, 1990 Charles Gutman Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Gutman: GC�C�OMC� MAY 2 3199D MAY 2 3198( • Enclosed for you files is a survey we were required to submit to the New York State Commission on Cable Television. Thank you. Sincerely, (A)A, Fran Wright Administrative Assistant 519 West State Street Ithaca, New York 14850 607-272-3456 P"'"" NEW YORE STATE COMMISSION ON CABLE TELEVISION Business Office On Site Report by: Fran Wright Cable Company:* American Community Cablevision Location: 519 West State Street Ithaca, NY 14850 Date: 5/90 Parent Company: American Television & Communication Corp. Location: 160 Inverness Drive West Englewood, CO 80112 Municipalities Served: City of Ithaca, Cayuga Hts., Trumansburg, Caroline. Town of Ithaca, Lansing, Dryden, Newfield, Ulysses, Danby, Groton, Freeville Candor, Newark Valley. Channel Capacity: 60 # of Basic: 16 # of Tiers: 2 # of. Satellite: 4 Number of Subscribers: 25,100 43(rebuilt) Number Activiate: 26(non-rebuilt) # of Tiers: % of Premium: 52% % of Penetration: 84% Is System Addressable: Type of.Convertezz Used: yes Scientific-Atlanta. ' Is a Converter Required For All Services:' NO -2 - Are Cable Ready Sets used in the System: YES Estimated t 17,000 Are there Scrambled Channels in the System: YES How Many 27 Business Office Hours, Monday through Friday: 8:30 to 6:00 pm Weekend: Sat. 8:00 to Noon Is there an After Hours Answering Service: YES Answering Machine: YES Number of Business Office Employees: 15 Service Complaints: Approx. 300/month Billing Complaints: Approx. 10/month Prior Experience Required for Business Office Employees: Some level of customer service experience Training of Business Office Employees: PCSS, weekly product knowledge meeting, customer service skills Is there a Formal Company Training Program: no, only departmental/position specific Turnover Rate of Business Office Employees: There has been no turnover in the business office since the beginning of 1989 Number of Terminals Available, Service: • 17 Billing: 15 -3 - Number of Incoming Telephone Lines: 13 Billing: 13 Installation, Sales: 13 Service: 13 Can Supervisor Monitor Calls: YES Average Number of Incoming Calls per day: 300 at this time of year Billing: 70% Service: 15% Other: 15% Average Number Per Month for: New Installs: 61 Disconnects: 413 (fluctuates due to student population) Reconnects: 390 Non -Paid Accounts: 409 Type of Telephone System: Northern Telecom (if sophisticated system, ask for copy of daily printout) Does Business Office Use Auto -sequence to put calls on hold: YES Does Auto -sequence Record Calls on hold that are dropped: YES Is there a Cue Clock for number of calls on hold: YES Average Time to Answer Calls: 23 seconds Billing In House: NO If not,, Where: Cable Data Are. Payment Locations Used, if so, Where: Tompkins County Trust Billing Cycle: . Monthly: Split -Billing X Date bills sent out: 1st Cycle -begin. Date Payment is due:20th of month 2nd wk/month 2nd cycle -3rd 5th of followin( wk of month month -4 - Amount of days before a late charge is instituted: Amount of Late Charge: -0- When is first Disconnect Notice sent: 30 days past due on statement (# of days after delinquent status starts) 6, 60 days on statement -0- When is service physically disconnected: 65-70 Number of Installers: 4 Turnover Rate: rare -Experience Required for Installers: in House training Training Required for Installers: basic cable skills, PCSS Experience Required for Repair Personnel: Basic electronics, install. traini Training Required for Repair Personnel:none-trained on the job by snpv.& other techs Number of Trucks for Installation and Repair: 15 Are Trucks in Radio Contact .with Office: YES Is there After Hours Service: YES For What Situations: Skeleton crew working until 6PM -techs on standby for outages, pole breaks, down drops Is Overtime Used when Complaints Peak: yes Average Number of Service Calls Per Day: 35 per day Are Sub -Contractors Used: Yes United Cable Installations For What Work: • (Name) Connections and rebuild activity Ask to see Trouble Call Log pursuant to Part 596.8 of the Commission's Rules and Regulations. Determine if a summary of type of calls, location of problems or any other analysis of trouble calls exists. -5 - How many Sales People Are There: -0- Full Time: Part Time: Salaried: Commission: Selling Techniques Used: Door -to -Door: Direct Mail: X Other: Telephone: X Advertisements: X Is there a Regular Program Guide for Subscribers: Ithaca TV Journal Is there a Charge: YES supplement In your opinion, what two or three non-technical problems are most significant. How are they handled: Timely solution to customer complaints. Manager of affected department responds in writing and files resolutions. Other Comments: -6- Please give us a copy of your Cable Guide & Converter Policy, subscriber notice of complaint resolution and billing practices, schedule of rate and charges and any recent ad campaigns mailed to subscribers. Meeting Attended By: Payment due"date: `Amount due This will mclu well asprior"balances.. Customer's mailing address: A ddress;to wh ch ayment s] e total of all previous onthly-charge for,basic;cable servicer Y _ onthlp charge for expandedservice. ny paymens,received anfd'processed by the date shown4iere'wil1'bereflected'ontlus statement If you sent m apayment after tlus'date at will appear -on your next'statement Address cable'"service is providedtd.. X13 S'Customer service' telephone numbers., r14: `Special'customer message or notice Pay'Per_-View events purchased:wil1- be itemized With' 'a charge attached to each` 1ndlvidual event WHEN ®OYYOUsSILL? Similar:to, other. companies, we;bill,one•-month`in. advance Customers who subscribe only to th'e' Basic Tier are billed every two months.:Should you l ave your ,; ', service' dis�cponnected, the. unused portion isacredited'to your account. WHAT DOES, •PARTIAL M®NTH ' MEAN? Partial month is a charge ,for ;those' days• m, the, •month •that: you had; service pnor.'to beingrbilled for 'the first full. month. . . ,WHEN,15 MY.ACCOUNTLATE?' • ACCs policy -regarding past due'accounts maintamsthat statements are • due 'uponreceipt o£: bill: Separate 30-; and 60-dayreminder notices are mailed to accounts•that have not . been paid ',within the ;currentmonth and are;: then subject to disconnection. if paynent is.notreceived promptly.: Delinquent accounts will beassessed a collec tion .or reconnection, fee WHAT,SHOULD too; IFI HAVE A PROBLEM WITH MrCABLE.I31LL?. Call -us at 272-3,456! Tn the meantime, please pay," all charges except theRdispa"ted amount to avoid falling into„ ', a delinquency status If your billing • problem >is unre -- • solved after uutial contact, 'please notify us, in writing If you-. ire moving and d Rto•disconnect your cable service, you will be, billedyfor cable service untilrthe date ::you" requestyour service tobe disconnected If you have a channel selector oerenote control,.you�will'be Billed; until .the day the equipment: is returned to our office.`: ' A -Keeping your account up -to date„'and "returning your equipment in good; vorkii g order<will speed'�up ixhe refund pro ;'cess_if:you ;are 'due one: Tlie refund takes 6 •to .8” ;weeks to •receive. If you are moving out of our.service area; please advise us ofyour forwarding address If you're>moving within the' l be scheduled at yo"u"r convenience WHAT- TO; 11:10 IF'=YOU; EXPERIENCE. SE�dVICE ,PROBLEMS. Occasionally, due to unforeseen eva,ents, television signal even, (believe it ornot) curious wildlife caninadvertently. diSrupticableServitei,If you experience cable reception; problems, ;our service department may.be,reached 24; hours a day, 7 days a weekY by calling 272.-3449 CREDIT .FOR FULL,,SERVICE OUTAGE. f ' A service outage is the loss of picture, or sound n caused bq you, the customer; or your television set ".We will ,issue :credit for }a service ,re ate -;if it exceeds'; 24 hours '(The 24-hourkperiodbegins after ,you have notifed us ;of the•.outage.), This -includes pay services- These credits are notgiven automatically To receive ay' credit fora service outage that exceeds;24 hours, contact, our. office wi hin ;90 ;days of •the,.outage _ •�r-i.`�`:"...:.:a>':r+t, is:.`:?... �`>Tm,�r,',...,ra��-iso_.:.'•StF"...s-_._....'S.:'c."wit+�:'r.^;.:C.iSrAt:: t'F'r�?.+4_.,�.'i":-�'-1':'i?,X. NOISIA318V3 AdINOWWO3 NV3W3WV AN 'En/3141 4C# ALwed QIvd e8elsod 'g'fl LVH N1f18 NN asvari BUSINESS REPLY MAIL • FIRST CLASS MAIL PERMIT N0 1078 ENGLEWOOD, CO POSTAGE WILL BE PAID BY ADDRESSEE AMERICAN COMMUNITY CABLEVISION Barbara Lukens, General Manager 519 West State Street Ithaca, NY 14850 NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES Nimmansommai Dear American Community Cablevision Customer: AMERICAN COMMUNITY CABLEVISION Werre proud to have you as,a new American Community Cablevision customer! It's very important to us that you are satisfied with our service. Would you please take a moment to fill in the attached postage -paid card and send it to us? Thanks! Barbara Lukens, General Manager P.S. Your comments are a big help to all of us in making our service the way you want it to be. • Was your connection of cable service completed at the time it was scheduled? If not, did we call to reschedule your connection? YES NO YES NO YES NO • Was your cable connection completed to your satisfaction? If not, please explain • What was your impression of the people who did the work? Excellent Good Average Poor a) Courteous b) Properly identified c) Neat about the job d) Neat in appearance • Did our representative explain: a) Your new channels and service? b) How the channel selector works? c) What prices to expect on your first bill? • Do you have any other comments or suggestions? YES NO Name Telephone Address Date City/State/Zip gado *�`�-` `^...vP%� .a : T. a' `.,'mss Summary of Consumer Related Regulations Concerning Billing Practices and Complaint Procedures Required by the New York State Commission on Cable Television Section 590.5: Should a subscriber choose to lodge a previously unresolved complaint against a cable operator, he/she may file it with the. Commission in writing or by telephone. Complaints received by telephone will be recorded and kept on file. After such complaint is filed, both the cable operator named, and the chief executive officer of the subscriber's municipality will receive a copy of the complaint from the Commission. Within 10 days, company must reply to the Commission and serve a copy the supervisor of the municipality. of said reply to the mayor ,or This response must contain a statement of action that has or will be taken to resolve the complaint and/or to prevent recurrence. If the complaint is filed due to failure of the operator to provide to an interested party a requested cable service, the Commission may obtain a map of the franchised area indicating and information requested by the Commission. Additionally, if numerous complaints are filed in the same municipality, or it appears that they remain unresolved the Commission can institute further investigative proceedings. These proceedings may be formai or informal and may include a hearing, oral argument, or both. `� eM. AMERICAN COMMUNITY CABLEVISI� SERVICES & PRICE .:INFORMATION SHEET - •MONT�HLY RATE $18.10 - 12.10 9.95 - 9.95 9.95 3.00 ADDITIONAL OUTLETS BASIC ONLY ";' FRE DELUXE OUTLETS (SAME SVC AS PRIMARY. OUTLET) 00E SERVICES STANDARD SERVICE (Chis 2-13, 17-26) BASIC CABLE - 12 CHANNELS (2-13) HBO "(PAY -TV CINEMAX.„ (PAY -TV) DISNEY (PAY -TV) REMOTE CONTROL . - SERVICES BASIC CABLE (10 CHANNELS) HBO (PAY TV) ADDITIONAL OUTLETS (BASIC SERVICE ONLY) FREE . ADDITIONAL OUTLETS (WITH HBO) .9.95 (PER OUTLET) 2 ' HBO (Pay TV) 3 ` WSTM-3 Syracuse NBC 5 W BNO.12 Binghamton CBS 6 ;WICZ-40 Binghamton NBC 7'. USA Network 8 WTBS-17Atlanta. IND ' • 9 . WIXT 9 Syracuse ' ABC 10 ESPN • 11. WSKG-46 Binghamton_ ' PBS 12 WTVH-5 ' Syracuse CBS . 13 WMGC-34 Binghamton ABC IMPORTANT PHONE NUMBER Customer Service Office ,... 1-800.843-0453 CHANNEL LI JP 01 Pay -Per -View 02 ABC-9/WIXT 03 NBC-3/WSTM 04 PBS-24/WCNY 05 CNN 06 WSYT-68/FOX 07 Weather Channel 07 NcwsCcnter 7, M -F 6.11 pm on the hour 08 PBS-46/WSKG 09 WWOR-9 10 ESPN 11 WPIX-11 12 CBS-12/WBNG 13 Learning Channel 14 HBO Pay TV 15 Cinemax Pay TV 16 Disney Pay TV 17 CBS-5/WTVH 18 NBC-40/WICZ 19 PBS-44/1X/VIA 20 ABC-36/WENY 21 MTV 22 USA Network 23 FNN 24 C -SPAN 25 Nick/Nick-At-Nice 26 Arts&Entertainment Available in Rebuilt Areas: 27 CNI3C 28 MSG/Travel Chl. 29 Brava/C-SPAN 11 30 Discovery 3, Autertsan Mnvtc Classics/IWC 32 Headline News 33 Family Channel 34 Nashville Network 35 JC Penney's Shopping 36 Video I firs 1 37 Lifetime 38 Black Entertainment Television 39 Tomer Network Tele. 40 Learning Channel 41 QVC 42 Weather Channel 43 The Comedy Chl. Customers will be notified when these services become available in their area. IMPORTANT PHONE NUMBERS t. Customer Service Office 272-3456 Service Repair 272-3449 ACC Coming Through. Candor Cable TV Lineup .1 Pay -Per -View Family Channel ' 3 WMGC-34 (ABC -Binghamton) • 4 WCNY-24. (PBS -Syracuse) 5 WENY-36 (ABC -Elmira) 6 WVIA-44 (PBS -Scranton) 7 Weather Channel, News Center'? 8 WSKG-46 (PBS -Binghamton) 9 Nashville Network 10 • WICZ-40 (NBC -Binghamton) 11. WPIX-11 (independent -NYC) 12 .WBNG-12 (CBS -Binghamton) 13 Learning Channel; ' Cable 13, community access 14 HBO "`; (PAY TV)' 15 Cinemax ',(PAY TV). 16' Disney . (PAY TV) 17' . The Weather Channel 19 ' FNN, Score 20 CNN , • 21 MTV • " 22 .USA ` 23 JC Penney's Shopping 24 C -SPAN 25 Nick/Nick-At-Nice 26 Arts & Entertainment ' Customer Service .... 1-800-843-0453 w•. Coming Through:. . SCC CUSTON.— SERVICE 272-3456 ACC RErRESENTATIVE SERVICE REPAIR 272-3449 # AMEPICAM COMMUNITY CAELEVISIOM ACCOUNT NUMBER CUSTOMER'S NAME LAST FIRST M.I. STREETADDRESS CITY ZIP PHONE HOME BUSINESS OTHER BILLING ADDRESS IF DIFFERENT STREETADDRESS APT SERVICES 00'1 coNNsc` GOoos Mie cE BUDGET TIER SUPER TIER REMOTE CONTROL HBO CINEMAX DISNEY BRAVO BUDGETADD'L OUT. SUPER ADD'L OUT. DISCOUNT TOTAL MONTHLY PRICE COMMENTS: IDENTIFICATION: CITY STATE ZIP CONNECTION & EQUIPMENT FEES Cable Connection Equipment Deposit Upgrade Fee Additional Connection VCR Connection A/B Switch Total Due Total Collected Date Collected ❑ Cash ❑ Check # CONNECTION SCHEDULE ❑ Completed by Sales Rep DATE ❑ Scheduled Connection DATE CABLE BOX # REMOTE CONTROL # I hereby certify that all work has been performed to my satisfaction and I have read and agree to the policies, terms and conditions printed on the back hereof. "SUBSCRIBER ACKNOWLEDGES RECEIPT OF A PRIVACY NOTIFICATION AS REQUIRED PER THE CABLE COMMUNICATIONS POLICY ACT OF 1984." CUSTOMER'S SIGNATURE DATE ACC REPRESENTATIVE'S SIGNATURE DATE RP POLICIES, TERMS AND CONDITIONS 1. EQUIPMENT BELONGING TO AMERICAN COMMUNITY CABLEV'IS!ON (hereafter ACC) a. For purposes of this agreement "Cable television Equipment" includes all cable and associaied hardware, channel selectors and remote control (sec front of this agreement) used in the delivery of cable television signals to the customer's television set and; or video cassette recorder. b. The said cable television equipment shall remain the sole property of ACC and customer shall not alter, misuse. abuse, appropriate, remove, repair. or in any manner tamper with the said cable television equipment. nor shall the customer remove from the said cable television equipment any markings or labels affixed thereto indicating ACC's ownership of the said cable television equipment. c. The customer shall not disturb, alter or remove the outlet or any other equipment of ACC's, will safeguard such outlet and equipment from injury and damage, and will not permit anyone other than a representative of ACC to perform any work on the said equipment. d. Upon termination of cable television service to the customer, for whatever reason, customer acknowledges that his right to possession of cable television equipment shah likewise cease and terminate. in which event, customer agrees to return immediately to ACC the said cable television equipment in the same operating condition as when received, reasonable wear and tear excepted. In the event that the said cable television equipment is destroyed or damaged as a result of customer's negligence, oris lost or stolen while in customer's possession, customer shall be liable for the cost of repair or replacement of the cable television equipment. In the event that customer fails to return the cable television equipment to ACC upon termination of cable television services, customer agrees to pay ACC the sum of two hundred dollars ($200A0) for each channel selector and seventy five dollars ($75.00) for any. remote control device not required without any deduction whatsoever for depreciation, wear and tear, or the physical condition of' the unreturned equipment. e. Customer further agrees that in the event ACC terminates cable television to customer, for whatever reason, and customer fails or refuses to return promptly to ACC the said cable television equipment. ACC may enter any premises where the said cable television equipment may he located, with or without judicial process. for the purpose of discontinuing cable television service and. or removing the said cable television equipment. f. The customer acknowledges his understanding that the receipt of cable service without proper payment to ACC is a crime under state and federal law and may be punishable by fines and imprisonment. Additionally, ACC may disconnect customer's cable service and/or seize any equipment used to receive unauthorized cable signals. 