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HomeMy WebLinkAbout1992 Cable CorrespondenceSENDER: 1 • Complete items 1 and/or 2 for additional services. 01 • Completeitems & b. H • Print your name arid•address on the reverse of this form so that we can ® return this card to yoy,.. - - • • Attach -Mr -Gm to- s...Vont of the mailpiece, or on the back if space E does not permit"' - m • Write "ReturnReceip eegtiested" on the mailpiece below the article number. :+ • The Return Receipt SHF -Show to whom the article was delivered and the date 0 3. Article Addressed to: . General Manager 0 American Community Cablevision 519 W. State St. w Ithaca, NY 14850 W I also wish to receive the following services (for an extra fee): 1. ❑ Addressee's Address 2. ❑ Restricted Delivery Consult postmaster for fee. 4a. Art cle Number 4b. Service Type ❑ Registered L'dertified ❑ Express Mail ❑ Insured ❑ COD El.Return Receipt for Merchandise 5. Signature (Addressee) 6. Signature (Agent) • PS Form 3811, December 1991 * U.S.G.P.O. : 1992-307-530 7. Date of Delivery 0 8. Addressee's Address (Only if requested . and fee is paid) co .c DOMESTIC RETURN RECEIPT H m SENDER: ,•• Complete items 1 and/or 2 for additional services. H • Complete items 3, and 4a & b. y • Print your name and address on the reverse -of this form so that we can `m return this card tp you. • • Attach this form to the front of the mailpiece, or on the back if space E does not permit. r• Write "Return Receipt Requested" on the mailpiece below the article number. +• • The Return Receipt will show to whom the article was delivered and the date cO delivered. . 3. Article Addressed to: ra I also wish to receive the following services (for an extra fee): 1. ❑ Addressee's Address • John Fogarty, Assoc. Gen. Counsel E • American Television & Communicat rn Corp. W 300 First Stanford P. c Stanford, CT 06902 , G cc 5. Signature (Addressee) 2. ❑ Restricted Delivery ra co (0 .0, Consult postmaster for fee. m fr 4- m CC co c y 4a. Article Number 4b. Service Type ❑ R�e istered ❑ Insured re- ertified ❑ COD ❑ Express Mail Return Receipt for Merchandise 6. Signature S _ FoLC381 1, December 1991 * U.S.G.P.O. : 1992-307-530 DOMESTIC RETURN RECEIPT 7. Date of Delivery 8. Addressee's Address (Only if requested . and fee is paid) to H • P 640 989 089 IIVCertified Mail Receipt No Insurance Coverage Provided lT. •Do not use for International Mail poll.? srArEs (St3e Reverse) Sent to r John Fogarty, Assoc. Genera Street & No. Cour 300 1st Stanfofd=Pl. P.O., State & ZIP Code Stanford, CT 06902 Postage $ .29 Certified Fee J 0 Special Delivery Fee 4 Restricted Delivery Fee Return Receip King to Whom & r = Dred r 1:00 Return R.' to Whom, Date, & o ji ry - TOTAL P..ta��t • 2.29- Postmark . `IE� P 640 989 090 1VCertified Mail Receipt No Insurance Coverage Provided - T. Do not use for International Mail eN�sr•.ES (See Reverse) �sr�se� Sent to . American Community CableviE Street & No. General manager .19.1q. State St. P.O., State & ZIP Code Ithada7_ NY 14850 Postage ...29 Certified Fee 1.00 - - Special Delivery Fee . Restricted Delivery Fee Return Receipt Showing to Whom & Date Delivered 1.00 Return Receipt Showing to Whom, Date, & Address of Delivery - TOTAL Postage & Fees 2.29 Postmark or Date for STICK POSTAGE STAMPS TO ARTICLE TO COVER FIRST CLASS POSTAGE, CERTIFIED MAIL FEE, AND CHARGES FOR ANY SELECTED OPTIONAL SERVICES (see front). 1. If you want this receipt postmarked, stick the gummed stub to the right of the retum address leaving the receipt attached and present the article at a post office service window or hand it to your rural carrier (no extra charge). 2. If you do not want this receipt postmarked, stick the gummed stub to the right of the return address of the article, date, detach and retain the receipt, and mail the article. 3. If you want a return receipt, write the certified mail number and your name and address on a retum receipt card, Form 3811, and attach it to the front of the article by means of the gummed ends if space permits. Otherwise, affix to the back of article. Endorse front of article RETURN RECEIPT REQUESTED adjacent to the number. 4. If you want delivery restricted to the addressee, or to an authorized agent of the addressee, endorse RESTRICTED DELIVERY on the front of the article. 5. Enter fees for the services requested in the appropriate spaces on the front of this receipt. If retum receipt is requested, check the applicable blocks in item 1 of Form 3811. 6. Save this receipt and present it if you make inquiry. *U.S.G.P.O. 1990-270-153 STICK POSTAGE STAMPS TO ARTICLE TO COVER FIRST CLASS POSTAGE, CERTIFIED MAIL FEE, AND CHARGES FOR ANY SELECTED OPTIONAL SERVICES (see front). 1. If you want this receipt postmarked, stick the gummed stub to the right of the retum address leaving the receipt attached and present the article at a post office service window or hand it to your rural carrier (no extra charge). 2. If you do not want this receipt postmarked, stick the gummed stub to the right of the retum address of the article, date, detach and retain the receipt, and mail the article. 1. If you Lwant a return receipt, write the certified mail number and your name and address on a • return receipt card, Form 3811, ani attach it to the front of the article by means of the gummed i?nds if spots. pace p iis. Otherwise, affix to the back of article. Endorse front of article RETURN RECEIPT. RECIUESTED'adiacent to the number. 4. If ynu•want;deliveryfestricted to the addressee, or to an authorized agent of the addressee, endorsCRESTRICTED: DELIVERY on the front of the article. 5. Enter fees for the services requested in the appropriate spaces on the front of this receipt. If retum receipt is requested, check the applicable blocks in item 1 of Form 3811. 6. Save this receipt and present it if you make inquiry. *U.S.G.P.O. 1990-270-153 PS Form 3800, June 1990 (Reverse) PS Form 3800, June 1990 (Reverse) m • ssauisn8 !e!ORJO Yy UNITED STATES POSTAL SERVICE c — rn -0 m - -iZ 00> — 00-n Vi L900 in D -0D3 m{73 KZ o -4 m f ssau!sn8 plow) • "D ri• off ,5.F W • O N c Fh Co H 3 d CL T (.. -t m CD -0 cri c. m H N 0> 0Tm r m 0¢� Q 00 -Ti N > m1 ea C7n mp O fD m FO • UNITED STATES POSTAL SERVICE t. DOA Evckt/e IA) v e, v4.i' e_ S-16(2 `xi -7 z2/ /V (.(x c ( foo 3y2. 3 3 �� �� /-/er C 27y- 332( 0 P1 TO DATE YY j TIME Af s__ // PM N 1 FROM - �)' qREA .D NO. c ,2 l.J.5,y5. [6 l nn- is ../ fl / ,� t 9d4',&la L 7 ./� X1 1 a i%id �%t�4 0 itthd p /thx�r',) ripfiliadv4z, (} - 4 izeeLt_h-eiL,,E .,_ O i s A E .),r) C C i)0..,6 4' e' 2C,a-J /�/ ,y�,. / , , SIGNED PHONED ALL CK CALL❑ LL SEE YOU ❑ AGAIN❑ WAS IN ❑ URGENT ❑ OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Dan Hoffman, Chair Charter & Ordinance Members FROM: Chuck Guttman, City Attorney DATE: April 1, 1993 SUBJECT: American Community Cablevision TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 At the last C& 0 meeting questions were raised as to the extent which ACC is televising Council Committee meetings. We contacted ACC regarding this matter, enclosed please find copy of their response. 'An Equal Opportunity Employer with an Affirmative Action Program' Recycled Paper Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 ABLE AMERICAN COMMUNITY CABLEVISION1 Mr. Charles Guttman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Guttman, Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 • 607-272-7272 March 22, 1993 Thank you for your inquiry about ACC's coverage of City meetings for channel 53. Enclosed is a copy of the letter sent to the Ithaca Cable Commission and Common Council Committee chairper— sons informing them of ACC's scheduled coverage dates for 1993. Such schedules have been sent out each year of ACC's coverage. A record of meetings covered is included in ACC's Quarterly Reports of access use. These reports are submitted regularly to the Cable Access Advisory Board and maintained in a public file at the access center. All dates listed for January through March 1993 have been covered live, with the following exceptions: Tuesday, January 19, Human Services Committee Meeting was moved from usual Monday date due to Martin Luther King Day. We provided coverage, but had to tape programming for playback on January 20 due to prior request for channel time by the County. Monday, January 25, Planning & Development Committee Meeting moved to Jan. 26. We provided live coverage Thursday, February 11, Charter & Ordinance Committee We were informed by the City Clerk by phone on February 8 that this meeting had been rescheduled to February 18._ This was insufficient notice for us to schedule coverage (staff were committed to an editing class that night). Monday, March 15, Planning & Development Committee Meeting was cancelled by the City due to snow. No coverage. Monday, March 22, Human Services Committee Meeting This meeting was moved up to March 11 at the March 3 Common Council meeting. We had insufficient notice to provide coverage of the new date. As noted on the letter sent out along with the schedule each year, we require two weeks notice of changed meeting dates in "Television for Tompkins County" order to schedule staff and video equipment to cover rescheduled meetings. In general, it would be very helpful to us to be given official notice of cancellations or schedule changes for meetings we are scheduled to cover. Usually, such notice is not provided. We do try to work with changes we have knowledge of: in the cases of the changed meeting dates in January and March, above, we were not officially informed of the changes, but our staff overheard the discussion about it at the Common Council meeting they were covering. In the case of the January changes, we had sufficient notice to schedule coverage of the new dates. Thank you for your interest. If you need any further information, please let me know. Sincerely, uren ' Tf. 1 mmunity i -►-s moo- di'ator cc: Ray McCabe, ACC General Manager encl. Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 SBL AMERICAN !COMMUNITY CABLEVISION Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 "Television for Tompkins County" Jim Ferwerda Ithaca City Cable Commission Ithaca City Hall 108 E. Green_St., Ithaca, NY 14850 January 15, 1993 Dear Jim, ACC's scheduled coverage of City government meetings for 1993 is attached. The regular monthly meeting dates were provided to us by the City Clerk's office. Committee meeting coverage continues the existing rotating pattern we have been following in 1992. Please notify us of any changes in these meeting dates or times. We require two weeks notice of a meeting change to schedule coverage by ACC staff. Such notice may be written or by phone from any appropriate official. Please remember that we are able to cover only tbos•e meetings held in Common Council chambers, as that is where the live feed is located. We understand that all meetings are presently scheduled for that space! If you have any questions regarding ACC coverage of meetings on Channel 53, ple-ase feel free to -contact me at the access center. encl. CC: Lauen"`;t 1 i Communit /'cc s. C••rdinator Callista Paolangeli, Ithaca City Clerk John Efroymson, Common Council Liason to Cable Commission John Johnson, Chair, Human Services Committee John Schroeder; Chair, Planning and Development Committee Richard Booth, Chair, Budget and Administration Committee Dan Hoffman, Chair, Charter and Ordinance Committee Ray McCabe, General'.Manager, ACC 1993 Common Council Dates - Cable 13 Coverage Wednesday, January 6th: Common Council Tuesday, January 19th: Human Services Committee Monday, January 25th: Planning and Development Committee Wednesday, February 3rd: Common Council Thursday, February 11th: Charter and Ordinance Committee Wednesday, February 17th: Budget and Administration Committee Wednesday, March 3rd: Common Council Monday, March 15th: Planning and Development Committee Monday, March 22nd: Human Services Committee Wednesday, April 7th: Common Council Thursday, April 8th: Charter and Ordinance Committee Wednesday, April 21st: Budget and Administration Committee Wednesday, May 5th: Common Council Monday, May 17th: Planning and Development Committee Monday, May 24th: Human Services Committee Wednesday, June 2nd: Common Council Thursday, June 10th: Charter and Ordinance Committee Wednesday, June 16th: Budget and Administration Committee Wednesday, July 7th: Common Council Monday, July 19th: Planning and Development Committee Monday, July 26th: Human Services Committee Wednesday, August 4th: Common Council Thursday, August 12th: Charter and Ordinance Committee Wednesday, August 18th: Budget and Administration Committee Wednesday, September lst: Common Council Monday, September 20th: Planning and Development Committee Monday, September 27th: Human Services Committee Wednesday, October 6th: Common Council Thursday, October 14th: Charter and Ordinance Committee Wednesday, October 20th: Budget and Administration Committee Wednesday, November 3rd: Common Council Monday, November 15th: Planning and Development Committee Monday, November 22nd: Human Services Committee Wednesday, December 1st: Common Council Thursday, December 9th: Charter and Ordinance Committee Wednesday, December 15th: Budget and Administration Committee I/ ➢J Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 AMERICAN COMMUNITY CABLEVISION Mr. Charles Guttman City Attorney City of'Ithaca 106 E. Green St .Ithaca, NY 14850 Dear Mr. .Guttman, 11 March 22, 1993 Studio Address: 61.2 W. Green Street Ithaca, N.Y. 14850 607-272-7272 MAR 301993 h I Thank you for your inquiry about ACC's coverage of City meetings for channel 53. Enclosed is a copy of the letter sent to the Ithaca Cable Commission and Common Council Committee chairper- sons informing them of ACC's scheduled coverage dates for 1993. Such schedules have been sent out each year of ACC's coverage. A record of meetings covered is included in ACC's Quarterly Reports of access use: These reports are submitted regularly to the Cable Access Advisory Board and maintained in a public file at the access center. All dates listed for January through March .1993 have been covered live, with the following exceptions: Tuesday, January 19, Human Services Committee Meeting was moved from usual Monday date due to Martin Luther King Day. We provided coverage, but had to tape programming for playback on January 20 due to. prior request for channel time by the County. Monday, January 25, Planning & Development Committee Meeting moved to Jan. 26. .We provided live'coverage. Thursday, February 11, Charter & Ordinance Committee - We were informed by the City Clerk by phone on February 8 that this meeting had been rescheduled to February 18. This was insufficient notice for us to schedule coverage (staff were committed to an editing class that night). Monday, March 15, Planning & Development Committee Meeting was cancelled by the City due to snow. No coverage. Monday, March 22, Human Services Committee Meeting This meeting was moved up to March 11 at the March 3 Common Council meeting. We had insufficient notice to provide coverage of the new date. As noted on the letter sent out along with the schedule each year, we require two weeks notice of changed meeting dates in "Television for Tompkins County" order to schedule staff and video equipment to cover rescheduled meetings, In general, it would be very helpful to us to be given official notice of cancellations or schedule changes for meetings we are scheduled to cover. Usually, such notice is not provided. We do try to work with changes we have knowledge of: in the cases of the changed meeting dates in January and March, above, we were not officially informed of the changes, but our staff overheard the discussion about it at the Common Council meeting they were covering. In the case of the January changes, we had sufficient notice to schedule coverage of the new dates. Thank you for your interest. If you need any further information, please let me know. cc: Ray McCabe, ACC General Manager encl. Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 MBL AMERICAN 'COMMUNITY CABLEVISION. Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 "Television for Tompkins County" Jim Ferwerda Ithaca City Cable Commission Ithaca City Hall 108 E. Green St. Ithaca, NY 14850 January 15 1993 Dear Jim, ACC's scheduled coverage of City government meetings for. 1993 is attached. The regular monthly meeting dates were provided to us by the City Clerk's office. Committee meeting coverage continues the existing rotating pattern we have been following in 1992. Please notify us of any changes in these meeting dates or times-. We require two weeks notice of a meeting change to schedule coverage by ACC staff. Such notice may be written or by phone from any appropriate official. Please remember that we are able •to cover only those meetings held in Common Council chambers, as that is where the live feed is located. We understand that all meetings are presently scheduled for that space: if you have any questions regarding ACC coverage of meetings on Channel 53, please feel free to contact me at the access center. encl. CC: Sinc- ely, Lau en400,441$01:P/ i Communit /-cc--s. C••rdinator Ilo- Callista Paolangeli, Ithaca City Clerk John Efroymson, Common Council Liason to Cable Commission John Johnson, Chair, Human Services Committee John Schroeder; Chair, Planning and Development Committee Richard Booth, Chair, Budget and Administration Committee Dan Hoffman, Chair, Charter and Ordinance Committee Ray McCabe, General'.Manager, ACC . 1993 Common Council Dates - Cable 13 Coverage Wednesday, January 6th: Common Council Tuesday, January 19th: Human Services Committee Monday, January 25th: Planning and Development Committee Wednesday, February 3rd: Common Council Thursday, February 11th: Charter and Ordinance Committee Wednesday, February 17th: Budget and Administration Committee Wednesday, March 3rd: Common Council Monday, March 15th: Planning and Development Committee Monday, March 22nd: Human Services Committee Wednesday, April 7th: Common Council Thursday, April 8th: Charter and Ordinance Committee Wednesday, April 21st: Budget and Administration Committee Wednesday, May 5th: Common Council Monday, May 17th: Planning and Development Committee Monday, May 24th: Human Services Committee Wednesday, June 2nd: Common Council Thursday, June 10th: Charter and Ordinance Committee Wednesday, June 16th: Budget and Administration Committee Wednesday, July 7th: Common Council Monday, July 19th: Planning and Development Committee Monday, July 26th: Human Services Committee Wednesday, August 4th: Common Council Thursday, August 12th: Charter and Ordinance Committee Wednesday, August 18th: Budget and Administration Committee Wednesday, September lst: Common Council Monday, September 20th: Planning and Development Committee Monday, September 27th: Human Services Committee Wednesday, October 6th: Common Council Thursday, October 14th: Charter and Ordinance Committee Wednesday, October 20th: Budget and Administration Committee Wednesday, November 3rd: Common Council Monday, November 15th: Planning and Development Committee Monday, November 22nd: Human Services Committee Wednesday, December lst: Common Council Thursday, December 9th: Charter and Ordinance Committee Wednesday, December 15th: Budget and Administration Committee Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 AMBLE AMERICAN COMMUNITY CABLEVISION Charles Guttman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 March 22, 1993 Dear Mr. Guttman, Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 Thank you for your inquiry about ACC's coverage of City meetings for channel 53. Enclosed is a copy of the letter sent to the Ithaca Cable Commission and Common Council Committee chairper- sons informing them of ACC's scheduled coverage dates for 1993. Such schedules have been sent out each year of ACC's coverage. A record of meetings covered is included in ACC's Quarterly Reports of access use. These reports are submitted regularly to the Cable Access Advisory Board and maintained in a public file at the access center. All dates listed for January through March .1993 have been covered live, with the following exceptions: Tuesday, January 19, Human Services Committee Meeting was moved from usual Monday date due to Martin Luther King Day. We provided coverage, but had to tape programming for playback on January 20 due to prior request for channel time by the County. Monday, January 25, Planning & Development Committee Meeting moved to Jan. 26. We provided live coverage. Thursday, February 11, Charter & Ordinance Committee We were informed by the City Clerk by phone on February 8 that this meeting had been rescheduled to February 18. This was insufficient notice for us to schedule coverage (staff were committed to an editing class that night). Monday, March 15, Planning & Development Committee Meeting was cancelled by the City due to snow. No coverage. Monday, March 22, Human Services Committee Meeting This meeting was moved up to March 11 at the March 3 Common Council meeting. We had insufficient notice to provide coverage of the new date. As noted on the letter sent out along with the schedule each year, we require two weeks notice of changed meeting dates in "Television for Tompkins County" order to schedule staff and video equipment to coverrescheduled meetings. In general, it would be very helpful to us to be given official notice of cancellations or schedule changes for meetings we are scheduled to cover. Usually, such notice is not provided. We do try to work with changes we have knowledge of: in the cases of the changed meeting dates in January and March, above, we were not officially informed of the changes, but our staff overheard the discussion about it at the Common Council meeting they were covering. In the case of the January changes, we had sufficient notice to schedule coverage of the new dates. Thank you for your interest. If you need any further information, please let me know. Sincerely, cc: Ray McCabe, ACC General Manager encl. Mailing Address: 519 W. State Street• Ithaca, N.Y. 14850 AMERICAN 'COMMUNITY CABLEVISION. Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 "Television for Tompkins County" Jim Ferwerda Ithaca City Cable Commission Ithaca City Hall 108 E. Green St. Ithaca, NY 14850 January 15, 1993 Dear Jim, ACC's scheduled coverage of City government meetings for 1993 is attached. The regular monthly meeting dates were provided to. us by the City Clerk's office. Committee meeting coverage continues the existing rotating pattern we have been following in 1992. Please notify us of any changes in these meeting dates or times. We require two weeks notice of a meeting change to schedule coverage by ACC staff. Such notice may be written or by phone from any appropriate official. Please remember- that we are able to cover only those. meetings held in Common Council chambers, as that is where the live feed is located. We understand that all meetings are .presently scheduled for that space. If you have any questions regarding ACC coverage of meetings on Channel 53, please feel free to contact me at the access center. encl. CC: Sinc" ely,. Lau en'` Communit li rd1nator Callista Paolangeli, Ithaca City Clerk John Efroymson, Common Council Liason to Cable.Commission John Johnson, Chair, Human -Services Committee John ScYhroeder, Chair, Planning and Development Committee Richard Booth, Chair, Budget and Administration Committee Dan Hoffman, Chair, Charter and Ordinance Committee Ray McCabe, GeneralManager, ACC a 1993 Common Council Dates - Cable 13 Coverage Wednesday, January 6th: Common Council Tuesday, January 19th: Human Services Committee Monday, January 25th: Planning and Development Committee Wednesday, February 3rd: Common Council Thursday, February 11th: Charter and Ordinance Committee Wednesday, February 17th: Budget and Administration Committee Wednesday, March 3rd: Common Council Monday, March 15th: Planning and Development Committee Monday, March 22nd: Human Services Committee Wednesday, April 7th: Common Council Thursday, April 8th: Charter and Ordinance Committee Wednesday, April 21st: Budget and Administration Committee Wednesday, May 5th: Common Council Monday, May 17th: Planning and Development Committee Monday, May 24th: Human Services Committee Wednesday, June 2nd: Common Council Thursday, June 10th: Charter and Ordinance Committee Wednesday, June 16th: Budget and Administration Committee Wednesday, July 7th: Common Council Monday, July 19th: Planning and Development Committee Monday, July 26th: Human Services Committee Wednesday, August 4th: Common Council Thursday, August 12th: Charter and Ordinance Committee Wednesday, August 18th: Budget and Administration Committee Wednesday, September 1st: Common Council Monday, September 20th: Planning and Development Committee Monday, September 27th: Human Services Committee Wednesday, October 6th: Common Council Thursday, October 14th: Charter and Ordinance Committee Wednesday, October 20th: Budget and Administration Committee Wednesday, November3rd: Common Council Monday, November 15th: Planning and Development Committee Monday, November 22nd: Human Services Committee Wednesday, December lst: Common Council Thursday, December 9th: Charter and Ordinance Committee Wednesday, December 15th: Budget and Administration Committee • Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 Mr. Charles Guttman City Attorney City of Ithaca 108 E. Green St. Ithaca, NY 14850 Dear Mr. Guttman, IBLE AMERICAN COMMUNITY CABLE VISION1 March 22, 1993 Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 E@ELIME, MAR 3 0 1993 Thank you for your inquiry about ACC's coverage of City meetings for channel 53. Enclosed is a copy of the letter sent to the Ithaca Cable Commission and Common Council Committee chairper- sons informing them of ACC's scheduled coverage dates for 1993. Such schedules have been sent out each year of ACC's coverage. A record of meetings covered is included in ACC's Quarterly Reports of access use. These reports are submitted regularly to the Cable Access Advisory Board and maintained in a public file at the access center. All dates listed for January through March .1993 have been covered live, with the following exceptions: Tuesday, January 19, Human Services Committee Meeting was moved from usual Monday date due to Martin Luther King Day. We provided coverage, but had to tape programming for playback on January 20 due to prior request for channel time by the County. Monday, January 25, Planning & Development Committee Meeting moved to Jan. 26. We provided live coverage. Thursday, February 11, Charter & Ordinance Committee We were informed by the City Clerk by phone on February 8 that this meeting had been rescheduled to February 18. This was insufficient notice for us to schedule coverage (staff were committed to an editing class that night). Monday, March 15, Planning & Development Committee Meeting was cancelled by the City due to snow. No coverage. Monday, March 22, Human Services Committee Meeting This meeting was moved up to March 11 at the March 3 Common Council meeting. We had insufficient notice to provide coverage of the new date. As noted on the letter sent out along with the schedule each year, we require two weeks notice of changed meeting dates in "Television for Tompkins County" order to schedule staff and video equipment to cover rescheduled meetings. In general, it would be very helpful to us to be.given official notice of cancellations or schedule changes for meetings we are scheduled to cover. Usually, such notice is not provided. We do try to work with changes we have knowledge of: in the cases of the changed meeting dates in January and March, above, we were not officially informed of the changes, but our staff overheard the discussion about it at the Common Council meeting they were covering. In the case of the January changes, we had sufficient notice to schedule coverage of the new dates. Thank you for your interest. If you need any further information, please let me know Sincerely, uren mmunity cc: Ray McCabe, ACC General Manager encl. ator Mailing Address: 519 W. State Street Ithaca, N.Y. 14850 A4BL AMERICAN 'COMMUNITY CABLEVISION Studio Address: 612 W. Green Street Ithaca, N.Y. 14850 607-272-7272 "Television for Tompkins County" Jim Ferwerda Ithaca City Cable Commission Ithaca City Hall 108 E. Green St. Ithaca, NY 14850 January 15., 1993 Dear Jim, ACC's scheduled coverage of City government meetings for 1993 is attached. The regular monthly meeting dates were provided to us by the City.Clerk's office. Committee meeting coverage continues the existing rotating pattern we have been following in 1992. Please notify us of any changes in these meeting dates or times-. We require two weeks notice. of a meeting change to schedule coverage by ACC staff. Such notice may be written or by phone from any appropriate official. Please remember that we are able to cover only those meetings held in Common Council chambers, as that is where the live feed is located. We understand that all -meetings are presently scheduled for that space: If you have any questions regarding ACC coverage of meetings on' Channel 53, please feel free to contact me at the access center. encl. cc: Callista Paolangeli, Ithaca City Clerk John Efroymson, Common Council Liason to Cable Commission John Johnson, Chair, Human Services Committee i . John Schroeder; Chair, Planning and Development Committee Richard Booth, Chair, Budget and Administration Committee Dan Hoffman, Chair, Charter and Ordinance Committee Ray McCabe, General'.Manager, ACC 4 1993 Common Council Dates - Cable .13 Coverage Wednesday, January 6th: Common Council Tuesday, January 19th: Human Services Committee Monday, January 25th: Planning and Development Committee Wednesday, February 3rd: Common Council Thursday, February 11th: Charter and Ordinance Committee Wednesday, February 17th: Budget and Administration Committee Wednesday, March 3rd: Common Council Monday, March 15th: Planning and Development Committee Monday, March 22nd: Human Services Committee Wednesday, April 7th: Common Council Thursday, April 8th: Charter and Ordinance Committee Wednesday, April 21st: Budget and Administration Committee Wednesday, May 5th: Common Council Monday, May 17th: Planning and Development Committee Monday, May 24th: Human Services Committee Wednesday, June 2nd: Common Council Thursday, June 10th: Charter and Ordinance Committee Wednesday, June 16th: Budget and Administration Committee Wednesday, July 7th: Common Council Monday, July 19th: Planning and Development Committee Monday, July 26th: Human Services Committee Wednesday, August 4th: Common Council Thursday, August 12th: Charter and Ordinance Committee Wednesday, August 18th: Budget and Administration Committee Wednesday, September 1st: Common Council Monday, September 20th: Planning and Development Committee Monday, September 27th: Human Services Committee Wednesday, October 6th: Common Council Thursday, October 14th: Charter and Ordinance Committee Wednesday, October 20th: Budget and Administration Committee Wednesday, November 3rd: Common Council Monday, November 15th: Planning and Development Committee Monday, November 22nd: Human Services Committee Wednesday, December 1st: Common Council Thursday, December 9th: Charter and Ordinance Committee Wednesday, December 15th: Budget and Administration Committee The City of Ithaca has reason to believe that American Community Cablevision has defaulted in the performance of certain provision of the franchise existing between the City of Ithaca and American Community Cablevision. The City of Ithaca has notified American Community Cablevision (ACC) in writing of the provision or provisions which the City believes ACC may be in default and has provided to ACC an opportunity to respond and to cure such default. The City of Ithaca has reason to believe that the default has not been corrected. A public hearing has been held on these you will notice, at which hearing ACC had an opportunity to be heard. Pursuant to Section 22.1 of the Franchise Agreement existing between the City of Ithaca and ACC, the City hereby specifies the following as issues in which the City believes ACC is in default under the Franchise Agreement. 1. ACC has failed to provide 9 downstream channels designated for public, governmental and educational access as required by Section 14.1 (A) (1) of the Franchise Agreement. 2. ACC has failed to make available to access users, local origination of equipment as required by Section 14.1 (C) (1) of the Franchise Agreement. 3. ACC has failed.to provide 2% of gross City revenues for PEG access equipment replacement and expansion as required by Section 14.1 (C)(3) of the Franchise Agreement. 4. ACC has failed to maintain and/or replace in a manner consistent with good operating practice, PEG municipal access and local origination equipment as required by Section 14.1(C)(4) of the Franchise Agreement. 5. ACC has failed to construct and maintain a midsplit 300 megahertz institutional network with 8 upstream and downstream channels, free drops and necessary video converters as required by Section 15.1 of the Franchise Agreement. 6. ACC has failed to maintain and install dedicated cables as required by Section 15.2 of the Franchise Agreement. 7. ACC has failed to provide an all channel audio emergency alert system as required by Section 15.4 of the Franchise Agreement. 8. ACC has failed to designate one upstream channel for City and public sector uses as required by Section 15.5 of the Franchise Agreement. C & 0 Mtg-2/18/93 Acc/Violations 1 9. ACC has failed to publish all rates for subscriber services and leasing of channels as required by Section 16.4 of the Franchise Agreement. 10. ACC has raised .basic rates higher than the schedule set forth in Section 19.1 of the Franchise Agreement. 11. ACC has failed to pay to the City the franchise fee set forth in Article 20 of the Franchise Agreement. C & 0 Mtg-2/18/93 Acc/Violations 2 OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Cable Commissioner FROM: Chuck Guttman, City Attorney DATE: January 12, 1993 RE: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a letter I received from Sandra Vicedomini which sets forth her allegations that she has not been treated properly by ACC and further that she has complained to the Cable Commission and has not received a prompt response. Please look into this matter. I assume you will be responding to Ms. Vicedomini. Please forward to me a copy of your response to her and keep me updated on the progress of this matter. "An Equal Opportunity Employer with an Affirmative Action Program" tol Recycled Paper OFFICE OF CITY ATTOF1NEY CITY OF ITHACA . 108 EAST GREEN .STREET IT}-IACA, NEW YORK 148SC FAX =RANSM=TIAL SHEET TO : 6_4e, Pteic FROM : 6APA i€Z) -714_7=rfrrka,"-- A��P3%3 TELEPHONE: YOUR FAX NO: a7.(1-3v7y SUBJECT : r4CC-- TELEPHONE: 607-274-6504 OUR FAX NO: 607-272-7348 NOTES : C`= Gr �-.! �L O , 11.4' 06-141.-s0 621, TOTAL PAGES (INCLUDING TRANSMITTAL SHEET )• 'I 7 August 10, 1993 Charles Gutman, Esq. Ithaca City Attorney 108 East Green Street Ithaca, New York 14850 AUG 161993 HARRIS BEACH & WILCOX ATTORNEYS AT LAW 1816 Jefferson Place, N.W. Washington, D.C. 20036 (202) 861-0001 Telephone (202) 785-6657 Facsimile Subject: Federal Communications Commission Changes Effective Date of Cable Television Rate Regulation Rules -- Again and Again!!! Dear Mr. Gutman: In mid-June, I wrote to let you know of action by the Federal Communications Commission delaying the effective date of its new cable television rate regulation rules. At that time, the effective date was postponed from June 21 to October 1, 1993. Several prominent members of Congress were critical of this delay. Accordingly, when Congress passed a bill providing the Commission funds to hire additional staff to administer the rate regulation and other new cable television rules, the bill included a provision directing the Commission to make the rate regulation rules effective not later than September 1. All members of the Commission expressed serious reservations about a September 1 effective date. However, on July 27, the Commission acquiesced to the Congressional mandate and made its rate regulation rules effective September 1. By requiring the September 1 effective date, Congress has very significantly increased the burden which the early stages of rate regulation will place upon franchising authorities, the Commission and cable operators. Unfortunately, the earlier effective date will not produce commensurate benefits for cable subscribers. The most troubling substantive problem caused by the earlier date is the regulatory uncertainty which it necessarily causes. For example, many parties have petitioned the Commission to reconsider and substantially modify central elements of the rate regulation rules it published in May. The Commission had planned to act on those petitions before the October 1 effective date. There is no possibility that the Commission will decide all of the issues raised in the many petitions for reconsideration and release the text of such a decision prior to September 1. I am told by senior members of the Commission staff that it may act on some of the pending questions before;September land leave other questions for resolution at a later date. However, it is not at all clear that the Commission can act upon.a sufficient number of the open issues by September 1 to significantly reduce the present regulatory uncertainty. For example, rate regulation may well commence without the Commission 50 Fountain Plaza Buffalo, New York 14202 20 Corporate Woods Boulevard Albany, New York 12211 130 East Main Street Rochester, New York 14604 1 Clinton Square 121 East Seneca Street Syracuse, New York 13202 Ithaca, New York 14851 August 10, 1993 Page Two HARRIS BEACH & WILCOX having resolved the fundamental questions raised by many petitioners about its "benchmark" rates. Unfortunately, there are many additional regulatory uncertainties at the moment. For example, the Commission has today stayed the September 1 effective date of its rules as applied to cable systems with 1,000 or fewer subscribers. Thus, the Commission has today suspended an effective date that it adopted only two weeks ago! Moreover, it is presently unclear which systems are covered by this stay. The Commission has not yet explained how subscribers are to be counted when a single cable operator holds separate franchises for operations serving several small communities in close proximity to each other if each franchise area has less than 1,000 subscribers but the total system has far in excess of 1,000 subscribers. (This point may be clarified when the text of the Commission's decision becomes available within the next few days.) Local franchising authorities, the Commission and cable operators must also deal with added administrative burdens as a result of the September 1 effective date. For example, a community cannot begin rate regulation until it: (i) certifies to the Commission that it is "qualified" under the new federal rules to regulate rates (FCC Form 328); and (ii) notifies its franchisee that it is going to regulate rates for basic service and equipment. It may prove very desirable -- although not essential -- to have accomplished both of these tasks on the September 1 effective date. There is obviously very little time to accomplish these tasks in an orderly manner, especially since FCC Form 328 was only yesterday made available by the Commission. Harris, Beach would be pleased to provide your community's franchising authority and its regular counsel with as much, or as little, help. as they may wish in implementing local regulation of rates for "basic" cable service and equipment. For example, we can provide FCC Form 328, assist in its completion and filing on September 1 and obtain documentation of the filing. (The Commission will return forms filed in advance of that date.) We can, of course, also provide guidance on the rate -making process and the various other substantive actions which you must take to regulate rates. incerely, cc: Hon. Benjamin Nichols James R. Cooke ,^}4n 77L'(+1° c fjein F 'TUS 7 \ATOA \EIS h The National Association of Telecommunications Officers and Advisors An affiliate of the National League of Cities 4 AUGUST 3, 1993 FCC ISSUES ORDER CHANGING EFFECTIVE DATE FOR RATE REGULATION On July 20, the FCC changed the effective date of cable service rate regulation from October 1, 1993 to September 1, 1993. The rate freeze, however, will remain in effect until November 15, 1993. As of press time, none of the FCC forms are 1--1 available. NATOA will be your resource for ; these forms and instructions on filing them. NPRM ISSUED CONCERNING COST OF SERVICE SHOWING BY CABLE OPERATORS The FCC has released its Notice of Proposed Rulemaking concerning cost of service showings by cable operators seeking to/justify rates for regulated services above the FCC's benchmark rates. The Commission was concerned that the benchmark and price cap method adopted in the rate regulation Report and Order might not in all cases permit cable operators to recover the reasonable costs of providing service. The purpose of the NPRM is to gather information necessary for adoption of cost of service requirements. The Commission in the NPRM proposed regulatory requirements to govern cost of service VOL. 2, NO. 4 showings submitted by cable operators seeking to justify rates above the levels determined under the benchmark/price cap method. Comments to this NPRM are due on August 25, 1993, and reply comments are due on September 14, 1993. NATOA will be filing on behalf of its members in this rulemaking. NATOA FILES OPPOSITION TO PETITIONS IN RATE REGULATION DOCKET On July 21, NATOA, in conjunction with NLC, USCM and NACo, filed opposition to petitions for reconsideration and clarification in the rate regulation docket. The filing states that local governments believe the -cable rate regulations adopted by the Commission in this proceeding represent a significant step towards achieving the congressional goal of establishing "reasonable" rates for cable subscribers in areas not subject to "effective competition." In our Petition in this proceeding, the Local Government coalition highlighted modifications to the Commission's rules necessary to ensure that cable consumers pay reasonable cable rates. In- this Opposition, local governments urged the Commission, among other things, to adopt proposals that would: • permit franchising authorities to enforce service provisions in franchise agreements, including provisions for "lifeline" service, as permitted by law; LEGAL BRIEFS LOCAL ENFORCEMENT OF FEDERAL CUSTOMER SERVICE REGULATIONS BEGINS - RATE REGULATION POSTPONED by Arnold & Porter, Legal Counsel to NATOA Local Governments may begin enforcing new federal regula- tions governing customer service standards this summer. Federal customer service standards become effective on July 1, 1993. Before enforcing these standards, however, local governments must provide 90days notice to their cable operators as to their intention to enforce the federal standards. This new regulation was promulgated by the FCC pursuant to the Cable Television Consumer Protection and Competition Act of 1992, which was enacted by Congress on October 5, 1992. The following is a brief summary of important dates for enforcing the new federal regulations. CUSTOMER SERVICE STANDARDS The FCC's new customer service regulations were published in the Federal Register on April 19, 1993. The regulations set minimum national standards for: (a)office hours and telephone availability; (b)installations, outages and service calls; and (c)communications between the cable system and subscriber, . billing and refunds. Although the federal standards become enforceable on July 1, a cable operator is not required to comply with the standards unless a franchising authority has provided the cable operator 90 days' written notice via certified mail of its intention to enforce the federal standards. A franchising authority retains the right, however, to establish and enforce customer service standards that exceed the FCC's standards, or which are not covered by the FCC's standards. Such local standards may be established and enforced pursuant to a franchise agreement, or by state or local law or regulation. To implement customer service standards, franchising authori- ties should promptly review their existing standards, if any, and compare them to the new FCC standards. They should then notify their cable operators as to which standards, or which combination of standards, will apply in the future. In addition. they should consider whether additional standards or enforce- ment mechanisms are needed and should adopt such additional standards or mechanisms through an agreement with the cable operator or pursuant to applicable state and local procedures. CABLE RATES The new rate regulations were published in the Federal Register on May 21, 1993. Under the new regulations, franchising authorities may regulate the rates for basic service (i.e., the tier containing local television broadcast stations, PEG channels and any other programming placed by the cable operator on that tier), June 1993 and the rates for equipment and installation used to receive basic service. The FCC will regulate the rates for cable programming service tiers (i.e., all other tiers of service other than premium and pay-per-view programming), but the FCC will do so only in response to complaints from franchising authorities, subscribers or other relevant governmental entities. The rates for premium channels (e.g., Home Box Office, Cinemax) and pay-per-view programming are not subject to regulation. Cable rates are subject to regulation only in franchise areas not subject to "effective competition," which is defined as a franchise area: (a) where the cable system serves fewer than 30 percent of the households in the franchise area; or (b) which is served by at least two unaffiliated multichannel video programming distributors (where such distributors, other than the cable operator, each cover 50% of the franchise area and serve, in the aggregate, 15% or more of the households); or (c) where a municipally -owned system covers 50% of the households in the franchise area. Under the new rules, the FCC will presume that rates can be regulated in all markets and cable operators must show they are "subject to effective competition." Local governments must recognize that, if they fail to seek certification, they have no authority to order rollbacks of basic rates and to protect consumers from continuing increases in basic service rates, or equipment charges, in most cases. Similarly, there will be no restraints on the prices charged for nonbasic services unless complaints are filed with the FCC. In order to give local governments time to implement its new regulations and to give the FCC more time to procure additional funds, the FCC has postponed the effective date of rate regulation to October 1, 1993. The rate freeze that was to expire on August 3 has been extended until November 15, 1993. After that date, cable operators will be free to raise their rates in the absence of proper notification from a franchising authority that it has the right to regulate basic rates, and absent the 'filing of a complaint with the FCC concerning nonbasic rates. • The authors, Norman M. Sinel, Patrick J. Grant, Stephanie M. Phillips, and William E. Cook, Jr., serve as NATOA'S federal relations counsel. They are from the law firm Arnold & Porter. NATOA NEWS Quarlerly's n'ofliicial pubhcat on; of the National Asso- ciation of Telecommunications Officers and Advisors It ispubl�shecl.by; NATOA and the National League of Cities within>`the Center:for Membeii Programs7VATOANEWSQuaiterlylsa;forumfordeas Aitcles'appear ing{rn ihisissue "do not necess`anly represent the'.opinions; of'NLCor NATOA F membership and subscription mfonnaaon or-'permissto to repnnf matenal contact NATOAAdmrnistrauve Officer Renee M Winsley National League of Cities 1. 