2. OPERATION, MAINTENANCE ANI) REPAIR a. ACC will respond to service calls related to an individual customer's cable equipment or service as quickly as possible and normally the repair will be effected at least by the end of the next business day..A system outage involving several customers' cable will he responded to immediately at all times of the day or night. b. ACC may make periodic external inspections of its outlet and equipment upon the customer's premises. c. The customer shall not connect more than one television set and/or stereo receiver to an outlet without notifying ACC of the connection to additional cabled signals. - d. ACC shall not have any responsibility for operation, maintenance or repairs of the customers television set. 3. TRANSFER OF ACCOUNT OR CHANGING RESIDENCE The customer does not acquire any rights or privileges hereunder which are subject to assignment or transfer. Transfer of accounts from one customer to another is prohibited. All accounts must be closed and reopened under the name of a new customer for issuance of a new account number. 4. CUSTOMER AS RENTER In the event the customer is not the owner of the premises in which ACC's outlet and equipment are to be installed, the customer warrants to ACC that he has the consent of the owner of the premises for ACC to make installation and maintenance contemplated by the agreement. 5. DISCONNECTION - tipon termination of an account all customers are urged to notify ACC of their intention to disconnect when reloca0g or departing. cabled residence. Account holders are liable for all services rendered by ACC prior to the customer's informing ACC of his/her intention to terminate service or if customer has ACC's equipment. the customer is liable for all services rendered until the time that equipment is returned. Information regarding the intended moving or disconnection date must be communicated to the business office during normal working hours. 6. COMPLIANCE WITH POLICIES, TERMS AND CONDITIONS ACC specifically reserves the right to disconnect service for the breach of any of the above policies, terms and conditions by the customer. 7. PRIVACY NOTIFICATION Subscriber acknowledges receipt of a Privacy Notification as required per. the Cable Communications Policy Act of 1984, American Community Cablevision 519 West State Street Ithaca, New York ,14850 Business Office Phone: 272-3456 Service Call Phone: 272-3449 Direct Sales Office Phone: 272-7692 Hours: M -F 8:30 a.m. - 6 p.tn. Cablestore Only: Sat, 9:00 a.tn. - Noon CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF TELEPHONE: 272-1713 CITY ATTORNEY CODE 607 May 17, 1990 Mr. William Demo 119 Auburn St. Ithaca, NY 14850 Dear Mr. Demo: Enclosed please find a copy of a letter I received from ACC in which they enclosed certain reports. Pursuant to the last paragraph I am assuming they have provided copies of these reports directly to you but just wish to make sure that you are aware that these have been received by my office and, of course, are available for your review. CG/a enc. Very truly yours, arles Guttman City Attorney "An Equat Opcorrumry Em;'_ i e! an Athrmatne Act on Program" ACe AMERICAN COMMUNITY CABLEVISION May 15, 1990 Mr. Charles Gutman Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Gutman: gmelowal MN1619A016111111111111.11111 Per the franchise agreement between the City of Ithaca and American Community Cablevision, attached are some additional reports which are required. The three reports are: a 1989 summary of service calls and complaints which were received and handled, a 1989 summary of outages and FCC for 325. We are reviewing the reports to ensure that we are in compliance with section 18.5. (A copy is attached for your reference.) Per that section, this is where we stand as of today. 18.5.A Attached is the FCC form 325. Any reports filed with the NYSCCT in 1989 will be forwarded to you. 18.5.B. ACC's annual report was sent to Mayor Nichols on January 16, 1990. Asbuilt maps are incomplete as of this writing, but are in the process of being drafted. 18.5.C.(1) The ownership report was mailed to you on April 10, 1990. 18.5.C.(2) The annual report was mailed along with the report requested in 18.5.B. 18.5.C. (3) This is not applicable. 18.5.C. (4) A statement was mailed to the city on January 19, 1990. 18.5.C.'(5) This information was included with 18.5.C. (1). 18.5.D. (1) This report is no longer required by the FCC. 18.5.D. (2) This information was included in the report mailed on January 16, 1990. 519 West State Street Ithaca, New York 14850 607-272-3456 18.5.D. (3) Attached. 18.5.D. (4) Attached. 18.5.D. (5) See 18.5.A. The Ithaca Cable Commission has asked that ACC provide copies of all reports submitted to the City of Ithaca by ACC. Accordingly, I will insure they receive copies of the reports mentioned in this letter. Going forward it would be appreciated if your office could supply the Commission with copies of the reports which we provide to the City. Si1cerely, /.f r Barbara L. Lukens General Manager BLL/fw enc. cc: Ithaca Cable Commission ACC AMERICAN COMMUNITY CABLEVISION April 10, 1990 Mr. Charles Gutman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Gutman: rogIEOVE APR � 2 X90 1 21990 One of the requirements of ACC's franchise agreement with the City of Ithaca is to provide a report on the ownership of the company. At the time I submitted the annual report, I did not have the information but I am able to provide it now. ACC is a DBA and is owned 100% by American Television and Communications Corporation (ATC). Time Warner owns 82% of ATC while public shareholders hold the remaining 18%. No public shareholder owns more than 5% of the public shares. The Board of Directors of ATC are: Glenn A. Britt, David C. Chang, Joseph J. Collins, brian Conboy, James H. Doolittle, Philip R. Lochner, Jr., Richard D. Parsons and Herbert S. Schlosser. Respectfully, AL ix, Barbara L. Lukens General Manager BLL/fw 519 West State Street Ithaca, New York 14850 607-272-3456 LAW LAW OFFICES GINSBURG, FELDMAN AND BRES CHARTERED 1250 CONNECTICUT AVENUE, N. W. WASHINGTON, D.C. 20036 TELEPHONE (202) 637-9000 EDWIN N. LAVERGNE (202) 637-9191 Mr. Charles Guttman City Attorney City Hall 108 Green Street Ithaca, New York 14850 Dear Mr. Guttman: CORRESPONDENT OFFICE 9, RUE BOISSY D'ANG LAS 75008 PARIS, FRANCE March 1, 1990 MICIEOWIE TELECOPIER (202) 637-9195 TELEX 4936614 As a follow-up to our telephone conversation today, I am enclosing a copy of the Federal Communications Commission's ("FCC") Notice of Proposed Rulemaking ("Notice") regarding local cable television regulation. Under current FCC rules, cities can regulate basic cable rates only if the cable system is subject to "effective competition". Essentialy, effective competition means that three or more over -the -air broadcast television signals are available in the cable community. I know that about two years ago, the City of Ithaca had a dispute with American Community Cablevision regarding the City's regulatory jurisdiction over basic cable rates. I understand that a settlement was subsequently reached whereby Ithaca obtained the right to regulate cable rates until the current franchise expires. I think the FCC's Notice will be of interest to you because it proposes to expand the regulatory authority of cities over basic cable services. Specifically, the Commission believes that the three signal standard may no longer be adequate to determine when local regulation is appropriate. The Commission has asked parties to comment on whether a four signal standard should be implemented, or whether some other standard that is not premised solely on some number of locally available broadcast signals, should be considered. (-*<.d 3/ L C 9 Q Mr. Charles Guttman March 1, 1990 Page 2 As we discussed, I lived in Ithaca for several years, and wrote a Master's thesis on local cable regulation in Ithaca from 1952-1977. As a result, I know that Ithaca is somewhat unique in that nearly all of Ithaca's residents are cable subscribers due to local terrain conditions. At present, only about 3% of U.S. cable systems remain regulated. Thus, Ithaca's current regulatory powers are somewhat unusual; and there may be some good reasons why Ithaca should take steps to ensure that it continues to have regulatory authority, even after the current franchise expires. Since you do not know me personally, I have enclosed a copy of my resume for your review. You may also want to know that one of my partners, Rodney Joyce, was largely responsible for drafting the 1984 Federal Cable Act while he was Minority Counsel to the House Subcommittee on Telecommunications. Another one of my partners, E. William Henry, was formerly Chairman of the FCC. Comments on the FCC's proposals are due on April 6th. If you would like to discuss the possibility of participating in this proceeding, or if you have any questions, please give me a call at (202) 637-9191. Sincerely, Edwin. -N Lavergne Enclosure ENL:lmg EDWIN N. LAVERGNE 1286 Middleton Court Vienna, Virginia 22182 (703) 759-1925 (Home) (202) 637-9191 (Office) EMPLOYMENT HISTORY Partner: GINSBURG, FELDMAN AND BRESS, CHARTERED, 1250 Connecticut Avenue, N.W., Washington, D.C., February 1988 to present. Responsible for the development and expansion of the firm's domestic and international common carrier practice. Existing client base includes several telecommunications equipment manufacturers; domestic common carriers; private telecommunications service providers; large telecommunications users; and instructional television applicants and licensees. Associate: FINLEY, KUMBLE, WAGNER, HEINE, UNDERBERG, MANLEY, MEYERSON & CASEY, 1120 Connecticut Avenue, N.W., Washington, D.C., April 1983 to February 1988. Responsible for the preparation of pleadings in rulemaking and adjudicatory proceedings before the Federal Communications Commission with particular emphasis on domestic common carrier issues. Other responsibilities included analysis of telecommunications legislation; drafting and negotiation of telecommunications contracts; and preparation of broadcast, cable, and private radio applications. Associate: PEPPER, HAMILTON & SCHEETZ, 1777 F Street, N.W., Washington, D.C., February 1981 to April 1983. Practice involved legislative and administrative work in domestic and international common carrier, broadcast, cable and developing technologies. Associate/Law Clerk: LEIGHTON, CONKLIN, LEMOV & JACOBS, 2033 M Street, N.W., Washington, D.C., May 1979 to February 1981. Primary responsibilities included preparation of FCC filings; drafting legislative proposals; and monitoring congressional activities relating to telecommunications issues. Operations Manager: TELECOLOR PRODUCTIONS, INC., Alexandria, Virginia, June 1978 to August 1979. Responsible for coordinating video production activities and scheduling local and remote crew operations. TEACHING EXPERIENCE Graduate Assistant:. RADIO.AND TELEVISION DEPARTMENT, ITHACA COLLEGE, Ithaca, New York, August 1976 to June 1977. Responsible for the instruction and evaluation of approximately'100 undergraduate students in radio and television production techniques. Teaching Assistant: RADIO AND TELEVISION DEPARTMENT, ITHACA COLLEGE, Ithaca, New York, September 1973 to May .1976. Undergraduate studio instructor in Broadcast Fundamentals, Broadcast Operations, and Television Production and Direction. EDUCATION Legal: Graduate: College: Georgetown University Law Center, J.D., 1980. Dean's List 1979-80 academic year. Ithaca College, M.S., 1977. Thesis: Case study of cable television regulation to determine the effectiveness of local as opposed to federal regulation. Ithaca College, B.S. (communications), summa cum laude, 1976. MEMBERSHIPS/PERSONAL Born: Member: February 20, 1954 Chicago, Illinois The American Bar Association, District of Columbia Bar, and Federal Communications Bar Association. Admitted to practice before the U.S. Supreme Court, the U.S. Court of Appeals for the District of Columbia Circuit, the U.S. Court of Appeals for the Fifth Circuit, the District of Columbia Court of Appeals, and the U.S. District Court for the District of Columbia. Hobbies: Flying, karate, and tennis. 1318 guidelines to govern federal, state, and -local authorities' regulation of cable systems. The Cable Act also sought to''assure that cable systems provide the widest possible diversity of information sources and services to the public, and that they. are responsive to the needs and interests of the local communities they serve. Congress intended the Cable Act to promote competition in cable communications and, to achieve this objective, sought to minimize unnecessary regulation that would impose an undue economic burden on cable systems. Consistent with this approach, the Cable Act contained provisions regarding the regulation of basic cable service rates by`local franchising authorities, restrictions on the ownership of cable systems, requirements that channels be reserved for commercial access use, authority for cities to require public, educational and governmental access channels and the establishment of equal employment opportunity programs. In this Notice, we focus upon those provisions of the Cable Act regarding the regulation of basic cable service rates. 3. Prior to enactment of the Cable Act, a cable system was generally authorized to provide services through a franchising agreement with the local government in its service area. In most states this agreement also permitted the franchising authority to regulate basic service rate increases. The Cable Act preserved the power of franchising authorities to regulate basic cable service rates only in those situations where the cable system is not subject to "effective competition."3 The Cable Act directed the Commission to define the circumstances in which a cable system is not subject to effective competition and to establish standards for rate regulation in such situations.4 4. As discussed further below, the Commission adopted such a standa'rd-in April 1985, within the 180 daytimeframe specified in Section 623 of the Cable Act. --In addition to requiring that the Commission define effective competition, the Cable Act also: 1} provides that the Commission shall, not later than six years after its enactment, "prepare and submit to the Congress.,.;-., - a report regarding rate regulation of cable services, including such legislative recommendations.as the Commission considers appropriate,"5 and 2) "periodically review" its regulations relating to rate regulation and the effective competition standard "taking into account developments in technology. 