01.;Pennsylvania Avenue NW Washington DC 20004 y(202) 626 3160ySor Cheryl L Pasalic Gommumcations Administrator, Y�illage:of Mount Prospect 50x8 `Emerson Mount Pros pecf IL 60056 (708)'870 5685'. , M , t' COMPETITIVE CABLE ASSOCIATION COMMENTS: Volume 11, No. 2, July 15, 1993 RATE REGULATION FINALLY IN SIGHT Now that the FCC has finally received a long awaited supplemental appropriation from Congress with which to implement the 1992 Cable Act, cable subscribers may be a bit closer to realizing relief from onerous cable bills. We say "may" since the actual date for implementation is still undecided. Originally, the FCC planned to institute rate rollbacks effective June 21, 1992. That date was pushed back to October 1 by a beleaguered FCC that lacked resources — fiscal and otherwise — with which to get the job done. Now that Congress has voted to add $11.5 million to the Commissions's FY 1992 budget, it is also leaning on the FCC to begin the implementation as early as September 1. That is, even if the FCC is not in a position to actually reduce rates on that date, it should, in Congress' view, plan to calculate consumer rate refunds from September 1st. Of course, implementation of the Act is a task easier said than done. The Commission must, among other things, certify municipal agencies. They will, in turn, be authorized to order basic cable service rate reductions. The FCC will handle consumer complaints about rates for higher levels of cable service. sss FCC TO GET NEW CHAIRMAN Reed Hundt, a Washington, D.C. telecommunications lawyer and one-time classmate of Vice President Al Gore has been tapped by the Clinton administration to take over the reins of the FCC from Acting Chairman Jim Quello. Hundt, who received both his undergraduate and law degrees from Yale University, has been primarily involved in antitrust litigation with the D.C. firm of Latham & Watkins for some seventeen years. He is also a founding member of that firm's extensive and highly regarded telecommunications practice, a practice which includes former FCC Chairman Mark Fowler and friend of competitive cable operators, Nick Allard. Many believe that Hundt will be a very pro -competition Chairman, given his extensive antitrust background. It cannot be gainsaid that the challenges the FCC faces are many. Witness the rapid convergence of several technologies such as cable, telephone, television and computers. The Clinton administration places high priority on its aim for the kind of advanced interactive information services that could come from the transit of information over its much -touted national information highway of the future. PREFERRED REDUX The granddad of all cable franchising cases — Preferred Communications v. The City of Los Angeles — recently had another day in court 1400 16th Street, N.W., Suite 501, Washington, D.C. 20036, (202) 797-7500 VIDEO SERVICES NEWS, August 9, 1993 Page 4 **EYE ON THE CABLE ACT: FCC SPLITS ON DEADLINE --DENIES CFA REQUEST** Though the FCC decided in July to move forward the effective date of rate regulation from Oct. 1 to Sept. 1, not all of the commissioners agreed with the move, according to the recently released rate regulation order. A discouraged Commissioner Andrew Barrett said in aistatement: "I am concerned that the order could undermine the integrity of our regulatory process and authority." He added the congressional directives are not legally binding and contended the expedited regulations could increase the potential for unmet consumer expectations. Barrett said the FCC's decision to accelerate the effective date could cause more regulatory confusion in the future because the commission still is deciding on several outstanding rulemakings. These include the reconsideration of the benchmark and price cap mechanisms for cable rate' regulation and the cost -of -service standards that would enable certain cable operators to recover legitimate costs above the benchmark. He also expressed concern the uncertainty of the regulations could be particularly detrimental to small cablers who, due to their size and amount of financial leverage, are hit harder and are less equippedto deal with the expedited regulations. In a separate statement, acting FCC Chairman James Quello said he will not "gamble with the FCC's future" by making the most appropriate administrative decision. Ouello cited "the prospect that failure to heed conference report language could have led to additional budget cuts for the commission." Also, Quello noted the commission has denied the Consumer Confederation of America's (CFA's) proposal that would allow consumers toyunilaterally decrease their cable payments by 15 percent. /He said "the petition appeared to be more of an effort to grab headlines and to engage in self-aggrandizement than a serious plan for rate regulation." He also said "it underscores [CFA's] pathological disregard for the real-world implications of its suggestions." FCC Answers Common Rate Regulation Questions The FCC recently released a Q and A on commonly asked rate. regulation questions as they relate to form 393, which cable operators are required to submit to the FCC. Key points include: • Due to confusion concerning franchise fees, operators allocate these fees as part of form 393; *All tiers of service offered at the time the form is included, regardless of when they were introduced; •The operator should use the number of subscribers as is being completed; • Only revenues from sources listed in the instructions be included; •Operators may allocate equipment system based on relative numbers no longer need to completed should be of the date the form for line 104 should revenues to the franchises within of subscribers if this allocation approach is acceptable to the local franchising authorities • Equipment not covered under line 104 instructions should be schedule C to the equipment worksheet; •A calendar quarter should be used for line 125 on • The preceding fiscal year means the most recently prior to the time the operator completes the form; • Federal tax expense should be calculated based investment; •If the entity has no income tax obligation, as proprietorships, partnerships and subchapter S the amount will be zero in column D; and worksheet completed a involved; included on one; fiscal year upoa pre-tax return on ishe case for sole cororations, then VIDEO SERVICES NEWS, July 26, 1993 Page 4 **EYE ON THE CABLE ACT: FCC MOVES RATE REGULATION TO SEPT. 1** The FCC, citing congressional pressure, last week moved forward the effective date of rate regulation from Nov. 1 to Sept. 1. This action, which acting FCC Chairman James Quello said will present the commission with an administrative burden, is consistent with requests Congress made July 6, when it granted the agency $11.5 million in ancillary funds. "Our proposal to move the date was influenced in part by the possibility that the congressional advocates of the Sept. 1 date could express displeasure by cutting FCC's future funding to administer the Cable'Act," said Quello. Responding to advocates who contend the move could:save consumers roughly $100 million, Quello.pointed out that the rate freeze that went into effect April 1, had saved consumers between $122-200 million. Despite the change, cable operators will not be required to make rate changs any quicker than they would have under the Oct. 1 deadline. This is due to the FCC's decision to preempt local ,rand federal notification requirements which will allow cable operators to make rate changes up to Sept. 1 as they would under the original plan. --The preemption also gives operators additional time to file their Form 393 rate schedules with either the local government or the FCC. The FCC is already using the appropriated funds to hire new employees. "We will do the best we can using the personnel and resources from other key FCC bureaus and we will expedite the hiring and training processes," said Quello. To alleviate the FCC's administrative burden, the Public Debt Bureau of the Treasury Department has offered the FCC use of its personnel, including a maximum of 30 accountants (GS 7-12), for six months. Th;e commission currently is sorting through the Standard 171 forms to identify qualified candidates. 80. Percent of TV Stations, 90 Percent of Affiliates Opt for Retransmission Consent Results from a new National Association of Broadcasters survey indicate more than 80 percent of TV stations, and 90 percent of TV affiliates --ABC, CBS, Fox and NBC --have chosen to negotiate for retransmission! consent with at least one cable system in their local TV market or area of dominant influence (ADI). By network, 89.5 percent will seek agreements; 93.8 percent of CBS affiliates: 98.2 percent of Fox affiliates; 92.7 percentof NBC affiliates: and 20 percent for independents. Additionally, the study, which surveyed 850 station's, with 432 responding, found of those stations choosing retransmission consent,;25.1 percent have chosen this method with every cable system --some local stations serve markets with as many as 200 or more systems --within their ADI (see VSN Spotlight, p. 3). Cost -of -Service Showings The FCC recently released a Notice of Proposed Rulemaking suggesting rules to govern the cost -of -service showings by cable operators seeking to justify by costs, rate levels above those allowed under Cable Act benchmarks and price caps which were adopted in April with the opportunity for cable operators to justify their rates. The FCC tentatively decided its goals for cost -based rates for regulated cable service should include: •Maintaining the benchmark as the primary method of regulating cable service rates; •Obtaining a fair and reasonable balancing of the interests of cable operators and consumers; •Preserving cable operators' ability to respond to ompetitive forces and incentives to provide a modern telecommunications infrastructure; • not require franchising authorities to demonstrate insufficient resources as a precondition of basic rate regulation by the Commission; and • not presume, for purposes of determining whether a cable system is subject to effective competition, that SMATV services are capable of serving 50 percent of a franchise area. FCC ESTABLISHES CABLE INFORMATION LINE The FCC has established the "Cable Information Line" at (202) . 632-0004. The new FCC number "provides consumers, franchising authorities, cable companies, and other interested parties with information on cable regulation. Consumers can use this service to find out how to file complaints about their cable rates and other aspects of their cable service." The line is available 24 hours a day, seven days a week. In Spanish call 202/632-0100; TDD call 202/632-6999. BIDS SOUGHT TO HOST 1995 NATOA ANNUAL CONFERENCE NATOA is now accepting member bids for its 15th Annual Conference in 1995. Interested local jurisdictions should submit an application package consisting of the required criteria listed below and mail it to Renee Winsky, NATOA Administrative Officer, 1301 Pennsylvania Avenue, NW, Washington, DC 20004 by November 1, 1993. Call (202) 626- 3160 with any questions. 1. Designation from the applicant city or jurisdiction of competitive hotels with sufficient, committable first-class guest rooms within a reasonable distance from other local facilities. Hotels must be able to provide one (1) Targe meet ng room with minimum capacity. for 400 people, five (5) break-out rooms with minimum ca acity of 100 people, and sufficient cat ring facilities. Please list details on room ates; complimentary rooms (presidential suite required from day before conference to day after conference); complimentary sleeping room rates; recreational fcilities; other in-house facilities; and audio-visual equipment availability. I 2. A commitment from the applicant to one (1) local -hosted reception, and sponsorship (i.e. public or private), within NATOA guidelines, of one (1) luncheon and all continental breakfasts.** 3. A list of restaurants that are within a five (5) mile radius of the conference site. Please include a description of the restaurants and a normal price iange for meals. 4. Designations of key local and regional officials as liaisons with NATOA to plan the conference. Indicate the degree of local support and financial assistance for the conference by elected and appointed officials and related organizations. 5. Designations of local support personnel who will serve as hosting committee for the conference. In addition, please designate local individuals who will assist in the video production of the conference and with conference registration. 6. Descriptio I of local cooperation that will -be utilized to coordinate the conference in your area. (Please give description of conference and visitors bureaus, chambers of commerce and telecommunications and cable regulatory bodies, both in the aspirant host jurisdiction and in surrounding communities involved in the development of the conference.) 7. Description .of local transportation to be used by atteindees. Specify taxi and shuttle fares, distance, and transmit time from airport to hotels pr map of the of the airpor posed in criteria #1. Include a pplicant area showing locations and the hotels proposed. CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY John Fogarty, Esq. Associate General Counsel Time Warner Cable 300 First Stanford Place Stanford, CT 06902-6732 Dear John: August 12, 1993 RE: American Community Cablevision TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I wrote you on June 26, 1993 regarding the above matter outlining what I thought was the basis of an agreement between the City and Time Warner. In my letter, I attempted to emphasize as strongly as possible that we would need to move very quickly. to get this matter in final form so that it could be approved by Council before membership of our Common Council changed. Several weeks have gone by and I have heard nothing back from you. Please contact me as soon as possible to discuss this matter and let me know whether we have an agreement or not. I would like to get this matter resolved in a negotiated manner. However, if Time Warner is not going to agree, the City will have no choice but to pursue litigation. Very tr y y Guttman Cit ttorney 'An Equal Opportunity Employer with an Affirmative Action Program" A t41 Recycled Paper CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY John E. Fogarty, Esq. Associate General Counsel Time Warner Cable 300 First Stanford Place Stanford, CT 06902-6732 Dear John: July 26, 1993 Re: American Community Cablevision TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I wrote to you in March of this year setting forth ten points which I thought represented the basis of an agreement between the City and Time Warner. Based on our discussions since then, it is my understanding that point number one is acceptable to you but, that it may be a little more complicated because there are further mergers, etc." that are going on. I would suggest that you get me specific language that you would want included with regard to point one. With regard to points two and four, I understand these are now acceptable to you provided they operate "prospectively", with us still to determine from what date they will operate prospectively. I have discussed these points with the Mayor and members of Common Council. As I previously advised you, my Council feels that the City is correct on both of these points. In the interest of getting this issue resolved, they are willing to not to have this be retroactive to the beginning of the Franchise Agreement namely, 1988 or 1989. However, they are not willing to have it simply be prospective from the middle of 1993. The City first raised these issues in January of 1992. The City would be willing, in interest of settlement, to agree that points two and four will run prospectively from January 1, 1992. The City is willing to drop its claims on these issues for the years prior to 1992, but feel that these issues should be settled, at least as of the date the City first raised them. Time Warner or ACC should not be paying less simply because negotiations have taken an extended period of time. I do not believe there is any flexibility with the City on that date. "An Equal Opportunity Employer with an Affirmative Action Program" to, Recycled Paper Letter to John E. Fogarty, Esq. July 26, 1993 Page Two With regard to point number three, this obviously would be moot if the City sought recertification. However, if the City does not seek certification, it is my understanding that this is agreeable to both parties. With regard to issues five and seven, I understand that this is now agreeable to ACC. With regard to issues six, eight and nine, I understand they are agreed in concept. In regard to issue six, we will need some technical language. I would be willing to take a stab at drafting some first language on this. With regard to issue eight, it is also my understanding that this is acceptable with your client in concept. You need to know exactly what equipment is involved and exactly what the language will be. Again, I will take a first stab at drafting language on this, if everything else is acceptable. With regard to issue nine, again, I understand this is acceptable in concept. In particular, one new channel would be opened now and we would agree on a formula for the future. The 30 hour per week figure is acceptable. We will have to come up with some language to protect your client against too many syndicated shows forcing a new channel opening. With regard to repeat shows, it is myunderstanding that the four month period seems to be okay. We would revise the time in which ACC would have to open a new channel from two months to three months. Again, assuming that everything else is acceptable, I would take a stab at drafting this language. Issue ten simply provides that we would releases. xchange general Please get back to me at your earliest convenience as to whether the above is now acceptable to your clients. If so, please forward to me proposed language with regard to issue number one. I will then take a stab at drafting a proposed agreement. I think it is important, if what I am proposing is acceptable to your client, that we move fairly rapidly. Atresent I believe I would be successful in having the Mayor and Council approve a settlement along these lines. Elections will be held this November. The Mayor and all members of Council are up for re-election. W1ile I am fairly certain the Mayor will be re-elected, I am also fairly certain that there will be a very large change in the make-up of Common Council. If we do not have an agreement signed before January 1st, we will Letter to John E. Fogarty,•Esq. July 26, 1993 Page Three be back to square one and, considering who I expect to be on Common Council, I would not be surprised if I am directed to begin litigation fairly quickly. Considering the technical language that has to be drafted and approved, I expect that the drafting of this agreement will not be particularly easy or quick. I expect that it may take several months to get the technical language drafted in a form that is acceptable to both the City and to your client. In order for the agreement to be signed in 1993, it will have to be approved in its final form by Council at its December meeting at the latest. Since the December Council meeting is devoted almost entirely to next year's budget, I think that we realistically have to have this agreement in final form for approval by my Council at its November 3rd meeting. I also expect, knowing my Council, that if they have not had the agreement in final form for a couple weeks to review before then, they will simply table the matter to the December meeting and could very easily table the matter again to January. Considering all of the above, I think we need to have the agreement in final form some time in early October. I.therefore need to know from you, as soon as possible, whether the basic principles are acceptable to your client. Very truly yours, Charles Guttman City Attorney CG/cv OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET 1TMACA, NEW YORK 14850 July 26, 1993 Jim Ferwerda 580 Theory Center Building Cornell University Ithaca, New York 14853 Dear Jim: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a copy of my most recent letter. to John Fogarty. Please get back to me with any comments that you have. As you can see, I am proposing that the City draft the language on the INET, 2% money and the formula. Realistically I am not proposing that I do so because I do not have the technical expertise. It is my hope that someone from the cable commission will be able to draft, at least with regard to the INET, and partially with regard to the formula and the 2% money, appropriate language. With regard to the INET, I think I need this almost completely drafted by someone with technical expertise. With regard to the 2% money, I at least need to know exactly what equipment we are talking about. With regard to the formula, I think I can draft this except I am not sure of the technical language which has to be used, if any. With regard to the formula, the major concern which ACC has raised is the question of syndicated shows. They are agi.eeing to open up a new channel for public access (they are not concerned about this issue with educational governmental) when there is a sufficient number of shows on the air. Syndicated shows count however, they do not want to be in the position where all of a sudden someone goes and obtains a large number of syndicated shows and puts them on the air at no cost and then claims that we need a new channel. A solution which I think might work, which I h ve not discussed with ACC, is to put a cap on what percent of the shows can be syndicated shows in terms of requiring a new channel. Please get back to me with your position or the Cable Commission's position on this issue. "An Equal Opportunity Employer with an Affirmative Action Program" ri4: Recycled Paper Letter to Jim Ferwerda July 26, 1993 Page Two Of course, the enclosed is a fairly confidential negotiating position of the City with Time Warner. We do not want to have this position become public until an agreement has been reached. I trust you will keep this appropriately confidential. City Attorney CG/ cv Enclosure June 11, 1993 Charles Gutman, Esq. Ithaca City Attorney 108 East Green Street Ithaca, New York 14850 Dear Mr. Gutman: Re: Cable Television Rate Regulation HARRIS BEACH& WILCOX ATTORNEYS AT LAW 1611 NORTH KENT STREET SUITE 1000 ARLINGTON, VIRGINIA 22209 (703) 528-1600 Postponed In earlier correspondence, I provided you information about the Cable Television Consumer Protection and. Col1Lpetition Act of 1992 and the rules adopted by the Federal Communications Commission to implement certain provisions of the Act. This letter is to let you know that the Commission today delayed the effective date of its new rules. Last month, the Commission released a 475 -page decision adopting rules which make local franchising authorities primarily responsible for regulating rates for "basic" cable service. The Commission's rules were originally to become effective June 21, 1993. This afternoon, the Commission's Chairman, Hon. James Quello, issued a very brief statement, copy enclosed, announcing that it was delaying the effective date of the rules until October 1, 1993. This action was taken primarily because the Commission has no money to add personnel to administer the new rules. As of late this afternoon, the Commission Yad not released the more detailed Public Notice mentioned in Chairman Quello's statement. Accordingly, I do not yet have complete information on the Commission's action. However, based upon the enclosed statement, and my conversations today with senior members of the Commission's staff, the following points are clear: (a) The delay will enable franchising authorities to implement local rate regulation in a more orderly manner. In particular, they will now have additional time to: (i) Prepare and file the "certificat must be approved by the Commissi regulate charges for "basic" cab The forms are still not availabl Commission. Under the original THE GRANITE BUILDING 130 EAST MAIN STREET ROCHESTER, NEW YORK 14604-1687 (716) 232 1110 20 CORPORATE WOODS BOULEVARD ALBANY, NEW YORK 12211-2391 (518) 427-9700 on" forms which n before they can e service. -from the egulatory 50 FOUNT IN PLAZA SUITE 1260 BUFFALO, NEW Y. RK 14202-2212 (716) 854-5300 121 EAST SENE STREET P.O. BOX 580 ITHACA, NEW YORK 14851 (607) 273 6111 June 11, 1993 Page Two schedule, it would have been des essential) for franchising autho filed their certifications by Ju time pressure has now been relie HARRIS BEACH & WILCOX rable (but not ities to have y 2, 1993. This ed. (ii) Adopt local rate regulations and procedural rules which will meet the substantive nd procedural requirements contained in both the Act and the Commission's new rules. (b) The Commission is extending its nationlwide ban against increases in rates charged for "basic'( cable service. That ban was to expire August 2, 1993.1 It will now be extended beyond that date -- probably through November 2, 1993. The much ballyhooed rate decreases and refunds will also be delayed -- probably until eariy 1994. The Commission will likely make significant changes in the rules it has just adopted before they even become effective. For example, it may completely exempt "small" cable systems from rate regulation. (It is not yet clear how "small" systems will be defined for this purpose.) (e) Unless Congress appropriates addition1 tax funds, or authorizes the Commission to impose nw regulatory fees upon the cable television industry, t Commission will remain unable to add the staff if needs to implement the new rules. If the Commission is linable to increase its staff, it will have little choicelLbut to again defer the effective date of the new r,les. I will provide you additional information as it becomes available. I will also soon provide you a proposal for assisting your community in implementing rate regulation on a very cost- effective basis. Enclosure cc: Hon. Benjamin Nichols Edward C. Hooks, Esq. OFFICE OF THE CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WASHINGTON June 11, 1993 Statement of Chairman James H. Qu The FCC today is issuing a Public Noti deferral of the effective date of cable rate October 1, 1993. The cable rate freeze will al ello ce announcing the. regulation until so be extended. This extended date is necessary to provide time_for the FCC to complete the detailed administrative processes -and to plan for additional resources when supplementary funding is finalized. It will also allow time for the FCC to act on numerous requests for reconsideration and to establish cost of service standards. The Commission will soon issue a Further Notice of Proposed Rule Making to establish cost of service standards. The deferred date will also provide particularly small systems, time to adjust to requirements." ### cable operators, the new regulatory CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY July 27, 1993 Jeffrey Rothman 5900 South Salina St. Syracuse, New York 1205 Dear Mr. Rothman: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a copy of the Franchise Agreement which was entered into' between the City of Ithaca and the American Community Cablevision ("ACC"). The Franchise Agreement was entered into between the City and ACC on November 7, 1988 It then had to be approved by the New York State Commission on Cable Television. By order adopted February 1, 1989 and released September 12, 1989 from the New York State Commission on Cable Television, pursuant to §822 of the Executive Law, approved the renewal of the franchise granted by the City of Ithaca to American Community Cablevision for a ten year period expiring on February 1, 1999. This franchise affects the City of Ithaca.- It is my understanding that ACC also has franchise agreements with other municipalities within Tompkins County. This franchise was approved by the Common Council of the City of Ithaca. Pursuant to §24.9 of the Franchise Agr ement, the Mayor or the Cable Commission is responsible for the continuing administration of the franchise. While I cannot off -hand state the exact le al relationship between the following various companies, American Community Cablevision, I believe, is a subsidiary or part of American Television & Communication Corporation which itself is a subsidiary of Time Warner, Inc. Time Warner, Inc. itself has recently entered into a limited partnership with several other co anies including C. Itoh and Toshiba, large Japanese corporation I personally have been involved in discussions with Time i arner regarding various aspects under which the franchisee may have violated the terms of the franchise agreement. I have specifically been dealing with John Fogarty, Associate General Counsel for T -me Warner Cable. "An Equal Opportunity Employer with an Affirmative Action Program° t,i Recycled Paper Letter to Jeffrey Rothman July 27, 1993 I assume that you will be representing som the negotiations of a franchise agreement and I discuss with you any questions or concerns y• Ithaca's.history in this matter, and further. discuss with you the affects of the recent federal legislation. I particular, the question of whether it is wise for a municipal ty to be seeking certification under the new FCC rules. Page Two municipality in would be happy to u have regarding CG/ cv Enclosure Very truly yours, e Guttman City Attorney July 23, 1993 City Hall Mr. Charles Guttman 108 E. Green Street Ithaca, New York 14850 Dear Mr. Guttman, The courtesy your secretary Cindy extended to Li the phone today was greatly appreciated. She inf our request needed to be put forth in writing. I am in need of the following information pertai Television franchise in the Ithaca area: 1. The identity (name and address) of ever fran- chising authority (eg. town, city, coup y, etc.) and who specifically approves the franc ise (eg. city council, town board, county commission, etc.) 171\...1.1,11Mil4) J1.1 2 6 1993 da Lanzafame on rmed her that ing to Cable 2. The date each cable franchise was most granted and when it will expire 3. The geographic area covered by the cabl 4. A copy of each cable franchise agreemen 5. The identity of the current cable company now providing service under each franchise It would be greatly appreciated if this informat warded to me by July 29, 1993. Please send it t ecently franchise Jeffrey Rothman 5900 South Salina Street Syracuse, New York 13205 on can be for - If there are any questions, please contact me at (315) 469-7711. I would be glad to pay any processing fee that would be involved. Again, thank you very much for you help. Respectfully, effrey F. Rothman JFR/pj January 22, 1993 City of Ithaca Ithaca, New York Dear Sir: wm•ilm M • I r American Television & Communications Corporation A Time Warner Inc. Company National Division 160 Inverness Drive West, Suite 300' P.O. Box 6929 (80155-6929) Englewood, Colorado 80112 (303) 799-9599 Below is a report showing Gross Revenues for January, 1992 —though -December ough -December , -1992 . - The- report- - is - in compliance with_ Section 18.5 C. (4) of the franchise agreeme t, approved by the City Council June 8, 1988, with Ameri an Community Cablevision. Computation is as follows: Month Gress Revenues January, 1992 February March April May June July August September October November December Total $210,066.74 216,262.61 221,892.97 247,356.99 210,534.30 193,546.47 193,177.83 190,690.41 258,489.01 226,184.46 224,634.04 217,358.14 $',610,193.97 I, Ivy W. Parish, Controller of American Tel Communications Corporation,National Divisio the above schedule summarizes the Gross Reve in the franchising agreement, for the period the CATV operations in the City of Ithaca. • Signed: r�y W. radia4, Ivy+T Parish, Controller IWP!jdf Enclosure Providing entertainment and information choices. vision and , certify that ues, as defined indicated for Dear Charles, MAY 2 4 1993 Per our past television conversations, I am enc sections from the recentlq~ e&ea.sed _ FCC rate and Report & Order concefning the same which pe the issue of subscriber bill itemization. You also note that the "benchmark" rates issued by FCC against which cable rates are measured for reasonableness do not account for franchise fe As a practical matter, this creates an invitat' cable companies to separately itemize fees on bills. After you have reviewed this, give me and we can discuss it further. John Grow osing egulations tain to ight the s. on to ubscriber call programming sources that devote 90 percent or m programming to such purposes may qualify as a s minority or educational programming. Contrary Continental, we believe that "substantially all' high percentage of programming devoted to these percent would not be adequate under the statute. C. Subscriber Bill Itemization i. Background 542. Section 622(c) of the Cable Act states that: Each cable operator may identify, consistent with the regulations prescribed by the Commission p rsuant to section 623, as a separate line item on each regul r bill of each subscriber, each of the following: (1) The amount of the total bill asse sed as a franchise fee and the identity of the franchising authority to which the fee is paid. (2) The amount of the total bill asse sed to satisfy any requirements imposed on the cable operator by the franchise agreement to support public, educational, or governmental channels or the use of such channels. (3) The amount of any other fee, tax, assessment, or charge of any kind imposed by any go ernmental on the transaction between the opera or and the subscriber. 1377 The House Report states that a cable operator hall itemize "only [the] direct and verifiable costs" associated ith the above - listed categories of costs and should "not inc ude in itemized costs indirect costs.i1378 The House Report in addition makes it clear that while these costs may be itemized, the ire to be included as part of the billd not sim 1 added to it. The Conference eport a opted Section_622(c), wi h t e specific amendment that Section 622(c) be construed consistently with our re of their atutory source of o the position of denotes a very uses and 75 authority 1377 Communications Act, § 622(c), 47 U.S. § 542 (c) . 1378 The House Report states, for exam le, thata cable operator shall not include in the itemized co t of providing PEG channels the value of such channels if they were used for commercial purposes. House Report at 86. 1379 The House and Senate versions of virtually identical. Conference Report at 84. 334 ection 622(c) were rate regulations implementing Section 623 of th Cable Act.1380 The Notice asked for comment on the interrelati nship between Section 622(c) and Section 623. We also sought comment on whether to reflect in our rules the House Report statement that, while authorizing itemization Section 622(c) does not authorize' these aratel billed were not a part of the charge for cable service. ii. Comments 543. Many local franchising authorit'es argue that, in light of the Notice and the House Report, cable companies choosing to itemize under Section 622(c) should be permitted to itemize only direct and documentable costs incl ded in the categories listed explicitly in Section 622(c).382 Cable interests agree that the costs categorized in Section 622(c) may be itemized, and also argue that the term "any" within Section 622(c)(3) permits them also to itemize costs not stated explicitly in Section 622(c). For example, th y argue that costs incurred for institutional networks,'383 special municipal video services, 1384 free wiring of public buildings,'385 governmental '38° Id. at 84. Section 623 of the Act dire is the Commission, in devising rules governing basic cable se ice, to take into account, inter alia: the direct costs of obtai ing, transmitting, and otherwise providing signals carried on t e basic tier; the properly allocable portion of any amount asse sed as a franchise fee, tax, or charge of any kind, or any other fee, tax, or assessment of general applicability imposed by the state or local authority on the transactions between ca le operators and subscribers; and, any amount required to satisfy franchise requirements to support or use PEG channels or any other services required under the franchise. Commu ications Act, § 623 (b) (2) (C) (ii) , (v) , (vi) , 47 U.S.C. § 543 (b) (2) (C) (ii) , (v) , (vi) . 1381 Notice, 8 FCC Rcd at 545. 1382 See e.q., NATOA Comments at 91; Fort FJauderdale Comments at 3; Hays Reply Comments at 4; San Antonio R -ply Comments at 4; Austin Comments at 77. 1383 Cole Comments at 61; TCI Comments at 82; NECTA Reply Comments at 9; Continental Comments at 78. '384 Cole Comments at 61; TCI Comments at 82; Continental Comments at 78. 1385 NECTA Reply Comments at 9. 335 • 76.982 Continuation of rate aateements. During the term of an agreement executed b fore July 1, 1990, by a franchising authority and a cable operat r providing for the regulation of basic cable service rates, where there was not effective competition under Commission rules i effect on that date, the franchising authority may regulate basi cable rates without following Section 623 of the 1992 Cable Act or §§ 76.910 through 76.942. A franchising authority regulati g basic cable rates pursuant to such a rate agreement is not equired to file for certification during the remaining term of t e agreement but shall notify the Commission of its intent to continue regulating basic cable rates. § '76.983 Discrimination. (a) No Federal agency, state, or local may prohibit a cable operator from offering r senior citizens or to economically disadvanta franchising authority asonable discounts to ed groups. (1) Such discounts must be offered equally to all subscribers in the franchise area who qualify as members o these categories, or any reasonable subcategory thereof. (2) For purposes of this section, methbers of economically disadvantaged groups are those individuals who receive federal, state or local welfare assistance. (b) Nothing herein shall preclude any Fe4eral agency, state, or local franchising authority from requirin and regulating the reception of cable service by hearing impaired individuals. 76.984 - Geographically uniform rate structure. (a) The rates charged by cable operators sibject to §§ 76.922 and 76.923 shall be provided pursuant to a rate st ucture that is uniform throughout each franchise area in which cable' service is provided. (b) This section does not prohibit the establishment by cable operators of reasonable categories of service and customers with separate rates and terms and conditions f service, within a franchise area. § 76.985 Subscriber bill itemization. (a) Cable operators may identify as a separate line item of each regular subscriber bill the following: (1) mo the total bill assessed the identity of the franchising authority to 36 as a franchise fee and which the fee is paid. (2) The amount of the total bill assessed to satisfy any requirements imposed on the cable -operator by the franchise agreement to support public, educational, or governmental channels or the use of such channels. (3) The amount of any other fee, tax, assessment, or charge of any kind imposed by any governmental authority on the transaction between the operator and the subscriber. In order for a governmental fee or assessment to be separately identified under this subsection, it must be directly imposed by a governmental1body on a transaction between a subscriber and an operator. (b) The charge identified on the subscriber bill as the total charge for cable service should include all fees and costs itemized pursuant to this SpctJon. (c) Local franchising authorities may adopt regulations consistent with this section. 37 SCC ROCE LVED MAY 17 1993 AMERICAN COMMUNITY CABLEVISION May 13, 1993 Ms. Callista Paolangeli, Clerk City of Ithaca City Hall 108 E. -Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: Enclosed is a check in payment of American Community Cablevision's franchise fee for the first quarter of 1993. A statement outlining the computation of this fee payment has been included. Should you have any questions, please feel free to call. American Community Cablevision takes great pride in serving the residents of the City of Ithaca. erely,A(_e and H. McCabe Area Manager cc: The Honorable Benjamin Nichols enc. RHM/mkk Please ❑ READ ❑ HANDL ❑ APPRO and ❑ FORWAR ❑ RETURN ❑ KEEP ORLDISCARD ❑ REVIEW WITH ME Post-it"routing request pad 7664 BRAND ROUTING REQUEST Date From 519 West State Street Ithaca, New York 14850 607-272-3456 ” - p I H 0 N E TO e/rUidC--- DAT/2.7E „e_s-, AM PM FRO , 'lb OF I i - 4all A ifd AREA CODE NO. 25 EXT. 6 6-1. 9 ,n 0 Gervt, ex.44...0-A—, a ji Wi E "4.2.4et...ftax.4.102.51... ............4..........."/L......4.....4...., M S Es , — ., ' ' G E ____,,, #.11 4( ,__...., I 4 SIGNED PHONED RETURNEDJ4' JO CALLABACK(— AWGILALINCALLLil WAS IN URGENT the following criteria which were included in the 1992 CAAB budget as submitted to ACC, but were essentially ignored. A. Capital equipment must have an average expected usable life of more than one year. B. Original cost of capital equipment includes all reasonable and necessary expenses of acquiring and putting the equipment into service [sales tax, shipping, installation]. C. Expenditures for improvements to equipment are capitalized when: i. performance is qualitatively or quantitatively enhanced over [when new] standard of the equipment, the original ii. an extraordinary repair [extending the life] of equipment can be documented by a concurrent increase in its book value, i.e., if usable life is increased, then part of past depreciation must be cancelled. In terms ofpast years expenditures, the CAAB believes that ACC has misal ocated a significant portion of the capital equipment budget on maintenance and repair expenditures. 1992 [est.] $6,260.00 1991 8,156.00 [includes tools for maint. & repair] 1990 6,636.00 • 1989 17,000.00 [reported only as labor and replacement parts, estimate only] Each year has seen 12% to 20 % of the capital equipment budget being diverted to maintenance and repair items. More important than the past is the future. One might argue that reducing the capital equipment budget 12% to 20% per year has not hampered the growth ofAccess to date. This is because the Access equipment provision by the franchise was front-end loaded. In addition to a substantial existing equipment inventory valued at S150,000, an equipment package of 5165,000 was purchased the first year [1989]. By video equipment standards, much of this equipment is already nearing the end of useful life. The latter Half of the franchise period will see significant replacement costs simply to keep Access operating at current levels. Furthermore maintenance costs will surely rise with aging equipment and without any challenge to ACC's current practices ever greater portions of the capital equipment budget may be diverted to maintenance items. To summarize, the CAAB feels strongly that the 2% of Gross City Revenues allocated for capital PEG access equipment should be expended on appropriate equipment as defined by the accounting criteria cited above. Inhere is a dispute over an expenditure from this allocation, the burden of proof should be on ACC to verify the appropriateness of that expenditure since they alone keep the necessary accounting information to do so. Failure to provide verification would exclude an item from the capital equipment budget. To: Chuck Gutman, City Attorney From: Rick Gray, Chair Cable Access Advisory board [CAAB] Date: November 11, 1992 Subject: 2% of Gross City Revenues for capital PEG accesss equipment The negotiations between the City and ACC seem to have proceeded very well to this point and the Access community should be quite pleased with the results. There are several issues, however, which if neglected during these negotiations could remain as points of friction between ACC and Access users in the future. As I mentioned at the November 4th meeting, the provision of"2% of Gross City Revenues for capital PEG access equipment replacement and expansion" has been an area of contention since the first year of the franchise. Your negotiations have apparently resolved the principal dispute over which type of equipment the 2% allocation is providing for access use, i.e. program origination equipment vs.channel or distribution equipment. The remaining item of disagreement revolves around the interpretation of word capital in the phrase in question. The CAA13 has consistently argued that capital be defined according to generally accepted accounting principals. Essentially this means that the 2% allocation is for the -acquisition offixed assets or improvements to fixed assets which will be depreciated over time. Since ACC is assured ownership of all Access equipment by the franchise, they must record this information for reporting purposes . From the beginning of the current franchise, ACC has insisted on making expenditures for certain maintenance and repair items from the 2% allocation. The greatest portion of these expenditures are for an item known as refurbishment [of VCRs, VTRs, and camcorders]. I do not purport to be a technicalexpert; it is enough to know that refurbishment is performed on equipment routinely [recurring at predictable intervals by ACC's own reporting], that it is needed due to normal wear and tear, and the benefits of this application of labor and parts are used up over a relatively short period of time [approximately annually]. In short, refurbishment can be characterized only as maintenance or routine repair. The franchise anticipated that equipment needs maintenance and repair, and in a section following the section dealing with the 2% capital equipment allocation it states that ACC will maintain and/or replace equipment "in a manner consistent with good operating practice". A number of video technicians [from BOCES, TC Library, and Joe Powers fornerly of ACC] I have contacted this past week have stated that VCR refurbishment at . regular intervals is simply "maintenance consistent with good operating practice". Since ACC must use generally accepted accounting criteria in their financial reporting, the CAAB believes that these same criteria might be used to resolve any differences in interpretation of the section on capital equipment replacement or expansion. We suggest OFFICE OF MAYOR CITY OF ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 14850 October 1, 1992 Barbara L. Lukens General Manager American Community Cablevision 519 West State Street Ithaca, NY 14850 Dear Ms. Lukens: TELEPHONE: 274-6501 CODE 607 In response to your letter of September 10, 1992, please be advised that the "responsibleofficer" referred to your in your letter and referred to in Section 76.607 of the Federal Communications Commission's Rules and Regulations shall be the Ithaca City Clerk. Of course, if customers contact us with problems with their service we will be encouraging them to call you directly so that the problems can be resolved. Very truly yours; Benjamin Nichols Mayor cc: Callista Paolangeli, City Clerk Peter Hess, Chair, Cable Commission "An Equal Opportunity Employer with an Affirmative Action Program" T. RECEIVED SEPI 5 19 CITY OF ITHACA • CITY HALL • 108 EAST GREEN STREET • ITHACA, NEW YORK 4850 ! (607) 27? -1713 TO SEP 1 51992 LIb DATE DATE rte. 7p6. Post-It'routIng request pad 7664 ROUTING - REQUEST Please lj ❑ READ To Cy1,vc, k_ 6-. ❑ HANDLE ❑ APPROVE „ and ❑ FORWARD Cub " ❑ RETURN ❑ KEEP OR DISCA-D REVIEW WITH ME Date From B Item < NN73 The Drawing Board, Dallas, Texas 75266-0429 D Wheeler Group, Inc., 1982 INSTRUCTIONS TO SENDER: 1. KEEP YELLOW COPY. 2 SEND WHITE AND PINK COPIES INTACT. SIGNED INSTRUCT! NS TO RECEIVER: 1. WRITE REPLY. 2. DETACH STUB. KEEP PINK COPY. RETURN WHITE COPY TO SENDER. SCC AMERICAN COMMUNITY CABLEVISION September 10, 1992 Ms. Callista Paolangeli City Clerk of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: As you may know, the Federal Communications Commission (FCC) recently developed additional cable television regulations. Section 76.607 of the rules requires that cable customers be advised at least once each calendar year of the procedures for resolution of complaints, including the address of the responsible officer of the local franchising authority. In order to comply with this FCC requirement, please let me know whom you wish listed as the "responsible officer" in these notifications. The FCC ruling does not define the responsible officer, so I trust this means you may designate whomever you wish as the "responsible officer". As you know, it always has been our preference that customers contact us, not you, if they have problems with our service since it is our responsibility, not yours, to resolve problems. However, the FCC ruling is likely to bring occasional calls to your office. As always, we encourage you to ask residents to call us. Customer service and excellent picture quality have always been priorities of our company. The "customer service guarantees" which we initiated over a year ago -- long before this FCC requirement - - demonstrate our commitment to quality service. If I may answer any questions, please call me at your convenience. Thank you, in advance for providing the information that will allow us to meet this FCC requirement. erely, arbara L. ukens General Manager cc: The Honorable Ben Nichols Mr. Peter Hess, Chair of the Cable Commiss 519 West State Street Ithaca, New York 14850 607-272-3456 OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Cookie Paolangeli, City Clerk FROM: Chuck Guttman, City Atorney DATE: September 29, 1992 SUBJECT: ACC Resolution TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 This is another resolution that is supposed to be on this month's COW and Council agendas. Attachment 'An Equal Opportunity Employer with an Affirmative Action Program' Recycled Paper s WHEREAS, the City has reason to believe that American Community Cablevision (ACC) has defaulted in the performance of certain provisions of the franchise existing between the City and ACC; and WHEREAS, the City has notified ACC in provisions which the City believes may be in def writing of the ault; and WHEREAS,. ACC has responded to the City in writing contesting the City's assertion of default; and WHEREAS, the City still has reason to believe that ACC may be in default in the performance of certain provisions of the franchise which defaults have not been cured; and WHEREAS, the franchise agreement provides that in such event the City shall convene a public hearing, on reasonable notice, at which hearing ACC may be heard and afterwards the City shall specify their complaints against ACC NOW THEREFORE BE IT RESOLVED, that a public hearing shall be held at the Charter and Ordinance Committee Meeting of this Common Council at 7:30 p.m. on December 10, 1992; and be it further RESOLVED, that the City Clerk shall provide appropriate notice as required by the franchise agreement. Contact ACC - They are, according to the franchise agreement, suppose to televise two committee meetings every month. We would like a schedule of what committee meetings have been televised, when and what committee meetings will be televised 1 r+, Axj"- f 9 a k C trd- -f-bui3 • CITY OF ITHACA 106 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF TELEPHONE: (607) 274-6504 CITY ATTORNEY FAX: (607) 272-7348 MEMORANDUM TO: Daniel L. Hoffman, Common Council Tom Terrizzi, Cable Commission FROM: Chuck Guttman, City Attorney DATE: March 23, 1993 SUBJECT: American Community Cablevision Enclosed please find a list of terms in regard to settling all outstanding disputes between the City and ACC. • 'An Equal Opportunity Employer with an Affirmative Action Program' t� Recycled Paper ;i The City of Ithaca has reason to believe that American Community Cablevision has defaulted in the performance of certain provision of the franchise existing between the City of Ithaca and American Community Cablevision. The City of Ithaca has notified American Community Cablevision (ACC) in writing of the provision or provisions which the City believes ACC may be in default and has provided to ACC an opportunity to respond and to cure such default. The City of Ithaca has reason to believe that the default has not been corrected. A public hearing has been held on these you will notice, at which hearing ACC had an opportunity to be heard. Pursuant to Section 22.1 of the Franchise Agreement existing between the City of Ithaca and ACC, the City herleby specifies the following as issues in which the City believes ACC is in default under the Franchise Agreement. 1. ACC has failed to provide 9 downstream channels designated for public, governmental and educational access as required by Section 14.1 (A) (1) of the Franchise Agreement. 2. ACC has failed to make available to access users, local origination of equipment as required by Section 14.1 (C) (1) of the Franchise Agreement. 3. ACC has failed•to provide 2% of gross City revenues for PEG access equipment replacement and expansion as required by Section 14.1 (C)(3) of the Franchise Agreement. 4. ACC has failed to maintain and/or replace in a manner consistent with good operating practice, PEG municipal access and local origination equipment as required by Section 14.1(C)(4) of the Franchise Agreement. 5. ACC has failed to construct and maintain a midsplit 300 megahertz institutional network with 8 upstream and downstream channels, free drops and necessary video converters as required by Section 15.1 of the Franchise Agreement. 6. ACC has failed to maintain and install dedicated cables as required by Section 15.2 of the Franchise Agreement. 7. ACC has failed to provide an all channel audio emergency alert system as required by Section 15.4 of the Franchise Agreement. 8. ACC has failed to designate one upstream channel for City and public sector uses as required by Section 15.of the Franchise Agreement. C & 0 Mtg-2/18/93 Acc/Violations 1 9. ACC has failed to publish all raters for subscriber services and leasing of channels as required by Section 16.4 of the Franchise Agreement. 10. ACC has raised basic rates higher than the schedule set forth in Section 19.1 of the Franchise Agreement. 11. ACC has failed to pay to the City the forth in Article 20 of the Franchise Agreement. C & 0 Mtg-2/18/93 Acc/Violations franchise fee set 2 AC -111-V_© -FL 11W ifftriS\1 RECEIVED NOV i 8 1992 AMERICAN COMMUNITY CABLEVISION November 16, 1992 Ms. Callista Paolangeli, Clerk City of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: 1 NOV' z !9g2 J��1' �v J Enclosed is a check in payment of American Community Cablevision's franchise fee for the third quarter of 1992. A statement outlining the computation of this fee payment has been included. Should you have any questions, please feel free to call me. American Community Cablevision takes great pride in serving the residents of the City of Ithaca and we are looking forward to serving our customers in the City in the future. Sincerely, ofttle-v Barbara L. Lukens lint ic) General Manager BLL/mkk Post-it'"routing request pad 7664 ROUTING - REQUEST To CLA.w- Please ❑ READ ❑ HANDLE ❑ APPROVE and 11 FORWARD ❑ RETURN KEEP OR DISCARD REVIEW WITH ME Date From 519 West State Street Ithaca, New York 14850 607-272-3456 RECEIV ED NOV 18 1992 AMERICAN COMMUNITY CABLEVISION November 13, 1992 Ms. Callista Paolangeli, Clerk City of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear-Ms.-Paolangeli: The following three reports are enclosed in partial fulfillment of the requirements of American Community Cablevision's franchise with the City of Ithaca: Sincerely, financial statements for American Community Cablevision for the fiscal year beginning July 1, 1991 and ending June 30, 1992 a list of the officers of Time Warner Entertainment Co., L.P. the annual AFR report which was submitted to the New York State Commission on Cable Television. oe Barbara L. Lukens, General Manager cc: The Honorable Benjamin Nichols w/o attachments Peter Hess, Ithaca Cable Commission w/o attachments 519. West State Street_ Ithaca, New York 14850 I 607-272-3456 Ms. Patricia M. Kennedy Asst. City Attorney 108 East Green Street Ithaca, NY 14850. Dear Pat, Your extraordinary letter to me of December 1, 1992, has been read. I found your imperious and accusatory tone hurtful and quite uncalled for by the circumstances, especially since Chuck had already spoken tome about the, matter. Perhaps it was inappropriate for me to have asked to use a reference book in Chuck's office, but it was done courteously and innocently and for a pro bono cause. It is true that Ms. Smith, your secretary, was upset the .last time I talked to her, and I am sorry that she was and my heart goes out to her..I hadaskedher a day or two earlier to ask Chuck if I could lookup a reference in the NY State Municipal Law books in his office. On the day in question I had asked what, I thought was a very simple question, "Could I use the_ reference books or not?" (You should realize that the conversation which you refer to was by telephone and I was not asking for immediate entree but whether it was possible for me to use the books — the earlier request had been in person.) It seemed to me that all she had to say was, "Yes, you can" or "No, you can't" or "I still haven't asked Chuck (or Mr. Guttman or whatever she calls him)." But instead she kept repeating, "You are putting me in a difficult position. You are putting me in a difficult position," and then started to cry. 2 Hillcrest Drive Ithaca, NY 14850 December 7, 1992 There was certainly nothing in my behavior to elicit such anextremereaction. and, therefore, it seems to me that her apprehension might rather have to do with feelings about your office and her role in it. I suggest that you and Chuck work at treating her and. others (including myself) in a less domineering and peremptory manner so that she will feel easier asking you necessary questions. I am sure that as your treatment of her becomes kinder and more considerate she will become more confident in her interactions with the public. I know that I have been treated by both you and Chuck with a rudeness and dismissiveness which at first I thought was only directed to me, but which, I have since learned, has been experienced by others as well. I am also aware that your letter to me may be simply a political ploy to attempt to make accessibility to City documents more difficult at a time when the group with which I am associated is very seriously challenging the validity and accuracy of Chuck's October 19, 1992, Memorandumto the Mayor and Common Council in which he asserted that the Festival Lands isnot park land. However, Pat, the important thing is that we are all children of God and. developing spiritually as best we can. So, truly, all best wishes to you and to Jennifer and to Chuck, cc. The Hon. Ben Nichols, Mayor Mrs. Callista Paolangeli, City Clerk Ms. Jennifer Smith, Secy. City Attorney Mr. Chuck Guttman, City Attorney Doria Higgins 1 SEP - 81992. Post-It'routing request pad 7664 BRAND ROUTING - REQUEST Please READ HANDLE APPROVE and ❑ FORWARD ❑ RETURN ❑ KEEP OR DISCARD ❑ REVIEW WITH ME Date To 4 g,� w iP LA ILL From Resolution of the City of Ithaca Cable Commission Passed unanimously, 8/11 / 92 . I I. The Ithaca City Attorney has formally requested American Community Cablevision (ACC) to correct several practices which the City contends are in default of the Franchise Agreement between ACC and the City. II. The City Attorney has been notified by Time Warner Entertainment, the parent company of ACC, that they contest the City's charges and therefore, presumably, do not intend to correct the practices described in the notice of default. III. The Franchise Agreement gives ACC thirty days from formal notification to resolve charges of default. That period has now elapsed. Therefore, the City of Ithaca Cable Commission urges the Common Council of the City of Ithaca to begin default proceedings against ACC, as outlined in Article 22 of the Franchise Agreement. The first step in this process is the calling of a public meeting at which the City will specify its complaint against ACC and at which ACC may be heard. We urge that such a meeting be convened at the earliest possible time. OFFICE OF SUPERINTENDENT CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 DEPARTMENT OF PUBLIC WORKS Mary Kreutter, Admin. Asst. American Community Cablevision 519 West State Street Ithaca, New York 14850 Dear Ms. Kreutter: September 16, 1992 TELEPHONE: (607) 274-6527 FAX: (607) 272-7348 Re: Request for Street Miles File: Civic - 425.56 This is in response to your request, of Septeiber.1, 1992. The City claims 67.76 miles of road in its report to NYSDOT. This figure is not the total amount of roads within the City boundaries. That figure would consist of state. arterials and privately owned roads and is not readily availab1Fe at this time. A rough estimate with arterials is 72 miles and perhaps 75 miles with all items considered. Very truly yours, llit.lLicem 646 William J. Gray, P.E. Superintendent of Public Works WJG/dlp cc: Chuck Guttman, City Attorney Cookie Paolangeli, City Clerk "An Equal Opportunity Employer with an Affirmative Action Program" to, Recycled Paper OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14E50 P ENiORANDUM TO: Bill Gray, Superintendent of. Public Works FROM: Chuck Guttman, City Attorney DATE: September 8, 1992 SUBJECT: ACC Request for Street Miles TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a request we received from ACC wanting information on the street miles within our franchise area which I assume is the City of Ithaca. Please send a letter to ACC stating the City of Ithaca road miles. Please forward a copy of that to myself and to Cookie in the Clerk's Office. Thank you. Enclosure cc: Cookie Paolangeli, City Clerk "An Equal Opportunity Employer with an Affirmative Action Program' tail, Recycled Paper Ms. Callista Paolangeli City Clerk of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: 1 SEP 3 1992 11!) CITY CLERK'S OFFICE 1 am writing to ask for information on the street miles in your franchise area. Would you please call 272-7875 or send us a letter stating the City of Ithaca road miles within your area. Thank you for your assistance in this matter. Sincerely, Mary Kreutter Administrative Assistant MK/klg 519 West State Street Ithaca, New York 14850 607-272-3456 ACC CEW E u Rug 1.4 1592 AMERICAN COMMUNITY CABLEVISION August 13, 1992 Ms. Callista Paolangeli City Clerk City of Ithaca 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: Enclosed is a check in payment of American Community Cablevision's franchise fee for the second quarter of 1992. A statement outlining the computation of this fee payment has been included. Should you have any questions, please feel free to call. American Community Cablevision takes great pride in serving the residents of City of Ithaca. Sincerely, Barbara L. Lukens General Manager Ctr►,C,C) cc: The Honorable Benjamin Nichols, Mayor Mr. Tom Terrizzi, Chair of the Cable Commission 519 West State Street Ithaca, New York 14850 607-272-3456 a August 10. 1992 City of Ithaca Ithaca, New York Dear Sir: au mum i i i American Television & Communications Corporation A Time Warner Inc. Company National Division 160 Inverness Drive West, Suite 300 P.O. Box 6929 (80155-6929) Englewood, Colorado 80112 (303) 799-9599 ZZNY 0040 Enclosed please find a check for $31,177.81 which is payment of franchise_ fees for the second quarter of 1992--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 April, 1992 $247,356.99 May 210,534.30 June 193,546.47 Total $651,437.76 Fee @ 5% - NYCC Rate .214 4.786% Franchise Fee $31,177.81 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, New York. Signed: IWP/jdf Enclosure • Ivy Parish, Controller Providing entertainment and information choices. SECTION FOUR TERM AND THE RIGHTS ARISING HEREUNDER Part 1: The franchise renewal herein granted and the rights arising hereunder are for a term of ten (10) years from the date of commencement of this franchise. The date of commencement shalt, be the date of final approval of this agreement by the NYSCCT. The term for the franchise renewal, agreement shall commence immediately upon the expiration of the then -in -effect franchise agreement or as soon thereafter as the Municipality and the Company, subject to any required approvals of the NYSCCT, shall execute, agree to, and file this agreement. Part 2: At the end of the term of this franchise renewal or any renewal thereof, if said agreement shall not be renewed by the Municipality, the Company shall have the right in addition to and not in lieu of all other rights granted by the Cable Policy Act, in its sole discretion, to sell the assets of said system to the Municipality or any other party for no less than the fair market value of the system valued as an on-going business concern. SECTION FIVE REVOCATION PART 1: The Municipality may revoke this franchise renewal and all right of the Company hereunder in any of the following events or for any of the following reasons: (a) Company fails after thirty days prior to written notice from the Council to sub- stantially comply or to take`reasonable steps to comply with a material provisions or material provisions of this renewal agreement. (b) Company is adjudged a bankrupt; or (c) Company attempts or does practice a material fraud or deceit in its securing of the fran- 6 chise renewal, provided however, that an in- nocent misrepresentation shall not be grounds for revocation. (d) Failure to complete technical rebuilds and upgrades as provided for in this agreement; (e) Reporting fraudulent information to Munici- pality or displaying gross negligence in the preparation, transmission or maintenance of information required under this agreement; (f) Intentional failure to timely pay taxes or fees due the Municipality under this agreement. (g) Company defaults in the performance of any substantial material provision of this Agreement. Part 2: Not withstanding the above, no revocation provided for in this section shall be effective unless and until the Council shall have adopted a resolution setting forth the cause and reason for the revocation and the effective date thereof, which resolution shall not be adopted without thirty days prior written notice to the Company and an opportunity for the Company to be fully and fairly heard on the adoptionof such resolution. If the revocation as proposed by such resolution depends on a finding of fact, : such finding of fact shall be made by Council only after an administrative hearing providing the Company with a fair opportunity to be heard, including the right to introduce evidence and the right to the production of evidence and to question witnesses and the expiration of the time to appeal and the final determination of such appeal. A transcript shall be made of such hearing with the right of the Company to appeal such final decision as available by law or federal or state regulation. Part 3: If the franchise and right thereunder are revoked the Municipality hereby agrees that the Company shall have the right to sell the same to the Municipality or to any other party and that the purchase price for the same, in the sole discretion of the Company, shall be no less than an equitable. price which for purposes of this renewal agreement shall be in the fair market value of the Cable Television system valued as an on-going business venture. SECTION SIX INDEMNIFICATION AND INSURANCE PART 1: Company alone is liable for damages, actions or claims arising out of its operation of its cable television system in the Municipality. Part 2: Company indemnifies the Municipality and holds the latter harmless from all liability, damage, cost or expenses arising from claims of injury to persons or damage to property occasioned by reason of any conduct undertaken in the Municipality by the Company as a result of its operation of its cable television system in the Municipality. Part 3: Company shall obtain and maintain in force throughout the term of this agreement, an insurance policy against claims. arising out of Company's operation of its cable television system in the Municipality. At a minimum this policy shall be in the amount of $3 million in the aggregate, $2 million for each occurrence and, $1 million products/completed operations coverage, and in a form reasonably satisfactory to the City Attorney. Part 4: Company shall not be held liable for and shall not indemnify the Municipality from and against any legal action or claim arising out of any programming the Company is required by federal or state law to transmit over its system or over which it is prohibited from exercising editorial control of content. Part 5: Company shall not be held liable for and shall not indemnify Municipality for any legal action or claim attributable to the negligence, misfeasance of malfeasance of Municipality, its employees., or agents. 8 USE SECTION SEVEN OF EXISTING POLES Company hereby agrees feasible and economical, telephone or electric or utilities' poles whereby access to said poles of othe:t equipment. that when and wherever reasonably it shall enter into agreements with other utilities for; the use of said said utilities shall provide use of Company of the Company's lines and Notwithstanding the above, where necessary to service subscribers and where attachment to the pole(s) of utilities is not economically reasonable or otherwise possible, the Company may erect or authorize or permit others to erect any poles or any other facilities within the streets of the Municipality pursuant to the issuance by the Municipality of any necessary authorizations which shall not be unreasonably withheld. SECTION EIGHT RELOCATION OF PROPERTY Part 1: Whenever a public utility franchise operating within the Municipality shall require the relocation or reinstallation of any property of the Company in or on any of the Streets of the Municipality, it shall be the obligation of the Company on written notice of such requirement to remove and relocate or reinstall such property as may be reasonably necessary to meet the requirements of the Municipality or the public utility. Part 2: The Company shall, on request of a person holding a building or moving permit issued by the Municipality, temporarily. raise or lower its wires or other property or relocate the same temporarily so as to permit the moving or erection of buildings. The expense of any such temporary removal, raising or lowering of wires or other property shall.. be paid in advance to the Company by the person requesting the same. - The Company shall be given in such cases not less than five (5) working days prior to written notice in order to arrange for the changes required. SECTION NINE UNDERGROUND FACILITIES Where, in any place within the Municipality all of the electric and telephone utilities shall be located underground, it shall be the obligation of the Company to locate or to cause its property to be located underground within such places. The Company shall have an affirmative obligation to relocate aerial lines underground at the same time. as electric and telephone utilities are so required. If the Company shall in any instance be unable to locate or relocate any part of its property underground, then the City Manager of the Municipality, on being apprised of the facts thereof, shall permit such property to remain above the ground even though other facilities in the area may be placed underground. However, any such permission shall be on such conditions as the City Manager of the Municipality may reasonably require to protect the public health and safety. With respect to the construction of ,new underground facilities wherein the Company is extending its lines, such construction shall be completed at the same time as electric and telephone utilities unless the Company is prevented from undertaking such construction by the property owner. In the event of a technical impediment to simultaneous utility - cable construction, the Company shall notify the city manager and undertake best efforts to overcome such impediment toward the goal of simultaneous construction. SECTION TEN USE AND INSTALLATION Part 1: The Company or any person authorized by the Company to erect, construct of maintain any of the property of the Company used in the transmission or reception of Cable Television Service shall at all times employ due care under the facts and circumstances and shall maintain and install said property of the Company in accordance with commonly accepted methods and principles in the cable television industry so as to prevent failures and accidents likely to cause damage or injury to member of the public. All Cable Television System equipment shall conform to those standards of the National Electrical Code of the National Council of Fire Underwriters which exists at the time said equipment is installed or .replace. - 10 Part 2: The Company agrees to make its best efforts to locate all cable television systems equipment so as to cause the least possible interference reasonably to be expected with the usual use of the streets and so as to cause reasonably minimal interference with the rights of property owners abutting said Streets, and in no event to substantially and regularly interfere with the usual public travel on any StreEit of the Municipality. Part 3: Whenever the Company shall cause or any person on its behalf shall cause any injury or damage to public property or Street, by or because of the installation, maintenance or operation of the cable television system equipment, such injury or damage shall be remedied as soon as reasonably possible upon notice to the Company from the Municipality in such fashion as directed by the City Manager of the Municipality unless ordinances of the Municipality shall make other provisions thereof and the Municipality notifies the Company of said other provisions. The Company is hereby granted the authority to trim trees upon and overhanging the Streets of an abutting private property in the Municipality to the minimum extent necessary so as to prevent the branches from coming in contact with the wires, cables and other equipment of the Company's cable television system upon no less than five (5) days notification to City Manager of the Municipality. Part 4: The City or its designee shall have the right to inspect at any time all construction or installation work performed subject to the provisions of this Franchise and to make such tests as it shall deem necessary to ensure compliance with the terms of this Franchise and all other applicable law. The Company shall cooperate fully with the City during all inspections and tests and shall provide access to all equipment records, and other materials and information necessary for such inspections and tests. The City agrees that no such inspections or tests shall be conducted so as to interfere with the normal construction, installation, or operation of thecablesystem. SECTION ELEVEN REMOVAL AND ABANDONMENT OF PROPERTY If the use of any part of the Company's"cable television system occupying the streets of the Municipality is discontinued for any reason for a continuous and uninterrupted period of twelve months, •the;Company shall on being given thirty (30) days prior written notice thereafter by the City Manager of the Municipality, provided no such notice is sent without prior vote of the Council directing the forwarding of said notification, remove that portion of its cable television system from the ;streets of the Municipality which has remained unused and which the Municipality for good cause shown and articulated in said notice deems necessary to remove to protect the public health and safety. The cost and expense; of said removal shall be borne by the Company, and said,'streets shall be placed in as nearly as good condition as before the installation of said system as is reasonable. In the event the Company shall fail to timely remove the unused portion of said system and after an additional thirty (30) days written notice from the City Manager of the Municipality to the Company, the said portion of the system shall be deemed abandoned and the Municipality may remove or cause to move said portions of the .cable television system from the streets of the Municipality which it deems necessary in order to protect the public health and safety. Notwithstanding the above, the Municipality may in its sole discretion and consistent with its obligation to protect the public health and safety permit any and all such abandoned equipment to be left in place. SECTION TWELVE OPERATION AND MAINTENANCE The company shall render efficient service, make repairs promptly and interrupt service only for good cause and for the shortest possible time. The Company shall maintain knowledgeable agents accessible during normal business hours via local or toll-free telephone number(s). Within one year of the effective date of this Agreement, the Company shall establish a location within the Municipality where customers so desiring may pay cable bills. On such occasions when a significant number (more than 20%) of Company's subscribers are required to exchange existing subscriber -premises equipment for replacement equipment, then the Company shall temporarily ._establisha suitable location in Municipality 12 for the conduct of said exchange. The Company shall provide customers upgrading service and requiring, new conversion equipment the option to pick up such equipment from the Company for self -installation. The Company's telephone shall be so operated that complaints or requests for repairs because of malfunctions of the Cable Television System may be given so that the same may be repaired as quickly as possible after notice of such malfunction. The Company shall make its best efforts to remedy said malfunction no later than twenty-four (24) hours after notice of the malfunction except or unless such malfunction shall affect a substantial portion of the Company's Television System or the malfunction shall have been caused by storm, fire, lightning, explosion, major equipment or computer failure, civil commotion or other similar catastrophe which is or are beyond the reasonable control of the Company, in which case all due diligence . to repair the problem as quickly as possible will be undertaken by the Company.' When planned system maintenance, either system -wide or per channel, will require more than one (1) hour to complete, the Company will, as a general rule subject to change based on reasonable circumstances, effect the maintenance between the hours of 12:00 a.m. and 6:00 a.m. If the system as a whole, fails in -reasonable totality for more than four (4) hours, each subcriber in Municipality shall be compensated automatically for such loss ofservice by a credit to subscriber's monthly bill. However, it is expressly understood and agreed by the Municipality and the Company that no compensation for any such failure shall be required by this paragraph if such failure is the result of: a) an Act of God; b) a power failure caused by a third -party provider; c) system maintenance during the above -prescribed hours; d) system reconstruction and/or upgrading as required by this Agreement; or e) an event beyond the reasonable control of Company. The Company shall perform all system tests and maintenance procedures as required and in accordance with tests and procedures as specified by the FCC, New York State Commission on Cable Television, and the National Cable Television Association's (NCTA) testing procedures. Results of such tests and the Company's corrective action plan (listing. corrective action needed .and timetable for 13 completion) be submitted to the City within thirty days from completion of tests. SECTION THIRTEEN CONSTRUCTION SCHEDULE The Company shall, by the end of the fifth year of this Agreement, develop, operate and maintain in the City a cable communications system spaced to permit minimum 450 MHz operation and capable of utilizing converters consistent with: state-of-the-art practice in the industry. In constructing, operating, and maintaining the system, Company shall at all times comply with applicable laws, construction standards, safety codes, government requirements and FCC technical standards. As evidence of its good faith in accomplishing system expansion to 450 MHz capability during the fifth year of this Agreement, the Company shall demonstrate substantial progress toward this goal by January 1992. "Substantial Progress" shall, as a minimum, mean presentation by January 1992 of a plan, purchasing schedule and timetable for accomplishing the goal in a timely fashion. Equipment used for the distribution system, headend and reception facilities shall be of good and durable quality and be serviced and repaired on a regular basis. Any, substitutions or changes in hardware components must be of good and durable quality (e.g. amplifiers,',cable, antennas, etc.) Prior to the erection or installation by the Company of any towers, plies, underground conduits or fixtures for use in connection with initial construction, rebuild, upgrade or line extension of the Cable Communications System under this Franchise, the Company shall make available to the City a concise description of the facilities proposed to beerected or installed, including the strand maps, if required, together with a map and plans indicating the proposed location of all such facilities. Written progress reports shall be submitted to the City on a monthly basis throughout the entire construction process. Line Extension areas (as that term is defined in the rules andregulations of the NYSCCT) shall be determined by application of the NYSCCT formula provided for in Part 595.5(b)(2) of the Commission's rules and regulations. 14 SECTION FOURTEEN RATES Company shall provide sixty (60) days notification to the Municipality and subscribers of rate increases. Company shall provide to the Municipality and each subscriber a complete schedule of all residential a la carte rates and charges for all residential services provided by Compdny in the Municipality at least !once each year throughout the term of this agreement. The Municipality and the Company acknowledge that rates and charges for cable television service are not regulated pursuant to the Cable Communications Policy Act of 1984. Should a change in the governing law occur with respect to rate regulation during this Franchise Agreement, Municipality and Company agree to negotiate in good faith. Company shall not unfairly discriminate against individuals or classes of individuals in the establishment and application of its rates and charges for service or in the provision of service. This prohibition is not intended to prevent the offering of sales promotions or other discounts to all subscribers similarly situated, in a non-discriminatory manner. Nothing in this paragraph shall preclude the Company from pricing its services in any legal manner it shall so determine to any group or class of subscribers when cable television service is offered in direct competition by another party! operating in Municipality. SECTION FIFTEEN SERVICE TO PUBLIC FACILITIES Notwithstanding any contrary provision in' Section 14, the Company shall provide service outlet(s) to the following: schools, firehouses, city hall, police station, volunteer ambulance squad, Wood Library and city "sponsored service center, and/or visitors center, and the Academy (when constructed and barring any unusually expensive construction requirements) as agreed to herein or as may be reasonably requested by the Municipality provided such institution is no further than one hundred fifty feet feeder of the cable television system. The level of service for programming shall be charge thereafter. 15 (150') from the "Enhanced Basic" provided without Return -line (upstream) transmission capability will be provided by the Company within one year !of the effective date of this Agreement or at the request of the Access Advisory Board (whichever is later) for City Hall, the Fire Station, and the Community College of the Finger Lakes (modulation equipment will be made available). Both a free service drop and return line shall be provided for the Acad- emy (high school.) consistent with the development of this facility and barring unusually expensive construction 'requirements. ' r SECTION SIXTEEN ADDITIONAL SUBSCRIBER SERVICE Part 1: Payment for cable television service rendered to subscribers is due and payable in advance on the first of each month and is delinquent when thirty (30) days haveielapsed from the due date without there having been full! payment to the Company. A late charge will be added to all bills paid later than thirty (30) days from said due date, or as prescribed by the rules and regulations of NYSCCT. Part 2: The Company shall have the right to disconnect delinquent subscribers, as that term is used above in Part 1 of this section, where: (a) At least five days have elapsed after written notice of discontinuance has been served personally upon a subscriber; or (b) At least eight days have elapsed after mailing to the subscriber written notice of discon- tinuance addressed to such person at the premises where the service is rendered or the recorded billing address; and (c) As further prescribed in Part1590 of the rules and regulations of the NYSCCT. Part 3: Notice of the Company procedures for reporting and resolving complaints will be given to each subscriber at the time of the initial subscription to the cable television system services and thereafter to all subscribers as required by federal.. or. state law. 16 Part 4: The Company shall offer to and shall notify in writing, the subscribers of the availability of locking program control devices which enable the subscriber to limit program reception in the subscriber's residence:. Any Subscriber requesting such device may be charged and shall pay the Company upon the receipt of the same, in full on a one time basis, the actual cost to the Company for;the manufacture, purchase and installation of percOnt (15%) above such cost. Company shall be given to new installation and thereafter to by the federal or state law. Part 5: such device plus fifteen The notice provided by the subscriber at the time of all subscribers as required The Company shall provide annually by January 31 a report of the previous year's activities of the system business office, that shall include: a) Totalnumber of new installations and discon- nections within Municipality; Logged reports, as required by Part 596.6 of the New York State Commission on Cable Television Regulations, of substandard visual reception on cable channels and system outages in Municipality that are the fault of the system and not due to subscriber -owned equipment or third -party facilities; c) Quarterly averages of telephone abandonment rates and call -waiting (on -hold) times as may be available on a system -wide basis; and d) Such other available and documentable information as requested by the Municipality needed to assess the performance of the Company in its business office operations. Part 6: The Municipality and the Company, at the discretion of the Municipality, may hold performance evaluation sessions no more frequently than annually. Prior to any evaluation session, upon request of the Municipality, the Company will conduct. ,a subscriber survey. The Company and Municipality 17 will mutually agree on the cost of said survey. The Municipality shall determine the type, form and method of the survey with the Company's advice and consent and within mutually acceptable cost parameters. The ;results of the survey will made available to the City for the evaluation session. All such evaluation sessions shall be open to the public. Topics which may be discussed at any scheduled or special evaluation session may include, but not be limited to, system performance, compliance with this Franchise and applicable law, customer service and compliant response, subscriber privacy, services provided, programming offered, servite rate structures, franchise fees, penalties, free or discounted services, applications of new technologies and judicial,.NYSCCT and FCC filings. The Company shall notify its subscribers of all evaluation sessions by announcement on at least one channel of its cable communications system between the hours of seven p.m. (7:00 p.m.) for and nine p.m. (9:00 p.m.), for five (5) consecutive days preceding each session. During review and evaluation the Company and the City shall fully cooperate with each other and shall provide such information and documents as each may reasonably need to perform its review. Part 7: The Administrator for the Municipality for this franchise renewal shall by City Manager of the City of Canandaigua. SECTION SEVENTEEN FRANCHISE FEES Part l: Company will pay to the Municipality on an semi-annual basis throughout the term of this agreement five (5) percent of all gross annual revenues as collected by Company from its operations in the Municipality during each annual period. Part 2: This franchise fee is in addition to and shall not be offset against the costs incurred by the Company in complying with the public access provisions of this agreement. 18 Part 3: The franchise fee herein provided shall semi-annually- on or before August 30 and on February 28. All fees shall be accompanied by statement verifying revenues for the previous signed by a CPA. Part 4: be paid or before a revenue period and This franchise fee is in addition to and shall not be offset against any real property taxes for so long as. any other cable television operator franchised by the, Municipality and operating shall have an identical obligation. Part 5: Upon reasonable notice (generally more than 48 hours) and during normal business hours, the Municipality shall have the right to inspect all books, records, ,maps, plans and financial information that pertain to, the Company's operations in the Municipality and which will not generally be considered confidential in nature. To the extent such information is not maintained in the aforementioned form, or locally, the Company shall be given a reasonable period of time to prepare such for presentation. SECTION EIGHTEEN COMPLIANCE AND CONFLICT WITH STATE AND FEDERAL LAWS Part 1: Company may apply to Municipality for a temporary waiver of any provision of this agreement or for an extension of time to comply with a provision of this agreement. The Municipality may grant such waiver or extension for good cause shown. The Municipality may require the submission of any information by Company necessary to support the latter's request for the waiver extension. Part 2: Should any provision of this agreement be held invalid by a court or regulatory agency, the remaining provisions of this agreement shall remain in full force and effect. 