116 3 4 5 See 47 U.S.C. §§543(b)(1), 5143(c). See 47 U.S.C. §§543(b)(2)(A) and (B). Section 623(h)f-47. U.S.C. §.543(h). •Section 623(b)(3)-=-u7.1I.S.C'. §543(b)(3): -2-- Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of Reexamination of the Effective Competition Standard for the Regulation of Cable Television Basic Service Rates FCC 90-12 MM Docket No. 90-4 NOTICE OF PROPOSED RULE MAKING Adopted: January 11, 1990 By the Commission: ; Released: January 22, 1990 I. INTRODUCTION 1. By this Notice of Proposed Rule Making (Notice), the Commission seeks to reexamine the rules regarding the regulation.of basic cable service rates. In 1985, as part of its implementation of the Cable Communications Policy Act of 1984, the Commission adopted a "three signal standard" for determining whether cable systems were subject to "effective competition" and thus not subject to regulation of their basic_ service- rates by the_local_.franchisIng____._ authority.) We now believe that changed7/'circumstances in the --video = - marketplace warrant review of the three signal standard. Accordingly, this Notice reexamines whether the premises for the 1985 action are valid today and, if reforms are needed, what changes might be appropriate. II. BACKGROUND 2. The Cable Communications Policy Act of 1984 (Cable Act) was signed into -law on October 30, 1984.2 Reflecting a national policy to encourage the growth and development of cable television services, the Cable Act set. forth 1 Report and Order in MM Docket No. 84-1296, 50 FR 18637 (1985). 2 Cable Communications Policy Act of 1984, Pub.L. No. 98-549, §1 et seq., 98 Stat. 2779 (1984). 1317 • 1320 of services available;,from alternative sources.10 It also suggests that, in addition to the number'of=over-the-air broadcast stations in a market,'factors such as the subscriber penetration rate of the cable system -may be relevant.11 7. Other provisions of Section 623 of the Cable Act allow cable operators to deem any rate increase request subject to franchising authority approval to be granted if that authority fails to.act.within 180 days of such request.12 Moreover, cable operators whose basic service tiers are subject to rate regulation may automatically increase these rates up to 5 percent annually in most instances without franchising authority approva1.13 Section 623(f) states that nothing in the Cable Act prohibits any Federal agency, State or franchising authority from prohibiting discrimination among customers of basic service. 8. FCC Rules Implementing Section 623. On December 4, 1984, the Commission adopted a Notice of Proposed Rule Making proposing rules to implement the Cable Act.T4 With respect to the definition of effective competition, the Commission sought comment on what constitutes effective competition and what kinds of signals or services compete with basic cable service. The Commission requested comment on defining effective competition in terms of the availability of off -the -air television signals in the cable system's community and suggested that the presence of four unduplicated signals, including the three major networks, might be an appropriate choice. The Commission also indicated that the use of predicted Grade B contours might be a more appropriate criterion for determining availability of a signal than one based on a specific mileage zone• -or the must carry rules that were in effect at that time. Comment also was sought on whether a cable penetration level should be included irn:ahedefini 9Re 9. On the basis of the comments received, a Staff-Study15 and the _. economic literature, the Commission Report and. Order in MM Docket No. 84-1296 (adopted April 11, 1985) determined that effective competition for a cable 11 Id. 12 47 U.S.C. §543(d). 13 47 U.S.C. §543(e)(1). 14 See Notice of Proposed Rule Making in MM.Docket No. 84-1296, 49 FR 48765 (1984) . 15 The Staff Study was placed in the record of- MMDocket No. 84-1296. It is discussed below. .-,.� ...w 5. In a separate Notice of Inquiry proceeding,7 we have commenced the process of gathering the information and public comment that will provide the basis of our six year report to Congress. We are also, as part of that process, working with the General Accounting Office on a survey of rate changes following adoption of the Cable Act. Through this Notice we are commencing the periodic review of our "effective competition" and other rate regulation rules. A1ttopen,these proceedings have different objectives, one. looking toward broad l'eg'islative recommendations and the other toward changes in specific Commission rules, there is a considerable overlapping of subject matter between the two. By proceeding on these two parallel tracks, we hope to effect any appropriate changes in cable regulation as expeditiously as possible.. Parties should be aware that in reaching a conclusion in this docket we will inevitably have before us the filings in the broader six year inquiry proceeding as well. To avoid duplicative filings, parties may wish simply to cross-reference in this proceeding comments that may already have been filed in response to the Notice of Inquiry in MM Docket No. 89-600. III. DISCUSSION A. Effective Competition 1. Definition of Effective Competition 6. Requirements of Section 623•of the Cable Act. Section 623(b) of the Cable Act requires the Commission to define the circumstances under which a cable system is not subject to effective competition and to establish _ standards for regulation of rates_cha ged.for-basic cable_ service_where_-. _- effective.competition does not exist.°. -.It is only under such circumstances that the Cable Act authorizes a franchising authority to regulate even basic cable service rates. The legislative history states that the Commission's definition of effective competition should establish objective nationwide criteria which are readily applicable on a community -by -community basis.9 .It further indicates that in determining whether a cable system is subject to effective competition, the Commission should consider the number, nature and price of services cable provides, compared with the number, nature and price 7 MM Docket No. 89-600, FCC 89-345, adopted December 12, 1989. 8 "Basic cable service" is defined in the Cable Act as "any service tier which includes the retransmission of local television broadcast signals." 47 U.S.C. S522(2)(1984).. 9 See House Committee on Energy and Commerce, H.R. Rep. No. 934,= 98th Cong., 2nd Sess. (1984) (hereinafter House Report) at 66. — 1.31.9 1322 court found that the Commission'sdefinition of effective competition was reasonable, and it therefore affirmed the use of a three -signal criterion, it ruled that the standard for measuring signal availability was arbitrary:#and:- capricious. Thus, it remanded that issue to the Commission for a reasoned explanation of the chosen standard for determining signal availability or the development of a new signal availability standard.20 12. In response to the ACLU decision, the -Commission adopted a Further Notice of Proposed Rule Making proposing changes to the procedures for determining signal availability.21 On the basis of that record, the Commission amended the signal availability standard.22-,--Under the revised rules, a cable 'system is currenCly considered to be subject to effective competition if the entire community it serves can rece.ive,.4three or more unduplicated broadcast television signals. It is not necessary, however, that the same three signals serve the entire community. In order to reflect signal availability in the cable community, the modified rules require that a determination of a signal's significantly viewed status for this purpose be based on viewership data from the -cable community. As stated previously, the Commission also modified its rules to require that the signals in question. encompass the entire cable community, rather than simply a portion of it, with their Grade B contours. The Commission believed that this revised approach would satisfy the court's concerns, yet provide a methodology that would be inexpensive and easy for cable operators and franchising authorities to implement. Furthermore, the revised standard is intended to assure that off - the -air signals are generally available in communities in which they are found to provide effective competition to basic cable television service. 2. Changed Circumstances e. 13. Section 623(b)(3) of the Cable Act requires that,.:the Commission periodically review its standards for rate regulation. This section specifically provides that the Commission take into account developments in technology and permits the Commission to amend its regulations to the extent the Commission deems necessary. In reviewing these regulations, the court, in 20 In particular, the Court faulted the Commission for not discussing why the "any portion" standard was selected over'a more refined geographic area. 823. F.2d at.1571-1573. 21 See Further Notice of Proposed Rule Making in MM Docket No. 84-1296, 2 FCC Rcd 5888 (1987). 22 See Second Report and Order in MM Docket No. 84-1296, 3 FCC Rcd 2617 (1988). Two petitions for reconsideration of this action were._filed and one was subsequently withdrawn. The remaining petition, addressing a relatively narrow_ aspect. o£._.the_ existing rules;,.;w.ill be, addressed separately. -- -6- system exists where three off -the -air broadcast signals were available in the cable community.16 The Commission stated that a'broadcast television signal would be considered available if: (1) the signal placed a predicted Grade B contour over apy portion of the cable community, or (2) the signal -was "significantly dewed,""as that term is defined in the rules.17 10. The Commission at that time decided to base the criteria for determining effective competition on the availability of off -air television signals. Given the fact that the basic tier was at that time composed primarily of retransmitted broadcast signals, the Commission believed 'then that some amount of locally -available broadcast programming provided effective competition to the services then typically offered as basic cable service. At that time, the Commission also found that the services provided by alternative video.distribution technologies, such as multichannel multipoint distribution systems (MMDS)-,_direct broadcast satellites (DBS) or video cassette recorders (VCRs), compete most directly with nonbasic cable services,'14h ch are not subject to. rate regulation. Although the Commission initially proposed to define effective competition as being the availability of four television -- signals off -air, the record in that proceeding indicated that three broadcast signals would be sufficient to allow viewers adequate and significant programming choices and to ensure that the basic tier offering did not become a source of undue market power for the cable operator. This conclusion also was supported by a Staff Study that analyzed two, three, four and five signal markets using Arbitron viewing data.18 11. Modification of standard in response to the ACLU decision. Several elements of the Commission's rules implementing the rate regulation provisions of the Cable Act were modified in response to the decision of the U.S. Court of Appeals for the District of Columbia -Circuit -i -n -American Civil Liberties Union v. FCC (ACLU)..19 In that decision,-the-court=concluded-=that=the rate-- -_ regulation rules were, for'the.most part, consistent with the law. While the 16 See Report and Order in MM Docket No. 84-1296, 50 FR 18637 (1985). •17 See 47 CFR §76.5(i), formerly 47 CFR §76.5(k), and 47 CFR §76.54. 18 We note that the standard adopted by the Commission established a presumption. that effective competition exists, e.g., where the predicted Grade B contour of three television stations encompassed any portion of the community in.question. (Signals may also be counted for effective competition purposes if they are significantly viewed.) Nevertheless, the rules provide. an opportunity for franchising authorities.to demonstrate that such signals are in fact not receivable anywhere within the cable community, and thus that effective competition does not actually exist. 19 823 F.2d 1554 (D.C'.. Cir. 1987),• cert. denied, 108 S. Ct. 1220 (1988). -5.- . .. _ _ ,:z:.. . - - •=Y.Yi..: iii ��C^s 1321 1324 • programming service to maximize their pricing freedom and net revenue. With rate deregulation, however, cable operators have an incentive-. to shift programming to the basic tier(s) to make that -service more attractive to the consumer in order to increase their level of subscribers. This basic tier expansion appears to be an especially common marketing tool as cable penetration increases and a larger array of programming options becomes important in attracting new subscribers in areas where cable service has existed for some time. In other words, cable operators are attempting to increase the demand for their basic service by making it a product distinguishable from local broadcast television. 17. Thus, while three off -the -air broadcast television signals may have been an appropriate measure of effective competition when the basic service Stier consisted primarily of retransmissions of signals available over=th air, local broadcast television signals may no longer be a good substitute for the full range of programming and other services now distributed by cable television systems on their basic tiers This tentative conclusion appears to be reinforced by the fact that, since the deregulation of rates under the existing effective competition standard occurred, rates for basic cable service have increased substantially while subscribership has also increased. This apparent inelasticity of demand for cable suggests that alternatives to cable are limited. We note that the GAO study reports that from December 1986 to October 1988, the average monthly rates for the lowest priced basic service tier increased by 29 percent and the monthly rate for the most popular basic service tier increased by 26 percent. We seek comment on the extent to which basic tier expansion has occurred and the extent to which it has undermined the validity of our threesignal standard. 18. We note that while the shifting of non -broadcast programming may affect the basis for our three -signal -effective- competition.standard,-.it does not alter the statutory definition of basic service in the Cable Act or our"" ,jurisdiction to provide for rate regulation of such basic service in the absence of effective competition. Basic cable service means "au:service tier which includes the retransmission of local television broadcastignals,i25 regardless of whether non -broadcast services are also included.20 In its definition of basic..service aongress.contemplated that the basic tier would include signals other than local broadcast television signals, and that these 25 47 U.S.C. §522(2). 26 See ACLU v. FCC, 823 F.2d at 1566.' •The court- noted that -this definition "speaks with crystalline.. clarity". and the .Commission has -no. alter it. Id: at" 1567-68. >.. .. r-`7-�5 .,. ,_vY ,4,Y CT 4�::1>�l-�3i.--'is 1..,-: .. ._. j.,, ,, .a`�ed.r'.V�•L`.X.... .,nS :!1'L >udr-`i. .�r: Y.G`�.c sY�'-�E�i ,�a?Np,.•m.s'.,,;'e�za,n13 ts�: ee > N.'.?iRA�`-CZt?�°.nvi i. . b+`�t"�.7y;':. ;•f�=f .',t . _ �Y^ s aa.':; ,�vt•Xra: - �c;�.�s�",�eSS:i�'z"�S_tei7��.`�.xa�..-i'c.�,'-'•TtKd:'a•ssu,?:..:r:-t^4nitn`,s.Yi?yrvsw���i�S�zt,7-'.1-4..n414,t,s: _. .- . s, .tit>.. -^;r -J✓.: "Es:r l,-:: tzs: _ _. rh... ,.xy • }✓ _ ; ay-�.:^`� ; , �....•. - _ .. 1323 ACLU, also emphasized tint'need for the Commission to review the effects of its regulations. The court said: t. In light of the speed with which the FCC was compelled to act, and the statutory command that the Commission "periodically review" [footnote omitted] its rate regulation rules, we wish to make clear that we fully anticipate that the Commission will carefully monitor the effects of its regulations and make adjustments where circumstances so require.23 We now believe the time has come to commence such review. 