19 Part 3: The Company and the Municipality shall comply with all laws, rules, and regulations of the federal government and of the State of New York and the regulations of both concerning this Agreement and regarding the installation, construction, maintenance and operation of theCompany's Cable Television System, and the provision of the Cable Television Service,. provided said state laws are not in conflict with, are not preempted, superseded, or suspended by federal law, regulations or orders. Part 4: The parties agree to amend to their mutual;satis;faction any provisions of this agreement that become invalid and unenforceable during the term of this agreement because of a change in law or regulation, within one year of this change. In the interim, the parties agree to !comply with the provisions of the new law or regulation. Part 5: Nothing contained herein shall be construed to prohibit the Company from requesting a waiver of any state or federal rule or regulation or of any provision contained in this agreement provided a copy of such request shall be served upon the Municipality. Part 6: The Company shall file requests for all necessary operating authorizations with the NYSCCT and the FCC within sixty (60) days of this franchise renewal agreement being awarded. Part 7: The Municipality reserves the right to adopt in addition to the provisions contained in this franchise renewal agreement and existing applicable ordinances, such additional regulations as it shall find necessary and lawful in the exercise of its police powers to protect the public health and safety; provided, however that such regulations are reasonable and not in conflict with state or federal law, rule, regulation or order. 20 J $ Part 8:. The Company neither bar discriminate conditions, race, creed, shall not refuse to hire or employ and shall nor discharge from employment, and shall not against any person in compensation or in terms, or privileges or employment because of age, color, natural origin or sex. SECTION NINETEEN SEVERABILITY If any provision of this franchise renewal agreement shall be held invalid, void, unenforceable or illegal, by a court or a regulatoryagency of competent jurisdiction, the remaining provisions of such franchise renewal shall remain in full force and effect. SECTION TWENTY NOTICE All notices required or permitted herein shall be in writing and shall be deemed delivered when mailed in the United States mail, postage pre -paid and sent certified, return receipt requested or on the date of delivery when sent by express mail, and in other cases when addressed to: When Cablevision Industries, Inc,. Office of the President 6 Wierk Avenue, Box 311 Liberty, NY 12754 to Municipality: City Manager City of Canandaigua 2 North Main Street Canandaigua, NY 14424 SECTION TWENTY ONE PUBLIC ACCESS CHANNELS AND SERVICES 21.1 PUBLIC ACCESS CHANNELS In order to develop and promote public, educational and governmental access programming for the system's access channels and institutional services, Company hereby agrees to the following: 21 1 A. The Company and the Municipality 'shall support the creation and maintenance of a Public Access Advisory Committee (PAAC) to establish the guidelines (rules) for the operation of the public access channels. is 1. The initial Advisory Committee will be appointed by the. Common Council and will consist of nine (9) members suggested as follows: three (3) City residents appointed by the City; one (1) Community College member; three (3) representatives of other local institutions; one (1) Company representative. The Committee shall be representative of all communities served locally by the Company to the extent the Company may request. 2. The PAAC will establish rules to ensure that: the studio(s) and portable equipment are available equitably for users of the access channels; procedures for scheduling the use of television production field and studio equipment and for scheduling the cablecasting programming on the channel(s) designated for public access are identified; the procedures for registering and resolving complaints regarding channel avail- ability, priorities and usage are,, identified; and the criteria for determining the appropriateness of material and organizations eligible for using the access channels. The PAAC shall have the right to petition the Municipality for funding of public access activities. Said rules and regulations. established by the PAAC shall be mutually agreed upon with the Company and will be established within twelve (12) months of the Franchise award and New York State approval; the Company will file such rules and any subsequent changes with the NYS Commission on Cable Television. B. ACCESS CHANNELS. Three downstream channels shall be designated for public, governmental, and educational. access when the cable system is activated for 450 MHz capacity. The access channels shall be available for use by neighboring communities served by Company, New York State, local governments, educational institutions (including colleges), or members of the general public for education and public service programming, municipal services and local. expression. The public, governmental, and educational access channels --_ shall be,available-..on a first-come, first-served basis at no. 22 • charge for air time to any individual, association or organization desiring to utilize them. One of the access channels shall be designated for an electronically generated community "bulletin board" announcements. There will be no charge for the programming of this channel. Rules for the operation of this service are to be negotiated by the .Public Access Advisory Committee. No business, personal forcommercial announcements of any kind will be displayedlon this channel. y Upon- activation of 450 MHz capability,, the hours of operation shall be from 8:00 a.m. to 10:00p.m., seven (7) days a week and the channel designated as the electronically generated bulletin board announcements shall air continuously twenty-four (24) hours per day, seven (7) days per week, unless preempted for other public access programing. The third channel shall be dedicated to PEG use providing that the first two channels are programmed continuously for fourteen (14) hours per day, seven (7) days per week for thirteen consecutive weeks. At least one channel shall be included in the basic level of service. It is the understanding of the parties that use of the access channels will become a primary responsibility of the PAAC no later than two years from the effective date of this Agreement or such longer period as the Municipality and Company shall mutually determine. During said two year period, the Company shall: a) provide partial channel capacity, facilities and assistance for the replay of access programs, as has been customary; b) provide partial channel capacity for a character generated Community Bulletin Board; and c) program the information for the Community Bulletin Board. Following said two year period or extension thereof, access programming responsibility shall shift from Company to an agency designated by PAAC. At such time Company shall no longer be responsible for providing facilities or assistance to access< users, ; ncluding programming of - the. Community 23 Bulletin Board. Once responsibility shifts to PAAC, the Company shall be required to provide an annual grant of ten thousand dollars ($10,000) if such funding is a) needed, b)formally requested by Municipality, and c) fully invested in the production of access programming. C. INTERCONNECTION. The Company may interconnect the access channels with neighboring cable systems in Ontario County with whom they have a franchise, but there is no affirmative obligation to do so. Se EQUIPMENT. 1. Public, Educational Equipment. Under the Advisory Committee, access channels with and Government Access direction of the Access new equipment for the a purchase value .of $50,000 shall be purchased (from. Company funds) for PEG use. See Appendix 1. The Access Advisory Committee shall identify an equipment purchase list for City approval as it sees fit. All equipment will be purchased within sixty (60) days after the submission of the list. 2. Access Equipment Ownership; Location and Availability. All access equipment shall remain the property of the City. All access equipment shall be replaced once by, the Company consistent with good operating practice. All access equipment shall be available to access users on1a first priority basis before local origination users. Location will be determined by the Access Advisory Committee. E. STUDIO. The Company shall maintain in its local programming studios in the greater Canandaigua area the equipment specified in (1) above. The Company shall adopt business hours which shall provide for the use of the studio from Monday through Friday at a minimum of eight (8) hours a week between the hours of 5:00 p.m. and 10:00 p.m. The Company shall make reasonable efforts to accommodate additional weekday and weekend hours as the community needs.. dictate during the first two years of this Agreement. There will be no charge for the use of the studio and a technician for the eight (8) hours per week. A rate card shall be 24 r established within sixty (60) days of the franchise date for studio/technician costs beyond the given eight (8) hours per week. F. LOCAL PROGRAMMING EQUIPMENT. It is understood that local origination channel programming is the sole responsibility of the Company. 21.2 ADDITIONAL ACCESS REQUIREMENTS. The following re- quirements shall also apply to access use: `" A. Records shall be maintained on a quarterly basis, regarding the use of the designated television channels, including the names and addresses of persons and organizations providing programming for such channels;. such record shall be available locally for public inspection and retained for minimum of two (2) years. B. Designated Access channels shall not be used for the promotion or sale of commercial products or services, including advertising by or on behalf of candidates for public office. 21.3 STAFFING. The Company shall provide adequate staffing for the maintenance and operation of the access channels, facilities, studio and equipment, as determined by the PAAC, and the provision of access services as required in the franchise. The Company shall provide, at a minimum, a part-time (8 hour/week) production staff person to meet requirements of Section 21.1.E., as well as, additional staff as necessary to accommodate videotape replays and training during the operational hours mentioned in Section 21.1.B., Paragraph 4. It is understood that provisions of this section are limited by and are subordinate to the provisions of section 21.1.B. 21.4 TRAINING. .The Company shall provide adequate training for access users free of charge. At a minimum, the Company shall provide bimonthly access production and editing training classes, provided that community interest of five (5) or more residents in any given month exists. 21.5 ANNUAL WRITTEN NOTICE TO SUBSCRIBERS. The Company, at a minimum, shall provide each subscriber information on the 25 availability of the access channels, production equipment, training and the Company's address and telephone number on a regular basis. 21.6 ACCESS DAMAGE WAIVER POLICY. The Company_ shall provide access to users with the access damage waiver policy as established by the PAAC for negligent damage to equipment. Negligent damage shall not include ordinary wear and tear, and mechanical breakdown through causes not the fault of the operator. 21.7 EMERGENCY ALERT. The Company shall provide_ an all channel audio Civil Emergency Alert System (CEAS) to the City in accordance with specifications outlined by the City Manager. The initiation site for emergency messages shall be the Central Fire Station. The City will be responsible for any messages sent from the CEAS system. SECTION TWENTY-TWO CABLE COMPANY COMPETITION In the event another cable company shall receive a franchise from the Municipality and a "double -build" situation exists, each company shall proceed in a professional manner and will not inhibit the operation, maintenance, and/or construction processes of the other company. If a problem should arise, either company may contact the city manager and file a complaint under this provision. SECTION TWENTY-THREE MISCELLANEOUS The Municipality will agree to negotiate with the Company any favorable modifications granted to any other franchisees servicing the Municipality. 26 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. ATTEST: City;:Clerk fitness City of Canandaigua, New York a municipal corporation City Managed Cablevision Industries, Incorporated Executive +_ zE'ei G'C 1 c(.2/YL ce Preident 27 APPENDIX 1 Suggested Equipment (as 21.1.D.). Final list and quantity of items to 'be determined by Access Committee. outlined in Section FIELD EQUIPMENT Item V}!S VCR's 3 chip color cameras with 12:1 zoom lens each and with case and cables for each. tripods field production monitors 3 light lighting kit and case microphones audio mixer batteries with: charger/ac power supply video tape accessory equipment STUDIO EQUIPMENT Item Character generator Monitors Studio quality cameras/lenses Studio quality tripods Audio mixer Video switcher Synchronizing equipment Studio lighting fixtures Microphones Cables/wiring Turntable Cassette player or CD player 3/4" VCR's 3/4" Editing system including remote controller (May be part of above item) Intercom system. 28 ELECTRONIC BULLETIN BOARD EQUIPMENT Item Character generator capable pages of data in disc memory. Preview monitor 29 of holding minimum of 64 CABLE TELEVISION FRANCHISE AGREEMENT BY AND BETWEEN THE CITY OF CANANDAIGUA, NEW YORK AND CABLEVISION INDUSTRIES, INCORPORATED INDEX Section Page SECTION ONE: Defined Terms 2 SECTION TWO: Grant of Franchise 5 SECTION THREE: Approval of Company by Municipality it SECTION FOUR: Term and Rights 5 6 SECTION FIVE: Revocation . . . . . . . . . . ! . . . . . . . 6 SECTION SIX: Indemnification and Insurance . e . 8, SECTION SEVEN: Use of Existing Poles . . . . o . . . . . . . 9 SECTION EIGHT: Relocation of Property ! 9 SECTION NINE: Underground Facilities 10 SECTION TEN: Use and Installation 10 r SECTION ELEVEN: Removal and Abandonment of Property . . . . 12 SECTION TWELVE: Operation and Maintenance. ! . . . . . . . 12 SECTION THIRTEEN: Construction Schedule . . . . . . . . . 14 SECTION FOURTEEN: Rates 15 SECTION FIFTEEN: Service to Public Facilities 15 SIXTEEN: Additional Subscriber Service . . . . . . 16 Franchise Fees 18 SECTION SECTION SECTION SECTION SECTION TWENTY: Notice SEVENTEEN: EIGHTEEN: NINETEEN: Severability Comnpliance with State and Federal Laws . . 19 21 21 SECTION TWENTY-ONE: Public Access Channels and SECTION TWENTY-TWO: Cable Company Competition SECTION TWENTY-THREE: Miscellaneous APPENDIX Services . . . 21 . . . . . 26 28 FRANCHISE RENEWAL AGREEMENT' THIS AGREEMENT, executed in triplicate this` _ day of ./� z.t, f Alloy and betwee the City of Canandaigua (h4reinafter referred to as the Municipality), by the City Manager acting in accordance with the authority of the duly empowered local governing body (hereinafter referred to as the Council, party of the ;first part, and Cablevision Industries, Incorporated (or other appropriate entity), a corporation organized and existing under the laws of the State of New York, the principal place of business of which is located at Six Wierk Avenue, Box 311 Liberty, New York 12754 (hereinafter referred to as the !Company), party of the second part: WITNESSETH WHEREAS, Pursuant to the City Law, the Council has the power on behalf of the Municipality to grant non-exclusive franchise renewal providing for or involving the use of the Streets (as defined in Section 1 hereof) and to give the consent of the Municipality and whereas the Council and the Company pursuant to federal law and pursuant to applicable state laws and the regulations promulgated thereunder, have complied with the franchise renewal procedures required of municipalities and cable operators in the grant of cable television franchise or their renewal; and. WHEREAS, The Municipality has conducted negotiations with the Company and has conducted one or more public proceedings on the Company's franchise renewal proposal affording all interested parties due process including notice and the opportunity to be heard; said deliberations included consideration and approval of the Company's technical ability, financial condition, and approval of the Company's plans for constructing and operating the cable television system; and WHEREAS, Following such public proceedings and such further opportunity for review, negotiations. and other actions as the Council deemed necessary and that is required by law, the Council decided to renew Company's franchise as provided hereinafter; and NOW, THEREFORE, In consideration of the foregoing clauses, which clauses are hereby made a part of this franchise renewal agreement, and the mutual covenant and agreements herein contained, the parties hereby covenant and agree: 1 SECTION ONE DEFINED TERMS Unless the context clearly indicates that a different meaning is intended: (a) "Basic Service" means those provided in the lowest priced Service Tier. "Enhanced Basic" will include Basic Service plus the next tier of channels. (b) "Council" means the Common ,Council of that municipality known as the City of Canandaigua. (c) "Cable Television System" .means a facility, consisting of a set of closed transmission paths, including fiber optic wires, and associated signal generation, reception and control equipment that is designed to provide cable television service, said, service includes among other things Video Programming, Other Programming Service and/or communications services which is provided to Subscribers within a community and which is originated by the Company or by any other party. (d) "Company" means Cablevision Industries, Inc., its successors and assigns. (e) "Cable Television Service" means: (1) The one way transmission to Subscribers of Video Programming, Other Programming Service or other cable and communications services; and/or (f) (2) Subscriber interaction, if any, which is required for the selection of such Video Programming, Other Programming Service, or other communications services; and/or (3) Interactive Service. "Franchise Renewal" means the permission, license, franchise, grant or authority given 2 hereunder and evidenced by regulation, ordinance, permit, this agreement or by any other license, to conduct and operate a cable television system in the Municipality. (g) "Franchise Fee" means the percentage, as specified in this Franchise agreement, of company's gross annual.revenues earned from all sources within the City payable in exchange for the' rights granted pursuant to the franchise. (h) "FCC" means the Federal, Communications Commission, its designee and any successor thereto. (i) "Gross Annual Revenues" means all revenues actually received by Company 'from all sources within the Municipality and attributable only to its subscribers in Municipality. "Other Programming Service" means programming that thecompany makes available to Subscribers over the Cable Television System on its pay programming Service Tier, but not including any or all pay per view services, and not including InteractivelServices whether or not provided on the pay programming service tier. (k) "Video Programming" means programming provided to the Company by, or generally considered comparable to programming provided by, a television station. (1) "Person" means an individual, partnership, association, corporation, joint stock company, trust,corporation, or organization of any kind, the successors or assigners of the same. (j) (m) "Interactive Service" means the two-way transmission of information over the cable television system including but not limited to data transmission. (n) "May" is permissive. (0) "Shall" or "will" are mandatory. 3 s. (p) "Subscriber" means any person lawfully receiving any cable television service provided over the cable television system. (q) "Streets" means the surface of, as well as the space above and below, any and all streets, avenues, highways, boulevards; concourses, driveways, and public grounds and waters within or belonging to the Municipality. (r) "Municipality" means City of Canandaigua. (s) "NYSCCT" means New York State Commission on Cable Television. (t) "Service Tier" means a category of Cable Television service provided by 'the Company over the cable television system for which a separate rate is charged for such category by the Company. (u) "Access Channels" meanschannels(6MHz each) set aside for public, educational, or governmental uses with no charge for public usage by. Access channels designed for public use shall be available on a nondiscriminatory basis. (v) "Reasonable Notice" shall be written notice addressed by either party at its principal office within the City of such other office as the Company has designated tothe City as the address to which notice shall be transmitted to it, which notice shall be certified and postmarked not less than ten (10) business days prior to that day in which the party giving such notice shall commence any action which requires the giving of notice. "Transfer" means the disposal by the company, directly or indirectly, by gift, assignment, voluntary sales, merger consolidation or otherwise twenty percent (20%) cumulatively over the term of the Franchise of such interests to a corporation, partnership, limited partnership, trust or association or person or groups of persons acting in concert. (w) 4 c SECTION TWO GRANT OF FRANCHISE RENEWAL Municipality hereby grants to the Company the non-exclusive right to construct, erect, operate and (maintain a cable television system within the Municipality as it now exists and may hereafter be changed, and in so doing to use the Streets of the Municipality by erecting, installing, constructing, repairing, replacing ;reconstructing, maintaining and retaining in, on, under upon, and across any and;11 said streets such poles, wires, cables, conductors, ducts; conduits, vaults, manholes, amplifiers, appliances, attachments and other property as is deemed necessary or useful by the company, subject to the Company's obligation to provide efficient cable television service and to the reasonable exercise of Municipal police powers as provided below. Additionally, the Municipality hereby grants to the Company the rights to use any and all easements granted for or dedicated to compatible uses, such as electric, gas, telephone or other utility transmissions for the purposes of erecting, installing, constructing, repairing, replacing, reconstructing, maintaining and retaining in, on, over, under, upon and across such easements such items of the cable television system as is deemed necessary or useful by the company in order to provide cable television service including any other associated communications services such as transmission of data information. Upon request by Cablevision, the Municipality hereby agrees to assist the Company in gaining access to and using said easements. SECTION THREE APPROVAL OF COMPANY BY MUNICIPALITY Pursuant to any applicable procedures stated in Section 626 of the Cable Communications Policy Act and those procedures provided in Part 591 of the rules and regulation of the NYSCCT, to the extent such rules are not inconsistent with the applicable provisions of said Section 626, the Council of the Municipality, after affording the public adequate notice and opportunity for comment and having determined that the Company is .likely to satisfy cable -related community needs, hereby grants this franchise renewal. The Council, in public proceeding affording due process, considered and approved the Company's technical ability, financial condition, and character and in proceedings complying with the requirements of due process has found the Company's plan for constructing and operating the Cable Television System to be adequate and feasible. OFFICE OF CITY ATTORNEY TO: FROM: Chuck Guttman, City Attorney DATE: August 21, 1992 SUBJECT: ACC CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM Dan Hoffman, Chair, Charter and Ordinance TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 As you are aware, the City has sent a letter. to ACC claiming that we believe they are in breach of the franchise agreement in several respects including how they are calculating the franchise fee which they pay to the City; how much they are charging consumers for basic service; and how they are dealing with regard to access TV. We have received a written a response from ACC denying that they are in breach and have received a considerable amount of background documentation which I have gone through. I have recently spoken with John Fogarty, the Associate General Counsel for ATC, the parent corporation of ACC, who advised me that he hopes that this dispute can be resolved by settlement rather than litigation and that he would like to come to !Ithaca to discuss this matter with us. In my conversation with him I went through the different issues and believe I have a sense as to which issues are non-negotiable from their point of view and on which issues they feel they have a great amount of flexibility. Mr. Fogarty stated that he would like to come tolIthaca to discuss this matter with us. I told him that it would make sense for him not to come until I have had a chance to talk at least with the C&O Committee on this issue and to get some direction. I have also recently met with the Cable Commission and asked them to come up with a clear statement of what they ideally would like on the access issues and if they feel there are other issues which, if we are going to be settling this matter, could be included in the settlement. I have also met with Dominick and gone over the general fund implications of possible settlement. 'An Equal Opportunity Employer with an Affirmative Action Program' t4, Recycled Paper Memo to Dan Hoffman -2- ;August 21, 1992 Based on the above I would request that this matter be put on the C&O agenda for September to consider, in Executive Session, whether we should be negotiating with ACC or simply moving ahead with a public hearing to find them in default; and, if we are going to be negotiating what, from the City's point of view are the most important issues. I have told the Cable Commission that I would be requesting that you put this on the September:` agenda and they advised me that if that occurred, that they wouldjbe happy to come to the September meeting to present their points of view as to what settlement issues are most important to them. They will be having a special meeting of the Cable Commission on September 7th so they can get their position clear before the September 10th C&O meeting. I would recommend, that if this item is put on the agenda, that it be scheduled for discussion in Executive Session because it deals with the subject involving potential litigation. I would further suggest that members of the Cable Commission be invited to the beginning of that Executive Session to present their recommendations to Council and the Council then continued the Executive Session without members of the Cable Commission so that the settlement negotiations of the City remain as° confidential as possible. If you have any questions about this or wish me i to brief you in more detail prior to the September- C&O meeting of course let me know. cc: Mayor Benjamin Nichols • OFFICE OF CITY OF ITHACA 10S EAST GREEN STREET ITHACA, NEW YORK 14960 TELEPHONE: (607) 274-6504 CITY ATTORNEY FAX: (607) 272-7348 MEMORANDUM TO: Peter Hess, Chair, Cable Commission FROM: Chuck Guttman, City Attorney DATE: August 10, 1992 SUBJECT: Franchise Agreement Enclosed please find a copy of a letter I received from John Fogarty by fax on August 10, 1992. I did not receive any enclosures with this letter. I assume they will probably. be attached to the hard copy which will be coming by regular mail. I will forward copiesof those to you when I receive them. When I have the entire packet I will also forward copies to other appropriate individuals such as Tom Terrizzi,,the Mayor, members of Council, etc. I would like to sit down and discuss this with you and such other individuals from the Cable Commission as you deem appropriate in order to formulate the next step the City should take. My preliminary feeling is that we should more particularly identify the items in which we feel that ACC is in default. (Please note that they did not even address the issue of the number of access channels to be opened.) We should then present that to the Charter and Ordinance Committee with a suggestion that the C&O Committee appoint the independent fact -finder referred to in the Franchise agreement. It is my recommendation that we do, this publicly and forward to ACC in advance a copy of the more detailed, specific allegations. I believe we have adequately satisfied the formal procedural requirements by giving them thirty days notice. I believe we should continue to give them as much notice about every. specific item as possible to -avoid the potential allegation by them in the future that they do not know exactly what we were complaining about. We should also prepare a specific list of documentation which we will demand that ACC have present for the fact-finding hearing. I am at a loss to determine what that should be at present. Obviously I would like to see what enclosuresthey forward with this letter. 'An Equal Opportunity Employer with an Affirmative Action Program' tee/ Recycled Paper Again, I will forward the enclosures as soon as I receive them. Please contact my office to schedule a meeting of yourself and such other members of the Commission as you deem appropriate. Attachment P.S. I have now received the enclosures which Fogarty referred to. I am not enclosing a copy since they are approximately four (4) inches thick and include, for example, their entire report to NYSCCT, the Time Warner 1991 Annual Report, the limited partnership agreement between Time Warner, C. Itoh, Toshiba, etc. which -runs to about 250 pages, etc. I have all the documentation in my office. Please stop by to make copies of what you deem appropriate. On the top is what looks like the most. relevant; namely, the financial information which we want. SENT B`f : _; 1 C i IE 1DQUAR 1 ERS Post -!t" brand fax transmittal memo 7671 From Co, 7-92 ; i6:,3i. ; TC HEADQ ART"- 607 279 7348: ` 'Ir 3 . 1, # or innea r~ , ueu t 5. 160 Charles Guttman, Esq City Attorney City of Ithaca 108 East Green Street Ithaca, New York 14850 RE: City of Ithaca Fr°t;rsciiise Agree rent Dear Mr. Guttman: A%[4,: ITelevis.v r; Cnrpr1u' cdth;u COrpoIJ ..r A Tirre. Warnirr t:on pr,np eorpot e Headquarters I-,rst Stamford PInCH Stamford, CT O6fl 2 Iir3'1 203 :!28 ncno This will respond to your lettEr of Jt 1y 8, 1992 on behalf of Time Warner Entertainmerit Company, L. P. ("TWE'y) . i As the City has been advised, the franchise was tranaferre4 to TWEon June 30, 1992 from the previous franchisee,j American Television and Communications Corporation ("ATC") . Given the fact that both TWE and. ATC are under the control of Tim' Warner Inc., there is no need. for the purposes of this letter t) distinguish between the two franchisees. moth entities will be referred to herein by the name under which they have done and contilnue to -do business in the City of Ithaca, American Comftiunity Cablerision ("ACC" ) . Your letter of July 8, 1992 contains allegations of default by ACC in its performance under the terms el! i t.s fr_a'nchise agreement with the City of Ithaca. ACC denies all the !allegations and believes it ie in compliance with all the terms and conditions of the franchise agreement. Pursuant; to the provisions of Section 22.1(a) of the franchise agreement, ACC will ; respond to the spec€fic allegations of.default mad'. in your letter. For ease of complc"ehension, we will attempt to Organize our responses in the sequence of allegations and demands made in your ri.ett er.. RAspant5e. to Aliecla ion Reegardi�g Nene of Lei *'ill Your letter alleges that "ACC is not in compliance with all statutes, rules, and regulations of the Neta York Mate Commission on Cable Television (NYSCCT)." While there is no allegation of non-compliance with any' spec:iti c statute, rule or: regulation, we assume from the later discussion in your;Letter regarding §20..1 that the allegation is that ACC i , not in compliance with the NYSCCT Statement of Policy in Docked#90389. A statem :nt of policy is not a rule or regulation of the NYSCCT-and is therefore, not within the provisions of this franchise section. -The rules of the NYSCCT provide at S 590.31 through e 590.39 !specific procedures for the adoption of rules and regulation which :meed net be followed in adoption of a more inf,rmal statem nt of ,policy. Statements of policy do not have the 'coercive st tus of a rule or regulation. Furthermore, even if a statement of policy were a rule or regulation (which it clearly is n t) it: would be, of course, invalid to the extent that it conflicts With applicable Federal law. ' ProvidiuppflwUmmit aritl Int rmarinu SENT BY:ATC HEADQUARTERS ; Y- 7-42 ; 16:32 ; ATC HEADQUARTERS 607 272 7348;;a 2! 3 Resp. o Alle• a • .� Re•ard otice of Default e24 . ee Your letter directs that "ACC is to cease and desist from acting or performing in any agency capacity on behalf of the City of Ithaca.' Since reference is arcade to the letter of J. Fogarty to C. Guttman of May 12, 1992, we assume that the agency capacity referred to is ACC's role in collecting franchise tees from its customers and remitting those fees to the City. We believe that the payment of franchise fees is a specific requirement of Section XX of the Franchise Agreement and that ACC is in compliance with this section. We:believe that what is essentially at issue here is whether the money paid as franchise fees is revenue to ACC, the question discussed with respect to §20.1. Response to Allegation Regarding Notice of Default §20.1 Your letter status that "The City hereby demands accurate receipt of the total Franchise Fe due from ACC." We believe there are essentially two issues raised by your letter with respect to §20.1. One hats to do with the gitestioe of whether the portion of a subsori,ber'ps bill which is attributable to franchise fee payments is gross revenue to ACC. bur positron in this regard is set forth in the letter of May 12, 1992, J. Fogarty to C. Guttman, a copy of which is attached and made a part of this response. We believe that the 'position taken in that letter is consistent with the applicable provisit ns of the. Franchise Agreement and Federal law. You also raiie in the discussion of §2.0.1 the issue of payment of franchise fees on ° advertising revenues and revenues from affiliates using! the 'SCC system. The Franchise Agreement at Section 1.18 defines the Gross City Revenues on which franchise fees are Calculated as 'fall revenues derived directly or indirectly by Grantee and by:Grantee's affiliates for services provided within the City by the cable communications system." We do not believe that revenue received from the sale of adverti_sine time on the system is revenue derived for "cervi es pr o;vided within the City by. the cable communications system." We are not aware of any revenues from affiliates utilizing the ACC system. Documentation supplying the information requested in your discussion of §20.1 is ,enclosed. Rewe nse to 'A1legetiQn .Regarding totjce of_DeefauelLealiael Your letter alleges that "ACC adjusted its Basic rate of service to more than the $14.64 amqunt set forth in §19.1 of the Franchise Agreement." Of course, the allegation of default with respect to §19.1 Is related to the 11egat. on set forth in re pest to §20.1 regarding the subscriber's paynent attributable tp 2 stir 13y : ATC H AD6L. K r[ S 4t ATC iiF DOL ART R - 607 272 7348' is _, fee G f_ven our belief the money pal(': aw; fL"alir:` e L,::<c; 3u- in addition to and not a:part of the payment th#' subscriber makes for cable serviced, ACC is clearly in comp.tian n with the provisions of §i9.1. ons to A.1.14ggiign Reaardinallotice of Defa..0 L chApte? XIV1 This is, of course, a matterlwhich has been the subject of much discussion between ACC and the City. As we have made clear both orally and in writing on several occasions, ACC believe that the equipment expenses involved lin the activation of access channels should, under the terms of the 'Franchise Agreement, be paid from the access equipment fund. Calculations with respect to the 2% of gross revenues used to fund access equipment are enclosed .i RCz; once to All .y_ tion R gard.rig Note. of Defults_ Chapter ACC is prepared to respond to any inquiries by the City pursuant to §18,2. ACC is also prepared to cooperate with the City pursuant to §18.4(A). Reports requested .by §18.5(A) are enclosed. Reports pursuant to S18.5(C) are enclosed. ACC is prepared to furnish the City information and records pursuant to §18.5 (E) upon a specific request. ACC believes that this reponse complies fully with the provisions of Section 22.1 of the Franchise Agreement by responding- to the City's assertion of default and provides the information and documentation necessary to rebut such assertions. 1f the City wishes to discuss any of these matters further, we are, of course, quite willing to da so and, indeed, believe that such discussion would be useful in i-esolvx,ng whatever difference, in viewpoints which may. still remaib. %�: Very t u1y Yiuurs, ithaca Joh 3 In the Matter of NEW YORK STATE COMMISSION ON CABLE TELEVISION Application of Greater Rochester Cablevision, Inc. for approval of the renewal of its cable television franchise for the City of Rochester (Monroe County) Initial Docket No. 10713 ORDER APPROVING RENEWAL 92-286 DOCKET NO. 30855 (Adopted: April 1, 1992; Released: June 18, 1992) The above -captioned application was submitted by Greater Rochester Cablevision, Inc. ("GRC") on March 16, 1992. A copy of the application was served upon the City and all local notice requirements have been satisfied. Notice was also published in this Commission's Weekly Bulletin on March 20, 1992. No comments or objections have been received. The application seeks approval of the renewal of a franchise for the City of Rochester embodied in a franchise agreement executed by the Maypr and GRC on March 12, 1992. The renewal was authorized by Ordinance No. 91-533 passed by the City Council on December 17, 1991 and approved by the Mayor. Also, on December 17, 1991, the City Council passed (and the Mayor subsequently approved) Ordinance No. 91-532 entitled An Ordinance Amending The Municipal Code By The Adoption Of New Regulations Governing Cable Television. Ordinance No. 91-532 adds a new Chapter 4A to the City of Rochester Municipal Code and provides at Section 2 that "this ordinance shall take effect immediately subject to approval by the New York State Commission on Cable Television." (Ordinance No. 91-532 and Chapter 4A of the City Code are herein referred to as "Chapter 4A.") The application is governed by Section 822 of the Executive Law which requires our approval unless we find specific violations of law, the regulations of this Commission, or the public interest. Section 822(4) of the Executive Law provides that we may approve the renewal contingent upon compliance with standards or conditions consistent with the public interest. Having reviewed the application in the context of all applicable statutory and regulatory standards, we have determined to approve the renewal subject to conditions as hereinafter set forth. Tower Building • Empire State Plaza • Albany, NY 122.23 3 to subscribers by a franchisee, or receipts from sales or use taxes or any other tax that a franchisee collects on behalf of any taxing authority." (Emphasis aded) The Commission has recently amended Section 595.1(0) of its rules relative to the manner in which franchise fee requirements may be stated in a franchise agreement. (See, Memorandum and Resolution Adopting Rulemaking, Docket No. 90327, Order No. 92-210; released: April 9, 1992) The effect of the new rule is to ensure a minimum content in„the revenue base used to calculate municipal franchise fees. Specifically, the rule requires that if a fee is based on a percentage of revenues, the revenue base must include "revenues received by the franchisee directly from subscribers for any cable services purchased by subscribers on a regular, recurring monthly basis.” In other words, the rule limits the items of revenue that may be deducted from gross revenues before calculating a franchiser fee. The attempt here to exclude "franchise fees" from the gross revenues upon which the fee is based is contrary to Section 595.1(o). A franchise fee is not a separate category of revenue like a tax. (See, e.g., Statement of Policy, Docket No. 90389, released: April 20, 1992) Indeed, the definition itself distinguishes the franchise fee from taxes which "aj franchisee collects on. behalf of any taxing authority." Nor is it apparent how an amount' that is calculable only upon revenue can be excluded from revenue. Accordingly, we find that so much of the definition of gross revenues as purports to exclude "franchise fees" is preempted. Section 4A-2 would also exclude annual grants for PEG access from "gross revenues." Under Section 622 of the Cable Communications Policy Act of 1984 ("Cable Act"), 47 U.S.C. Section 542, support payments for PEG access (as distinct from capital costs for PEG access facilities) generally are considered to be includible as part of the franchise fee and, as such, would be subject to the same analysisas above. We note, however, that the parties here have agreed that the franchise fee shall not include the annual grant for public access.2 Accordingly, we shall not preempt this aspect of the definition of "gross revenues" in Section 4A-2 in any instance where a franchise agreement approved by the City does not treat the annual grant for public access as part of the frarichise fee. Third, Section 4A -14(B) relative to public access requires that use of the public access channels be available only to individuals who are residents of the City and to organizations that have an office located in the City. Section 595.4 of ,the Commission's rules contains minimum standards applicable to public, educational and governmental access throughout the State of New York. Section 595.4(5) . defines local use to mean "noncommercial use by residents of the State of New York," it being the intent of the Commission that public access channels be available to any New York State resident. Accordingly, we find that the residency requirement in Section 4A -14(B) is contrary to the Commission's rules and policy applicable to PEG use and, therefore, is preempted. 2 Section 10 of the franchise agreement provides that "[t]he Grantee shall not charge against the franchise fee in any way the expenses incurred in supporting access programming and in meeting the requirements of this Agreement and the City Code." 5 We shall also approve the option in favor of the City. We note, however, that the existence of such option does not relieve the City of the obligation under Section 591.3 of our rules to exercise due diligence to review the past performance of the cable operator and to consider future community needs and interests prior to acting tpGextend the franchise. Nor does the existence of an option (in favor of either party) remove a renewal from the requirements of Section 822 of the Executive Law. Given the absence of any time specified in the franchise for exercising the renewal option, coupled with the requirements of Section 591.5(b)(2) that a renewal application be submitted to the Commission six months prior to the expiration date of a franchise, we believe that the City should ,determine whether to extend by option no later than the beginning of the ninth month preceding the expiration of the franchise, or July 1, 2001. Of course, the existence of the option will not preclude GRC from seeking a renewal of the franchise prior to July 1, 2002 in accordance with Section 626 of the Cable Act, 47 U.S.C. Section 546. Section 7 of the franchise agreement contains various provisions applicable to public, educational and governmental channels. Sections 4A-13 and 4A-14 also include comprehensive provisions generally applicable to public access. Section 4A-13 is specifically incorporated into the franchise pursuant to Section 11. Section 4A-14 is not similarly incorporated. Nonetheless, it appears from Section 7.1 of the franchise agreement as well as from other provisions thereof, that there is an intent to incorporate at least part of Section 4A-14 and we shall so construe the franchise agreement. In addition, Section 7.1 of the franchise agreement provides that a not-for- profit corporation shall administer the public channel and that the corporation shall be appointed by the Mayor pursuant to an annual contract with the City. Section 7.3(b) provides that the not-for-profit corporation shall receive an initial grant "for the administration and operation of the public access channel(s)" from GRC in the amount of $175,000 to be increased annually at least by 5%. The administration of a public access channel by a separate entity is consistent with Section 595.4(c)(1) of our rules applicable to PEG access. As in similar cases, we shall require the City to provide us with documentation that the corporation has been formally designated together with copies of its certificate of incorporation and by-laws and a list of the initial board of directors.4 We also note that the franchise requires separate educational and governmental channels and that pursuant to the agreement the educational access channel shall be jointly administered by the Cable College Educators of Greater Rochester and the Rochester City School District. 4 Since the Commission's vote approving this application, the City has filed this information which shows that Rochester Community TV, Inc. has been formed as a not-for- profit corporation that will administer public access in the City of Rochester. OFFICE OF CITY ATTORNEY CITY OF 1THACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 July 8, 1992 Barbara Lukens General Manager American Community Cablevision 519 W. State Street Ithaca, NY 14850 TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 CERTIFIED MAIL RE: City of Ithaca Franchise Agreement Dear Ms. Lukens: This will serve on behalf of the City of Ithaca, as a notice ofdefault by American Television and Communications Corporation d/b/a American Community Cablevision (ACC) . This notice of default is as provided for in Chapter .XXII, §22.1, of the Franchise Agreement between the City of. Ithaca. and ACC. The .City of Ithaca finds ACC does not adhere ,`to New York State Regulations and Policies as set forth in §24.1 Of the Franchise Agreement; has failed to provide all monies due the City of Ithaca; ACC charges cable subscribers in excess of the maximum Franchise Agreement amount; ACC failed to activate Access channels as demanded; ACC failed to rebate money spent from the Access Capital Equipment fund for the activation of two Access channels. Pursuant to §22.1 of the Franchise Agreement, the City demands, within thirty (30) days of receipt of this letter, either a cure, or a response as set forth in §22.1 of the Franchise Agreement. After thirty (30) days, if a .response is not made, a cure not effected, or reasonable and diligent steps not taken to cure the provisions in default, the City may pursue remedies as set forth in Chapter XXII of the Franchise Agreement entitled "BREACH". THE CITY OF ITHACA FINDS TEE FOLLOWING PROVISIONS IN DEFAULT: Chapter XXIV MISCELLANEOUS PROVISIONS. §24.1: ACC is not in compliance with all statutes, rules, and regulations of the New York State Commission on Cable Television (NYSCCT). 'An Equal Opportunity Employer with an Affirmative Action Program' rill Recycled Paper Barbara Lukens July 8, 1992 524.10: ACC is to cease and desist from acting or performing in any agency capacity on behalf of the City of Ithaca. Please refer to letter of J. Fogarty to C. Guttman, May 12, 1992. Any and all agency actions known or unknown, disclosed or undisclosed are to stop immediately. Chapter XX FRANCHISE FEE 520.1: The City hereby demands accurate receipt of the total Franchise Fee due from ACC. ACC is in violation of the NYSCCT STATEMENT OF POLICY (Docket No. 90389). As expressed in §24.1, ACC is to comply with the regulations of the NYSCCT. The Franchise Fee of 5% of ACC's Gross City Revenue is to be correctly calculated for past,present and future paymentsdue the City, considering all income, including, but not limited to Franchise Fees and Advertising Revenues. The City demands an accounting of Gross Revenues pursuant to the Franchise Agreement, the regulations of New York State as set by the New York State Commission on Cable Television, and the FCC. The City demands full disclosure of Gross Revenue accounting pr.actice;s in the_ past .and those to be used in the. future. The City also demands disclosure and accounting of advertising revenues and revenues from affiliates utilizing the ACC system. Please refer to 5..20.3. The City demands an explanation of .how the NYSCCT Rate. of .359% and .277%, deducted from the 5% Franchise Fee,. .is timed and applied, as well as the impact this fee and its accounting has had on the Franchise Fee calculation and subsequent fees paid to the City. The City imposes a due date for the proper payment of all fees now due and additionally for the fees incorrectly accounted for and not made in the past. The date for the properpayments and refunds shall be 30 days from the receipt of this letter. This notice is made pursuant to 521.1 (D) of the Franchise. Agreement. Chapter XIX RATE REGULATION 519.1: ACC adjusted its. Basic rate of service to more than the $14.64 amount set forth in 519.1 of the Franchise Agreement. A refund is due the customers of ACC of the amount overcharged since March 1, 1992. Chapter XIV ACCESS CHANNELS AND SERVICES The City demands that. ACC comply with 514.1 of the Franchise Agreement as demanded in 1991 by the City as well as by Resolution of the Ithaca Cable Commission (attached; dated 02/11/92), Barbara Lukens 3 July 8; 1992 regarding the activation of nine access channels, and the rebate of all monies taken from the Access Capital Equipment Fund to activate access channels. In addition, the City demands a detailed, specific and clearly set forth calculation of the 2% of Gross Revenues used to fund Access equipment. The dates of this calculation are to include all years of the Franchise Agreement along with avaiJlable projections for 1992 and for 1993. Please take notice thatlit is the City's position that ACC is requiredto pay 2% of its total Gross Revenues to the Access fund .and the salaries of the ACC Access staff in addition to the 5% Franchise Fee. ACC is expected to adhere to the NYSCCT Statement of Policy Docket No. 903891 and 47 USCS.§542 (g)(B)(C). If ACC has a contrary position, ACC is requested to respond in detail immediately. Chapter XVIII REGULATION OF FRANCHISE Pursuant to §18.2 of the Franchise Agreement the City now makes inquiry into the management and affairs' of ACC. Please advise as to the process you wish us to follow in reviewing these documents. Pursuant to §18.4, the City of Ithaca gives notice of its intent to exercise its right to inspect the Books, Records and all pertinent materials of ACC, whether kept in ACC's Ithaca Office or elsewhere. Pursuant to §18.5(A) the City requests ACC to immediately provide the City with any and all reports required by or voluntarily submitted to the NYSCCT and the FCC. If any'reports are not currently on file, please make them so. In addition, the City requests immediately, statements setting forth ACC general operating costs in Ithaca for 1990, 1991, and projected for 1992 and 1993. Pursuant to the provisions of §18.5(C), ACC shall immediately submit to the City the following financial reports: (1) An ownership report, including all persons, who at any time during the preceding year did control or benefit from an interest in this Franchise of five percent (5%) or more. (2) A copy of ACC's annual report. (3) A report on the placement of any limited partnership offering, if any, including the amount subscribed and the amount paid in. Barbara Lukens 4 July 8, 1992 (4) An annual City -only, certified income statement. (5) An annual list of officers and members, of the Board of ACC's and of any parent corporation. Pursuant to §18.5(E), the City demands ACC immediately furnish any and all information and records with respect;to its operation, affairs, transactions or property, as may be reasonably necessary and appropriate to the performance of any of the rights, functions or duties of the City in connection with this Franchise. Pursuant to §18.7, the City is exercising -its right to inspect. A representative of the Ithaca City Attorney's Office and/or theCity Controller's Office and/or an lauditor from the NYSCCT will notify ACC in the near future of .inspections on site in Ithaca, or, if necessary at the location of the information sought. 1 Chapter XXI BONDS, INSURANCE AND INDENINIFICATION §21.1 et seq. ACC is advised to note the ACC Performance Bond is subject to conditions set forth in §21.1(B).1 If ACC does not comply with the notice of default and demands herein, the City may foreclose the ACC Performance Bond as provided at §21.1, and seek :such other relief as allowed by the terms of the Franchise _Agreement and as may be appropriate under the circumstances. If ACC fails to respond, cure, or take reasonable and diligent steps to cure the provisions in default, the City will begin to accrue damages as provided for in §22.2 Please respond to this letter and demands herein. Very truly es G -- an City Attorney Attachment cc: Mayor Benjamin Nichols Dominick Cafferillo, Controller Resolution of the Ithaca Cable Commission Regarding Activation of Access Channels Passed unanimouly, 2/11/92 The cable franchise adopted by the City Council of Ithaca on June 8th 1988, submitted to the NYSCC on December 20th 1988 and approved by NYSCC on September 12, 1989 contains the following language: 14.1 A. (1) Nine downstream channels shall be designated for public, governmental, and educational access. The access channels shall be available for use by New York State, local governments, educational institutions, or members of the public for education and public service programming, municipal services and local expression. The City and ACC have been arguing over whether the word designate means to set aside space in the spectrum (ACC) or to provide activated channelsfor PEG access use (the City). I The following language is found in the NYSCC rules "setting minimum standards for the designation and use of channel capacity for public access". Notice of these rules was released on February 24, 1988, and they became effective on September 8, 1988: 595.4 (b) (7) The designation of PEG access facilities shall include the provision by the cable franchisee of the technical ability to playback prerecorded programming and to transmit programming information consistent with the designated use of PEG channels. We have every reason to believe that the drafters of our franchise were familiar with the proposed access rules and the way they construed designation of channels. We must assume that it was the understanding of the signers of the franchise, including ACC, that the franchise. required ACC to provide nine activated access channels. After a careful review of the documents pertaining to this matter, it is our opinion that there is no ambiguity in the franchise; that it is incumbent upon ACC provide nine activated access channels as part of its franchise obligations. Therefore, we resolve that the money taken from the access capital budget to activate access channels should be rebated forthwith. Further we resolve, consistent with our prerogatives and our understanding of the needs of the community, that the activation of a second public access channel take place within 60 days from the passage of this resolution. i OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 July 8, 1992 Barbara Lukens General Manager. American Community Cablevision 519 W. State Street Ithaca, NY 14850 TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 CERTIFIED MAIL RE: City of Ithaca Franchise Agreement Dear Ms. Lukens: This will serve on behalf of the City of Ithaca, as a notice ofdefault by American Television and Communications Corporation d/b/a American Community Cablevision (ACC) . This notice of default is as provided for in Chapter .XXII, §22.1, of .the Franchise Agreement between the City of Ithaca and ACC. The .City of Ithaca finds ACC does not adhere. o New York State. Regulations and Policies as set forth in §24.1 ',of the Franchise Agreement; has failed to provide all monies due thlie City of Ithaca; ACC charges cable subscribers in excess of. the maximum Franchise Agreement amount; ACC failed to activate Access channels as demanded; ACC failed to rebate money spent from the Access Capital Equipment fund for the activation of two Access channels. Pursuant to §22.1 of the Franchise Agreement, the. City demands, within thirty (30) days of receipt of this letter,either a cure, or a response as set forth in §22.1 of the Franchise Agreement. After thirty (30) days, if a response is not made, a cure not effected, or reasonable and diligent stepsnot taken to cure the provisions in default, the City may pursue remedies as set forth in Chapter XXII of the Franchise Agreement entitled "BREACH". THE CITY OF ITHACA FINDS THE: FOLLOWING 'PROVISIONS IN DEFAULT: Chapter XXIV MISCELLANEOUS PROVISIONS 524.1: ACC is not in compliance with all statutes, rules, and regulations of the New York State Commission on Cable Television (NYSCCT). 'An Equal Opportunity Employer with an Affirmative Acton Program" tot Recycled Paper Barbara Lukens 2 July 8, 1992 524.10: ACC is to cease and desist from acting or performing in any agency capacity on behalf of the City of Ithaca. Please refer to letter of J. Fogarty to C. Guttman, May 12, 1992. Any and all agency actions known or unknown, disclosed or undisclosed are to stop immediately. Chapter XX FRANCHISE FEE 520.1: The City hereby demands accurate receipt of the total Franchise Fee due from ACC. ACC is in violation of the NYSCCT STATEMENT OF POLICY (Docket No. 90389). As expressed in §24.1, ACC is to comply with the regulations of the NYSCCT. The Franchise Fee of 5% of ACC's Gross City Revenue is to be .correctly calculated for past, present and future payments. due the City, considering all income, including, but not limited to Franchise Fees and Advertising Revenues. The City demands an accounting of Gross Revenues pursuant to the Franchise Agreement, the regulations of New York State as set by the New York State Commission on Cable Television, and the FCC. The City demands full disclosure of Gross Revenue accounting practice in the.past,and those to.be used in the future. The City also demands disclosure and accounting of advertising revenues and .revenues. from affiliates. utilizing the ACC system. Please refer to 520'.3. The City demands an explanation of how the NYSCCT Rate of .359% and .277%, deducted from the 5% Franchise Fee, is timed and applied, as well as the impact this fee and its accounting has had on the Franchise Fee calculation and subsequent fees paid to the City. The City imposes a due date for the proper payment of all fees now due and additionally for the fees incorrectly accounted for and not made in the past. The date for the properpayments and refunds shall be 30 days from the receipt of this letter. This notice is madepursuant to 521.1 (D) of the Franchise Agreement. Chapter XIX RATE REGULATION §19.1: ACC adjusted its Basic rate of service to more than the $14.64 amount set forth in 519.1 of the Franchise Agreement. A refund is due the customers of ACC of the amount overcharged since March 1, 1992. Chapter XIV ACCESS CHANNELS AND SERVICES The City demands that ACC comply with §14.1 of the Franchise Agreement as demanded in 1991 by the City as well as by Resolution of the Ithaca Cable Commission (attached; dated 02/11/92), Barbara Lukens 3 I July 8,-1992 regarding the activation of nine access channels, and the rebate of all monies taken from the Access Capital Equipment Fund to activate access channels. In addition, the City demands a detailed, specific and clearly set forth calculation of the 2% of Gross Revenues used to fund Access equipment. The dates of this calculation are to include all years of the Franchise Agreement along with available projections for 1992 and for 1993. Please take notice that it is the City's position that ACC is requiredto pay 2% of its total Gross Revenues to the Access fund .and the salaries of the ACC Access staff in addition to the 5% Franchise Fee. ACC is expected to adhere to the NYSCCT Statement of Policy Docket No. 90389 and 47 USCS.§542 (g)(B)(C). If ACC has a contrary position, ACC is requested to respond in detail immediately. Chapter XVIII REGULATION OF FRANCHISE Pursuant to §18.2 of the Franchise Agreement the City now makes inquiry into the management and .affairs of ACC. Please advise as to the process you wish us to follow in reviewing these documents. Pursuant to §18.4, the City of Ithaca .gives notice of its intent to exercise its: right to inspect the Books, Records and all pertinent materials of ACC, whether kept in ACC's Ithaca,Office or elsewhere. Pursuant to §18.5(A) the City requests ACC to -immediately provide the City with any and all reports required by or voluntarily submitted to the NYSCCT and the FCC. If any reports are not currently on file, please make them so. In addition, the City requests immediately, statements setting forth ACC general operating costs in Ithaca for 1990, 1991, and projected for 1992 and 1993. Pursuant to the provisions of §18.5(C), ACC shall immediately submit to the City the following financial reports: (1) An ownership report, including all persons, who at any time during the preceding year did control or benefit from an interest in this Franchise of five percent (5%) or more. (2) A copy of ACC's annual report. (3) A report on the placement of any limited partnership offering, if any, including the amount subscribed and the amount paid in. J Barbara Lukens 4 j July 8, 1992 (4) An annual City -only, certified income statement. (5) An annual list of officers and members of the Board of ACC's and of any parent corporation. Pursuant to §18.5(E), the City demands ACC immediately furnish any and all information and records with respect to its operation, affairs, transactions or property, as may be reasonably necessary and appropriate to the performance of any of the rights, functions or duties of the City in connection with this Franchise. Pursuant to §18.7, the City is exercising -its right to inspect. A representative of the Ithaca City Attorney's Office and/or the City Controller's Office and/or an auditor from the NYSCCT will notify ACC in the near future of inspections on site in Ithaca, or, if necessary at the location of the information sought. Chapter XXI BONDS, INSURANCE AND INDEMNIFICATION 521.1 et seq. ACC is advised to note the ACC Performance Bond is subject to conditions set forth in §21.1(B).1 If ACC does not comply with the notice. of default and demands herein, the City may foreclose the ACC Performance Bond as provided aft §21.1, and seek such other relief as allowed by the terms of .the Franchise _Agreement and as may be appropriate under the circumstances. If ACC fails to respond, cure,or take reasonable and diligent steps to cure the provisions in default, the City will begin to accrue damages as provided for in §22.2 Please respond to this letter and demands herein. Very truly es G City Attorney Attachment cc: Mayor Benjamin Nichols Dominick Cafferillo, Controller Resolution of the Ithaca Cable Commission Regarding Activation of Access Channels Passed unanimouly, 2/11/92 The cable franchise adopted by the City Coundl of Ithaca on June 8th 1988, submitted to the NYSCC on December 20th 1988 and approved by NYSCC on September 12, 1989 contains the following language: 14.1 A. (1) Nine downstream channels shall be designated for public, governmental, and educational access. The access channels shall be available for use by New York State, local governments, educational institutions, or members of the public for education and public service programming, municipal services and local expression. _ The City and ACC have been arguing over whether the word designate means to set aside space in the spectrum (ACC) or to provide activated channelsfor PEG access use (the City). The following language is found in the NYSCC rules "setting minimum standards for the designation and use of channel capacity for public access". Notice of these rules was released on February 24, 1988, and they became effective on September 8, 1988: 595.4 (b) (7) The designation of PEG access facilities shall include the provision by the cable franchisee of the technical ability to playback prerecorded programming and to transmit programming information consistent with the designated use of PEG channels. We have every reason to believe that the drafters of our franchise were familiar with the proposed access rules and the way they construed designation of channels. We must assume that it was the understanding of the signers of the franchise, including ACC, that the franchise required ACC to provide nine activated access channels. After a careful review of the documents pertaining to this matter, it is our opinion that there is no ambiguity in the franchise; that it is incumbent upon ACC provide nine activated access channels as part of its franchise obligations. Therefore, we resolve that the money taken from the access capital budget to activate access channels should be rebated forthwith. Further we resolve, consistent with our prerogatives and our understanding of the needs of the community, that the activation of a second public access channel take place within 60 days from the passage of this resolution. CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY June 17, 1992 John Grow, Esq. New York Commission on Cable TV Tower Building, 21st Floor Empire State Plaza Albany, NY 12223 Dear Mr. Grow: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Thank you for spending the 'time with me recently. I am enclosing for your reference the following documents for your file: 1. Letter to the City Clerk from ACC dated January 15, 1992 advising the City of a proposed rate change to be instituted as of March 1, 1992. 2. Letter froth myself to Barbara Lukens dated January 22, 1992 objecting to the rate increase. 3. Letter from myself to Barbara Lukens 1992. dated April 14, 4. Letter to myself from John Fogarty dated May 12, 1992. 5. Basis of franchisefee payments received by the City on April 6, 1992. 6. Letter to the City of Ithaca dated May 11, 1992. 7. Letter to Peter Hess, Chairman of the City of Ithaca Access Advisory Board dated December 20, 1991. 8. Resolution passed by the Ithaca Cable Commission regarding activation of access channels, passed February 11, 1992. 9. Letter from Barbara Lukens to Peter Hess dated March 9, 1992. 'An Equal Opportunity Employer with an Affirmative Action Program" ri �i Recycled Paper John Grow, Esq.. -2- June 17, 1992 As I advised you on the phone, I will continue to keep you informed as this matter develops. . If you have comments or suggestions 'to the City of Ithaca please do not hesitate to contact me. Very truly yours G an City Attorney Enclosures 4a nATS O f D' AMERICAN COMMUNITY CABLEVISION January 15, 1992 Ms. Callista Paolangeli, Clerk City of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: ,Ii JAN 211992 t�II; ;u American Community Cablevision would like to inform the City of Ithaca of rate changes which are being instituted as of March lst, 1992. Basic Cable ACC r is'Increasing. the :rate''for-basic. service -to $13:=95 -which is less than the $14.64Ts'maximum. °: set } forth in the franchise. {agreement: n The:5%2franchise fee will be collected in addition: to the :$13:95. Since December of 1989 until now our total basic channels have actually increased by 58% while the cost per channel has decreased by 16%. 1989 customers paid 87 cents/channel for 12 channels @ $10.48 1991 customers paid 75 cents/channel for 17 channels @ $12.68 1992 customers will pay 73 cents/channel for 19 channels @ $13.95. The basic cable service "grew" in 1991. An educational access channel was added along with SCOLA (Satellite Communications for Learning). The latter was a cooperative effort between Cornell University, Ithaca College and ACC. Rates for basic cable service are related to overallincreases to ACC for general operating costs. Not unrelated is the demand for better programming and cable's response to those demands. For example, CNN's unequalled coverage of the Gulf War. ESPN's spectacular sports coverage, *including exclusive. NFL games and Major League Baseball games. gin Wm.* Ct.,... C ...... C-SPAN's and CNN's continuing coverage of the presidential race ( while the big three nets ;r N. consider cutting back on their coverage!).. In addition, ACC has responded to customer expectations for service. For_example, We continue to be in compliance with strict National Cable Television Association customer .service standards (Self-imposed standards!) We continue to invest in upgrading our phone system to provide still quicker response times. Continual training and supervision has resulted in more efficient staff members. Their proper handling of customer calls and service and installation response has resulted in an overall "good" to "excellent" rating by 92% of those customers surveyed. Remote Control The monthly fee for a remote control will be increasing from $3.00 per month to $3.95 per month. This fee has not been increased since we began offering a remote. The 5% franchise fee will be collected in addition to the $3.95. ACC has plans to offer a universal remote control both for rent and/or for purchase at some time during the first quarter of 1992. We are announcing this to our subscribers via our annual newsletter which is being mailed now. In addition, ACC makes its remotes available in the cable store for the programming of customer owned "learning" remotes. Non-payment Customers who are disconnected for non-paymenthave been charged $20.00 for reconnection. Beginning April 1, 1992 these customers will be charged the standard $40.00 (plus tax and franchise fee) connection rate. As always, if our technician collects the customer's payment when s/he arrives to disconnect service, (thereby eliminating the need to physically. disconnect and/or reconnect the cable) a $20.00 collection fee is charged. ACC has made an effort to work with customers who are having difficulty paying their cable bills by setting up limited payment plans and by reducing their current service to the basic cable service level. After the deficit is paid off and the customer is able to maintain the payments, the customer is allowed to upgrade his/her . service level. Other In order to make fee structures more equitable among communities, franchise fees for pay-per-view movies and events and for converter rentals will be added to -the stated rates for those services where applicable. Hotels and motels will be charged the basic rate for their .first television set and a nominal fee per additionil set. -This is not really a departurefromour past practice but more clearly states the rate to be paid for the initial set. (ACC has not always increased the fee for the first set as the basic rate has increased). American Community Cablevision has an outstanding offering of television programming for its customers and charges reasonable rates for the same. In comparing ACC to other New York communities' rates, I believe you will find that Ithacans enjoy a higher level of viewing at more reasonable rates. cerely, m 4bara i. Lukens, General Manager cc: The Honorable Benjamin Nichols, Mayor Mr. Tom Terrizzi, Chair, Ithaca Cable Commission BLL/mkk CITY OF ITHACA 10E3 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF TELEPHONE: (607) 274-6504 CITY ATTORNEY FAX: (607) 272-7348 January 22, 1992 Barbara L. Lukens American Community Cablevision 519 W. State Street Ithaca, NY 14850 Dear Ms. Lukens: C am in receipt of a copy of your letter of January 15, 1992 addressed to the City in which. you advise us that ACC is increasing the rates for basic service from $12.58 to $13.95 with 'a five percent franchise fee to be collected in addition. When the five percent franchise fee is added in, the rate which customers will be paying is actually•$14.65, a penny more than the maximum set forth in the franchise agreement. As I read Section 19.1 of the franchise, ACC agrees not to raise the basic rate higher than the $14.64 charge. Section 20.1 states that the City shall be entitled to receive from ACC, not from the consumer, the franchise fee. Therefore, -I would assume that the maximum that ACC can charge the consumer, including the franchise fee, is the $14.64 charge. Accordingly, I believe that the increase you are proposing actually brings your rates over the maximum set forth in the franchise agreement. You further state in your letter of January 15, 1992 that the rates for basic cable service are related to overall increases to ACC for general operating costs. I would appreciate D your forwarding to me a financial statement setting forth your general operating costs for 1990, 1991 and projected for 1992 to demonstrate that the 58 percent increase since December of 1989 is actually related to overall increases for general operating costs. I expect that Common Council will be discussing this issue and I would appreciate a response as soon as possible. Very t e Guttman City Attorney cc: Mayor Benjamin Nichols Tom Terrizzi, Cable Commission Peter 'Hess, Cable Commission 'An Equal Opportunity Employer with an Affirmative Action Program" Recycled Paper OFFICE OF CITY ATTORNEY CITY OF ITHACA 1 08 EAST GREEN STREET ITHACA, NEW YORK 14850 April 14, 1992 Barbara L. Lukens American Community Cablevision 519 West State Street. Ithaca, NY 14850 Dear Ms. Lukens: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I wrote to you on January 22, 1992 advising you that I was in receipt of your letter of January 15, 1992 in which you advised us that ACC was increasing the rates for basic services from $12.58 to $13.95 with the five percent franchise fee to be collected in addition. I calculated that when the five percent franchise fee was added in, the rate was actually $14.65 -- more than the maximum set forth in the franchise agreement. I asked you to respond to me as soon as possible regarding this matter. Some time after that letter, I received a phone call from an attorney for ACC advising me that the matter had.been. referred to him and I would promptly receive }a further response regarding this matter. It is now mid-April, approximately three months after my original letter and si.gnifica*ly after the rate increase has gone into effect. To date I have received no response to this matter. If I do not promptly receive alresponse regarding this matter I will have no choice but to advise Common Council that ACC is not responding and request direction from Council as to how to respond to what, in my opinion, is a charge of more than the maximum set forth in the franchise agreement. Please get back me or have your attorney get back to me regarding this matter at your earliest convenience. Very truly yours, Charles Guttman City Attorney 'An Equal Opportunity Employer with an Affirmative Action Program' tot Recycled Paper Meeting Chair: Jim Minutes taker: Tom CITY OF ITHACA TV CABLE COMMISSION Meeting July 14, 1992 7:30 PM City Hall Agenda 1. Call to Order 2. Approval of minutes of June 9, 1992 meeting. 3. Chair's report -Federal legislation 4. Announcements 5. ACC Report 6, Public Comment 7. Cable Acr_ess Advisory Board Report 8. Old business -CAAB Appointment 9. New Business - Southside Community Center 1 -Net drop/ Science Center I -Net drop 10. Adjournment of public session 11. Executive session City of Ithaca Cable Commie, --on Minutes of June 9, 1992 meeting, 7:30pm City Hall Attending: ICC: Peter Hess, Mary Euell, Jim Ferwerda, Ric ACC: Chris Doyle Public: Bill McCormick k Gray 1. Call to order 2. Approval of minutes of May 12, 1992 meeting. (Approved as submitted.) 3. Chairperson's Report Hess asked if there had been any further developments in the discussion of providing a discounted rate to the residents of Titus Towers based on bulk service for the complex. Doyle indicated t at he had talked with Janet Ernisse, building manager, about the options, but that he had not heard back from her about whether the residents were interested in proceeding with the plan. 4. Announcements No announcements. 5. ACC Report (see attached) 6. Public Comment McCormick expressed his concern that access staff have not been neutral in their responses to callers asking about program content issues. He suggested that access staff should immediately refer such callers to ACC customer service representatives so the call can be properly logged and the response can be officially identified as ACC's position on access program content. McCormick complained that off-street parking space near the access facility has been severely reduced by construction in other parts of the lot bounded by Newscenter7, the Access facility, and ACC's general offices. Particularly he expressed concern that there is no parking for handicapped access users. The ICC agreed to inquire withthe City to determine the requirements for hadicapped parking in the vicinity of the Access facility. 7. CAAB Report (see attached) 8. Old Business CAAB members asked if the fact that the Access capital spending plan was passed at the May 12, 1992 ICC meeting indicated that the dispute between ACC and the City over use of the 2% fund had been resolved. it has not. Hess proposed to keep this issue on the agenda of ICC meetings until it is resolved. 9. New Business Rick Gray inquired about the possibility of having the new Sciencenter be a node on the I -net. Doyle suggested that Sciencenter representatives should contact ACC to pursue this. The meeting was adjourned at 8:45 pm. Minutes submitted by Jim Ferwerda For Immediate Release August 11, 1992 Contact Peter Hess, Chair, City of Ithaca Cable Commission Phone 272-1831(h), 274-3384(o) Cable Commission Calls for Default Proceedings Against ACC Today, the City of Ithaca Cable Commission passed a resolution urging the Common Council to call for a public hearing as the next step in a procedure to find American Community Cablevisison (ACC) in default of its franchise agreement with the City of Ithaca. This action follows repeated attempts on the part of the City to resolve a number of issues with the cable company. On June 8th, the City Attorney sent a letter to Barbara Lukens, General Manager of ACC, formally notifying her of the franchise agreement provisions which the City believes ACC is failing to meet. The letter was written in consultation with the Charter and Ordinance Committee of Common Council, the New York State Cable Commission, and the local Cable Commission. The City of Ithaca Cable TV Franchise Agreement gives the cable company thirty days to respond to written charges of default, after which it authorizes the City to proceed with actions to enforce compliance. Thirty days has passed, and the city has not yet received any (a satisfactory) response from ACC. Therefore the Cable Commission now urges the City Council to proceed to the next stage of action, as provided for in Article 22 of the franchise agreement, by calling for a public hearing on these issues. The violations cited in the letter sent to ACC include the following points: - ACC is attempting to increase its rates for basic service above the limits allowed by the franchise agreement by billing its subscribers separately for the franchise fees it owes to the City. This new method of billing is in direct violation of policy statements of the New York State Cable Commission. In addition to overcharging customers, this -practice, if permittedlo continue, would enable ACC to evade several thousand dollars in franchise fee payments to the City each year. - ACC has failed to report to the City all of the income it derives from its City cable operations, as required by law. This failure has resulted in ACC's underpayment of franchise fees owed to the City. - ACC has refused to meet its franchise obligations with regard to providing equipment for public, educational, and governmental access. The Cable Commission has repeatedly requested ACC to comply with these requirements, to no avail. Resolution As American Community Cablevision has failed to respond (satisfactorily) to the formal notice of default sent to them by the City Attorney And as the thirty day period for such a response, as required by Article 22 of the Franchise Agreement has elapsed Therefore, the City of Ithaca Cable Commission urges Common Council of the City of Ithaca proceed with the next step in default proceedings, as outlined in Article 22, by calling a public meeting at which ACC may be heard and at which the City will specify its complaint against ACC. We urge that this meeting be convened at the earliest possible time. l August 2, 1992 Chuck, �9 5.1992 4 Here are drafts of: a resolution to be presented at the next Commission meet ng (August 1 1) - the press release we discussed You comments on form, style, content &c. will be appreciated. You can call me at 274-3384 (o) or 272-1831 (h). Resolution of the City of Ithaca Cable Commission Passed unanimously, 8/11/92 I. The Ithaca City Attorney has formally requested American Community Cablevision (ACC) to correct several practices which the City contends are in default of the Franchise Agreement between ACC and the City. II. The City Attorney has been notified by Time Warner Entertainment, the parent company of ACC, that they contest the City's charges and therefore, presumably, do not intend to correct the practices described in the notice of default. III. The Franchise Agreement gives ACC thirty days from formal notification to resolve charges of default. That period has now elapsed. Therefore, the City of Ithaca Cable Commission urges the Common Council of the City of Ithaca to begin default proceedings against ACC, as outlined in Article 22 of the Franchise Agreement. The first step in this process is the calling of a public meeting at which the City will specify its complaint against ACC and at which ACC may be heard. We urge that such .a meeting be convened at the earliest possible time. For Immediate Release August 12, 1992 Contact Peter Hess, Chair, City of Ithaca Cable Commission Phone. 272-1831(h), 274-3384(o). Cable Commission Calls for Default Proceedings Against ACC Yesterday the City of Ithaca Cable Commission passed a resolution urging the Common Council to call for a public hearing as the next step in a procedure to find American Community Cablevisison (ACC) in default of its franchise agreement with the City of Ithaca. - This action follows repeated attempts on the part of the City to resolve a number of issues with the cable company. On June 8th, the City Attomey sent a letter to Barbara Lukens, General Manager of ACC, formally notifying her of the franchise agreement provisions which the City believes ACC is failing to meet. On Monday, August 10th, the City received a reply from Time Warner Entertainment, ACC's parent company, denying the City's charges. The violations cited in the letter sent to ACC include the following points: -ACC is attempting to increase its rates for basic service above the limits allowed by the franchise agreement by billing its subscribers separately for the franchise fees it owes to the City. This new method of billing is in direct violation of policy statements of the New York State Cable Commission. In addition to overcharging customers, this practice, if permitted to continue, would enable ACC to evade several thousand dollars in franchise fee payments to the City each year. - ACC has failed to report to the City all of the income it derives from its City cable operations, as required by law. This failure has resulted in ACC's underpayment of franchise fees owed to the City. - ACC has refused to meet its franchise obligations with regard to providing equipment for public, educational, and governmental access. The Cable Commission has repeatedly requested ACC to comply with these requirements, to no avail. According to the franchise agreement, if the company does not resolve the alleged default within thirty days of notification, the City is empowered to proceed with actions to enforce compliance. Since that time has passed and we have been notified that ACC has no intent of responding positively to these allegations, the Cable Commission now urges the City Council to proceed to the next stage of action, as provided for in .Article 22 of the franchise agreement, by calling for a public hearing on the issues. _ AMERICAN. COMMUNITY CABL AUG 1 8'992 Dear Sir/Madam The July 13 edition of "Nation's Weekly," published by the National League of .Cities, inappropriately urged members to write their Washington legislators to support the "Cable Consumer Protection and Competition, Act of 1992." This proposed legislation is a bizarre vision of consumer protection. It has been created by a number of legislators who have been misled by the broadcast industry andispecial interest groups. 4 August 13, 1992 The bill legislates advantages for cable industry competitors, largely at the expense of cable customers. On the one hand, the Act will require price controls, while simultaneously requiring cable companies to install new equipment on the other. We are estimating that in 199,3 we will have to spend more than $840,000.00, perhaps as much as $1,120,000.00', to meet these requirements. The cost of this equipment will ultimately be paid by our customers through price increases. While the cable industry has been unregulated, many new channels have been developed. For example, years ago our corporation and other cable corporations agreed to fund C -SPAN by pledging a small payment each month for each cable customer. There is no other way such a fine public service would have been created and funded. In the space of ten years, Cable News Network has become the undisputed leader in televised news coverage. It was done through the financial commitment of cable companies across the country. This excessive regulation could cripple -the growth of current channels and development of new cable programming services consumers would enjoy. I urge you to write to your Senators and Representatives, and urge them to vote against this legislation. I am available to discuss this misguided and mislabeled piece of legislation at your convenience. Sincerely, 3CA)-e--- 1441M Dave Huff 519 West State Street Ithaca, New York 14850 607-272-3456 Pg. 2 National Cable Television Association H.R. 4850, THE CABLE REREGULATION BILL, WILL RAI CABLE RATES SE - NOT LOWER - H.R. 4850 is excessively regulatory and will cause cable rates to qo up, not down. - - Specifically, H.R. 4850 contains provisions that will force cable operators to deploy addressable scrambling technology in all subscribers' homes, regardless of demand. The cost of these provisions could exceed $5 billion - a cost that will surely put upward pressure on cable rates. -- Other provisions in H.R. 4850 would micromanage the cable industry, imposing substantial regulatory costs on cable operators and, ultimately, cable subscribers. Everything from the types of equipment that a system uses to the decision to place a particular network on a particular channel would be regulated by this legislation. -- According to the Congressional Budget Office, H.R. 4850 will cost the federal government at least $100 million to implement in its first five years. In addition, state and local governments are expected to spend another $8, million to $14 million per year to fulfill their responsibilities under the bill. These costs will be borne by all taxpayers, cable subscribers and nonsubscribers alike. - - Under H.R. 4850, improvements in cable service and programming would again be stymied. The bill also would reimpose burdensome must -carry obligations on cable operators, forcing one-third of each cable company's cable channels to be sett aside for carriage of over -the; air TV stations. - - As a result, some cable networks (such. as C -SPAN and CNN) might have to be dropped. This boondoggle for broadcasters almost certainly is unconstitutional. Finally, there is the prospect that H.R. 4850 will be "loaded up" with other special interest provisions, either on the floor or in conference. - - Broadcasters are seeking "retransmission consent" rights that would force cable operators to pay as much as $1 billion per year to carry the local TV stations that are available to viewers over - the -air for free. - - Cable's other business rivals, such as the DBS venture being launched by the Hughes Communications, are pushing for a "forced program access" provision that would abridge the property rights of cable program networks like CNN and Nickelodeon by prohibiting exclusive distribution arrangements and by forcing the sale of cable programming to all corners at government-dictatedprices, terms, and conditions. SEDT B'I:Xer ox IoIec pier 7021 41rII2'.92 ;11:50 20332) 2-i 607 272 7348:# 1 JornEFogerti PoSt.it"' brand fax. _tran'ti Itt&! memo 7671 {4Dij?spe t, ` Assoc ata G. sera. Counsel 203 32a-0629 (, ,60) May 12, 1992 _.,�_ �•7 I -- 7'3'/ Charles Guttman, Esq. City Attorney City of Ithaca 103 ]fit Green Street Ithaca, New York 14850 BOE: City of Ithaca - Franchise Fees Dear Mr. Guttman: „ • uu, Teletiig,on & Comrr,tn'canCns Coruoratio:t A Timm Warner Inc. Cornram;• Corporate rladdq. tcra 300 First Stamford Piacc StaRYorn. CT 06902-6732 203 328-0600 �.1 will respond on behalf of American Television Et Communications Pre ..:rattan, d/b/a American Community Cablevision (Cablevision") to your letter e..easy 22, 1992. 1 appreciate your patience in wafting for this response. In your letter you object that Cablevision's rate for basic service increased beyond the maximum 5% permissible without regulatory approval.. Your eels ulatiou. however, as your letter explains, is based on including within the rate charged for basic service the amount attributable to the franchise fee paid to the City of .Y.tlta, Your position would seem to be that the franchise fees are part of the rate charged by Cablevision at.d therefore part of Cablevislon's revertum For the reasons set forth herein, it is Cablevislon's position that monies collected from subscribers and paid as franchise fees are not revenue to Cablevision and are not part of the rate chary for Cablevisfou's services. Cablevision, his required by the terms of its cable; u,L evisfon franchise agreement ,pith the City of Ithaca, collects and remits to the City of Ithaca ,Je percent of its "gross City revenues" (as defined ht the 'Franchise) as a fran.eh , . fee. Cablevision �> Is the appropriate a3111 -!