14. The record evidence upon which the Commission relied to develop the "three signal" standard in 1985 was based on information gathered in-.11984,•and often reflected data relating to even earlier -time periods. In particular, the Staff Study used data reflecting viewership patterns in late 1981 and early 1982. In the ensuing years, the cable industry has undergone rapid changes, in both structure and conduct, which have fundamentally altered the nature of "basic cable service'" These changes in turn appear to call the _ continued validity of the "three signal" standard into serious question. We discuss these changes below. 15. The fundamental change that has occurred is that the number of channels now generally offered on the basic tier has increased. Cable operators are including more program choices on the lowest level basic tiers, including a larger number of non -broadcast program channels (e.g., the Discovery Channel, MTV, CNN, USA, ESPN, etc.). The results of this basic tier expansion have been reflected in a recent General Accounting Office (GAO) survey of cable systems . 24 The -.study= -shows—that; --between -December -1986- and------- October nd--- ------October 1988, the average numbet—of—basic-channels offered increased -from 24 -- to 30 on the lowest priced basic service tier and increased_-from,27 to-32:on_ the most popular.basiccableservice tier. 'The makeup of the basic tier has changed from principally offering retransmitted local broadcast television signals and some locally originated programming to a menu that now includes eable;networks,'superstations and other services beyond local broadcast stations. - 16. One. major, reason that basic -tier expansion ocourrd._after adoption of the Cable Act isnot difficult to discern. Prior to the -"enactment of the Cable Act, rates for basic tier cable service -were generally subjected to local rate regulation, while higher tiers were not. Thus, cable operators had an incentive to shift programming to higher, unregulated tiers of pay 23 823 F.2d at 1565. 24 See U.S. General Accounting Office, Telecommunications: National Survey of Cable Television Rates and Services (GAO Survey), August 1989 1326 under the Cable Act to redefine "effective competition" and thus require corresponding changes in the regulation of this new.-!'basic'cab`e service," we believe.it:is now appropriate to review our existing effective competition standard and consider whether to modify or,replace it. In the`'fo1Yowing section, we propose a number of alternative ways to -measure effective competition.. We now ask interested parties for their comments on whether the existing standard remains valid, or whether the alternatives listed below or other alternatives, either singly or in combination, would provide a more accurate determination of effective competition. 21. Available Over -the -Air Signals. For the reasons stated above, it is our view that the current three signal standard may no longer provide an accurate measure.of effective competition for today's basic cable service. One obvious alternative is to enlarge the complement of availab1 ever -the -air signals constituting effective competition to four or more. To do so, however, presumes that today's basic cable service subscriber chooses basic cable service primarily to get better reception of local television signals rather than to receivecable programming not otherwise locally available on broadcast television. As an initial matter, we ask commenters to address the issue of why subscribers today subscribe to basic cable service and relate this observation to whether an effective competition standard premised solely on some number of locally available broadcast signals would constrain cable system operators from the exercise of undue market power. 22. Assuming arguendo that some increase in the number of over -the -air signals would be adequate to define effective competition, commenters are also asked to address what number of signals would suffice and why. We ask commenters urging adoption of this standard (or any other specific standard) to provide hard evidence to support their proposed signal standard. 23. Our existing standard does not differentiate among station types (i.e., network affiliate, independents, noncommercial). It permits television translator stations to be counted for effective competition, but not low power stations. We seek comment on whether these provisions should be modified and, if so, how. For example, should a new effective competition standard premised on four or more locally -available broadcast signals require the existence of some combination of signals which includes network stations, independent and noncommercial stations? -10- other signals may appropriately be rate regulated along with the local signals. 7 - 19. The Commission's determination that three broadcast television signals comprised effective competition Tor basic cable service was based in part on the Staff Study. The Commission staff recently updated the study using 1988 data antl(£opnd that the revised results do not appear tosupport the three signal standard for effective competition.28 The 1985 Staff Study investigated the potential market power of a cable operator in those areas where there are few local broadcast signals (i.e., 2, 3, 4 and 5 station markets). For each sampled county, we compared the audience share of programming only. available to cable subscribers and most likely to be included on the basic service tier (i.e., broadcast signals from neighboring television markets,,distant signals, including those that are satellite delivered, and other (non -pay) cable programming, such as ESPN and CNN) to the off -air viewership of a local station. The premise of the study was that undue market power for .the cable operator might be indicated where the viewership share of programming available only to bas tc cable subscribers was as large or larger- than argerthan the off -air viewership of a local station. In 1985, the staff found this to be the case when the comparison was made for two station markets. In three station markets, the data showed that cable viewership of such basic programming was in general less than the off -air viewership of a single local signal. Thus, the existence of basic cable service appeared to be comparable to adding one more competitor to a three competitor market. On this basis, we concluded that the existence of three or more off -the -air broadcast signals in the cable market provided an effective constraint on the market power of a cable system in the provision of basic service. The revised study, however, does not appear to support this conclusion. In particular, it shows that in three station markets the cable viewership of such basic programming has, in general, increased and now accounts for a larger viewing share than does the off -air viewership of the typical local signal. Thus, changes in viewing patterns appear to indicate that the three signal effective competition standard is no longer appropriate for determining situations when a cable operator is subject to effective competition, 3. Proposals 20. In light of the basic tier expansion that has occurred since the enactment of the Cable Act and the fact that this Commission has jurisdiction 27 See House Report, supra, at 40. 28 The original Staff Study, Alternative Criteria for Defining Effective Competition: A Statistical Analysis of Small Cable Markets, and the update have. been placed. in: this docket for comment.- - 9. -. 1325 1328 F :a competition to the local cable system,31 31 .. p y , as well as the degree Co -Which whicc h the absence of such systems are indicative of the absence of effective . competition. 26. Another factor that led us to adopt an off -the -air signal standard was the relative ease with which the number of such signals serving a cable community can be determined. At t1is time MMDS, SMATV..and HSD offer only limited competition to cable and the first DBS satellite has yet to be launched. We recognize that the existence of an alternative distribution technology may not be sufficient to provide effective competition if it is only available in a small portion of .the cable community, or certain factors lead few consumers actually to subscribe to it. We, therefore, seek comment on how to incorporate the availability of these services in an effective competition standard. For example, if MMDS were to be included in the. effective competition standard, should we require a certain minimum reach in the cable community,32 or minimum level of penetration, and should this be based upon some number of years the competing service has been available For example, would a 10 or -20 percent subscriber penetration of homes for which MMDS is available be sufficient to count MMDS as an effective competitor to local cable service? In this regard, we would note that viewership of MMDS may be limited because MMDS signals are subject to terrain shielding and obstructions that limit its availability to all households in an MMDS system's service area. How do these possible reception problems limit MMDS' effectiveness as an actual competitor to cable service? 27. If we were to include SMATVs or HSDs among competitors to local cable systems, there is the problem of how we would determine their availability to local consumers. To the best of our knowledge, there are_no readily available data regarding the number of -households having SMATVs-or 31 MMDS is a service which ' uses omnidirectional microwave signals to deliver video programs to subscribers. There are relatively few operations currently in service. .DBS is generally understood to apply to a generation of high-powered satellites which are intended to transmit programming to large audiences via inexpensive -home receivers. This service has been approved by the Commission but has yet to become operationsI. HSDs are relatively expensive home receivers that permit the consumer to receive existing satellite broadcasts. HSDs are now in use in over -2.5 million homes, according to the Satellite' Broadcasting and Communications Association of America (cited in the Washington Post, December 13, 1989, at A20). SMATVs are satellite dishes used to deliver signals to multiple dwelling units (e.g., apartment buildings, trailer parks). 32 The- term "reach" refers to the availability of a service in the community, i.e:,. thenumber of homes to which .the service is available even if residents choose not to subscribe = °°' +-:_... ��..._ ... - kuru-� .....: s�-,=}i..�._. .,:.z.t..Y.i'a2n...s..:5�.•i;.�fii'.�'¢"Cc�`_'L#i.. -.12- 4'`q>53'"'aa%'si`d8'��.';tsk"gT,c;`2s'�t;�;xo`v`>;?i`'.�'i;+�'. '-•a+.nti'r� t .wt� sem' 2r�•. =\ .19�i•'.3..".��i:Y`hi,'ritalk�E'73:xssah".:;.:a'r,'..-'-c...= q. ?�,:zr�`�....s ... _. F.. ,__...'`"�.. ..-. _ . •.:.1'�c d._ .l :i'•.. `C:Y "::;:--...il� r+i.�re'..r':-s:l�t'..LW,ii. +.::::J.: p.:x. '.. .. ...-=f`.:�: +i:ia : "...._ 1327 24. The existing effective competition standard determines signal availability on the basis of the signal's predioted'Grade B contour, or its status as significantly viewed in the cable community.29 We seek comment, particularly from those asserting a continuation or expansion of the current definition, whether these or other measures, such as a 35 -mile zone, would be appropriate measures for determining signal availability in an effective competition standard based on a specific number of off -air signals. 25. Alternative Delivery Systems. As discussed previously, the number and variety of cable networks on. ths.basic tier has increased subsequent to enactment of the Cable Act. This dSvelppment may in turn have rendered off - the -air signals, whatever their number in a,given community, inadequate substitutes for the basic cable tier. We solicit comment on what types of video services in fact provide effective competition to basic cable service. Clearly, a second cable system would provide effective competition to an existing cable system assuming it were able to obtain fair access to programming. Is -a second cage system the only true measure of "effective __ competition"?30 We also ask whether, and under what conditions, other video distribution'technologies, such as MMDS, satellite master antenna systems (SMATVs), DBS, and home satellite dishes (HSDs), can also provide effective J.: • •'t4 ,} 29 Section 76.33(a)(3) of the rules provides a waiver procedure wherein a franchising authority or cable operator may submit engineering or other studies that show that such Grade B level signals are (or are not) available within the community. The waiver process is an important part of the effective competition standard because interference problems may make off -air viewing, either with an A/B switch or another television set, an infeasible alternative. (An A/B switch allows the viewer to switch his television back and forth between his cable system and an outdoor or other antenna.) 30 More fundamentally, in the future, when fiber optic cable becomes more widely available, it may be possible for consumers to choose their cable service from among several competing service providers. We seek comment on whether we should find, in such cases, that effective competition exists: ?:7±+'-:: .. _!':?'3:; •rs3G'+�,'�*^;;C;;rie!i Mw{.,+r�+x �a2v� �i� �t.:•�F.'. F. c :o.:1f`-:.<-.. ..-z"•Cn`i'aFs:l•�y�%(�;.t �v.�?R..,vj .•Y ....�.4 �.- .. .. r. . 1330 on whether we have the statutory authority to encourage or even require cable operators to offer programming services on an unbundled basis..::: 31. Combination of Off -Air and Other Video Services. It mayy,,alsobe any one of the measures discussed above cannot, in isolation, ensure effective competition. For this reason, we also wish to examine standards that would combine two or more of the proposals discussed .above. We note that both the U.S. Department of Justice and the National League of Cities urged such an approach in their comments filed in response to the 1984 Notice of Proposed Rule Making in MM Docket No. 84-1296. 32. In its comments, the Department of Justice proposed that the Commission adopt an effective competition standard that requires that a cable system meet two of.:the.following criteria to be subject•to effective competition: 1) the availability of at least five unduplicated broadcast stations, including affiliates of the three national broadcast networks; 2) the total number of basic service channels is less that three times the number of locally available broadcast signals; 3) no more than 20 percent of -the - cable system's subscribers are "basic only" subscribers as of the date of enactment of the Cable Act. We seek comment on whether this or some other related multiple -part standard might be appropriate. 33. The National League of Cities offered a similar standard. It proposed that a franchising authority be permitted to regulate rates if: 1) the community is served by fewer than five over -the -air television broadcast stations (or is not served by an affiliate of each of the three major television networks, a commercial independent, or a public broadcasting station); 2) the community is not served by an economically viable multichannel distribution::system (e.g., DBS, MMDS); or 3) the cable system has attained a penetration rate of 70 percent. Again, we seek comment: on this or other similar standards. 34. There are other combinations that might also improve upon current effective competition standard in identifying those cable systems with undue market power. For example, it might be appropriate to consider over - the -air broadcast signals and the availability of MMDS or SMATV in combination. If we were to adopt an effective competition standard that took into account the presence of an MMDS or SMATV competitor, it might still be true that the presence of a particularly large number of local broadcast signals couldprovide effective competition even in the absence of such alternative services. We could require that a certain minimum number of signals must be available in most or all of the local community to prove the existence of effective competition and any signals (i.e., broadcast or MMDS) would count. toward meeting this standard. We seek comment on these as well as other possible combinations of proposed standards for determining whether a cable system is subject to effective competition. —14— • .14-. w.�+�ik..,%.. ..�:� 1329 HSDs on a community -by -community basis. Commenters are asked to address the question of how we can count SMATV or HSD availability for effective competition purposes. 