-,;at of the franchise fee on each customer's bill as a separate 'en/ distinct from the cetarge for the cable televJ ion services the subscriber receives. e.a quarterly basis, Cablevision pays to the City the exact amount it has received ir.. c'anchise fee payments from its customer's. Thus, Cablevision is, in effect, acting as agent for the City of Ithaca in collecting the franchise fee from its customers and remit ams; it to the City. In accordance with generally accepted accounting principles, Cablevisiotr reflects such franchise fees on its books as nonrevenue liabilities collected from the subscriber and payable to the City. Cablevision does not treat the franchise fees collected from subscribers as gross revenues of Cablevision and, thus, does not collect or p . rive percent of these monies as franchise fee. Put succinctly, Cablevlsia a the n<:' a fee on the amount it collects as franchise fees. ?ro,-idr',Q aitertalrment and Intcnrdt o» choice SENT 3Y;Xerox Teiecop er 7021 ' —12-92 ;11:51AM ri4. 20332 �?-� 507 272 7345;# 2 The City claims that, contrary to Cablevision's practice, the amount collected by Cablevision in franchise fees should be treated as part of Cablevision's gross revenues and subject to the five percent fee. It is Cablevision's position, as detailed below, that (1) the funds it collects as franchise fees are not "gross revenues" as defined in the Franchise; (2) Cablevision's treatment of the franchise fees which it collects as nonrevenue liabilities is in accord with generally accepted accounting principles; and (3) under the provisions of the Cable Communication Policy Act of 1984 ("the Cable Act"), monies collected as franchise fees and paid to the. City are not gross revenues and imposing a franchise fee on these monies would violate the franchise fee limitation set in Section 622(b) of the Cable Act. N%,Wsee elliect$d.a i iinly f 4�.cy n re.n �dQrlf] ¢_An t41 l tichisee �` +v The Franchise at Section 1.18 defines "gross City revenues" as follows: "Gross city revenues means all revenue derived directly or indirectly by the Grantee and by Grantee's affiliates from services provided within the City via the Cable Communications System." The definition of "gross City revenues" is limited expressly to revenue derived from services provided on the cable system. tinder a fair reading of the Franchise, money collected as franchise fees should not be included within this definition. A - Ilse fee which is simply passed through to the consumer cannot be said to derive t'.. the services provided by a cable operator to its customers via its cable system. It is not part of the consideration paid for cable servie or for the operation of the cable system by customers. That consideration is set by Cablevision and is separately indicated on the bili. Franchise fees should not qualify as revenues derived from set -vices provided by Cablevision. II. maples. As previously indicated, Cablevision's accounting treatment of the monies it collects as franchise fees is in accord with its view of the meaning of the Franchise: Cablevision records these monies as liabilities and does not recognize there a:.. revenues. In so treating these .monies, Cablevision is acting in accord with generally accepted accounting principles. Attached is. a letter of November 9, 1989 from accountants Ernst & Young so stating. aiot "gross seven 1 ." 2 11 eleekteeire SENT BY:Xerox Te l ecopier 7021 72-92 ;1 i : 52Arr1 ': r 20332 607 272 7340:4 3 Section 622 of the Cable Act provides, in relevant part, that: (b) For any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such cable operator's gross revenues derived in such period from the operation of the cable system. re cable operator may pass through to subscribers the arraount of any increase in a franchise fee, unless the franchising author;ty demonstrates that the rate structure specified in the franchise reflects all costs of franchise fees and so notifies the cable operator in writing. (c) (e) Any cable operator shall pass through to subscribers the amount of any decrease in a franchise fee. tf) A cable operator may designate that portion of a subscriber's bill attributable to the franchise fee as a separate item on the bill. Section 622(b) allows the franchise fee to be assessed only on "gross revenues derived. from the operation of the cable system." As argued with respect to similar language in the Franchise, money collected as franchise fees is not derived by Cablevision from the operation of the system; rather it is money collected by Cablevision on behalf of the City. Thus, the terms of the Franchise, which do not include money collected as franchise fees within gross revenues, are consistent with Federal law,. Other pros esions of Section 622 are consistent w! h the position that franchise tees are a pass-through. charge assessed by the franchising authority and not part of the consideration received by the cable operator from operation of the system. Section 622(f) authorizing cable operators to separately itemize franchise fees on customer bills evidences the view implicit in the Cable Act that a franchise fee Le a charge passed through to the subscriber which Is in addition to and not a part of the charge a customer pays for cable services. Separate itemization is, of course, the way sales taxes are generally treated on consumer bills and Section 622(0 indicates that franchise fees are to be regarded as a similar charge. Section 622(c) and (e) further indicate that franchise fees are to be directly passed through to customers by the cable operator and are not to be treated as part of revenue received in payment for cable services. It should be noted that these provisions are relevant only in circumstances where there is regulation of the rate charged for cable sere cs. Section 622(c) would be meaningless where the cable operator is exempt front rate regulation, since the franchise would not specify a rate 3 SENT BY:Xerox Telecopier 7021 12.12 ,11:I3ry;M 20332 507 272 7c1484# 4 structure, or if it did, such language would be preempted. Similarly, the requirement fn sr5bsection (e) that mandates a pass through of any decrease in the frcrnchise fee can only have meaning in a rate regulated environment since an unregulated operator weed always be free to raise its rates. Both sections make clear the intent of the Act that the portion of the customer's bili attributable to franchise fees and the portion attributable to the charges for cable services are distinct and that the portion attributable to the franchise fee s indeed a straightforward pass through which directly rises or falls as the franchise fee incresn or decreases. The use of the term "pass through" in the Act itself emphasizes that the franchise fee revenues collected from customers are the funds of the City and the cable operator's function is merely to collect these fir i ds on the City's behalf. Subsection (c) ensures that the rate regulated cable operators can pass through any subsequent increase in the franchise fees without having to seek permission for a rate increase from the franchising authority in those limited situations where a rate regulated cable system has voluntarily chosen not to pass through its franchise fee In place on the effective date of the Cable Act. In short, in enacting a provision which allows even a rate regulated cable operator to pass through any franchise fee increases on top of the fixed rate, subsection (c) evidences Congress' intent to protect the general right to pass through the entire franchise fee by ensuring the availability of the pass through in a situation where the practice might be interpreted to conflict with local rate regulation. Simi arly, the purpose of subsection (e) is to ensure that the franchise fee reductions are passed on to subscribers, rather than being absorbed by the cable operator as profit, in those limited situations where a rate regulated cable operator voluntarily had chosen not to pass through its existing franchise fee. In sum, Section 622 of the Cable Act strongly supports Cablevislon's practice. The franchise fees are in addition to, distinct from, and not a part of the rate charged for cable services; the monies paid as franchise fees are not consideration, for a cable service and therefore not revenue to the cable operator. To treat the portion of the subscriber's bill attributable to franchise fees as revenue on which franchise fees must be paid would not only be inconsistent with the intent of the Cable Act, it would in the case of the Ithaca franchise violate the prohibition of Section 622(a) on the payments of franchise fees in excess of five percent of gross revenues. Since the portion of the customer's payment attributable to franchise fees is not part of Cablevislorr's gross revenues and Cablevision already pays five percent of its gross revenues as franchise fps, payment of any percentage of the money paid as franchise fees would result in a payment In excess of five percent of gross revenues in violation of Section 622(b). 4 SENT ?Y:Xerox Te!ecoppier 7021 53: 2 :Qr 4 Jf.9 after your review of Cablevision's position, you wish to &ems thds ' sue further we are, of course, wining to clo so. Again., may thanks for your courtesy and patience, JF:pg Ithaen.fe 5 Very truly yours, /a4 (6L4r)t;- John E. Fogarty C r RECEIVED APR NEW YORK STATE COMMISSION ON CABL1 3 0 1992 :.LEVISION art - In the Matter of 92-21.0 Amendment of Section 595.1 of the Commission's Rules DOCKET N MEMORANDUM AND RESOLUTION ADOPTING RULEMAKING (Issued: April 9, 1992) By Notice of Proposed Rulemaking (In the Matter of Amendment of Section 595.1 of the Commission's Rules; Docket No. 90327, Order No. 91-305, released: July 24, 1991; published in the New York State Register on July 31, 1991), the Commission proposed to amend Section 595.1(o) of its rules relative to cable television franchise fees payable to municipal governments. Following the receipt and review of comments, the Commission authorized a revised proposal which was issued December 4, 1991 and published in the State Register on that same date. Having reviewed all the comments submitted, we have determined to amend Section 595.1(o) in accordance with the !changes in the revised proposal. Section 595.1(o) was first amended to include requirements concerning franchise fees in 1988. (Order Adopting Regulations in Docket No. 90327, Order No. 87-191, Released: February 10, 1988.) The rule provided as follows: OPPIA11/1 �/`con� "Section 595.1 Required Contents of Franchises. Where a cable television franchise is awarded or renewed after April 1, 1973,...the franchise will be confirmed by the Commission only if it contains: (o) A provision stating (1) whether a franchise fee shall be payable by the franchisee to the municipality and, if applicable, (2) the precise amount or method of calculation of such franchise fee which, if expressed as a percentage of the franchisee's revenues, shall be expressed as a percenta g e of the franchisee's gross revenues derived from the operation of the cable system within such municipality.* * For purposes of this Section, the term "franchisee's gross revenues derived from the operation of the cable system "shall mean all revenues required to be reported to the Commission in Accounts 4000,0 through 4230.0 pursuant to 9 NYCRW 'art 599." P- -a ct 2 The rationale for the rule and the objectives. to be achieved are set forth in the Order Adopting Regulations at pp. 4-5. (See also Notice of Proposed Rulemaking in Docket No. 90327, Order No. 91-305, Released: July 24, 1991.) The rule applied to franchise fee provisions contained in franchises granted or renewed after February 11, 1988. Notwithstanding the rules, some franchises submitted for Commission review and approval after the effective date continued to contain franchise fee provisions which required payment on a revenue base other than as set forth in Section 595.1(o). Upon further review and consideration, we determined that some modification of the rule to provide flexibility could be achieved without compromising the underlying objectives of the rule itself. On July 24, 1991, we issued a proposed amendment (the "initial proposal") for comment which we believed maintained the objective that franchise fee provisions be clear and unambiguous but permitted some reasonable flexibility by defining the term "gross revenues" in a less inclusive fashion. We received comments from the Cable Television Association of New York, Inc. ("CTANY"), the Towns of Sand Lake and Saugerties, and a number of parties from Westchester County (See: List of Appearances, attached). A copy of the proposed rule is attached hereto as Appendix A. A copyof the Assessment of Public Comment is attached hereto as Appendix B. The majority of municipalities commenting upon the initial proposal opposed it on practical, rather than legal, grounds. They expressed fear that the proposed minimum revenue base for calculating franchise fees would become the starting point for negotiations with cable operators and thereby impair their ability to obtain fees based on all gross revenues including the maximum fee of 5% of "gross revenues derived from the operation of a cable system" as permitted by federal statute (47 USC Section 542). Although it has never been our intent to effect the total dollar amount of franchise fees payable pursuant to a franchise, we recognize that in many instances the fees are negotiated and that the initial proposal might have the unintended effect described in the comments. Accordingly, we issued a revised proposed amendment (the "revised proposal") wherein we proposed to reinstate an all inclusive definition of gross revenues with language that would permit the parties to exclude some components of revenue in expressing the fee obligation. Specifically, the revised rule provided that, absent exclusions, a fee based on a percentage of revenues must be based on all revenues; and that notwithstanding exclusions, the fee could not be less than a percentage of all revenues received from subscribers on a regular recurring monthly basis. A list of those parties who commented on the revised proposed amendment is attached as Appendix C. Having considered all comments and our own experience with franchises and franchise negotiations, we conclude that the rule we adopt will preserve our objectives while at the same time provide a degree of flexibility to those municipal governments who may 3 choose to continue existing exclusions for nonrecurring programming charges or to authorize new exclusions consistent with the requirement that there be a uniform fee applicable to all recurring programming charges. The provisions of Section 202(1,) of the State Administrative Procedure Act and Section 101-a(2) of the Executive Law having been complied with, the Administrative Officer shall file with the Secretary of State the attached resolution which adopts the amendment of 9 NYCRR, Section 595.1(o) Commissioners Participating: William B. Finneran, Chairman; John A. Passidomo, Barbara T. Rochman Commissioners. Appendix A TEXT OF RULE Section 595.1 Required Contents of Franchises. Where a cable television franchise is awarded or renewed after April 1, 1973, or where a franchise was awarded prior to said date but the franchisee had not commenced operations or substantial construction prior to January 1, 1972,; the franchise will be confirmed by -the Commission only if it contains: o. A provision stating: (1) whether a franchise fee shall be payable by the franchisee to the municipality; and, if applicable, (2) the precise; amount or method of calculation of such franchise fee which, if expressed as a percentage of the franchisee's revenues, shall be expressed as a percentage of the franchisee's gross revenues derived from the operation of the cable system within such municipality.1 A municipality may elect to approve certain exclusions from said revenue base, provided that the resultant revenue base shall not be less than revenues received by the franchisee directly from subscribers for any cable services purchased by subscribers on a regular, recurring monthly basis. 1 For purposes of this section, the term "franchisee's gross revenues derived from the operation of the cable system" shall mean all revenues required to be reported to the Commission in Accounts 4000.0 through 4230.0 pursuant to Part 599 of this Title. Appendix B ASSESSMENT OF PUBLIC COMMENT The Commission proposed to amend Section 595.1(o) of its rules concerning franchise fees by a Notice of Proposed Rulemaking released July 24, 1991. The Cable Television Association of New York, Inc. ("CTANY"), Senator Suzi Oppenheimer, Assemblywoman Cecile D. Singer, Assemblyman Richard Brodsky, Assemblyman George Pataki, Rye Community Television, and a number of municipal governments submitted written comments on the proposed amendment. In response to these comments and in an effort to further clarify Section 595.1(o), the Commission issued a revised proposed amendment to Section 595.1(o) on December 4, 1991. The revised proposed amendment generated written comments from CTANY and a few municipal governments. The initial proposal provided that any franchise fee expressed as a percentage of revenues must be based on revenues that are "no less than gross revenues received by the franchisee directly from subscribers .for any cable services purchased by the subscriber on a regular, recurring monthly basis." This proposal would have relaxed the existing minimum standard in 595.1(o) which required a fee based on revenues to be based on gross revenues from all sources. Although the proposal would not have required any reduction in fees, the majority of comments were in opposition. CTANY, which opposed Section 595.1(o) when it was first adopted, continues to oppose any minimum standard concerning franchise fees. CTANY contends that the amendment threatened to "harm both cable operators and municipalities." According to CTANY, "expanding the measure of revenues against which a franchise fee percentage will be applied" financially hurts those operators who currently exclude premium services from the revenue base. CTANY maintained that the proposal would prohibit municipalities from excluding revenues derived from subscription pay channels and consequently denies the municipalities freedom to negotiate. Lastly, CTANY reiterates is position that the Commission exceeded its proper role because the proposed amendment infringed on the municipalities' legal right under Executive Law Section 818 to determine the franchise fee, subject only to federal limits. The Commission has previously determined that it has the jurisdiction to promulgate a minimum franchise standard applicable to franchise fees. In adopting the existing standard, we noted that in accordance with early federal policies franchise fees were often stated as a percentage of revenues from "basic service" and that at least since the Cable Act in 1984 "basic service" depends more or less upon unilateral marketing strategies of cable companies. We emphasized our concern that franchise fee obligations should be clear and readily ascertainable. We also expressed our concern about the imposition of fees on some, but not all, categories of programming services. Accordingly, we adopted a rule that required any franchise fee based on revenues, to be based on gross revenues as the term is used in our Uniform System of Accounts. At the same time, it should be clearly understood that neither the existing rule nor the revised rule requires the payment of a franchise fee, or that a fee be based on gross revenues or any minimum percentage payable !Pk- -2 - thereon. The amount of the fee remains subject only to federal law Executive Law. and Section 818 of the Correspondence from Assemblymen Brodsky and Pataki, Assemblywoman Singer and Senator Oppenheimer expressed reservations about the' initial proposal. They asserted that the proposed amendment would be detrimental to municipalities in that it would place municipalities at an unfair disadvantage in negotiating contracts with cable companies and would, therefore, result in decreased franchise fee payments. Several municipalities voiced similar concerns in their opposition to the first proposed amendment of 595.1(o). In a written comment, the Larchmont-Mamaroneck Cable TV Board of Control ("Larchmont-Mamaroneck"), on behalf of the Town of Mamaroneck and the Villages of Larchmont and Mamaroneck, objected to the proposed amendment. Correspondence from the Town and Village of Harrison, the Village of Croton -on -Hudson, and the City of Mount Vernon supported the Larchmont-Mamaroneck comment. Larchmont-Mamaroneck based its opposition to the proposal on the premise that the proposed minimum standard would exacerbate a municipality's already disadvantaged negotiating position and become "the standard." Larchmont-Mamaroneck also insisted that the unamended rule assists the municipality in obtaining information regarding the franchisee's total revenue, while the amended rule would make disclosure itself the subject of negotiations. Comments from the Towns of Eastchester and Gree'nburgh, the Villages of North Tarrytown, Irvington, Ossining, Tuckahoe, Rye Brook, Scarsdale,- Bronxville, and the City of New Rochelle expressed opposition to the proposed amendment of 595.1(o). Like the Larchmont-Mamaroneck comment, these municipalities also objected to the establishment of a minimum standard that did not include all sources of revenue. The common threads of opposition in these comments was the alleged resulting weakened bargaining position of the municipality and the reduction in municipal revenues, particularly lost advertising revenue. Under federal law, "any cable operator may be required under the _terms of any franchise to pay a franchise fee." (47 USC Section 542) Certain limitations, including a ceiling of 5% of gross revenues, are contained in the statute. Although it is our view that a municipality may require a specific fee as an absolute condition of a franchise or renewal, we concede that the existence of a fee or the precise amount thereof is often subject to negotiation. It is apparent from the comments that many municipalities believed that the effect of the proposed rule would be to favor cable companies during such negotiations by permitting the companies to characterize the minimum standard ds a preferred standard. In fact, it was not the intent of the Commission to influence the amount of the franchise fee payable to a municipality. Rather, the Commission's initial proposed amendment was intended to provide a degree of flexibility consistent with the underlying principle that franchise fee requirements be clear and unambiguous and apply uniformity to all recurring programming. -3 - Based on the comments received in response to the proposal, the Commission issued a revised proposed rulemaking on December 4, 1991 designed to achieve the same goals in a somewhat different manner. The revised proposed rule reinstates an all- encompassing definition of the term "gross revenues" to be applicable whenever a franchise fee is to be expressed as a percentage of the franchisee's revenues. "Gross revenues" will continue to be defined as all revenues reported to the Commission in Accounts 4000 to 4230 of 9 NYCRR 599. Municipalities may elect to exclude some components from the revenue base so long as the resulting revenue . base is no less than that derived from regular, recurring monthly subscriber revenues. The revision responds to concerns of some municipalities that the Commission's initial proposal would set a minimum revenue base which would become the standard in negotiating the franchise fee. Fewer comments were received by the Commission regarding the revised proposal. In contrast to its response to the first proposal, the Town of Greenburgh does not object to the revised proposal. The Town of Scarsdale neither objected to nor supported the revised proposal, but did express continuedconcern over the effect it would have on the municipality's negotiating power. CTANY and Larchmont-Mamaroneck reiterated the arguments they advanced in response to the proposed amendment of July 24. A. Thomas Levin, Esq., representing two consortiums of villages in Nassau County, also submitted comments to the revised proposed amendment of 595.1(o). In essence, the Commission and Mr. Levin are in accord. Mr. Levin expresses concern over the municipalities' ability to negotiate for "inclusion in a franchisee's 'gross revenues' any sums which the contracting parties agree are appropriate to include in the franchise agreement." This is exactly what the revised proposal permits. As to existing contract language, the amendment to Section 595.1(o) will vary in its applicability. Many franchises contain a provision obligating the parties to amend their franchises to reflect changes in the Commission's rules. For these -municipalities, the amendment of Section 595.1(o) would become effective in accord with the franchise obligation. For others, Section 595.1(o) would apply at renewal. LIST OF APPEARANCES Comments to First Proposal 1. CTANY 2. Village of Larchmont ) 3. Village of Mamaroneck) 1 letter 4. Town of Mamaroneck ) 5. Town of Saugerties 6. Town of Eastchester 7. Town of Sand Lake 8. Town of Harrison 9. Village of Harrison 10. Village of N. Tarrytown 11. Village of Irvington 12. The Assembly of the State of New York --Rep. Richard L. Brodsky --Rep. George E. Pataki --Rep. Cecile D. Singer 13. The Senate of the State of New York --Sen. Suzi Oppenheimer 14. Village of Croton -on -Hudson 15. Village of Tuckahoe 16. City of New Rochelle 17. Village of Rye Brook 18. City of Mount Vernon 19. Town of Greenburgh 20. RCTV - Rye Community Television 21. Village of Scarsdale 22. Village of Bronxville Comments to Revised Proposal 1. CTANY 2. Village of Larchmont ) 3. Village of Mamaroneck) 1 letter 4. Town of Mamaroneck ) 5. Town of Greenburgh 6. Village of Scarsdale 7. A. Thomas Levin, Esq. - per 16 Villages in Nassau County § 599.33 _. ' 'TLE 9 EXECUTIVE records shall contain particulars as to liquidation rights, dividend arrears, and other details such as voting rights. 3300.0 Treasury Stock - The cost of capital stock repurchased and held in the treasury. Each class of common or preferred stock held as treasury stock shall be separately identified by means of a subsidiary account. • 3400.0 Proprietor's Equity - Equity of a sole proprietor, partners, or members of a joint venture. Subsidiary accounts shall be estabilshed to reflect the equity of the individual partners or members of the joint venture. 3500.0 Additional Paid -in Capital - The amount contributed or assigned to capital stock in excess of par value or stated value; or the value of donations re- ceived; or the reduction in par or stated value of capital stock; or the gain or loss on sale of treasury shares; .,r ca;ita: expenses; or other cred- its which are not properly includable elsewhere. Separate subsidiary ac- counts shall be established as necessary, so as to identify each class of stook or type of transaction as described immediately above. 3600.0 Retained Earnings — Represents the accumulated amount of earnings which have not been capitalized, paid to stockholders as dividends or other- wise utilized. 3610.0 Appropriated Retained Earnings - This account, appropriately sub- divided by purpose, shall include the amount of retained earnings which have been appropriated or set aside for specific purposes. 3620.0 Unappropriated Retained Earnings - This account shall include the balance, either debit or credit, of unappropriated retarined earnings arising from earnings. Authorized dividends shall be debited to this account and credited to account 2130.0, Dividends Payable. 3700.0 Proprietor's Withdrawals - Withdrawal by a sole proprietor, or member of a partnership or joint venture. Subsidiary accounts shall be established to adequately reflect all transactions. 4000.0 OPERATING INCOME - These accounts shall include all revenues due to render- ing services connected with the cable activity. Classification of income by fran- chise area for the purpose of preparing reports required by FCC, franchising mu- nicipalities and others may be 'accomplished by account expansion right of the decimal point; but it is not required by the Commission. 4100.0 Subscriber Revenues 4110.0 Installation Income - Represents income obtained from charges for subscriber connections, relocations and additional outlets. 4120.0 Regular Subscriber Charges - Represents periodical service charge for cable service. 4130.0 Per Program or Per Channel Charges - Income arising from special fees imposed to obtain programs not obtainable by means of regular subscription fees. 4140.0 Other Subscriber Revenues - Subscriber revenues not includable is accounts 4110.0, 4120.0, and 4130.0. 4200.0 Non -Subscriber Revenues 4210.0 Advertising Income - Income arising from advertising on caole chan- nels. 4220.0 Special Service Income - Income attributable to leasing or sale of time or facilities. 4230.0 Other Non -Subscriber Revenues - All other non -subscriber revenues not includable in accounts 4210.0 and 4220.0. 5000:0 COST OF OPERATIONS Account Numbering - The account numbering system has been devised so that the costs of each department or operating function may be accumulated separately but in a consistent manner. In this system, operating expenses have been segregated into three groups; service costs, origination costs and sealing, general and adminis- trative. Classification of expenses by franchise area to correspond with similar classifica- tion of revenues may be had by appropriate expansion of accounts. Care should be taken to provide uniform expansions for the various functions. Total company -wide expense for each natural cost can be obtained easily since the unit and tens digit of each account number signify cost factor as follows: 01.0 Salaries and Wages 01.1 Salaries and Wages—Officers and Directors 01.2 Salaries and Wages - All Others 02.0 Employee Benefits 02.1 Employee Benefits - Officers and Directors 02.2 Employee Benefits - All Others 230.544 EX 12-31-74 • • • BASIS OF FRANCHISE FEE PAYMENTS. ****************************************************************** FRANCHISE FEE BASIS • 1991 ****************************************************************** Basic Service Revenue (1) Tier Revenue Equipment Rental•Revenue (2) Installation Revenue Pay Service Revenue (3) Pay Per View Revenue Service Upgrade Revenue. Home Shopping Service Revenue NOTES: $1,200,601.47 459,043.45 183,819.09 134,013.79 391,381.86 36,314.09 3,042.02 4,001.27 TOTAL REVENUES (4) $2,412,217.04 (1) Basic Service includes commercial/bulk accounts., (2) Equipment Rental reflects remotes and (additional outlet) converters. (3) Pay service includes pay services for commercial/bulk accounts. • (4) A rate of 5% is applied to the total revenues to determine franchise fees due. (Less`NYSCCT Rate .359% for period 1/91-3/91 and .277% for period 4/91-12/91). r,./k "-7 eti? 7 Revenues as shown above are taken directly from the billing reports for City of Ithaca addresses. .May 11, 1992 City of Ithaca Ithaca, New . York Dear Sir: ZZNY 0040 w _ M U Rmom American Television & . Communications Corporation A. Time Wamer Inc. Company National Division 160 Inverness Drive West, Suite 300 P.O. Box 6929 (80155-6929) Englewood, Colorado 80112 (303) 799-9599 Enclosed please find a check for $30,615.54 which is payment of franchise fees for the first quarter of 1992 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 January, 1992 February March $210,066.74 216,262.61 221,892.97 Total $648,222.32 Fee @ 5% - NYCC. Rate .277 4.723% Franchise Fee $30,615.54 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, New York. Signed: IWP/jdh Enclosure tam, Parish, Controller Providing entertainment and information choices. AMERICAN COMMUNITY CABLEVISION March 9, 1992 Mr. Peter Hess City of Ithaca Cable Commission City Hall 108 E. Green Street Ithaca, NY 14850 Dear Peter: /L5'5 2,o This will respond to your letter of February 17, .1992 and the enclosed resolution of the City of Ithaca Cable Commission. As your letter notes, there have been several discussions between representatives of the City and ACC regarding ACC's responsibility to activate additional access channels and the source of the funds to pay for the equipment required for such activation. We thought that real progress had been made toward reaching a mutually acceptable resolution of these issues. However, it appears from your letter that some of these issues remain unresolved and we believe it would-be in the best interests of the City, ACC and our customers to continue• our attempts to resolve them. In an attempt to further those efforts, ACC is willing to agree to activate a second public access channel as soon as practicable, despite our view that such activation is not required, nor is there an existing need for an additional public access channel. We believe that the alleged need for the activation of this channel arises from the continuing repetition of public access programming and excessive use of access channel time by certain individuals. We doubt that it was ever intended that any individual should have, in effect, his or her own personal access channel. And certainly the best interests of our customers are not served by such a situation. Any resolution of the outstanding issues regarding access channel activation should include limitations on the repetition of programming and on the use of the` access channels by any one individual. • While we are willing at this time to activate a public access channel, we continue to believe that the funds for the equipment required to activate such a channel are properly to be allocated from the 2% of revenues designated for access equipment under Section 14.1C(3). S-55.11 (b.) d 519 West State Street Ithaca, New York 14850 607-272-3456 • We again urge -that, • in . the interests of reaching an:":amicable `.-resolution-of these issues,•we continue our' :discussions. �-- Sincerely, .> Barbara L. Lukens, General Manager enc. . BLL/mkk John Grow, Esq. -2- June 17, 1992 As I advised you on the phone, I will continue to keep you informed as this matter develops. If you have comments or suggestions'to the City of Ithaca please do not hesitate to contact me. Enclosures Very truly yours, G an City Attorney .AMERICAN COMMUNITY CABLEVISION December 20, 1991 Mr. Peter Hess, Chairman Access Advisory Board City Hall, 108 E. Green Street Ithaca, NY 14850 Dear Peter: I just watched .the tape of your meeting with the Charter and Ordinance Committee, and I'm concerned about the impression that was left with them that access negotiations have been held up by ACC. If my memory serves me, we left the June meeting with 2 expectations: one, that we needed to write a letter to the City stating what equipment was required for transmission of a video channel and 2) that the City would make a recommendation on the point at which additional channels should be activated based on the use of and/or actual cablecasting needs of the community. ACC wrote to the City, however the City has not yet made its recommendation to ACC. In the more recent meeting, which took palace without our respective attorneys, you and Tom wanted to agree on what ;equipment ACC should buy in addition to the equipment purchased with the 2% of revenues dedicated to the purchase of access equipment under the terms of the franchise, but did not want to address the issue ofwhen additional PEG access channels would be activated. I believe you know that my reluctance to add access channels is that I do not believe it in the interest of customers to have channels which have inadequate programming or no programming content. Channel 13 ,is programmed less than 50% of the time with original programming. ':}It is not the best use of anyone's money to activate more channels )which will not be programmed simply to be able to say they have been activated. In response to your most recent letter, ACC will agree to the following if and only if we can reach agreement on 1) at what point it is appropriate to add a channel or channels ; and 2) at what point I -Net sites become activated. ACC will pay for a modulator for the activation of an access channel along with racks, 1 "v -a pkg"(video and audio amps) and 1 SVHS playback VTR. This will be paid for outiof monies other than the 2% fund. Because ACC has a requirement to provide off-site local 519 West State Street Ithaca, New York 14850 607-272-3456 • 11301 330 origination_from-the—following list of places, and also because, these -sites are on tile I -Net, ACC will provide a modulator and a demodulator for each site as it is needed. L/O sites as designated in the franchise agreement City Hall Cornell Ithaca College Tompkins County Library GIAC Ithaca Youth Bureau The Alternative School Boynton Junior High School Ithaca High School ▪ There is no requirement for ACC to route programming from one source to a choice of several outputs. Therefore, since the CAAB and Ithaca Cable Commission desire this routing option, equipment needed to accommodate the request will be paid for out of the 2% money. ▪ ACC provides weekly routine equipment maintenance and replaces minor individual parts as needed out of repair and maintenance monies. Major equipment refurbishment which requires dismantling of equipment and major parts replacements are paid for out of the 2% fund. The reason for this is that such major refurbishment do extend the life of a piece of equipment and are less costly than equipment replacement. In this way we are able to buy more new equipment each year with the 2% funds. ACC stands on its original proposal which was made at the June 12th meeting regarding the addition of PEG access .channels. That position is .that existing channels must be utilized 75% of the time with original (defined as first play) programming before an additional PEG access channel would be added. I hope this is acceptable to you. Sincerely, Barbara L. Lukens, General Manager cc: Lauren Stefanelli BLL/mkk CITY OF ITHACA TV CABLE COMMISSION Meeting June 9, 1992 7:30 PM City Hall Agenda Minutes taker 1. Call to Order 2. Approval of minutes -of May 12, 1992 meeting. 3. Chair's report -Ithaca Housing Authority 4. Announcements 5. ACC Report 6. Public Comment 7. Cable Access Advisory Board Report 8. Old business a) Negotiations with ACC regarding access questions b) Vacant CAAB position c) Access Capital Budget 9. New Business 10. Adjournment 11.! • n • City of Ithaca Cable Commission Minutes of the Meeting of May 12, 1991 Present: Commission Members Mary Euell, Jim Ferwerda, Rick Gray , Peter Hess, Tom Terrizzi ACC General Manager Barbara Lukens 1. Meeting was called to order at 7:35 pm by Mary Euell 2. Minutes of 3110/92 were accepted as read 3. Chairs report a) Commission Chair Peter Hess met with Mayor Ben Nichols. Discussion included the current state of negotiations with ACC, the petition of the residents of Titus Tovieis for rate relief, and the regional seminar sponsored by the New York State Cable Commission (NYSCC) which was attended by Peter, Tom Terrizzi, and Rick Gray. The Mayor agreed to have the City join the National Association of Telecommunications Officers and Advisors (NATOA) on ayear' s trial basis. Peter and the Mayor discussed expanding the City' s use of the municipal access channel, possibly having a charactergenerator located at City Hall for producingamunicipalbulletin-board. b) Peter reported on the NYSCC regional seminar atwhich presentations were given on public access, franchise renewal, the federal regulatory framework, consumer protection, assessment of franchise fees, and new cable technologies. Documentsfrom the seminarhave been placed in the Commission files at City Hall. c) Correspondence from Ellen Day, of Lansing, and Barry Hayes, of Trumansburg,.was reviewed. 4. There wereno announcements 5. ACC report (copy attached) Barbara Lukens, General Manager of ACC, gave the report. Among items' discussed: a)A contract with Ed Sargentfor establishing a commercial leased -access radio station was mailed to Sargent on 5/13. b) John Fogarty, ACC attorney, has sent a letter to Chuck Guttman, City attorney, stating ACC's position regarding assessment of franchise fees. ACC will assert that the franchise fee need not be included in city gross revenues on which the fee is calculated. The commission noted that this is contrary to the position of the City and the NYSCC (more below). 6. There was no public comment 7. CAAB Report a) Jean Dorancy and Ed Sergant protested the decision of the Access Coordinator that the programs they produced, which consist of music videos supplied by record companies, are to be considered syndicated programming. Currently syndicated shows may be bumped three weeks prior to cablecast. Lauren Sefanelli, the Access Coordinator, said these shows contain alot of repeated material, and might also classify as reruns. A committee of the CAAB met to discuss these issues and recommended that classification be based on percentage of local and new material in a show. It is felt that this will be less of a concern when a second access channel opens. b) The Capital Budget plan passed unanimously by the CAAB (more later). c)The Educational Access Committee met on4/23 (minutes attached). The committee elected officers and discussed the definition of educational institutionsforthe purpose of determining eligibility to use the educational access channel. Discussed adding the qualification" chartered" tothe definition of an educationalinstitution. 8. Old business a) Barbara reiterated the ACC position that they are unwilling to negotiate the funding of access related equipmentunless the negotiations include setting standards for establishing new access channels. Peter and Tom repeated the Commission' s positionthat the franchise guarantees the City of Ithaca nine working access channels and that itis the prerogative of the City to determine when new channels need to be activated. The City will continue to pursue this matter on its own. b) The Commission questioned ACC regarding their position on franchise fee assessment and its conflict with the NYSCC-Statement of Policy, DocketNo. 90302 which states that "franchise fees cannot be stated as a separate line item on subscriber bills as direct charges on subscribers". Barbara said ACC will contest that policy; details will be in Fogarty' s letter. The commission will pursue this matterthroughthe City Attorney s office. 9. New Business a) The Commission discussed the possibility of putting a government bulletin -board on the municipal access channel when otherprogramming is not being cablecast. Tlii 'would invol ie placing a character generator at City Hall or some other government agency which was on the I -Net. Rick Gray suggested that this might appropriately be located at the county building, since the county better represents ACC' s coverage area. Barbara asked whether a body was going to be set up to administer the Municipal access channel analogous to the committee that now has responsibility for the educational access channels. b) AccessCapital Budget: -Jim discussed several equipment choices inthe budget where he proposed options that he thought would bemore cost-effective and/orbetterlong-term investments. -Barbara expressed her concern that there was no allocation in the budget for spare equipment, emergencies, test equipment, or installation of anew routing switcher. -The commission voted to recommend the capital budget proposal passed by the C a AB , with the provision thatmodifications may be made regarding specific equipment choices. Itis our understanding that some funds will be reserved until later inthe year in the event they are needed to accommodatethe concerns Barbararaised. c) The petition of residents of Titus Towers to the Commission was presented. (A copy of the petition is inthe Commission files.) The petition asks the Commission to review the rates that ACC is currently charging Titus residents, many of whom are on fixed incomes. :Barbara said that if ACC could send a single monthly bill to the Ithaca Housing Authority or cable service to all units in Titus Towers, the Housing Authority would be charged a bulk rate which would be significantly lower per unit than current rates. The Housing Authority could then re -charge residents for cable service, Grits cost could be included in the rent. Peter will call Janet Ernisse, Dir. of Resident Services at the Housing Authority, and advise her to contact Chris Doyle at ACC for further discussion. -Minutes submitted by Peter Hess EDUCATIONAL ACCESS COMMITT ih,E MEETING APRIL, 23, 1992 MINUTES Attendance: Alicia Dowd (Cornell), Rick Gray (CAAB), Eloise Greene (Ithaca College), Jim Loomis (Ithaca College), Robert Manvell (TST BOCES), Walter Rose (George Jr.), Toni Russo (Cornell), Lauren Stefanelli (ACC), David Watkins (Cornell) 1. Organizational Structure The committee agreed Robert Manvell will chair the conthaittee and Alicia Dowd will take minutes. It was reiterated that the committee was formed to advise the Community Access Advisory Board (CAAB) regarding the administration of educational access cable channels. CAAB advises American Community Cablevision. As the advisory group to an advisory board, it is not clear how much influence the recommendations of the committee will have. }' '2.. Definition of an Educational Institution In defining an educational institution, the question is whether groups which are not strictly educational, such as those with overlapping recreational, social service or religious functions , should be allowed programming on educational channels or public access channels. (Organizations may not use the two types of channels interchangeably). A CAAB proposal originally limited educational institutions with the word "chartered," but was dropped from the final draft. The committee discussed the meaning of "chartered," and it was not clear if returning to that terminology would be useful in .� determining which groups should use the educational channels. We discussed limiting the definition by recognizing only "schools" as educational institutions. In this case, groups with a quasi -educational purpose would be required to seek a "school" to sponsor their programming on educational channels. In turn, it was not clear how to define a "school." The committee agreed to get a list of schools from the BOCES District Superintendent or to compile one. In addition, we agreed that for the next meeting each committee member would: a. propose a definition of a school. b. propose a mechanism for institutions that would not be recognized as schools to procure air time on educational channels. c. propose an approach both for revising and for making exceptions to the definition of a school. Any definitions or drafts will be considered working proposals until other issues are addressed. The related question of whether the content of programs aired by educational institutions must be educational was set aside. Copies of the ACC manual regarding public access channels (still in draft form) will be. mailed to committee members. 3. Procedures for Procuring Air Time This agenda item was not addressed, but each committee member was charged with thinking about this question from two perspectives: a. self interest b. public interest AMERICAN COMMUNITY CABLEVISION REPORT . TO ITHACA CABLE COMMISSION MAY 12, 1992 r. ACC recently had a free tier preview for customers. o ACC is participating with the Disney Channel on a special promotion for new Disney subscribers: $3.95 per month for a 6 month commitment. o Contract for Ed Sargent is being mailed 5/13/92. Contents are confidential between Mr. Sargent and ACC. o Both Ithaca College and Cornell University's graduation exercises will be cablecast live on channel 54. o ACC's general manager has received several telephone complaints about Bill McCormick in the past week. We need the revised policy on adult content and language from the. Cable Commission. Callers were invited to attend the cable commission meeting to address the commission with their concerns. o Current use of access channels is attached. Report was compiled by Lauren Stefanelli. o Letter from. John Fogarty t'o Mr. Guttman regarding cable rates has been sent. o ACC staff is volunteering for Special Olympics and the Sciencenter. OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14E50 MEMORANDUM TO: Tom West, Engineering Department FROM: Chuck Guttman, City Attorney DATE: June 3, 1992 SUBJECT: Easement to ACC TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I have looked over the proposed easement language which ACC has drafted. I do not think it adequately protects ACC but that is their problem. With regard to the City's protection, my major objection is that it does not state where on ;the property the communication and television lines will be located. I believe the agreementshould be modified to state that they have the right to "place, operate and maintain communications and'television lines and associated equipment, to attach an anchor and guy wire, and to place a utility pole on my property at in the City of Ithaca, County of Tompkins, State of New York, as more particularly shown on the attached map." Without this language, I believe they would have the right to place the lines and associated equipment anywhere on the property. Obviously, we are not willing to grant that. Alternatively, they could specify in the document itself exactly where the line will run as NYSEG does. I like the sentiments of the last paragraph but I am not completely satisfied with its wording. I would add at the end the phrase "and by acceptance of this agreement American Community Cablevision, Division of American Telephone and Communications Corporation agrees to so hold harmless and indemnify the Grantor for any such loss or damage." Otherwise we are simply saying that we are making the grant with that understanding but they are not accepting it necessarily. Attachment -An Equal Opportunity Employer with an Affirmative Action Program' 1 tot Recycled Paper IFI OFFICE OF CITY ENGII :R R - CITY OF ITHACA, NEW ..,RI( o 108 East Green Streit M ITHACA, NEW YORK 14850 III (607) 274-5530 FAX (607) 272-7348 DATE: c ^ FILE NO. PRIORITY ❑ URGENT! ❑ SOON AS POSSIBLE ❑ NO REPLY NEEDED ATTENTION: 0-1 uc 1 i O 1 c L. SUBJECT: A C C- C/\ L GT- I " ACC- l l rl s �'r Q � � s / �: !�FSI < ; 4.4 I ti / /�- CA 2 (' 7C� / LJGZ�4--WG/Z (S �J(96 • A A(/ [C�% M c/IG�JI1UAti CA S-14---1( L'( (6.L/f/'1 L ACC I f,'/ -7'6 uc / 5 A E • "1--71)/ C AHS L- 4.71 A (Jo 4 cc - f f) G r -'G S iJ s ` [(/( til/ /1(12rit • A / j P/c /l C C 1-0/44G/" /1('- t` - d' � (9 C r cel , / _ E r( aC u L /) / L l El �� G U /'? L (O 2,3 c /z / : 1_ �; /4-/A-7 t L j , % -// S Ate/ 7 ' z (7/4/V?� _ &/ - 717/14 I SIGNED: DATE OF REPLY: REPLY TO: R E P L Y SIGNED: RECIPIENT: WRITE REPLY. RETURN WHITE TO SENDER. KEEP THIS PINK COPY. 114? THIS INSTRUMENT WITNESSETH THAT C/7?' - hereinafter called the Grantor(s), being the owner(s) of or having an interest in land situate in.the C (JY of /7-NA.C/1 , County Of..-Ze.. State of New York, fronting on the street or highway known as W s7ee6-s7- bounded ...SOIL 7J/4AV by lands of • WOOD ST/Ce-67- and , IVESTEJELY by lands of t16400'/ .5.7 -X6 -E% for and in consideration of the sum of One and No/100 Dollars ($1.00), the receipt of which is hereby acknowledged, docs hereby grant and release unto NEW YORK STATE ELECTRIC & gm CORPORATION, a corporation organized under the laws of the State of New York, having an office inthe Towniof Dryden (no street address), County of Tompkins, State of New York, hereinafter called the Grantee, its lessees, licensees, successors and assigns forever, a permanent easement and right of way, with the right, privilege and authority to construct, reconstruct, relocate, extend, operate, inspect, maintain, repair, replace, and at its pleasure, remove any poles or line of poles, supporting structures, cables, crossarms, overhead and underground wires, guys, braces, communication facilities and other fixtures and. appurtenances which the Grantee shall require now and from time to time for the transmission and/or distribution of electric current and/or for communication purposes, for public or private use, in, upon, over, under and across said land and/or the highways abutting or running through said land. The easement and right of way hereby granted and released is /0 fed in width throughout its extent, situate, lying and being as follows: 707/ CA/7R 4/NE afr". if)/ Wel y 76. NEGIet/ eePeOt47- e0• - NeT//&>' F12/i1 7-1/e. 64-4/7:14 p�2L.57--,c ..9.4/D ,ceo‘67--3 • - EASth/z1-1/ ie,co/11 .7"M" c2 4-A7TE7e ef- MEel6o4) L7EE7° .5.4/0 Gif/11.X4//1/6: TO k-Arre/V6 /170,e77/h/Es-rextY A.416-6 774W ra /4 6Je 055 5/01 /e4e14.7-bGczeLeg. -cE/f1-7c-&- EATEAlsidiris 44/4 act.Y/N6 .1:467a774-5 4Y/4/6 0i4.7.75/d6.7.€4- -7/7 • VIDTli at- Raveg' a/L.- It/Mr. • TOGETHER with free ingress and -egress over the easement and right of way and other lands of Grantor(s) for all of -the above purposes and the right .now and from time to time to trim, cut, burn, treat and/or remove by manual, mechanical and chemical means trees, brush, structures and other obstructions within said easement and right of way and such other trees adjacent to the right of way that, in the opinion of the Grantees, may interfere with the construction, operation and tnaintenance of their line or lines. • PROVIDED, however, that any damage (other than for tritnming, cutting, treating, burning and/or removing trees, brush, structures and other obstructions as above provided) to the property of the Grantor(s), caused by the Grantee in the exercise of its rights under this instrument shall be borne by the Grantee. RESERVING, however, to the Grantor(s): the right to cultivate the ground between said poles, towers and supporting structures and beneath said wires and fixtures, and the right to cross and recross said easement and right of way provided that such use of said ground shall not interfere with, obstruct or endanger any rights granted as aforesaid and shall not disturb the grade of saki ground as it now exists, and provided that no structure shall be erected, no trees shall be grown, cultivated or harvested, and no excavating, mining or blasting shall be undertaken within the limits of the easement and right of way without written consent of the Grantee. Grantor(s) in said use of said ground shall maintain a clearance of 3 feet or more from Grantee's aerial wires with vehicle's, machinery and equipment. This Instrument shall be binding on and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns. • • IN WITNESS WHEREOF, the Grantor(s) ha hereunto set hand(s) and scal(s) this day of •• • , 19 IN PRESENCE OF: VI_ !1 n7 (L.S.) • Address: (L.S.) Address: (L.S.) Address: (L.S.) Address: NEW YORK STATE ELECTRIC & GAS CORP.-ITHACA DOCUMENT FP_E RWC— Line Auth. Parcel No Area Cost Center Co. Construction W. O. No. TO NEW YORK STATE ELECTRIC & GAS CORPORATION Dated , 19 Mute of .P;Tefu'Norh !ouniu of E 55: Recorded on the day of ,19 ar ' o'clock M. In Book of Deeds at Page and examined. (Clerk) (Personal Acknowledgment) Mute of Neils 'Nark Crouniui of 55: On this day of 19 , beore me, the subscriber, personally appeared to me personally known and known to me to be the same person described in and who executed the within Instrument and duly acknowledged to me the execution of the same. (Notary Public) REMARKS Paid from Working Fund Office Ck Nn Amt. - Dare Ck. No. Amt. Date -Consideration on this document is Tess than 5100.00. RETURN TO CORPORATE RECORDS CENTER NEW YORK STATE ELECTRIC & GAS CORP. -•- POST OFFICE BOX 287 - ITHACA, NEW YORK 14851 (Subscribing Witness Acknowledgment) Mute of cefu'Norh County of e f 55: On this day of 19 , before me personally carne the subscribing witness to the foregoing Instrument, with whom I am personally acquainted, who being by me duly sworn, did depose and say that he resides at in the of that he knew to be the individual described in and who executed the foregoing Instrument; that he, said subscribing witness, was present and saw execute the same; and that he, said witness, at the same time, subscribed h name as wimess thereto. (Notary Public) (Corporate Acknowledgment With Seal) ,} tate of Nefa 'Nark County of County J ss: On this day of 19 , before me carne to me personally known, who, being by me duly sworn. did depose and say that he resides at in the of and that he is of the corporation described in and which executed the above Instrument that he knows the seal of said Corporation; that the seal affixed to said Instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said Corporation, and that he signed h name thereto by like order. (Notary Public) RW -3, 4/°s AMERICAN COMMUNITY CABLEVISION - • —AN •-% • .z.).-.77 ••••••• r•-7 1LNfl NJ\ i-N•127ga,1 519 West State Street Ithaca, New York 14850 I „ 607-272-3456 18.7 RIGHT OF INSPECTION A. The City shall have the right to inspect all books, records, reports, maps, plans, financial statements and other like materials of ACC as provided in this Franchise, at any time during normal business hours. H. The City shall have the right to inspect all construction or installation work performed subject to the provisions of this Franchise and to make such tests as it shall find necessary to ensure compliance with the terms of this Franchise and other pertinent provisions of law. C. At all reasonable times and for the purpose of enforcement of this Franchise, ACC shall permit examination by any duly authorized representative of the City, of all Cable Communication System and facilities, together with any appurtenant property of ACC situated within the City and outside of the City if it is utilized in the operation of the City's Cable Communications System. XIX RATE REGULATION 19.1 City having established its right to rate regulation under applicable law, ACC will not raise basic rates higher than the following for a five year period. On February 1, 1988 the maximum rate will be $9.00. On March 1, 1989 the maximum rate will be $11.00. On March 1, 1990, the maximum rate will be $12.10. On March 1, 1991, the maximum rate will be $13.31. On March 1, 1992, the maximum rate will be $14.64. Starting on March 1, 1993, and for each and every year thereafter for the term of this Franchise the maximum rate will be the previous year's maximum allowed rate plus 5 percent or that percentage equal to the rise in the Consumer Price Index, whichever is higher. Additionally, ACC will give a need -based senior citizen discount of 10 percent to those who qualify for real property tax exemption and others who qualify using mutually agreeable criteria. Effective March 1, 1989, ACC will not!charge custoemrs for additional outlets or FM service. 19.2 ACC covenants that it will not bring or fundany lawsuit or other proceeding seeking deregulation of the aforementioned rates prior to March 1, 1991 and further agrees to pay the attorney's fees and other costs of the City incurred in defending any such lawsuit or other proceeding should ACC bring them or fund them prior.. to March 1, 1991. 19.3 Effective March 1, .1991 ACC may seek deregulation of basic- cable service rates. if at any time any additional cable -29- franchises granted by the City, or any additional cable television is authorized to operate within thelCity, there will be no further regulation of ACC's rates from the date of said grant of any additional franchise or the beginning of construction of such additional system, whichever comes sooner, until the termination of such additional franchise or of the operation of such additional 'system, whichever is later. 19.4 ACC shall file Iwith the City schedules which shall describe all services offered by ACC, all rates and charges of any kind and all terms or conditions relating thereto. Thereafter, ACC shall file with the City all changes in services, all rates and charges of any kind and all terms and conditions relating thereto thirty (30) days prior to all such changes. No rates or charges shall be effective except as they appear on a schedule so filed. XX FRANCHISE FEE 20.1 The City of Ithaca shall be entitled to receive from ACC a Franchise fee of five percent (5%) of ACC's Gross City Revenue. 20.2 The Franchise fee established .in 20.1 above shall be tendered as follows: A. Five percent (5%) of ACC's Gross City Revenue for successive three (3) month calendar periods tendered within forty-five (45) days after each such period. 20.3 To the extent necessary to prevent ACC from diverting revenues from the operation of the Cable Communications System from ACC to Affiliates to the detriment of the City, Affiliates (excluding any affiliate which provides a national or regional programming service) shall be permitted to utilize the•Cable Communications System only if a Franchise fee on City revenues derived therefrom is paid. 20.4 In the event that the fees herein required are not tendered on or before the dates fixed in this Franchise, interest due on such fee shall accrue from the date due at_an annual rate of three percent (3%) above the prime rate or rates of interest, at the City's primary depository bank. 20.5 Tender or acceptance of any payment shall not be construed as an accord that the amount paid is correct, nor shall such acceptance of payment be.construed as a release of any claim the City of Ithaca may have for additional sums including interest payable under this Franchise. All amounts paid shall be subject to audit and recomputation, by an independent auditor -30- chosen by the City, which shall be based on a fiscal year and shall occur in no event later than one (1) year after the fees are tendered with respect to such fiscal year." If, after audit and recomputation, an unpaid fee is owed to the City, such fee shall be paid within thirty (30) days after audit and recomputation and ACC shall pay the costs of the audit. The interest on such unpaid fee shall be charged from the due date at an annual rate of three percent (3%) above the prime rate or rates of interest at the city's primary depository bank during the period that such unpaid amount is owed. XXI BONDS, INSURANCE AND INDEMNIFICATION 21.1 PERFORMANCE BOND. A. ACC shall provide a performance bond in the amount of $500,000 (five hundred thousand dollars) until construction is completed and shall maintain a performance bond in the amount of $25,000 (twenty-five thousand dollars) for the remaining term of the Franchise. The performance bond shall be provided and regulated in accordance with this Franchise. The performance bond shall be provided within thirty days of the receipt of final operating authority. B. The performance bond shall provide the following conditions: (1) There shall be recoverable by the City jointly and severally from the principal and surety, any and all fines and penalties due to the City and any and all damages, losses, costs and expenses suffered or incurred by the City resulting from the failure of ACC to: faithfully comply with the provisions of this Franchise; comply with all lawful orders, permits and directives of any City agency or body having jurisdiction over its acts or defaults; pay fees due to the City; pay any claims due the City as resulting from judicial action; pay any claims, liens or taxes due the City which arise by reason of the construction, operation, maintenance or repair of the Cable Communications System. Such',1osses, costs and expenses shall include but not be limited to attorney's fees and other associated expenses. (2) The total amount of the bond shall be forfeited in favor of the City in the event: (a) ACC abandons the Cable Communications System at any time during the term of this Franchise or any extension thereto; -31= In the Matter of NEW YORK STATE COMMISSION ON CABLE TELEVISION The Itemization of Franchise Fees on Subscriber Bills STATEMENT OF POLICY (Released: April 20, 1992) 92-217 DOCKET NO. 90389 During the past months, various cable companies in the state have commenced the practice of including all or a portion of a franchise fee as a separate line item on a subscriber's bill. The practice is manifest in one of two ways.. In some instances, the franchise fee is one of many items, e.g., basic service, premium service, additional outlets, etc. listed in a single column, the amount for which is included with and added to all other amounts to arrive at a total amount due. In other instances, the bill recites the various services subscribed to and the amounts thereof, sets forth a subtotal of all such amounts and then includes an amount denominated "franchise fee" which, when added to the subtotal, creates a total amount due at the bottom of the. bill. In the latter! case, the franchise fee is treated in the same manner as a sales tax. In either case, the fee is stated as if it were a direct charge upon the subscriber. Some companies have instituted this practice coincidental with a franchise renewal or current increase in the amount of the fee or both. For other companies, the practice is unrelated to the franchise term or any change in franchise fee requirements. Because the practice raises fundamental issues concerning the effect of federal law and the relation of federal statute to state statute, Commissionregulations and franchise fee provisions in cable television franchise agreements, the Commission has determined that it is appropriate at this time to issue a general statement of policy on franchise fee itemization and "pass-throughs." Itemization of Fee Section 622(f) of the Cable Communications Policy Act of 1984 ("Cable Act") (47 USC Section 542(f)) provides that "[a] cable operator may designate that portion of a subscriber's bill attributable to the franchise fee as a separate item on the bill." Consistent with this section, a cable operator may include on a subscriber's bill a separate statement indicating the portion of the bill --as a percentage or fixed amount --that will be payable as a franchise fee by the cable company to the franchising authority. This section is not authority for including a franchise fee as a separate billable line item on a subscriber's bill. 2 In this regard, we note that franchise agreements in New York State have traditionally required franchise fees based on a percentage of revenues --either all or some portion thereof --received by the company from subscribers and, in some cases, from other sources. In other words, the fee is calculated as a percentage of all revenues received without deduction or allocation for such portion of the revenues as may ultimately be paid by the cable company to the municipal government in fulfillment of the franchise fee obligation. This practice is fully consistent with Section 817 of the Executive Law which requires the Commission to impose an assessment upon cable companies calculated on "gross annual receipts. i1 The only exception from "gross annual receipts" recognized in the statute would include sales taxes which are imposed directly on subscribers. (See, e.g., Tax Law, Section 1131(2)) Neither the municipal franchise fee nor the amount of the Commission's assessment is excluded from "gross annual receipts." The practice of billing the fee as a separate line item in addition to rates transforms the very nature of the fee from a component of doing business calculated on all revenues to a separate add-on charge imposed directly on subscribers. This practice also has the effect of transforming the very method by which the fee is calculated and, therefore, purports to modify the underlying statutory and franchise obligations. A simple example will illustrate the effect of itemization. Assume a cable company has been charging $20 per month for a service under a franchise which requires a franchise fee of 3%. The franchise fee attributable to such bill would be sixty cents. If the company determines to separate and itemize the fee as an add-on in the manner of a sales tax, the bill is likely toread as follows: Basic service rate --- $20.00 Franchise fee --- $0.60 Total $20.60 1 Section 817(2) provides that the Commission "shall...bill and collect. ..[from cable companies]. ..the total direct and indirect costs necessary to operate and administer the commission for the. ..state fiscal year." Each company is required to pay a pro rata share of the commission's costs based upon its gross annual receipts when compared to the gross annual receipts of all companies. "Gross annual receipts" is defined in Section 812(5) as follows: ". . .any and all compensation received directly or indirectly by a cable television company from its operations within the state, including but not limited to sums received from subscribers or users in payment for programs received and/or transmitted, advertising and carrier service revenue and any other moneys that constitute income in accordance with the system of accounts approved by the commission. Gross annual receipts shall not include any taxes on services furnished by a cable television company imposed directly on any subscriber or user by any municipality, state, or other governmental unit and collected by the company for such governmental unit." 3 Apart from the fact that this is a rate increase subject to notice requirements (and government approval in the absence of effective competition), it is readily apparent that the company, by its own unilateral act, has purported to change the manner of calculating the fee by reducing the base from the total amount billed to an amount which is artificially described as the "rate." In fact, $0.60 is but 2.91% of $20.60 -- the total amount billed. If the fee is calculated as before -- 3% of the full amount billed -- the fee attributable to the bill would be sixty-two cents. We find nothing in the Cable Act to suggest that Congress intended to transform the nature of a franchise fee or to amend existing franchises by permitting cable television companies to reduce franchise fee obligations by manipulating the subscriber's bill in such manner On the contrary, the effect of Section 622(a) was to increase from 3% to 5% of gross receipts the amount of franchise fees which could be required in a franchise. It could be argued that a cable company is free to bill in this manner without also intending to modify its franchise fee obligation. If so, such a bill would be inaccurate and, therefore, misleading. Nothing in the Cable Act authorizes cable companies to engage in inaccurate and misleading billing practices. We also note the likelihood that some cable companies would argue that the franchise fee is a tax and, as such, is a separately billable item. We need not finally determine whether the franchise fee is a tax for the simple reason that even if the franchise fee is in the nature of the tax, under New York State law it would be in the nature of a special franchise or real property tax; but clearly not in the nature of a sales tax.2 The special franchise tax is imposed on the owner of the special franchise property, i.e., the cable company, and not on ,the subscriber directly. As such, it is simply a component of doing business similar to .other non -sales taxes and business costs. 2 Section 626 of the Real Property Tax Law ("RPTIJ") provides as follows: "1. (a) When a tax levied on a special franchise is due in any assessing unit, if the special franchise owner has paid such assessing unit for its exclusive use during the past year under any agreement or statute requiring the same, a sum based upon a percentage of gross earnings or other income, a license fee or other sum of money on account of such special franchise possessed by such special franchise owner, which payment was in the nature of a tax, all amounts so paid for the exclusive use of such assessing unit, except money paid or expended for paving or repairing the pavement of a street, highway or public place, and except in a city having a population of one hundred seventy-five thousand or more according to the latest federal census, car license fees or tolls paid for the privilege of crossing a bridge owned by the city, shall be deducted from the tax based on the assessment made by the state board for purposes of the assessing unit, but not otherwise, and the remainder shall be the tax on such special franchise payable for such propose." 4 In sum, it is our determination that franchise fees cannot be stated as a separate line item on subscriber bills as direct charges on subscribers. This policy does not prevent cable companies from informing subscribers on bills, or otherwise, of the fact that franchise fees are paid to government, including the specific amount of the fee attributable to an individual bill. It is consistent with the Cable Act because companies may include a statement on the bill which identifies the franchise fee without imposing a separate and direct charge for the fee itself. Pass Through Provisions We also take this opportunity to express our policy with respect to the so-called "pass through" provisions in the Cable Act. Section 622(c) of the Cable Act (47 USC 542(c)) provides that "[a] cable operator may pass through to subscribers the amount of any increase in a franchise fee unless the franchising authority demonstrates that the rate structure specified in the franchise reflects all costs of franchise fees and so notifies the cable operator in writing." Section 622(c) provides that "[a]ny cable operator shall pass through to subscribers the amount of any decrease in a franchise fee." The issue here is whether these provisions have meaning in a deregulated cable community. We note, initially, that for many years prior to the enactment of the Cable Act the rates for premium cable television services had been deregulated by the Federal Communications Commission ("FCC"). See Brookhaven v. Kelly, (428 F.Supp. 1216 N.D. New York (1977); 573 F.2d 765, 2d Cir. (1978)) We also note that in many, if not all, cable television franchise agreements in New York State a franchise fee is required to be paid based on revenues derived by the cable television franchisee from premium services or some portion thereof. In fact, at the time the Cable Act became law, cable companies could unilaterally price premium services to account for all costs including franchise fees and increases therein. As a practical matter, the Cable Act did not alter the regulatory status of premium services. Section 623 of the statute provides that "[a]ny franchising authority may regulate the rates for the provision of cable service. . .provided over a cable system to cable subscribers, but only to the extent provided under this section." Section 623(b)(1) required the Federal Communications Commission to "prescribe and make effective regulations which authorize a franchising authority to regulate -rates for the provision of basic cable service in circumstances in which a cable system is not subject to effective competition." Under Section 623, only basic cable service can be subject to rate regulation.3 Cable companies remain free 3 Although basic cable service is defined in such a way as it is theoretically possible that single channel premium services could be marketed as part of basic service, we are not aware of any such circumstances and it is unlikely that a cable company which is not subject to effective competition would choose to submit rates for premium service to regulation by such marketing practice. 5 to price "premium" services without the need for governmental review and approval --a right which transcends the more limited language in Section 622(c) which merely permits a rate increase in the event of an increase in franchise fees. We note, as well, that historically, "pass-through" is used in utility ratemaking to permit a cost or change in cost to be included in the regulated rate borne by ratepayers. It fully appears, therefore, that the pass-through provisions in Section 622(c) of the Cable Act are intended to enable cable television companies to increase regulated rates by an amount equal to any current increase in the franchise fee attributable to the regulated rate.4 Similarly, the obligation imposed by Section 622(e) to decrease rates by any reduction in the franchise fee is only sensible in an environment where rates are regulated. Otherwise, there is no real benefit to subscribers. In sum, the pass-through provisions are redundant in rate deregulated communities. Granting to a cable company the unilateral ability to charge to subscribers whatever rate it wants --as the Cable Act does --transcends and makes meaningless cost pass-throughs which are reflective of a rate regulated environment. SO ORDERED. Commissioners Participating: William B. Finneran, Chairman; Theodore E. Mulford, John A. Passidomo, Barbara T. Rochman, Commissioners. 4 It is important to note here (1) that Congress sanctioned basic rate regulation for a minimum of two years following the effective date of the Cable Act for all cable systems irrespective of the existence of effective competition, and (2) that FCC regulations rather than statutory mandates caused most cable systems to be rate deregulated. RECEIVED MAY 141992 AMERICAN COMMUNITY CABLEVISION May 12, 1992 Ms. Callista Paolangeli, Clerk City of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms."Paolangeli: Enclosed is a check in payment of American Community Cablevision's franchise fee for the first quarter of 1992. A statement outlining the computation of this fee payment has been included. Should you have any questions, please feel free to call. American Community Cablevision takes great pride in serving the residents of the City of Ithaca. Sincerely, Barbara L. Lukens Geral Mana•. - r enc. BLL/mkk 519 West State Street norable Benjamin Nichols, Mayor Please ❑ HANDLE and ❑ FORWARD ❑ RETURN ❑ KEEP OR DISCARD ❑ REVIEW WITH ME Post=It'routing request pad 7664 EIPAND ROUTING - REQUEST READ To 2"`""' lL v APPROVE � c"146 O, 1/ , Z Date From Ithaca, New York 14850 607-272-3456 Bay 11, 1992 City of Ithaca Ithaca, New.York Dear Sir: American Television & Communications Corporation A Time Wamer Inc. Company National Division 160 Inverness Drive West, Suite 300 P.O. Box 6929 (80155-6929) Englewood, Colorado 80112 (303) 799-9599 ZZNY 0040 Enclosed please find a check for $30,615.54 which is payment of franchise fees for the first quarter of 1992 for American -Community -Cablevision. At -this- point , we have not deducti6d 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 January,.1992 February March Total Fee @ 5% - NYCC Rate .277 $210,066.74 216,262.61 221,892.97 $648,222.32 4.723% Franchise Fee $30,615.54 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, New York. Signed: IWP/jdh Enclosure Providing entertainment and information choices. Parish, Controller CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 OFFICE OF CITY ATTORNEY May 13, 1992 Peter Hess, Chair The Cable Commission -c/o City Hall 108 East Green Street Ithaca, NY 14850 Dear Peter: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a copy of a letter I received from John Fogarty, the Associate General Counsel for International Television and Communications Corporation, a Division of Time Warner regarding - setting of franchise fees. As you will see, he takes the position that their increase does not go beyondthe maximum, of 5%. The basic issue is whether the money collected from subscribers and ultimately paid to the City as a franchise fee is revenue to ACC. Fogarty relies on the Federal Cable Communication Policy Act of 1984 (47 U.S.C.S. Section 542) which he cites. I have looked at that Section and do not believe that it is clear one way or the other. I have seen your recent draft letter to Lukens in which you refer to the NYSCC Statement of Policy, Docket, No. 90389 which addresses this issue directly. I think there are a few issues involved. In the first place, is the recent ACC increase in rates permitted or have they now gone over the maximum allowed. Secondly, as mentioned in your recent draft; letter, are they including advertising revenue as gross revenues when computing the franchise fee payments. Thirdly, and possibly most importantly, are they including the separately stated 5% franchise fee payment in their calculation of gross revenues when computing how much franchise fee they should be paying us. 'An Equal Opportunity Employer with an Affirmative Action Program' to: Recycled Paper Peter Hess -2- May 13, 1992 I assume or hope that you have access to a copy of the NYSCC Statement of Policy Docket No. 90389. If ,you do, I would appreciate you getting to me a copy of that Statement of Policy. I further suggest that a meeting be scheduled between yourself, myself, anyone else from the Cable Commission you deem appropriate and possibly Dominick to determine where we proceed further on this matter. Very truly yours, Charles Guttman City Attorney Attachment cc: Dominick Cafferillo (with attachment) Dictated but not read - John E. Fogarty Associate General Co 203 328-0629 May 12, 19 Charles Guttman, Esq. City Attorney City of Ithaca 108 East Green Street Ithaca, New York 14850 RE: City of Ithaca - Franchise Fees Dear Mr. Guttman: AM EMNAIIE ■ ® r American Television & Communications Corporation A Time Warner Inc. Company Corporate Headquarters 300 First Stamford Place Stamford, CT 06902-6732 203 328-0600 This will respond on behalf of American Television & Communications Corporation, d/b/a American Community Cablevision ("Cablevision") to your letter of January 22, 1992. I appreciate your patience in waiting for this response. In your letter you object that Cablevision's rate for basic service increased beyond the maximum 5% permissible without regulatory approval. Your calculation, however, as your letter explains, is based on including within the rate charged for basic service the amount attributable to the franchise fee paid to the City of Ithaca. Your position would seem to be that the franchise fees are part of the rate charged by Cablevision and therefore part of Cablevision's revenues. For the reasons set forth herein, it is Cablevision's position that monies collected fromsubscribers and paid as franchise fees are not revenue to Cablevision and are not part of the rate charged for Cablevision's services. Cablevision, as required by the terms of its cable television franchise agreement with the City of Ithaca, collects and remits to the City of Ithaca five percent of its "gross City revenues" (as defined in the Franchise) as a franchise fee. Cablevision lists the appropriate amount of the franchise fee on each customer's bill as a separate item distinct from the charge for the cable television services the subscriber receives. On a quarterly basis, Cablevision pays to the City the exact amount it has received in franchise fee payments from its customers. Thus, Cablevision is, in effect, acting as agent for the City of Ithaca in collecting the franchise fee from its customers and remitting it to the City. In accordance with generally accepted accounting principles, Cablevision reflects such franchise fees on its books as nonrevenue liabilities collected from the subscriber and payable to the City. Cablevision does not treat the franchise fees collected from subscribers as gross revenues of Cablevision and, thus, does not collect or pay five percent of these monies as franchise fees. Put succinctly, Cablevision does not pay a fee on the amount it collects as franchise fees. Providing entertainment and information choices 4r The City claims that, contrary to Cablevision's practice, the amount collected by Cablevision in franchise fees should be treated as part gof Cablevision's gross revenues and subject to the five percent fee. It is Cablevision's position, as detailed below, that (1) the funds it collects as franchise fees are not "gross revenues" as defined in the Franchise; (2) Cablevision's treatment of the franchise fees which it collects as nonrevenue liabilities is in accord with generally accepted accounting principles; and (3) under the provisions of the Cable Communication Policy Act of 1984 ("the Cable Act"), monies collected . as franchise fees and paid to the City are not gross revenues and imposing a franchise fee on these monies would violate the franchise fee limitation set in Section 622(b) of the Cable Act. I. Monies collected as franchise fees are not gross revenues as defined in the Franchise. The Franchise at Section 1.18 defines "gross City revenues" as follows: "Gross city revenues means all revenue derived directly or indirectly by the Grantee and by Grantee's affiliates from services provided within the City via the Cable Communications System." The definition of "gross City revenues" is limited expressly to revenue derived from services provided on the cable system. Under a fair reading of the Franchise, money collected as franchise fees should not be included within this definition. A franchise fee which is simply passed through to the consumer cannot be said to derive from the services provided by a cable operator to its customers via its cable system. It is not part of the consideration paid for cable services or for the operation of the cable system by customers. That consideration is set by Cablevision and is separately indicated on the bill. Franchise fees should not qualify as revenues derived from services provided by Cablevision. II. Cablevision's ' ractice is in accord with enerall acce s ted accountin principles. As previously indicated, Cablevision's accounting treatment of the monies it collects as franchise fees is in accord with its view of the meaning of the Franchise. Cablevision records these monies as liabilities and does not recognize them as revenues. In so treating these monies, Cablevision is acting in accord with generally accepted accounting principles. Attached is a letter of November 9, 1989 from accountants Ernst & Young so stating. M. Under the terms of the Cable Act. monies collected as franchise fees are not "gross revenues." Section 622 of the Cable Act provides, in relevant part, that: (b) For any twelve-month period, the franchise fees paid by a cable operator with respect to any cable system shall not exceed 5 percent of such- cable operator's gross revenues derived in such period from the operation of the cable system. (c) A cable operator may pass through to subscribers the amount of any increase in a franchise fee, unless the franchising authority demonstrates that the rate structure specified in the franchise reflects all costs of franchise fees and so notifies the cable operator in writing. (e) Any cable operator shall pass through to subscribers the amount of any decrease in a franchise fee. (1) A cable operator may designate that portion of a subscriber's bill attributable to the franchise fee as a separate item on the bill. Section 622(b) allows the franchise fee to be assessed only on "gross revenues derived ... from the operation of the cable system." As argued with respect to similar language in the Franchise, money collected as franchise fees is not derived by Cablevision from the operation of the system; rather it is money collected by Cablevision on behalf of the City. Thus, the terms of the Franchise, which do not include money collected as franchise fees within gross revenues, are consistent with Federal law. Other provisions of Section 622 are consistent with the position that franchise fees are a pass-through charge assessed by the franchising authority and not part of the consideration received by the cable operator from operation of the system. Section 622(f) authorizing cable operators to separately itemize franchise fees on customer bills evidences the view implicit in the Cable Act that a franchise fee is a charge passed through to the subscriber which is in addition to and not a part of the charge a customer pays for cable services. Separate itemization is, of course, the way sales taxes are generally treated on consumer bills and Section 622(1) indicates that franchise fees are to be regarded as a similar charge. Section 622(c) and (e) further indicate that franchise fees are to be directly passed through to customers by the cable operator and are not to be treated as part of revenue received in payment for cable services. It should be noted that these provisions are relevant only in circumstances where there is regulation of the rate charged for cable services. Section 622(c) would be meaningless where the cable operator is exempt from rate regulation, since the franchise would not specify a rate structure, or if it did, such language would be preempted. Similarly, the requirement in subsection (e) that mandates a pass through of any decrease in the franchise fee can only have meaning in a rate regulated environment since an unregulated operator would always be free to raise its rates. Both sections make clear the intent of the Act that the portion of the customer's bill attributable to franchise fees and the portion attributable to the charges for cable services are distinct and that the portion attributable to the franchise fee is indeed a straightforward pass through which directly rises or falls as the franchise fee increases or decreases. The use of the term "pass through" in the Act itself emphasizes that the franchise fee revenues collected from customers are the funds of the City and the cable operator's function is merely to collect these funds on the City's behalf. Subsection (c) ensures that the rate regulated cable operators can pass through any subsequent increase in the franchise fees without having to seek permission for a rate increase from the franchising authority in those limited l situations where a rate regulated cable system has voluntarily chosen not to pass through its franchise fee in place on the effective date of the Cable Act. In short, in enacting a provision which allows even a rate regulated cable operator to pass through any franchise fee increases on top of the fixed rate, subsection (c) evidences Congress' intent to protect the general right to pass through the entire franchise fee by ensuing the availability of the pass through in a situation where the practice might be interpreted to conflict with local rate regulation. Similarly, the purpose of subsection (e) is to ensure;' that the franchise fee reductions are passed on to subscribers, rather than being absorbed by the cable operator as profit, in those limited situations where a rate regulated cable operator voluntarily had chosen not to pass through its existing franchise fee. In sum, Section 622 of the Cable Act strongly supports Cablevision's practice. The franchise fees are in addition to, distinct from, and not a part of the rate charged for cable services; the monies paid as franchise fees are not consideration for any cable service and therefore not revenue to the cable operator. To treat the portion of the subscriber's bill attributable to franchise fees as revenue on which franchise fees must be paid would not only be inconsistent with the intent of the Cable Act, it would in the case of the Ithaca franchise violate the prohibition of Section 622(a) on the payments of franchise fees in excess of five percent of gross revenues. Since the portion of the customer's payment attributable to franchise fees is not part of Cablevision's gross revenues and Cablevision already pays five percent of its gross revenues as franchise fees, payment of any percentage of the money paid as franchise fees would result in a payment in excess of five percent of gross revenues in violation of Section 622(b). If, after your review of Cablevision's position, you wish to discuss this issue further we are, of course, willing to do so. Again, my thanks for your courtesy and patience. JF:pg ithaca.fe 5 Very truly yours, �a r John E. Fogarty DRAFT City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 ar a ara-- ukens, General`- Manager American Community Cablevision 519 W. State ST. Ithaca, NY 14850 Date DearBarbara, We believe that two aspects of your computation of franchise fees need to be changed to conform to existing laws and regulations: 1. Our franchise establishes the franchise fee to be paid to the City of, Ithaca at "five percent (5%) of ACC's Gross City Revenue" (§20.2 A). According to Executive Law §812(5), which deals with the collection of the statefranchise fee, gross annual receipts are defined as "...any and all compensation received directly or indirectly by a cable company from its operations within the state, including but not limited to payment for programs received and/or transmitted, advertising and any other monies that constitute income._". According to your report BASIS OF FRANCHISE FEE PAYMENTS, submitted at our request, advertising income is not included in your computation of gross receipts for determining the City franchise fee. In discussions with a representative of the NYSCC, he clearly stated that advertising income should be included in the computation of gross city revenue, as it is in the model set by Executive Law. 2. In a recent Statement of Policy, Docket No. 90389, the NYSCC states the franchise fee "Is calculated as a percentage of all revenues received without deduction or allocation for such a portion of the revenues as may ultimately be paid for by the cable company to the municipal government in fulfillment of the franchise fee". To use the NYSCC example, which assumes a franchise fee of 3%, a bill where a franchise fee of $.60 is added to a service rate of $20.00 results in the incorrect payment of a 2.91% franchise fee, as $.60 is 2.91% of 20.60. The correct franchise fee must be calculated on the basis of bottom line of the bill. In reviewing my ACC bill, it appears that ACC is calculating the franchise fee similarly to the incorrect example. Please let us know by our next meeting what actions you plan to take to resolve these discrepancies. Sincerely, BASIS OF FRANCHISE FEE PAYMENTS ****************************************** ******* ************* ** FRANCHISE FEE BASIS 1991 ****************************************************************** Basic Service Revenue (1) Tier Revenue Equipment Rental Revenue (2) Installation Revenue Pay Service Revenue (3) Pay Per View Revenue Service Upgrade Revenue Home Shopping Service Revenue NOTES: $1,200,601.47 459,043.45. 