28. With respect to DBS, we observe that it is -not -Available to any 'at American consumers today. Given that fact, at this time should we take DBS into account at all as a potential competitor to cable service? 4 :. 29. Cable Penetration. In 1985, the Commission considered including' some measurement of cable penetration in the effective competition standard. The Staff Study evaluated whether high cable penetration could be a reliable indicator of undue cable market power, and concluded that there appeared to be no direct correlation between high penetration rates and small numbers of over -the -air signals. In the Report and Order, the Commission concluded that it was unconvinced that cable penetration statistics are reliable indicators of broadcast reception problems. The updated study reaches the same conclusion. We are aware, however, that many parties continue to believe that high cable penetration is a measure Qf cable market power, and we recognize.. that there is a certain intuitive appeal to that position. We seek comment, therefore, on how we could distinguish between high penetration as an indication of undue market power and high penetration as an indication of the provision of a valuable service in a nevertheless generally competitive market. We note that if we were to establish some level of cable penetration as being an indicator of undue market power, we might give cable operators incentives to keep subscribership just below the cut-off. Is there a way we might mitigate this adverse effect of using cable penetration as an indicator of undue cable market power? 30. Provision of Cable Service on an Unbundled Basis. Cable -operators ---- now offer programming on the basic tier -as a package or "bundle." Cable operators could, theoretically, offer the channels now available on the basic tier individually (i.e., on a per -channel basis). Such a marketing scheme . would afford consumers greater choice in their purchase of cable service because it would permit them to purchase only those channels they specifically desire rather -than artier of service that includes signals they may not want. We seek comment on whether we should determine that effective competition exists if all subscribers in the.cable,community-can purchase cable -service on flr_' •a per -channel basis.--Or-would effective 'competition still be absent and regulation needed unless there were some additional competition from'other`•J multichannel delivery systems or program-packages?33 We also request comment 33 In this regard, we would further note that in the Commission's common carrier regulatory scheme, cost -based pricing along with unbundling, are key elements. We therefore ask whether unbundled cable channels should be further subject to cost -based pricing and, if so, how such a regulatory program would be implemented. _ - 13 - :s? 1332 procedural requirements. We seek comment on this proposal and on -whether .we should impose any additional standards. We discuss several options below. We invite parties to comment on these proposals and will also consider'commenting parties' proposals of substantive rules, additional procedural rules or a,j_w:;. combination of both.35 In particular, we are interested in,.proposedebtanaards that could avoid repetition of some municipalities' reported abuses of the franchise power. 37. The Commission could assist local franchising authorities' efforts to regulate basic service rates by requiring cable systems to adopt accounting standards that would enable franchising authorities to identify the cable operators' costs and realized rate of return. Prior to cable deregulation, the Commission had considered creating a uniform reporting and accounting system.for cable television systems.30.: We could consider requiring, for example, that cable systems implement uniform systems of.aecounts similar to Part 32 of the Commission's rules that now apply to telephone companies. However, a question arises as to whether the benefits of establishing such detailed standards would exceed the costs to us and the parties directly -- affected by such standards. We seek comment on these proposals. 38. The Commission might also assist local authorities by reinstituting and making publicly available the financial reporting system in place prior to 1983.37 These forms required cable systems to provide the Commission with financial information concerning: operating revenues and expenses, payments to pay cable program suppliers, depreciation, amortization, other income, current assets, fixed assets, other assets, current liabilities, deferred credits, long term debt, and owner's equity. However, a question arises as to whether • 35 - On a related matter, we note that Section 621(d)(1) gives the Commission authority to "require the -filing of informational tariffs for any intrastate communications service provided by a cable system, other than cable service, that would be subject to regulation by the Commission or any State if offered by a common carrier subject, in whole or in part, to Title II of this Act." Under this:;provision, the Commission could require the filing of informational tariffs to monitor such services. We determined in 1985 that it was then unnecessary to require -the filing -of such tariffs. We -seek comment on whether we should now require such filings. Parties favoring such a filing requirement are asked to explain how the benefits outweigh the burden this requirement would impose on cable systems, as well as to explain what such services exist and how common they are. 36 See Notice of Proposed Rulemaking in Docket No. 20681, 57 FCC 2d 368 (1975). See also Report and Order in Docket No.. 20681, 60 FCC 2d 672 (1976). 37' Report and Order in Docket 82-528`,..43j4FR 51791 (1978)= - 16 - B. Standards for Rate Regulation' 1. Existing Standards 35. Section 623(b)(2)(B) of the Cable Act also requires that the Commission establish standards to govern the local franchising. authority's regulation of basic cable service rates. The Commission has adopted a set of administraive.procedures that franchising authorities must use in setting rates. Fran hi ng authorities are .required to,provide: (1) formal notice of a rate standard (or -change thereof) to the public; 12-) opportunities for interested parties to make their views known; and (3) a formal statement to the public when a decision on,a rate matter is made. With respect to the substance of the rate -making decision, the Commission concluded that the -- appropriate regulated rate is best determined by the local franchising authority consistent with the statute.34 1331 a. 2. Proposals 36. At this time, the Commission has imposed only administrative procedures for local rate regulation. We propose to retain these existing 34 The Commission stated, in the Notice of Proposed Rule Making in MM Docket No. 84-1296, supra,'that it would not require that franchising authorities use rate of return regulation for basic cable service. The.,:, Commission stated that -rate- of -return- regulation-was-inappropr-iate-because--of -- its inherent costliness and complexity..- The Commission therefore proposed -to--- adopt a comparable rate method that would set the regulated basic cable service rate equal to the level incomparable unregulated, markets. To ensure greater flexibility and ease of implementation, the Commithion also proposed a plus or -minus ten.percent."zone of reasonableness" of the average rate of the comparable cable systems. Parties commenting on the proposal argued that rates should be established through negotiation between the franchising author'ityand'the cable operator., In the Report and Order, the Commission concurred that, consistent with the statute, the determination of the appropriate regulated rate is best left to the local franchising .authority, n: and declined to require that franchising authorities adopt any particular rate regulation approach. Report and Order, supra, at para. 125. The Commission originally adopted a cost pass-through standard which would have permitted cable systems subject to basic service rate regulation to automatically pass through any readily identifiable increase (or decrease) in cost which is entirely attributable to the provision of basic service, e.g., the price' of programming appearing on the basic service tier. In ACLU-, the court ruled that the Commission exceeded its aii.thor.'ity. by establishing this cost. pass-through mechanism... - 1334 "price caps" regulation approach would be in addition to the five percent annual increase in the regulated basic service rates to which they are. entitled under Section 623(e)(1) of the Cable Act. Accordingly, it may not be appropriate, in this instance, to include an inflation factor. Therefore, we further request comment from those parties favoring the use of "price -caps" regulation regarding the relevant factors for -adjusting the price limits. C. Additional Matters 41. Implementation of the Rules. If we modify the existing effective competition standard, it may not always be readily apparent whether a cable system is subject to effective competition. We note, in this regard, that even under our existing effective competition standard this may be true. Under certain circumstances, a cable system may be required to submit to the Commission a special viewership study to establish that - ft theets':thethree signal standard, and a franchising authority is required, under certain circumstances, to submit to the Commission a special engineering, study to establish that the_cable system in its community does not meet 'the three`_ signal standard. If the effective'competition=standard is modified to include, for example, a cable penetration rate or the availability of another provider of multiple video services in the local community, we may require, in some instances, that cable systems or franchising authorities submit data or other evidence to us to establish whether the cable system meets the effective competition standard.4° Section 76.33(c) of the Commission's rules now permits any party seeking to establish either the presence or absence of effective competition to petition the Commission in accordance with the provisions and procedures set forth in Section 76.7 of the Commission's rules on special relief. We propose to retain this section of the rules. Furthermore, in order to avoid 'disruption following adoption of any new effective competition standard, we propose 'that:franchising authorities -_be 40 We note that the House Report directs the Commission to define effective competition in a manner that can be easily interpreted and readily applied by a franchising authority. It states: In establishing the necessary regulations, the FCC should establish objective nationwide criteria which are readily"applicable- for determining on a community -by -community basis whether a cable system is subject to effective competition. ... Regulations should specify objective criteria to avoid the need for an independent examination of the status of competition on a community -by -community basis. 1 House Report, supra, at 66. Thus, we intend that any revised effective competition standard be readily applicable with a minimalburden on private parties- and the Commission. . sar:. 1 _ p 18 - ? ..z ' Sa', y-. / _ ...�• ....-.a1.:1. 1 ^'•-: ice. v� 1333 • collection of such information would greatly benefit local franchising authorities. We seek comment on this proposal. ;.. • 39. The Commission could also require a specific rate making methodology to be used by franchising authorities in regulating basic service rates. The Commission previously considered and rejected traditional rate of return regulation.38 Use of conventional rate of return regulation raises issues relating to rate base calculations, permissible rates of return, depreciation schedules, uniform system's of accounts and financial information reporting systems, debt/equity ratios, cost allocation mechanisms, and intercorporate transaction rules. We continue to believe -that conventional rate of return regulation has a number of drawbacks that would appear to be equally applicable in the cable television context.39 This method of regulation is not only administratively cumbersome but, because it interferes with incentives to operate efficiently, -may also fail over the long rUmv o assure consumers the lowest reasonable rates for the services to which they subscribe. We seek comment on these tentative conclusions. To the extent-- - parties believe that this type of regulation may be necessary and that federal standards would be useful, they should provide detailed comments as to the nature and content of such standards. 40. We also believe that alternative forms of rate control, including incentive regulation such as "price caps," warrant comment and analysis. In . general, such regulation operates by placing limits on the rate a cable system may charge for basic cable service. The price limits may be related to such factors as the inflation rate (i.e.,-Consumer Price Index), known changes in input costs (e.g., programming), and productivity gains. Pricing limitations offer consumers strong protection against_ attempted= -exercises of undue -market _ power. Consumers may benefit because the price caps method of regulation would give cable systems incentives to avoid unnecessary costs, invest in efficiency -enhancing technology, and employ innovative service approaches in order to increase earnings, rather than incentives to pad costs and to cross -subsidize certain services. This system may be less complex than rate of return regulation and easier to administer, which should reduce the cost of regulation. We seek comment on these tentative.conclusions. We thus seek comment on whether the Commission should require a "price caps" rate making . methodology to be used by franchising authorities in regulating basic service rates, and what the details of any such system would be. We note that any rate increase in basic service rates that cable systems might obtain under a 38 See Notice of Proposed Rule Making, MM Docket No. 84-1296, supra, at para. 48. 39 Policy and Rules Concerning Rates for Dominant Carriers, CC Docket No. 87-313, Report and Order and Second Further Notice of Proposed Rulemaking, 4 FCC Red 2873 (1989) ("Price Caps" docket). -- 17 - '•sti:;.,Y.w'i��"AC'G[.t�s,: .�;;:�,�k`,,f"'.°-�y.' - -•— .,e .'--• • delegated in the first instance the authority to determine whether a cable system whose rates for basic service are currently not regulated would -qualify for regulation under our news'tandard, with this Commissionts'•processes available in the event the cable System peerator, or any other interested party, disagrees with the determination.'" We seek comment on these proposals. 42. Transition Period. The Cable Act delayed for two years the effective date of the new competition standard for determining rate regulation of basic cable service rates for existing cable systems. When the Commission modified the signal availability measures in response to the decision in ACLU,42 it delayed full implementation of the new rules for a period of six months from the release date of the Second Report and Order. The Commission stated that this delay was necessary in order to allow time for preparation of any special studies needed to prove the existence or absence of effective competition, and for completion,of review under the Paperwork Reduction Act of 1980. We seek comment on whether we should also delay -the implementation of any new rules that we may -adopt herein for some length of time, and,. if so, _ _ for what period of time. 43. The practical effect of the Commission's three signal standard has been to prevent most cable systems from being subject to regulation of basic rates.43 Any new rules we may adopt in this Notice would likely authorize more franchising authorities to regulate the basic service rates of their local cable television systems. We seek comment on the likelihood that cable systems would engage in strategic behavior before the effective date of any new regulatory scheme to defeat its intended effect. For example, cable operators whose basic cable service rates are not now regulated can raise these rates before the new effective.- 9mpetitign_ standard_ goes_ -into _effect:-`= ="= The Cable Act does not appear to give franchising authorities the right to require roll -backs (and refunds) of rate.- increases taken when basic service 41 We note that Section 76.33(a)(4) of the rules provides that a cable system, once determined .to be subject to effective competition after the effective date of this section,_shall not be subject to regulation for one year after any change in market�'conditions which would cause it, to be determined not to be subject to effective competition. By way of clarification, this section of the rules does not apply when a cable system becomes subject to regulation because the Commission modified the effective competition standard. 42 See para. 11, supra,. 43 We note that -the GAO survey found -that only about 3 percent of cable systems remained regulated as of October 31, 1988. See GAO Survey, supra, at 4., • ,�.t;-. A 4 P -".- rv" 577zn. .r. �,-tr ,'Un^' - .:cam- -a .z�"-•' ci.- 4 "bst J �+"a�" } . i -z .. i -• .< 1336 rates were no.t.subject to regulation. Furthermore, the Communications Act does not appear to give this Commission authority to intervene with respect to roll -backs or:refunds. Is there any legal basis under which franchising authorities or the Commission could..have the right to require such roll -backs? What, if anything, can or should the Commission or franchising authorities -do to minimize any adverse effects of these rate increases? 44. Furthermore, we note that the Cable Act gives cable operators complete freedom to retier their services among. their unregulated tiers.44 Cable operators subject to regulation of their basic service rates may also modify the, -basic service tier(s) subject, however, to certain„limitations associated with the )'ranchise process.45 Since.the deregulation of rates under the existing effective competition standard occurred, cable operators have endeavored to increase_the.attractiveness of. their service - by increasing the number and variety of signals available,on their basic tiers. Cable operators whose basic cable service rates are not now regulated would be able to retier non -local signals and other cable programming services out of basin service (i.e., they could reverse tier expansion) before the new effective competition standard goes into effect. In this way, cable operators could limit the number of cable channels subject to rate regulation to the local, off -the -air signals. Franchising authorities would then be limited to regulating a basic service tier analgous to the tier as it was configured prior to the Cable Act. We seek comment on whether this outcome serves the public interest. The enlarged basic service tiers now in existence appear to reflect, in part, the cable industry's response, in an unregulated environment, to subscriber preferences. Accordingly, we seek comment on whether the purpose of the Cable Act provisions respecting the -.regulation of basic service rates would be undermined.�if-,the,basic tiers contained only signals available off -the -air. We also” 'seek comment=6n whether -we have- authority to and, if so, should require that the basic service tiers that will become subject to rate regulation under any new effective competition standard - we may adopt in this proceeding must include all previously carried services (e.g., those carried on the adoption date of this Notice or some other specified date). 44 Section 625(d), 47 U.S.C. §545(d). "Under the Cable Act, cable operators generally have the freedom to structure their service tiers in whatever way they wish." ACLU v. FCC, 823 F.2d at 1570. 45 A cable operator may obtain a modification of a franchise programming obligation only after demonstrating to the franchising authority that the proposed modification will maintain the mix, quality, and level of the programming services. See Section 625(a), 47 13-.S.C. §545(a).- s'14 545(a). 2a hrirt�-�Tr n�J',`va`.•.�� moi`.",_: 1337 IV. CONCLUSION ' 45. In light of the changes that have occurred in the video marketplace since we adopted standards, for the regulation of basic -cable service rates in 1985, we believe that it'is•ttow;appropriate to reexamine the rules regarding this matter. The fundamental` change that has occurred is that the number of channels now generally offered on the basic tier has increased. As a result of this basic tier expansion, the makeup of the basic tier has changed from principally offering retransmitted local broadcast television signals to a menu that now includes a fuller range of programming services. We also note that the increases in basic service rates that have been recently reported may indicate that cable systems have a greater degree of market power,.than was indicated by the 1985 Staff Study. Therefore, the existing three signal standard may no longer be appropriate for determining when a cable system is subject to effective competition. In this Notice of Proposed Rule Making we discuss a wide variety of alternatives to the existing rules. We seek comment on these proposals. In addition, parties are encouraged to suggest_anyr,Yother readily. applicable alternatives or ensuring that franchising author'i'ties are. permitted to regulate basic cable service rates where effective competition does not exist. V. ADMINISTRATIVE MATTERS 46. As required by Section 603 of the Regulatory Flexibility Act, the FCC has prepared an initial regulatory flexibility analysis (IRFA) of the expected impact of these proposed policies and rules on small entities. The IRFA is set forth in the Appendix. Written public comments are requested on the IRFA. These comments must be filed in accordance with the same. filing deadlines as comments on the rest of the Notice, but they must have"a separate and -distinct heading designating -them as responses to the regulatory flexibility analysis. The Secretary shall cause a copy of this Notice, including the initial regulatory flexibility analysis, to be sent to the Chief Counsel for Advocacy of the Small Business Administration in accordance with Section 603(a) of the Regulatory Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. Section 601 et seq. (1981). 47. The proposals contained herein have been analyzed with respectsto the Paperwork Reduction Act of 1980 and found to impose a new or modified requirement or:burden upon the public. Implementation of any new or modified requirement or burden will be subject to approval by the Office of Management and Budget as prescribed by the Act. 48. For purposes of this non -restricted notice and comment rule making proceeding, members of the public are advised that ex parte presentations are permitted except during the Sunshine Agenda period. See generally Section 1.1206(a). The Sunshine Agenda period is the period of time which commences with the release of a public notice that a matter has been placed on the Sunshine Agendaand terminates when the Commission (1) releases the text of a • 21 - . ._ r7�•:tv..t':eW..s!aw-•i:,•tti.+an.:ae:.<'67re1 .. � ..� .f .r.✓-laa�:r ', :i_T c--�a.:.,`F:`; :.+aS4 .vr. _.M _ ,-. .. 1.338 decision or order in the matter; (2) issues a public notice stating that the matter has been deleted from the Sunshine Agenda; or (3) issues a public notice stating that the matter has been returned to the staff for further consideration, whichever occurs first. Section 1.'1202(f). During the Sunshine Agenda period, no presentations, ex parte or otherwise, are permitted unless specifically requested by the Commission or staff for the clarification or adduction of evidence or the resolution of issues in the proceeding. Section 1.1203. 49. In general, an ex parte presentation is any presentation directed to the merits or outcome of the proceeding made to decision-making personnel which (1) if written, is not served on the parties to the proceeding, or (2), if oral, is made -without advance notice to the parties to the proceeding,and without opportunity for them to be present. Section 1.1202(b). Any person who makes or submits a written ex parte presentation shall provide on the same day it is submitted two copies of same under separate cover to the Commission's Secretary for inclusion in the public record. The presentation (as well as any transmittallettr) must clearly indicate on its face the -- docket number of the particular proceeding(s) to which it relates and the fact that two copies of it have been submitted to the Secretary, and must be labeled or captioned as an ex parte presentation. B 50. Any person who in making an oral ex parte presentation presents data or arguments not already reflected in that person's written comments, memoranda, or other previous filings in that proceeding shall provide on the day of the oral presentation an original and one copy of a written memorandum to the Secretary (with.•a copy.to the Commissioner or staff member involved) which summarizes the data and arguments. The memorandum (as well as any transmittal letter) must clearly -_indicate on its face the -docket number of the .particular proceeding and the fact that an original and one copy of it have bedirsubmitted to the Secretary, and must - be labeled or captioned as an ex parte presentation, Section 1.1206. 51. Pursuant to applicable procedures set forth in 1.415 and 1.419 of the Commission's Rules, interested parties may file comments on or before April 6, 1990, and reply comments on or before May 7, 1990. All relevant and timely comments will be considered by the Commission before final action is taken -in this probeeding. To file formally in this proceeding; participants must file an original and four:copies of all comments, reply domments, and supporting comments. If participants want each Commissioner to receive a personal copy of their comments, an original plus nine copies must be filed. Comments and reply comments should be sent to Office of the Secretary, Federal Communications Commission, 1919 M. Street, N.W., Washington, D.C. 20554. Comments and reply comments will. be available for public inspection during regular -business hours in the Dockets. Reference Room (Room 239) of the Federal Communications Commission, 1919 M Street, N.W., Washington, D.C.. 20554. • ... r::�,Y%.w'-„,,.6.7' 4-`"s�r-�..�'y- •. -. 22.- .. %t5:,v-r .v^-�;��:��,..�+c•1•.cm��e1:$+�`�Y"E�'".'ZAye-''2�!t ;-!�rS"�” ,t-s'.nf?' . 52. Authority for this action is contained in Sections 4(i), 303 and 543(b)(3) of the Communications Act of 1934, as amended. 53. For further information on this proceeding, contact Marcia Glauberman, Policy and Rules Division, Mass Media Bureau, (202) 632-6302. FEDERAL COMMUNICATIONS COMMISSION Donna R. Searcy Secretary -23 1339 1340 Appendix Initial Regulatory Flexibility Act Analysis Pursuant to the Regulatory Flexibility Act of 1980, the Commission finds: I. Reason for action. The Cable Communications Policy Act of 1984 requires the Commission to periodically review its rules regarding the regulation of basic cable service rates. An analysis of changes in the video marketplace since these rules were adopted in 1985 leads us to believe that this is an appropriate time to reexamine the "effective competition" standard and to consider revisions to them. II. Objectives. To consider alternative definitions for "effective competition" and modifications to the standards for rate regulation to ensure that local franchising authorities are permitted to regulate basic cable rates in situations where a cable system.has significant market power. We also- - desire to adopt rules that will be easily interpreted and readily applicable and, whenever possible, minimize the regulatory burden on affected parties. III. Legal basis. Action as proposed for this rule making is contained in Sections 4(i), 303 and 543(b)(3) of the Communications Act of 1934, as amended. IV. Description, potential impact and number of small entities affected. Depending on the action taken as a result of this proceeding, additional cable television systems could be subject to rate regulation of their basic cable service by their franchising authorities. However, as these cable systems may or may not be rate regulated, at the discretion of the franchising authority, we are unable to estimate the number of cable systems that would be affected by any of the proposals discussed in the Notice of Proposed Rule Making. V. Reporting, record keeping and other compliance requirements: The proposals under consideration in this Notice of Proposed Rule Making include the possibility of new reporting and record keeping requirements for cable systems. VI. Federal rules which overlap, duplicate or conflict with this ruler None. VII. Any significant alternatives minimizing impact on small entities and consistent with stated objectives: None. -24- • February 9, 1990 City of Ithaca Ithaca, New York Dear Sir: Ammummum ATI mum American Television & Communications Corporation A Time Inc. Company National Division 160 Inverness Drive West Suite 300 Englewood, Colorado 80112 (303) 799-9599 ZZNY 0040 Enclosed please find a check for $26,151.44 which is payment of franchise fees for the fourth quarter of 1989 for American Community Cablevision. At this point, we have not deducted the overpayments for the prior periods. -However, in the future, we reserve the right to reduce franchise fee payments by the amount overpaid. Computation is as follows: Month Gross Revenues October, 1989 November December Total $196,451.38 183,283.84 190,261.31 Fee @ 5% - NY Rate .412 $569,946.83 4.588% Franchise Fee $26,151.44 I, Ivy W. Parish, Controller of American Television and • Communications Corporation, National Division, certify that the above schedule summarizes the Gross Revenues, as defined. .in the franchising agreement, for the period indicated for the CATV operations in the City of Ithaca. Signed: IWP/jdh Enclosure • y"W. Parish, Controller Providing entertainment and information choices. SCC FEBFE820� 20� AMERICAN COMMUNITY CABLEVISION February 12, 1990 Mr. Charles Guttman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Guttman: With this letter I would like to inform the City of Ithaca of some changes which are going to be made to ACC's channel line-up. We plan to roll out most of the changes on May 1, 1990. Since this plan has not yet been fully detailed the timing could possibly change. If that is the case, I will notify you at once. I feel it is important to let you know of the planned changes as soon as possible, hence this letter and the tentative date. ACC is moving five local signals to its basic cable service tier. These channels are not new, but have been carried on the upper tier of our standard cable service. As a result of the changes to the line-up, ACC will offer subscribers a 16 -channel basic cable service instead of the 12 -channel basic cable service we now offer. The cost of the 16 channels will be the same as the planned price for the 12 -channel service - $11.52 plus franchise fees. The reasons for the changes are twofold and both in response to comments from our subscribers. First, we are removing the Prevue Guide (cable channel 6) from our line-up completely. Second, in response to customer requests, we are moving channels 5,, 40 and 36 back to the basic tier. Also, ACC wanted to have all broadcast (non -cable) stations on one tier of service. While this change could be completed with less cost to ACC by removing cable programming from its basic tier, we choose instead to increase the number of channels on the basic cable service tier from 12 to 16 for the benefit of basic cable subscribers.* Our standard 40 channel cable service will continue to be priced at $18.19 per month plus franchise fees. This standard service is comprised of two tiers of service: a tier of 16 channels priced at $11.52 plus franchise fees and a tier of 24 channels priced at an additional $6.67 plus franchise fees. ACC will add a new cable channel, the popular American Movie Classics, to this service level as of May 1, 1990. I have included information on AMC for you. 519 West State Street Ithaca, New York 14850 607-272-3456 I have attached a new channel line-up for your information. All changes have been footnoted at the bottom of the page for easy reference. Not all of the changes are directly attributable to the increase in channels on the basic cable service. For example, cable channel 7 will begin to carry local origination material, slowly at first, and we hope with more regularity in the future. In addition, we will use channel 7 to keep viewers informed of Pay -Per -View events. As always, American Community Cablevision remains committed to providing the highest quality programming and customer •service. Please feel free to call me if you have any questions. Sincerely, Barbara L. Lukens General Manager BLL/fw enc. CC: Bill Demo, Chair Ithaca Cable Commission Mayor Ben Nichols * see attached A set-top channel selector will be required in order subscriber to receive the entire 16 channel basic cable unless the subscriber has a cable ready television set. be establishing a number of convenient locations around where subscribers will be able to pick up their channel (s). Basic cable subscribers who require a channel will receive the first one at no charge. for a service, ACC will the city selector selector There is no fee for an additional basic cable service outlet and ACC will continue to provide additional outlets free of charge. A subscriber will still be able to watch 12 channels on his/her additional outlet without a channel selector; or with a cable ready set would be able to view all 16 channels without requiring a channel selector. A subscriber who wishes to receive 16 channels on his/her additional outlet on a non -cable ready TV and who will thereby need an additional channel selector (beyond the first free channel selector) will be charged a channel selector fee of $3.00 per month plus franchise fees. o 12 channels without a channel selector o 16 channels without a channel selector o 16 channels with a channel selector on on a non -cable ready TV with a cable ready TV a non -cable ready TV Those subscribers who presently receive our standard cable service (40 channels) on an additional outlet pay a monthly additional outlet fee of $5.71 plus franchise fees for the use of the channel selector. This will not change. ITHACA CHANNEL LINE-UP MAY 1990 01 PAY-PER-VIEW B 02 ABC-9/WIXT B 03 NBC-3/WSTM B 04 PBS-24/WCNY B 05 CNN B* 06 FOX-68/WSYT B 07 THE WEATHER CHANNEL/L.O./PPV B B 07 NEWSCENTER 7, M 6-11PM ON TH B 08 PBS-46/WSKG B 09 WWOR-9 B 10 ESPN B 11 WPIX-11 B 12 CBS-12/WBNG B 13 THE LEARNING CHANNEL B 13 CABLE 13, PUBLIC ACCESS + 14 HBO + 15 CINEMAX + 16 THE DISNEY CHANNEL B 17 CBS-5/WTVH B 18 NBC-40/WICZ 8* 19 PBS-44/WVIA B 20 ABC-36/WENY 21 MTV 22 USA NETWORK * 23 FNN 24 C -SPAN * 25 NICK/NICK-AT-NITE * 26 ARTS AND ENTERTAINMENT AVAILABLE IN REBUILT AREAS 27 CNBC 28 MSG/TRAVEL CHANNEL 29 BRAVO/C-SPAN II 30 DISCOVERY * 31 AMERICAN MOVIE CLASSICS/TWC 32 HEADLINE NEWS 33 THE FAMILY CHANNEL 34 NASHVILLE NETWORK * 35 JC PENNEY'S SHOPPING 36 VIDEO HITS 1 37 LIFETIME 38 BLACK ENTERTAINMENT 39 TURNER NETWORK TELEVISION 40 THE LEARNING CHANNEL 41 QVC 42 THE WEATHER CHANNEL 43 THE COMEDY CHANNEL B=BASIC SERVICE CHANNEL +=PREMIUM CHANNEL OFFICE OF CITY ATTORNEY CITY OF. ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Bill Demo, Cable Commission Chair Cable Commission Members FROM: John J. Kelleher, Assistant City Attorney DATE: February 16, 1990 SUBJECT: Senior Citizens Discounts on Cable TV TELEPHONE: 272-1713 CODE 607 Ithaca grants up to a 50% property tax exemption for persons over 65 years of age whose income is under $15,025 per year. The actual percentage tax abatement is graduated beginning at 20% reduction at $15,025 and going to 50% at incomes of $12,025 and below. It is our recommendation that for simplicity's sake, the Senior Citizen Cable TV discount be the same for all persons over 65 whose income is below $15,000 per year. Proof of age should be by any form of identification issued by a public agency: a driver's license, birth certificate, passport, or other such document should be presented. Proof of income could be by existing eligibility for property tax abatement as certified by the City Chamberlain, income tax return from the most recently filed state or federal tax return, or any other verifiable source. Werecommend that once someone is qualified, we presume that no change has taken place. This would avoid an annual task of recertifying our seniors for discount. The form could look like this: SENIOR DISCOUNT CERTIFICATION I, , hereby certify that.I am over 65 years of age, having been born e on at I further certify that my income in the last calendar year was less than $15,000 and that I am therefore eligible for a Senior Citizen Discount on my cable television rates. "An Equal Opportunity Employer with an Allirmative Action Program" I submit the following documents in proof of the foregoing: AGE 1. Driver's License 2. Birth Certificate 3. Passport 4. Other INCOME 5. City Property Tax Records 6. New York Income Tax Return 7. Federal Income Tax Return 8. Other Signature I hereby certify that I haveexamined the indicated documents and that they confirm the facts asserted by the applicant. I therefore request that the Senior Citizen Discount be extended as required by the Cable Franchise Agreement. City Controller Please let us know if we can be of any further assistance to you,. Jack PRNIEEDODMMLIkrfor M &-'ic D.0_,0. of '-honed 0 Returned your call 0 Came in 0 Will call again 14—P1e-ase return the call 0 See me Message • Com-ovt-41-50„3,1 tch—<J, 0...44-4-t U. Sz-x,C4-A Phone (.11( 343.(i Date Time 9 By • i MEMORANDUM TO: Jack FROM: Chuck DATE: February 8, 1990 SUBJECT: Senior citizen discount on cable tv rates You wrote a memo on February 6, 1990 to senior citizens regarding cable tv rates. Bill Demo is the chairperson of the Cable Commission. He wants to know what the procedure is regarding giving this exemption and they're having a meeting this coming Tuesday so you should contact him before then to get him a copy of 'the memo and answers he has regarding it. There are two significant . questions that are coming up. One is where did we get the $15,025 per year figure? Ben also would like to know where that number came from so we should let Ben know as �, well as Demo. Secondly, is there any method for a non -property tax �` 1 owner to get the discount without actually getting through bringing in their income tax return? I don't see any myself. Tom Terrizzi who is the head person at Prisoner's Legal Services, is also on the Commission and it would be nice or politic or just funny to talk to "Trees." He's a good person. He signs his name as follows: You may want to discuss with him the existence of this memo as well as discussing it with Demo. If I haven't already said so, Demo can be reached at 844-8211, extension 354. ryfrt 5 OFFICE 'OF CITY ATTORNEY • CITY OF. ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Senior Citizens FROM: John J. Kelleher, City Staff Attorney DATE: February 6, 1990 SUBJECT: Senior Citizen Discount on Cable TV Rates TELEPHONE: 272-1713 CODE 607 The City of Ithaca's cable television franchise agreement provides that senior citizens who qualify for the City's real property tax exemption are entitled to a discount on the cable television costs. To claim the benefit of this discount agreement, you must present identification proving that you are over 65 years of age and either: 1. a statement of property tax exemption from the City Clerk, or, if you do not own real estate in the City, 2. a copy of the most recent year's income tax statement proving that your household income is below $15,025.00 per year. If you have any further questions regarding your eligibility, ,please contact the City Attorney's Office so that one of us may be of assistance. "An Equal Opportunity Employer with an Affirmative Action Program" 4 CHAPTER 81 PARTIAL TAX EXEMPTION § 81.1 Partial tax exem ion for certain persons over 65 years of age A. Pursuant to the provisions of Section 467 of the Real Property Tax Law of the State of New York, real property in the City of Ithaca owned by one or more persons, each of whom is 65 years of age or over, or real property owned by husband and wife, one of whom is 65 years of age or over, shall be partially exempt from taxation by the City based upon the income of the owner or the combined incomes of the owners. Such partial exemption shall be to the extent set forth in the schedule following: ANNUAL .INCOME OF OWNER OR COMBINED ANNUAL INCOME OF OWNERS .Up to $12,025 More than $12,025 but less than $12,525 ,$12,525 or more, $13,025 or more, $13,525 or more, $14,025 or more, $14,525 or more, but less than but less than but less than but less than but less than $13,025 $13,525 $14,025 $14,525 $15,025 PERCENTAGE ASSESSED VALUATION EXEMPT FROM TAXATION The partial exemption provided by this law shall, limited to such property and persons as meet the exclusions and limitations set forth in Section 467 Property Tax Law of the State of New York.. [Subd. #87-1, 2/4/87.] B. owned over, death least 50% 45% 40% 35% 30% 25% 20% however, be conditions, of the Real A amd. Ord. The partial real property tax exemption on real property by husband and wife, one of whom is 65 years of age or once granted, shall not be rescinded solely because of the of the older spouse so long as the surviving spouse is at 62 years of age. [§ 81.1 last amended, Ord. 84-2, 2/1/84.] Supp. #12, May 7, 1987 81.1 ,e 1100, Ho Fold at line over top of en e to the right of the return address CERTIFIED P .467558 730 MAIL ii //„/ a „ .-' , / / CHUBB GROUP OF INSURANCE COMPANIES 1990 Post Oak Boulevard, Suite 1100, Houston, Texas 77056-3812 • Phone: (713) 623-0160 February 2, 1990 City of Ithaca City Hall Ithaca, New York 14851 ATTN: Mayor's Office Re: Request for Termination of Bond Principal: Bond Number:' Effective Date: Type of Bond: Gentlemen: RECEIVED FEB 07 1990 fe-La� ata0)/tia. LP/ 9 American Television & Communications Corporation dba .American Community Cablevision 8093 56 73, October 6, 1982. Franchise Bond The bond provides it may be cancelled by the Surety giving ( 30 ) days written notice to the Obligee. Please consider such notice. Would you please acknowledge receipt of this cancellation below and returning to us at the above address. Thank you for your early reply. Sincerely, FEDERAL IRS :4 " • CE r. MPANIY rk Smith Surety Department ACKNOWLEDGED BY: TITLE: DATE: THIRTY this letter by signing November 9, 1989 Federal Insurance Company c/o Nancy Ruano Johnson & Higgins of Texas, Inc. 1400 MCorp Plaza 333 Clay Street Houston, Texas 77002-4093 PRINCIPAL: AMERICAN TELEVISION & COMMUNICATIONS CORPORATION DBA AMERICAN COMMUNITY CABLEVISION OBLIGEE: CITY OF ITHACA BOND NO: 8093-56-73 Dear Ms. Ruano: A bond assuming the previous obligations of the captioned PRINCIPAL and its SURETY has been received by this office. , In lieu of returning the original bond, please accept this letter as our acknowledgement of the termination of liability under the captioned bond effective July 1, 1989, which is the inception date of the r -placement bond. (S C#e ar/es e"rrmY ,/ /734 '9-- 4,741 /,1rra'',/ y (Title) (Obligee) (Date) cc: Ed Heine, Chubb & Son /24 1 This bond replaces.Feueral Insurance Company Bond No. 6093-56-73 American International Companies AMERICAN INTERNATIONAL BUILDING 2200 North Loop West, Suite 200 Houston, TX 77018 713/683-4500 Direct Dial: 713/683 - PERFORMANCE BOND Bond No. 02-74-00 Know All Men By These Presents, That we, American Community Cablevision Amount $ 25,000.00 (hereinafter called the Principal), as Principal, and the NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, a corporation duly organized under the laws of the State of Pennsylvania (hereinafter called the Surety), as Surety, are held and firmly bound unto City of Ithaca (hereinafter called the Obligee), in the.sum of Twenty Five Thousand and No Dollars ($25.000 . oo ), for the payment of which we, the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. Sealed with our seals and dated this 22nd day of December 19 89 THE CONDITION OF THIS OBLIGATION IS SUCH, that whereas the Principal entered into a certain Contract with the Obligee, dated November 19 88 for In accordance with the terms and conditions of said Contract, which is hereby referred to and made a part hereof as if fully forth herein, under Section XXI 21.1 A through I of the Franchise Agreement. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the above bounden Principal shall well and truly keep, do and perform each and every, all and singular, the matters and things in said Contract set forth and specified to be by said Principal kept, done and performed, at the times and in the manner in said Contract specified, or shall pay over, make good and reimburse to the above named Obligee, all Toss and damage which said Obligee may sustain by reason of failure or default on the part of said Principal so to do, then the obligation shall be null and void; otherwise shall remain in full force and effect, subject, however, to the following conditions: RPT.010/farms Any suit under this bond must be instituted before the expiration of two (2) years from the date on which final payment under the Contract falls due. No right of action shall accrue on this bond to or for the use of any person or corporation other than the Obligee named herein or the heirs, executors, administrators or successors of the Obligee. American Community Cablevision NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA Surety By: RPT.010/forms Jivienne Douglas, Attorney -I act American Home Assurance Compel _ I'slatrina! Union Fire insurance Compel -iv of Pittsburgh, Pa. Principal Bond Office: 70 Pine Street, New York, N.Y. 10270 KNOW ALL MEN BY THESE PRESENTS: POWER OF ATTORNEY No. 04—B-13820 That American Horne Assurance Cornpany, a New York corporation, and National Union Fire Insurance Company of Pittsburgh, Pa., a Pennsylvania corporation, does each hereby appoint ----Vivienne Doug Las ; 1Tarr-iet J. Hunt: of Denver, Colorado --- its true and lawful Attorneys) -in -Fact, with full authority to execute on its behalf bonds, undertakings, recognizances and cthor contracts of indemnity and w, fittings obligatory in the nature thereof, issued in the course of its business , and to bind the respectivs• company thereby. IN WITNESS WHEREOF, American Hama Assurance Company and National Union Fire Insurance Company of Pittsburgh, P,, have each execved these p cse nts this 12 day of November t > Edward J. Fren h, Vice President 1cl k STATE OF NEW YORK 1 COUNTY OF NEW YORK f ss. On this 1 2 day of_ TQY Ji11ar-_ , before me came the above named officer of American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pa., to me personally known to be the individual and officer described herein, and acknowledged that he executed the foregoing instrurnent and affixed the seals of said corporations thereto by authority of his &flee. CERTIFICATE '7:r7.3 1 /(}d,<?,1471 BRENDAN R. DAVENPORT Notary Pnbfc, 51e e 'f New York No, 01-4755643 Qualified in Bronx County Cc tiff r;i,d it Now York County Cormission_Expiaes_lmy 35, 1983 Excerpts of Resolutions adopted by the Boards of Directors of American Home Assurance Company and National Union Fart, Insurance Company of Pittsburgh, Pa. on May 18, 1976: "RESOLVED, that the Chairman of the Board, the President, or any Vice President be, and hereby is, authorized to appoint Attorneys -in -Fact to represent and act for and on behalf of the Company to execute bonds, undertakings, recognizances and other contracts of indemnity and writings obligatory in the nature thereof, and to attach thereto the corporate seal of the Company, in the transaction of its surety business; "RESOLVED, that the signatures and attestations of such officers and the seal of the Company may be affixed to any such Power of Attorney e, tc any certificate relating thereto by facsimile, and any such Power of Attorney or certificate bearing such facsimile signatures or facsimile sea! shall valid and binding upon the Company when so affixed with respect to any bond, undertaking, recognizance or other contract of indemnity or writ;::g obligatory in the nature thereof; "RESOLVED, that any such Attorney -in -Fact delivering a secretarial certification that the foregoing resolutions still be in effect may insert in such certification the date thereof, said date to be not later than the date of delivery thereof by such Attorney -in -Fact." 1, Maureen P. Tully, Secretary of American Home Assurance Company and of National Union Fire Insurance Company of Pittsburgh, Pa. do hereby certify that the foregoing excerpts of Resolutions adopted by the Boards of Directors of these corpora- tions, and the Powers of Attorney issued pursuant thereto, are true and correct, and that both the Resolutions and the Powers of Attorney are in full force and effect. IN WITNESS WHEREOF, 1 have hereunto set my hand and affixed the facsimile seal of each corporation 23240 (9/851 this day of 9 $% Maureen P. Tully, Secretary CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF TELEPHONE: 272-1713 CITY ATTORNEY CODE 607 January 16, 1990 Barbara Lukens General Manager American Community Cablevision 519 W. State St. Ithaca, NY 14850 Dear M. Lukens: In response to your letter of January 8, 1990, I am enclosing herewith a copy of the new Surety Bond and the Release form which I have executed. If the original Performance Bond is to be returned, to you or filed elsewhere, please let me know or if you need any- thing else from me with regard to this matter. CG/a enc.: original Release copy of Performance Bond Very trul. yours Guttman City Attorney "An Equal Opportunity Employer with an Affirmative Action Program" ACC l . //ro/9t AMERICAN COMMUNITY CABLEVISION January 8, 1990 Charles Gutman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Gutman: Enclosed are 1) the new surety bond and 2) a release form for the old bond. Please execute the release. Sincerely, Barbara L. Lukens General Manager BLL/fw enc. 519 West State Street Ithaca, New York 14850 607-272-3456 January 16, 1990 Ben Nichols Mayor City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mayor Nichols: Enclosed is a copy of American Community Cablevision's financial statements for the fiscal year ending June, 1989. The year's after tax net income of $415,299 represents a 4.2% return on investment. ACC measures its performance in many ways, however. From July 1988 to June. 1989, ACC took significant positive steps to improve its cable operation in the Greater Ithaca Area. ACC and the City of Ithaca finally concluded their somewhat stormy negotiations and signed a new franchise agreement. This specific agreement is one of the most detailed and the most favorable to the community of any cable television franchise agreement in the State of New York and is often used as a model by the New York State Commission on Cable Television. Following the signing of the agreement, ACC fully rebuilt the cable television system in the City of Ithaca, installing new cable and electronic equipment and taking down the old. Rebuilding the plant allowed us to increase the channel capacity and add new services. Among the new services added were C -Span II, The Discovery Channel, Madison Square Garden/The Travel Channel, Turner Network Television, The Family Channel, The Comedy Channel, Lifetime, Bravo and others. ACC concluded its office renovation and the public access studio was moved to a new location at 612 West Green Street, behind our other buildings which are on West State Street. The new studio boasts state-of-the-art video equipment and a staff of three knowledgeable facilitators whose function it is to guide Ithaca area citizens through the use of the equipment and all of the procedures involved in television production. The access studio is open and staffed 60 hours a week, meeting the needs of Ithaca's active producers. NewsCenter 7 became the choice of Ithacans for local news, according to a. survey. This was positive reinforcement that people want to know what's happening about town. ACC is pleased to. be able to help fill that need. NewsCenter 7 has also provided a great place for area businesses to promote their goods and services to a majority of our subscribers. While these advertisements are good business for ACC they also provide local businesses with a means for garnering new customers and thereby help to strengthen the local economy. ACC continued to show customer growth although growth in basic customers was not particularly strong due to a flattening of the local economy. Continued improvement of cable programming has helped maintain growth in the number of expanded tier customers. There was a decline in the number of customers taking premium services. Approximately twelve miles of line extensions were built in this period allowing us to offer service to an additional 500-600 residences. As you probably know, Mike Withiam left ACC in May of 1989 and an acting manager who commuted from Pennsylvania helped the staff through the remainder of the fiscal year. I was named as Mike's replacement in July of 1989. It will remain to be seen how the change in management will affect American Community Cablevision. I can sincerely say that we are making every effort to provide the very best in quality product and service to our customers. Our forthcoming customer newsletter will bring you up to date on the changes which are coming and which should enhance our position to serve customers better. Respectfully, Barbara L. Lukens General Manager BLL/fw enc. • , • Audited Financial Statements American Community Cablevision Division of American Television and Communications Corporation June 30, 1989 Ernst &Whinney AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION Audited Financial Statements June 30, 1989 Audited Financial Statements Report of Independent Auditors 1 Statement of Assets, Liabilities and Net Assets 2 Statement of Revenues and Expenses and Changes in Net Assets 3 Statement of Cash Flows 4 Notes to Financial Statements 5 Ernst ®ung 4300 llu{n,blic; r'li,Lr, Y.VMr{{:eI {{p"ok lelepl{one: (303) 534-4300 Report of Independent Auditors The Board of Directors American Television and Communications Corporation Stamford,Connecticut We have audited the accompanying statement of assets, liabilities and net assets of American Community Cablevision Division of American Television and Communications Corporation as of June 30, 1989, and the related statements of revenues and expenses and changes in net assets and cash flows for the year then ended. Thesefinancial statements are the responsibility of the Division's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1 to the financial statements, American Community Cablevision is one of several divisions and subsidiaries of American Television and Communications Corporation, and has material transactions with its affiliates. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and net assets of American Community Cablevision Division of American Television and Communications Corporation at June 30, 1989, and its revenues and expenses and changes in net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. Denver, Colorado September 20,.1989 1 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS June 30, 1989 ASSETS Cash $ 211,413 Accounts receivable, less allowance for doubtful accounts of $121,843 68,101 Prepaid expenses 7,617 Property, plant and equipment, at cost --Note 2: Land, building and improvements Distribution system Vehicles and other equipment Construction in progress Less accumulated depreciation Net property, plant and equipment. Franchise costs, less accumulated amortization of $1,002,170 --Note 2 $ 1,787,520 11,698,633 2,042,714 1,174,650 16,703,517 (6,378,008) LIABILITIES AND NET ASSETS Accounts payable Accrued liabilities Subscribers' advance payments and deposits Debt --Note 3 Net assets --Note 1 See notes to financial statements 2 10,325,509 1,465,832 $12,078,472 $ 592,503 411,530 282,481 207,597 1,494,111 10,584,361 $12,078,472 AMERICAN COMMUNITY CABLEVISION DIVISION OF..AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION STATEMENT OF REVENUES AND EXPENSES AND CHANGES IN NET ASSETS Year Ended June 30, 1989 Revenues: Service $5,676,119 Connection and other 913,958 Expenses --Notes 1 and 2:: Operating and. origination Selling, general and administrative Depreciation and amortization Interest, net Income before charge in lieu of income taxes Charge in lieu of income taxes --Note 5 Net income Net assets at beginning of year Net advances from corporate office Net assets at end of year 2,511,741 1,566,768 1,196,249 616,020 See notes to financial statements $ '6,590,077 5,890,778 699,299 284,000 415,299 7,599,223 2,569,839 $10,584,361 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION STATEMENT OF CASH FLOWS Year Ended June 30, 1989 Cash Flows From Operating Activities: Net income Adjustments to reconcile .net income to net cash provided by operating activities: Depreciation and amortization Change in current assets and liabilities: Increase in accounts receivable Decrease in prepaid expenses Decrease .in other assets Decrease in accounts payable Increase in accrued liabilities Decrease in subscribers' advance payments and deposits Net Cash Provided By Operating Activities Cash Flows From Investing Activities: Net purchases of property, plant and equipment Franchise costs. Net Cash Used In Investing Activities Cash Flows From Financing Activities: Net borrowings from American Television and Communications Corporation Proceeds from long-term debt Net Cash Provided By Financing Activities Net increase in cash Cash at beginning of year Cash at end of year Supplemental Disclosures of Cash Flow Information: $ 415,299 1,196,249 (2,465) 41,971 3,500 (390,706) 182,326 (31,095) (4,090,696) (91,963) 2,569,839 207,597 $ 1,415,079 (4,182,659) 2,777,436 9,856 201,557 $ 211,413 Cash.paid during the year for: • Interest $ 683,000 Income taxes 25,000 See notes to financial statements 4- AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 1989 1. Basis of presentation American Community Cablevision Division of American Television and Communications Corporation (the Division) is principally engaged in the operation .of a cable television business. Such operations consist primarily of selling video programming which is distributed to subscribers for a monthly fee through a network of coaxial cables. It operates in the City of Ithaca, New York and contiguous areas under nonexclusive franchise agreements which are in effect until 1998. The Division has no separate legal status or existence. Its resources and existence are at the disposal of American Television and Communications Corporation (ATC) management, subject to contractual commitments by ATC to perform certain long-term contracts within the present divisional structure. Its assets are legally available for the satisfaction of debts of the entire corporation, not solely those appearing in the accompanying statements, and its debts may result in claims against assets not appearing therein. It is one of several divisions and subsidiaries of ATC, and transactionsand the terms thereof may be arranged by and among members of the affiliated group. ATC is an 82% owned subsidiary of Time Warner Inc. (formerly Time Inc., hereinafter referred to as Time Warner). 2. Significant accounting policies Property, plant and equipment: Depreciation is provided on the straight-line basis over the estimated useful lives of the assets as follows: Building and improvements Distribution system Vehicles and other equipment 10-20 years 8-15 years 4-10 years Franchise costs: The Division has deferred costs incurred to acquire the franchises. Additional costs incurred to renew the franchise have also been deferred. Amortization of franchise costs is provided on the straight-line basis over periods of up to forty years. Statement of cash flows: Effective July 1, 1988 the Company adopted Financial Accounting Standards Board Statement No. 95, "Statement of Cash Flows." For purposes of this statement, all highly liquid investments with a maturity of three months or less are included in the category of cash. 5 AMERICAN COMMUNITY CABLEVISION DIVISION OF AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION NOTES TO• FINANCIAL STATEMENTS June 30, 1989 3.. Debt A 10.25% mortgage note payable due June 2006 was assumed during the year ended June 30, 1989 related to the purchase of a building in June 1988. The note was paid in August 1989. 4. Related party transactions The statement of revenues and expenses and changes in net assets includes charges for programming and promotional services provided by Home Box Office Incorporated, a subsidiary of Time Warner. . These charges were based upon customary rates. The Division records charges for selling, general and administrative expenses that are directly associated with it and a portion of the ATC expenses ($455,854 for the year ended June 30, 1989) which are allocated to divisions and subsidiaries based upon subscriber levels. Interest charged to the Division by ATC ($682,570) was computed by multiplying 71.8% of the Division's average net assets (computed using beginning and end of year balances) by the average interest rate (9.32% for the year ended June 30, 1989) on ATC's outstanding borrowings; $66,550 of the interest applicable. to construction in progress was capitalized. 5. Income taxes Operating results of the Division are included in the consolidated federal income tax return of Time Warner. In lieu of income taxes, ATC charges the Division an amount which approximates statutory state and federal income tax rates on pretax income. 6. Leases Rental expenses for all operating leases, principally office and pole attachments, for the year ended June 30, 1989 amounted to $105,759. The Division had no significant noncancelable rental commitments. 7. Defined Benefit Plan The Division participates in a noncontributory defined benefit pension plan (the "Plan") which is maintained by ATC and covers substantially all employees. The benefits under the Plan are determined based on formulas which reflect employees' years of service and compensation levels during their employment period. January 19, 1990 City of Ithaca Ithaca, New York Dear Sir: GSY'1'1211 American Television & Cornmunications Corporation A Time Inc. Company National Division 160 Inverness Drive West Suite 300 Englewood, Colorado 80112 (303) 799-9599 ZZNY 0040 Below is a report showing Gross Revenues for January, 1989 through December, 1989. The report is in compliance with Section 18.5 (B) of the franchise agreement, approved by the City Council June 8, 1988, with American Community Cablevision. Computation is as follows: Month Gross Revenues January, 1989 $168,047.37 February 174,542.05 March 179,407.48 April 182,897.99 May 178,555.16 June 142,092.39 July 161,879.58 August 131,681.47 September 168,060.70 October 196,451.38 November 183,283.84 December 190,261.31 Total $2,057,160-.72 I, Ivy W. Parish, Controller of American Television and Communications Corporation, National Division, certify that the above schedule summarizes the Gross Revenues, as defined in the franchising agreement, for the period indicated for the CATV operations in the City of Ithaca. Signed: IWP/jdh Enclosure Ivy tl Parish, Controller Providing entertainment and information choices. AMERICAN COMMUNITY CAELEVISION April 10, 1990 Mr. Charles Gutman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 • Dear Mr. Gutman: One of the requirements of ACC'.s franchise agreement with the City of Ithaca is to provide a.report on the ownership of the company. At the .time I submitted the annual report, I did not have the information but I am able to provide it now. ACC is a DBA and is owned 100% by American Television and Communications Corporation (ATC). Time Warner owns 82% of ATC while public shareholders hold the remaining 18%. No public shareholder owns. more than 5% of the public shares. The Board of Directors of ATC are: Glenn A. Britt, David C. Chang, Joseph J. Collins, brian Conboy, James H. Doolittle, Philip R. Lochner, Jr., Richard D. Parsons and Herbert S. Schlosser. Respectfully, Barbara L. Lukens General Manager. BLL/fw 519 West State Street Ithaca, New York 14850 607-272-3456