183,819.09 134,013.79 391,381.86 36,314.09 3,042.02 4,001.27 TOTAL REVENUES (4) $2,412,217.04 (1) Basic Service includes commercial/bulk, accounts. (2) Equipment Rental reflects remotes and (additional outlet) converters. (3) Pay service includes pay services for commercial/bulk accounts. (4) A rate of 5% is applied to the total revenues to determine franchise fees due. (Less NYSCCT Rate .359% for period 1/91-3/91 and .277% for period 4/91-12/91). Revenues as shown above are taken directly from the billing reports for City of Ithaca addresses. RECEIVED ke•A 3 0 1992 NEW YORK STATE COMMISSION ON CABLr. clrVISION In the Matter of 92-210 Amendment of Section 595.1 of the Commission's Rules DOCKET NO. 90327 MEMORANDUM AND RESOLUTION ADOPTING RULEMAKING (Issued: April 9, 1992) By Notice of Proposed Rulemaking (In the Matter of Amendment of Section 595.1 of the Commission's Rules; Docket No. 90327, Order No. 91305, released: July 24, 1991; published in the New York State Register on July 31, 1991), the, Commission proposed to amend Section 595.1(o) of its rules relative to cable television franchise fees payable to municipal, governments: Following the receipt and review of comments, the Commission authorized a revised proposal which was issued December 4, 1991 and published in the State Register on that same date. Having reviewed all the comments submitted, we have determined to amend Section 595.1(o) in accordance with the changes in the revised proposal. Section 595.1(o) was first amended to include requirements concerning franchise fees in 1988. (Order Adopting Regulations in Docket No. 90327, Order No. 87-191, Released: February 10, 1988.) The rule provided as follows: "Section 595.1 Required Contents of Franchises. Where a cable television franchise is awarded or renewed after April 1, ,1973,. .the franchise will be confirmed by the Commission only if it contains: (o) A provision stating (1) whether a franchise fee shall be payable by the franchisee to the municipality and, if applicable, (2) the precise amount or method of calculation of such franchise fee which, if expressed as a percentage of the franchisee's revenues, shall be expressed as a percentage of the franchisee's gross revenues derived from the operation of the cable system within such municipality.* * For purposes of this Section, • the term "franchisee's gross revenues derived from the operation of the cable system "shall mean all revenues required to be reported to the Commission in Accounts 4000.0 through 423.0.0 pursuant to 9 NYCRR Part 599." 7mor.7,-z, 2. The rationale for the rule and the objectives to be achie Adopting Regulations at pp. 4-5. (See also Notice of Proposed ed are set forth in the Order 90327, Order No. 91-305, Released; July 24, 1991.) Rulemaldngprions contained in franchisesg in Docket fee The rule applied to franchise granted or renewed after February 11, 1988. Notwithstanding the rules, some franchises sub and approval after the effective date continued to contain Emitted for Co required payment on a revenue base other than asmnussion review 'further r revi yw and consideration, , e otherha in Section fee provisions capon provide flexibility bed achievedthat some in 59f 0 . maned modification of the rule to rule itself. without compromising the underlying 'n g objectives of the On July 24, 1991, we issued a proposed amendment the "initial and unambiguous but permitted some reasonable( Proposal') for comment which we believed maintained the objective that franchise revenues" a less inclusive fashion. unambiguous fee provisions be clear flexibility j by defining the term "gross Inc. We received comments from the Cable Television (��CTANY ), the Towns of Sand Lake and Saugerties, and number Association f f par s York, Westchester County See: List of Appearances, attached . attached hereto as A endix A. ) A copy of the proposed rule is BP A copy of the Assessment of Public Comment is attached hereto as Appendix The majority of municipalities commenting upon the initial it on practical, rather than leg, g , grounds. ' They expressed fear that thproposed nvmPmum revenue base for calculating franchise fees would become the starti with cable operators and thereby impair their ability to revenues operators the maximum fee of 5of "gross r n ng point for negotiations including tY revenues derived fees basedomthe palle of a cable system" as e g evenues from operon permitted by federal statute (47 USC Section 542). never been our intent to effect the total dollar amount of franchise to a franchise, we recd Although it has recognize that in many instances the fees are negotiatedeesaand pursuant initial proposal might have the unintended effect described' we issued a revised proposed amendment (the "revised proposal") that the reinstate a all inclusive definition of in the comments. e proposed to P posal") a that wouldwe permitto parties to exclude some components of revenue in expressing gross revenues with language that permit the Specifically, the revised rule provided that, absent exclusio Sof revenuesethemustr bevi based on all revenues• ,afbased fee percentage could nt less than a percentage �� a are 1uon a ns, the percentage and that notwithstanding exclusions, the fee recurring monthly basis. A list of those parties who co venues received from �, amendmenturring is attached as Appendix C. subscribers d a regular proposed commented on the revised proposed Having considered all comments and our own e franchise negotiations, we conclude that the rule we adopt fatranchise the same time provide a degree hibili experience with franchises and ofp will papal goserve our objectives while flexibility to those municipal governments who may 3 choose to continue existing exclusions for nonrecurring programming charges or to authorize new exclusions consistent with the requirement that there be a uniform fee applicable to all recurring programming charges. The provisions of Section 202(1) of the State Administrative Procedure Act and Section 101-a(2) of the Executive Law having been complied with, the Administrative Officer shall file with the Secretary of State the attached resolution which adopts the amendment of 9 NYCRR, Section 595.1(o) Commissioners Participating: William B. Finneran, Chairman; John A. Passidomo, Barbara T. Rochman Commissioners. Appendix A TEXT OF RULE Section 595.1 Required Contents of Franchises. Where a cable television franchise is awarded or renewed after April 1, 1973,, or where a franchise was awarded prior to said date but the franchisee had not commenced operations or substantial construction prior to January 1, 1972, the franchise will be confirmed by:theCommission only if it -contains: o. A provision stating: (1) whether a franchise fee shall be payable by the franchisee to the municipality; and, if applicable, (2) the precise amount or method of , calculation of such franchise fee which, if expressed as a percentage of the franchisee's ; revenues, shall be expressed as a percentage of the franchisee's gross revenues derived from the .operation of the cable system within such municipality.1 A municipality may elect to., /approve certain exclusions from said revenue base, provided thatthe resultant revenue base` shall not be less. than -revenues received.by the franchisee directly from subscribers for an y cable services purchased by subscribers on a regular, recurring monthly basis., '1 For purposes of this section, the term "franchisee's gross revenues derived from the operation of the cable system" shall mean all revenues required to be reported to the Commission -in Accounts 4000.0 through 4230.0 pursuant to Part 599 of this Title. Appendix B ASSESSMENT OF PUBLIC COMMENT The Commission proposed to amend Section 595.1(o) of its rules concerning franchise fees by a Notice of Proposed Rulemaking released July 24, 1991. The Cable Television Association of New York, Inc. ("CTANY"), Senator Suzi Oppenheimer, Assemblywoman Cecile D. Singer, Assemblyman Richard Brodsky, Assemblyman George Pataki, Rye Community Television, and a number of municipal governments submitted written comments on the proposed amendment. In response to these comments and in an effort to further clarify Section 595.1(o), the Commission issued a revised proposed amendment to Section 595.1(o) on December 4, 1991. The revised proposed amendment generated written comments from CTANY and a few municipal governments. The initial proposal provided that any franchise fee expressed as a percentage of revenues must be based on revenues that are "no less than gross revenues received by the franchisee directly from subscribers for any cable services purchase1d by the subscriber on a regular, recurring monthly basis." This proposal would have relaxed the existing minimum standard in 595.1(o) which required a fee based on revenues to be based on gross revenues from all sources. Although the proposal would not have required any reduction in fees, the majority of comments were in opposition. CTANY, which opposed Section 595.1(o) when it was first adopted, continues to oppose any minimum standard concerning franchise fees. CTANY contends that the amendment threatened to "harm both cable operators and municipalities." According to CTANY, "expanding the measure of revenues against which a franchise fee percentage will be applied" financially hurts those operators who currently exclude 'premium services from the revenue base. CTANY maintained that the proposal would prohibit municipalities from excluding revenues derived from subscription pay channels and consequently denies the municipalities freedom to negotiate. Lastly, CTANY reiterates is position that the Commission exceeded its proper role because the proposed amendment infringed on the municipalities' legal right under Executive Law Section 818 to determine the franchise fee, subject only to federal limits. The Commission has previously determined that it has the jurisdiction to promulgate a minimum franchise standard applicable to franchise fees. In adopting the existing standard, we noted that in accordance with early federal policies franchise fees were often stated as a percentage of revenues from "basic service" and that at least since the Cable Act in 1984 "basic service" depends more or less upon unilateral marketing strategies of cable companies. We emphasized our concern that franchise fee obligations should be clear and readily ascertainable. We also expressed our concern about the imposition of fees on some, but not all, categories of programming services. Accordingly, we adopted a rule that required any franchise fee based on revenues, to be based on gross revenues as the term is used in our Uniform System of Accounts. At the same time, it should be clearly understood that neither the existing rule nor the revised rule requires the payment of a franchise fee, or that a fee be based on gross revenues or any minimum percentage payable -2 - thereon. The amount of the fee remains subject only to federal law and Section 818 of the Executive Law. Correspondence from Assemblymen Brodsky and Pataki, Assemblywoman Singer and Senator Oppenheimer expressed reservations about the initial proposal. They asserted that the proposed amendment would be detrimental to municipalities .in that it would place municipalities at an unfair disadvantage in negotiating contracts with cable companies and would, therefore, result in decreased franchise fee payments. Several municipalities voiced similar concerns in their; opposition to the first proposed amendment of 595.1(o). In a written comment, the Larchmont-Mamaroneck Cable TV Board of Control ("Larchmont-Mamaroneck"), on behalf of the Town of Mamaroneck and the Villages of Larchmont and Mamaroneck, objected to the proposed amendment. Correspondence from the Town and Village of Harrison, the Village of Croton -on -Hudson, and the City of Mount Vernon supported the Larchmont-Mamaroneck comment. Larchmont-Mamaroneck based its opposition to the proposal on the premise that the proposed minimum standard would exacerbate a municipality's already disadvantaged negotiating position and become "the standard." Larchmont-Mamaroneck also insisted that the unamended rule assists the municipality in obtaining information regarding the franchisee's total revenue, while the amended rule would make disclosure itself the subject of negotiations. Comments from the Towns of Eastchester and Greenburgh, the Villages of North Tarrytown, Irvington, Ossining, Tuckahoe, Rye Brook, Scarsdale, Bronxville, and the City of New Rochelle expressed opposition to the proposed amendment of 595.1(o). Like the Larchmont-Mamaroneck comment, these municipalities also objected to the establishment of a minimum standard that did not include all sources of revenue. The common threads of opposition in these comments was the alleged resulting weakened bargaining position of the municipality and the reduction in municipal revenues, particularly lost advertising revenue. 1 Under federal law, "any cable operator may be required under the terms of any franchise to pay a franchise fee." (47 USC Section 542) Certain limitations, including a ceiling of 5% of gross revenues, are contained in the statute. Although it is our view that a municipality may require a specific fee as an absolute condition of a franchise or renewal, we concede that the existence of a fee or the precise amount thereof is often subject to negotiation. It is apparent from the comments that many municipalities believed that the effect of the proposed rule would be to favor cable companies during such negotiations by permitting the companies to characterize the minimum standard as a preferred standard. In fact, it was not the intent of the Commission to influence the amount of the franchise fee payable to a municipality. Rather, the Commission's initial proposed amendment was intended to provide a degree of flexibility consistent with the underlying principle that franchise fee requirements be clear and unambiguous and apply uniformity to all recurring programming. -3 - Based on the comments received in response to the proposal, the Commission issued a revised proposed rulemaking on December 4, 1991 designed to achieve the same goals in a somewhat different manner. The revised proposed rule reinstates an all- encompassing definition of the term "gross revenues" to be applicable whenever a franchise fee is to be expressed as a percentage of the franchisee's revenues. "Gross revenues" will continue to be defined as all revenues reported to the Commission in Accounts 4000 to 4230 of 9 NYCRR 599. Municipalities may elect to exclude some components from the revenue base so long as the resulting revenue base is no less than that derived from regular, recurring monthly subscriber revenues. The revision responds to concerns of some municipalities that the Commission's initial proposal would set a minimum revenue base which would become the standard in negotiating the franchise fee. Fewer comments were received by the Commission regarding the revised proposal. In contrast to its response to the first proposal, the Town of Greenburgh does not object to the revised proposal. The Town of Scarsdale neither objected to nor supported the revised proposal, but did express continued concern over the effect it would have on the municipality's negotiating power. CTANY and Larchmont-Mamaroneck reiterated the arguments they advanced in response to the proposed amendment 'of July 24. A. Thomas Levin, Esq., representing two consortiums ofvillagesin Nassau County, also submitted comments to the revised proposed amendment of 595.1(o). In essence, the Commission and Mr. Levin are in accord. Mr. Levin 'expresses concern over the municipalities' ability to negotiate for "inclusion in a franchisee's 'gross revenues' any sums which the contracting parties agree are appropriate to include in the franchise agreement." This is exactly what the revised proposal permits. As to existing contract language, the amendment to Section 595.1(o) will vary in its applicability. Many franchises contain a provision obligating the parties to amend their franchises to reflect changes in the Commission's rules. For these municipalities, the amendment of Section 595.1(o) would become effective in accord . with the franchise obligation. For others, Section 595.1(o) would apply at renewal. LIST OF APPEARANCES Comments to First Proposal 1. CTANY 2. Village of Larchmont ) 3. Village of Mamaroneck) 1 letter 4. Town of Mamaroneck ) 5. Town of Saugerties 6. Town of Eastchester 7. Town of Sand Lake 8.' Town of Harrison 9. Village of Harrison 10. Village of N. Tarrytown 11. Village of Irvington 12. The Assembly of the State of New York --Rep. Richard L. Brodsky --Rep. George E. Pataki --Rep. Cecile D. Singer 13. The Senate of the State of New York --Sen. Suzi Oppenheimer 14. Village of Croton -on -Hudson 15. Village of Tuckahoe 16. City of New Rochelle 17. Village of Rye Brook 18. City of Mount Vernon 19. Town of Greenburgh 20. RCTV - Rye Community Television 21. Village of Scarsdale 22. Village of Bronxville Comments to Revised Proposal 1. CTANY 2. Village of Larchmont ) 3. Village of Mamaroneck) 1 letter 4. Town of Mamaroneck ) 5. Town of Greenburgh 6. Village of Scarsdale 7. A. Thomas Levin, Esq. - per 16 Villages in Nassau County ti er In the Matter of NEW YORK STATE COMMISSION ON CABLE TELEVISION The Itemization of Franchise Fees on Subscriber Bills STATEMENT OF POLICY 92-217 DOCKET NO. 90389 (Released: April 20, 1992) During the past months, various cable companies in the state have commenced the practice of including all or a portion of a franchise fee as a separate line item on a• subscriber's bill. The practice is manifest in one of two ways. :In some instances, the franchise fee is one of many items, e.g., basic service, premium service, additional outlets, etc. listed in a single column, the amount for which is included with and added to all other amounts to arrive at a total amount due. In other instances, the bill recites the various services subscribed to and the amounts thereof, sets forth a subtotal of all such amounts and then includes an amount denominated "franchise fee" which, when added to the subtotal, creates a total amount due at the bottom of the bill. In the latter case, the franchise fee is .treated=inthe same `manner as a sales taxa--In-either ca se; -the -fee. is stated ascif it;were a- direct charge upon the subscriber. - Some companies have instituted this practice coincidental with a franchise' renewal or current increase in the amount of the fee or both. For other companies, the practice is unrelated to the franchise term or any change in franchise fee requirements. Because the practice raises fundamental issues concerning the effect of federal law and the relation of federal statute to state statute, Commission regulations and franchise fee provisions in cable television franchise agreements, the Commission has determined that it is appropriate at this time to issue a general statement of, policy on franchise fee itemization and "pass-throughs." Itemization of Fee Section 622(f) of the 'Cable -Communictions Policy Act_ 01984 ("Cable Act") (47 USC Section 542(f)) :provides -that la] =cable operator May designate_ that portion,of,a subscriber's bill -attributable -to the franchise fee as a,separate itein on: thebill , Consistent with this section, a cable operator may include on a subscriber's bill a separate statement indicating the portion of the bill --as a percentage or fixed amount --that will be payable as a franchise fee by the cable company to the franchising authority. This, section not; authority for mcludm a franchise: fee as a separate billable line item on a subscriber's bill , ,wY... g a.., 1 2 In this regard, we note that franchise agreements in New York State have traditionally required franchise fees based on a percentage of revenues --either all or some portion thereof --received by the company from subscribers and, in some cases, from other sources. In other words, the fee is calculated as a percentage of all revenues received without deduction or allocation for such portion of the revenues As. may ultimately be. -paid' by the: Cable'',company :to.:1 the mumcipal government -;in fulfillment of the franchise fee obligation. This practice is fully consistent with Section 817 of the Executive Law which requires the Commission to impose an assessment upon cable companies calculated on "gross annual receipts."' The only exception_. from "gross annual receipts" recognized inthe, statute would include: sales _taxes which are imposed_ directlyon: subscribers (See, e.g., Tax Law Section 1131(2)) Neither the municipal franchise -fee nor�the amount of the- Commission's: assessment is exchided from :'gross annual receipts."y The practice of billing the fee as a separate line item in addition to rates transforms the very nature of the fee from a component of doing business calculated on all revenues .to a_ separate _add-on charge imposed directly on subscribers:` This practice also has the effect of transforming the very method by which the fee is calculated and, therefore, purports to modify the underlying statutory and franchise obligations.; A simple example will illustrate the effect of itemization. Assume a cable company has been charging $20 per month for a service under a franchise which requires a franchise fee of 3%. The franchise fee attributable to such bill would be sixty cents. If the company determines to separate and itemize the fee as an add-on in the manner of a sales tax, the bill is likely to read as follows: Basic service rate --- $20.00 Franchise fee --- $0.60 Total $20.60 1 Section 817(2) provides that the Commission "shall...bill an& collect...[from cable companies]. ..the total direct and indirect costs necessary to operate and administer the commission for the. ..state fiscal year." Each company is required to pay a pro rata share of the commission's costs based upon its gross annual receipts when compared to the gross annual receipts of all companies. "GrossYannual1receipts" is; _defined=in Section 812(5) as follows: ". . .any and all compensation received directly or indirectly by a cable television company from its operations within the state, including but not limited to sums received from subscribers or users in payment for programs received and/or transmitted, advertising.:, and : carrier service, revenue and any other moneys that constitute income in accordance with the•"system of accounts approved by the commission. Gross annual receipts shall not include any taxes on services furnished by a cable television company imposed directly on any subscriber or user by any municipality, state, or other governmental unit and collected by the company for such governmental unit." 3 Apart from the fact that this is a rate increase subject to notice requirements (and government approval in the absence of effective competition), it is readily apparent that the company, by its own unilateral act, has purported to change the manner of calculating the fee by reducing the base from the total amount billed to an amount which is artificially described as the "rate." In -fact,= -$0.60 is=but_. 2.91%0 $20.60-- the total amount billed. If the fee is calculated as before -- 3% of the full amount billed -- the fee attributable to the bill would be sixty-two cents. We find nothing in the Cable Act to suggest that Congress intended to transform the nature of a franchise fee or to amend existing franchises by permitting cable television companies to reduce franchise fee obligations by manipulating the subscriber's bill in such manner. On the contrary, the effect of Section 622(a) was to increase from 3% to 5% of gross receipts the amount of franchise fees which could be required in a franchise. It could be argued that a cable company is free to bill in this manner without also intending to modify its franchise fee obligation. If so, such a bill would be inaccurate and, therefore, misleading. Nothing in the Cable Act authorizes cable companies to engage in inaccurate and misleading billing practices. We also note the likelihood that some cable companies would argue that the franchise fee is a tax and, as such, is a separately billable item. We need not finally determine whether the franchise fee is a tax for the simple reason that even if the franchise fee is in the nature of the tax, under New York State law it would be in the nature of a special franchise or real property tax; but_ clearly not in the nature of a sales tax.2 Tli=e:;special,franchisetax_; is imposed the owner of the special franchise property, i.e.,. the cable company, and not_on the subscriber directly: -',-As such, it is simply a component of doing business similar to other non -sales taxes and business costs. 2 Section 626 of the Real Property Tax Law ("RPTL") provides as follows: i "1. (a) When a tax levied on a special franchise is due in any assessing unit, if the special franchise owner has paid such assessing unit for its exclusive use during the past year under any agreement or statute requiring the same, a sum based upon a percentage of gross earnings or other income, a license fee or other sum of money on account of such special franchise possessed by such special franchise owner, which payment was in the nature of a tax, all amounts so paid for the exclusive use of such assessing unit, except money paid or expended for paving or repairing the pavement of a street, highway or public place, and except in a city having a population of one hundred seventy-five thousand or more according to the latest federal census, car license fees or tolls paid for the privilege of crossing a bridge owned by the city, shall be deducted from the tax based on the assessment .made by the state board for purposes of the assessing unit, but not otherwise, and the remainder shall be the tax on such special franchise payable for such propose." 4 In sum 'it is our -determination that franchise fees cannot be stated asa„sepafate line item on subscriber bills -as-direct charges .on -subscribers.- This policy does-notprevent cable coinpames frominforimng subscribers on bills;. or otherwise, of the -fact that_ franchise fees - are ,`paid t_ o government,. _including_ the - specific :amount ==of Ithe ..fee -attributable .to an individual bill: It is consistent with the Cable Act because companies may include a statement. on the bill which identifies the franchise fee without imposing a separate and direct charge for the fee itself. Pass Through Provisions We also take this opportunity to express our policy with respect to the so-called "pass through" provisions in the Cable Act. Section 622(c) of the Cable Act (47 USC 542(c)) provides that "[a] cable operator may pass through to subscribers the amount of any increase in a franchise fee unless the franchising authority .demonstrates that the rate structure specified in the franchise reflects all costs of franchise fees and so notifies the cable operator in writing." Section 622(c) provides that "[a]ny cable operator shall pass through to subscribers the amount of any decrease in a franchise fee." I The issue here is whether these provisions have meaning in a deregulated cable community. We note, initially, that for many years prior to the enactment of the Cable Act the rates for premium cable television services had been deregulated by the Federal Communications Commission ("FCC"). See Brookhaven v. Kelly, (428 F.Supp. 1216 N.D. New York (1977); 573 F.2d 765, 2d Cir. (1978)) We also note that in many, if not all, cable television franchise agreements in New York State a franchise fee is required to be paid based on revenues derived by the cable television franchisee from premium services or some portion thereof. In fact, at the time the Cable Act became law, cable companies could unilaterally price premium services to account for all costs including franchise fees and increases therein. As a practical matter, the Cable Act did not alter the regulatory status of premium services. Section 623 of the statute provides that "[a]ny franchising authority may regulate the rates for the provision of cable service. .provided over a cable system to cable subscribers, but only to the extent provided under this section." Section 623(b)(1) required the Federal Communications Commission to "prescribe and make effective regulations which authorize a franchising authority to regulate rates for the provision of basic cable service in circumstances in which a cable system is not subject to effective competition." Under Section 623, only basic cable service can be subject to rate regulation.3 Cable companies remain free 3 Although basic cable service is defined in such a way as it is theoretically possible that single channel premium services could be marketed as part of basic service, we are not aware of any such circumstances and it is unlikely that a cable company which is not subject to effective competition would choose to submit rates for premium service to regulation by such marketing practice. 5 to price "premium" services without the need for governmental review which transcends the more limited language in Section 622(c) which merely permits a rate increase in the event of an increase in franchise fees.() and approval --a right We note, as well, that historically, "pass-through', is used permit a cost or change in cost to be. included in the regulated me ted rate borne ratemaking to by ratepayers. the Cable Act ta Illy appears, therefore, ref re, that the Pass-through provisions in Section 622(c) by an amount equal to any current increae se in the e television �anchise fee() of paries to increaseaere fated rates rate. Similarly, the obligation imposed by Section 622(e) to decrease rates toy the re in the franchise fee is only sensible in an environment where ratesgelated there is no real benefit to subscribers. In sum, therates to any reduction are rons ate redundant Otherwin rate deregulated communities. Granting to a cable pass-throughompany the unilateralpilo� are e to subscribers whatever rate it wants --as the Cable Act . 'does --transcends meaningless cost pass-throughs which are reflective of ability to charge a rate regulated evironmendt, makes SO ORDERED. JohnCommissioners Participating: William B. Finneran, Chairman,Theodore E. Mulford, A. Passidomo, Barbara T. Rochman, Co mmissioners. 4 It is important to note here (1) that Congress sanctioned minimum of two years following the effective date of the Cablebasic rate regulation for a irrespective of the existence of effective competition, and (2)that FCCAct for all cable systems statutory mandates caused most cable systems to be rate eregulateregulations rather than OFFICE OF CITY ATTORNEY CITY OF ITHACA 106 EAST GREEN STREET ITHACA. NEW YORK 14850 MEMORANDUM TO: Dominick Cafferillo, Controller FROM: Chuck Guttman, City Attorney DATE: May 18, 1992 SUBJECT: ACC TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I am in receipt of a copy of a letter of May 12, 1992 to Cookie in which ACC enclosed a check in the amount of $30,615.54 representing what they claim to be the appropriate franchise fee for the first quarter of 1992. They attached a statement, copy which I am enclosing, showing gross revenues and the 5 percent fee. My concern is whether they have correctly calculated gross revenues. Questions have been raised as to whether they are including in gross revenues advertising revenues and whether they are including in gross revenues the franchise fee which is separately listed on bills. I believe we should look into this further to make sure that their calculation of gross revenues is correct.. Please get back regarding this at your convenience. Enclosure 'An Equal Opportunity Employer with an Affirmative Action Program' ts, Recycled Paper Bay 11, 1992 City of Ithaca Ithaca, New.York Dear Sir: ZZNY; 0040 Enclosed please find a check for $30,615.54 which is payment of franchise fees for the first quarter of 1992 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. wm�•� i i i American Television & . Communications Corporation A Time Wamer Inc. Company National Division 160 Inverness Drive West, Suite 300 P.O. Box 6929 (80155-6929) Englewood, Colorado 80112 (303) 799-9599 Computation is as follows: Month Gross Revenues January, 1992 February March $210,066.74 216,262.61 221,892.97 Total $648,222.32 Fee @ 5% - NYCC Rate .277 4.723% Franchise Fee $30,615.54 I, Ivy, W. Parish, Controller of American Television and Communications Corporation, National Division,, certify that the above schedule summarizes the Gross Revenues, las defined in the franchising agreement, for the period indicated for the -CATV operations in the City of Ithaca, New York. bd. ralvtA Signed: IWP/jdh Enclosure .,Parish, Controller Providing entertainment and information choices. f/e o,7. on -e- yiredy - _ dfi - ��Cc' OFFICE OF CITY ATTORNEY CITY OF ITHACA 10E1 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: Dominick Cafferillo, Controller FROM: Chuck Guttman, City Attorney DATE: May 12, 1992 SUBJECT: American Community Cablevision TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Enclosed please find a draft of a proposed letter from the Cable Commission to ACC. As you can see, there are at;least a couple of questions as to the manner in which ACC is calculating its franchise fees. We should review exactly what, in the City's opinion, ACC is using as its figure for gross City revenues and the manner in which .they are calculating the franchise fee. It appears they may be underpaying us for the two reasons stated in this draft letter. Please look into this and get back to me at your convenience to discuss it. .1 am also attaching the Basis of Franchise Fee Payments. In Footnote (4) it says a rate of 5% is applied to the total revenues to determine the franchise fees due. They then subtract .359% and .277% for the NYSCCT Rate. I am not sure what type of subtraction is being done and whether that subtraction is justified. Attachments 'An Equal Opportunity Employer with an Affirmative Action Program' tel Recycled Paper DRAFT City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 Barbara Lukens, General Manager American Community Cablevision 519 W. State ST. Ithaca, NY 14850 Date DearBarbara, We believe that two aspects of your computation of franchise fees need to be changed to conform to existing laws and regulations: 1. Our franchise establishes the franchise fee to be paid to the City of Ithaca at "five percent (5%) of ACC's Gross City Revenue" (§20.2 A). According to Executive Law §812(5), which deals with the collection of the statefranchise fee, gross annual receipts are defined as "._any and all compensation received directly or indirectly by a cable company from its operations within the state, including but not limited to...payment for programs received and/or transmitted, advertising...and anyother monies that constitute income...". According to your report BASIS OF FRANCHISE FEE PAYMENTS, submitted at our request, advertising income is not included in your computation of gross receipts for determining the City franchise fee. In discussions with a representative of the NYSCC, he clearly stated that advertising income should be included in the computation of gross city revenue, as it is in the model set by Executive Law. 2. In a recent Statement of Policy, Docket No. 90389, the NYSCC states the franchise fee "is calculated as a percentage of all revenues received without deduction or allocation for such a portion of the revenues as may ultimately be paid for by the cable company to the municipal government in fulfillment of the franchise fee". To use the NYSCC example, which assumes a franchise fee of 3%, a bill where a franchise fee of 5.60 is added to a service rate of $20.00 results in the incorrect payment of a 2.91% franchise fee, as 5.60 is 2.91% of 20.60. The correct franchise fee must be calculated on the basis of bottom line of the bill. In reviewing my ACC bill, it appears that ACC is calculating the franchise fee similarly to the incorrect example. Please let us know by our next meeting what actions you plan to take to resolve these discrepancies. Sincerely,. BASIS OF FRANCHISE FEE PAYMENTS. ****************************************************************** FRANCHISE FEE BASIS 1991 ****************************************************************** Basic Service Revenue (1) $1,2.00,601.47 Tier Revenue Equipment Rental Revenue (2) Installation Revenue Pay Service Revenue (3) Pay Per View Revenue Service:Upgrade Revenue. Home Shopping Service Revenue NOTES:, (1) (2) (3) 459,043.45 183,819.09 134,013.79 391,381.86 36,314.09, 3,042.02 4,001.27 TOTAL REVENUES (4) $2,412,2.17.04 Basic Service includes commercial/bulk accounts. Equipment Rental reflects remotes and (additional outlet) converters. Pay service includes pay services for commercial/bulk accounts. (4) A rate of 5% is applied to the total revenues to determine franchise fees due. (Less NYSCCT Rate .359% for period 1/91-3/91 and .277% for period 4/91-12/91). Revenues as shown above are taken directly from the billing reports for City of Ithaca addresses. NAY - j7 1992 CITY OF ITHACA TV CABLE COMMISSION Meeting May 12, 1992 7:30 PM City Hall Agenda Meeting chair - Mary Minutes taker - Peter 1. Call to Order 2. Approval of minutes of March 10, 1992 meeting. 3. Chair's report - Meeting with Ben (NATOA, Heegard, CG for Muni Access) - Correspondence: Curt Dunham, Ellen Day, Barry Hayes - NYSCC Regional Seminar -Cortland Cable Commission 4. Announcements 5. ACC Report 6. Public Comment 7. Cable Access Advisory Board Report 3 / 24 & 4 / 28 a) Ed. Access Committee Rept - Rick 8. Old business a) Negotiations with ACC regarding access questions b) Discussion of franchise fee determination 9. New Business a) Access Capital Budget b) Titus Towers petiton c) Appointment of CAAB position(s) 10. Adjournment Mailing for Ithaca Cable Commission melting 5/12/92 Enclosures: Minutes of Cable Commission meeting of 3/10/92 Agenda of Cable Commission meeting of 5/12/92 Application letter for CAAB from Joe Powers Application letter for CAAB from Jean Dorancy Letter from Ellen Day Letter from Barry Hayes Broadcasting magazine article from Curt Dunnam Agenda of the Planning Committee of the CAAB Basis of Franchise Fee Payments Draft letter to ACC concerning franchise fee payments Resolution of the Ithaca Cable Commission Regarding Activation of Access Channels Passed unanimouly, 2/11/92 The cable franchise adopted by the City Council of Ithaca on June 8,th 1988, submitted to the NYSCC on December 20th 1988 and approved by NYSCC on September 12, 1989 contains the following language: 14.1 A. (1) Nine downstream channels shall be designated for public, governmental, and educational access. The access channels shall be available for use by New York State, local governments, educational institutions, or members of the public for education and public service programming, municipal services and local expression. The City and ACC have been arguing over whether the word designate means to set aside space in the spectrum (ACC) or to provide activated channelsfor PEG access use (the City). The following language is found in the NYSCC rules "setting minimum standards for the designation and use of channel capacity for public access". Notice of these rules was released on February 24, 1988, and they became effective on September 8, 1988: 595.4 (b) (7) The designation of PEG access facilities shall include the provision by the cable franchisee of the technical ability to playback prerecorded programming and to transmit programming information consistent with the designated use of PEG channels. We have every reason to believe that the drafters of our franchise were familiar with the proposed access rules and the way they construed designation of channels. We must assume that it was the understanding of the signers of the franchise, including ACC, that the franchise required ACC to provide nine activated access channels. After a careful review of the documents pertaining to this matter, it is our opinion that there is no ambiguity in the franchise; that it is incumbent upon ACC provide nine activated access channels as part of its franchise obligations. Therefore, we resolve that the money taken from the access capital budget to activate access channels should be rebated forthwith. Further we resolve, consistent with our prerogatives and our understanding of the needs of the community, that the activation of a second public access channel take place within 60 days from the passage of this resolution. miry O F ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14E50 OFFICE OF CITY ATTORNEY May 5, 1992 Peter Hess, Chair The Cable Commission c/o City Hall 108 East Green Street Ithaca, NY 14850 Dear Peter: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I have reviewed the draft of your proposed letter to Barbara Lukens. I have no objection to your sending this letter. It appears from Barbara Lukens' response that, at most, ACC is willing to activate a second channel and may be insisting that the funds come from the 2 percent revenues. If the Cable Commission truly believes that all nine channels should be activated at this.time, it appears there is clearly an impasse. If that situation exists, at a minimum I believe the matter should be at this time referred to the Human Services Commission for discussion by Council as to exactly what position. the City should be taking and how vigorously we wish to fight on this matter. Inasmuch as potential litigation is involved, the discussion with the Human Services Commission can and shouldbe held in Executive Session. know. If you .wish to discuss this further with me please let me Very truly yours, Charles Guttman City Attorney 'An Equal Opportunity Employer with an Affirmative Action Program' A• tot Recycled Paper City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 Barbara Lukens, General Manager American Community Cablevision 519 W. State ST. Ithaca, NY 14850 May 7, 1992 Dear Barbara, We have received your letter of March 9th responding to ou- resolution of February 1 1 th, 1992, regarding activation of access channels. Our position continues to be that our franchise and state regulations require the designation of nine active access channels. Activation of these channels should have been provided initially as part of the fulfillment of your franchise obligations. By not activating the channel called for in our resolution of February 1 1 th and by not restoring the money spent from Access Capital Equipment funds for the activation of two of the existing channels, as called for in that resolution, we find that ACC is in default of its franchise obligations under section 14.1 A. If you continue to be unwilling to comply fully with the terns of our resolution, the City will seek redress. We await your reply and look forward to putting this difficult issue behind us. Sincerely, Peter Hess, Chair City of Ithaca Cable Commission OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 114850 April 14, 1992 Barbara. L. Lukens American Community Cablevision 519 West State Street Ithaca, NY 14850 Dear Ms. Lukens: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I wrote to you on January 22, 1992 advising you that I was in receipt of your letter of January 15, 1992 in which you advised us that ACC was increasing the rates for basic services from $12.58 to $13.95 with the five percentfranchise fee to be collected in addition. I calculated that when the five percent franchise fee was added in, the rate was actually $14.65 -- more than the maximum set forth in the franchise agreement. I asked you to respond to me as soon as possible regarding this matter. Some time after that letter, I received a phone call from an attorney for ACC advising me that the matter had been referred to him and I would promptly receive a further response regarding this matter. It is now mid-April, approximately three months after my original letter and significantly after the rate. increase has gone into effect:. To date I have received no response to this matter. If I do not promptly receive a response regarding this matter I will have no choice but to advise Common Council that ACC is not. responding and request direction from Council as to how to respond to what, in my opinion, is a charge of . more than the maximum set forth in the franchise agreement. Please get back me or have your attorney get back to me regarding this matter at your earliest convenience. Very truly yours Charles Guttman City Attorney "An Equal Opportunity Employer with an Affirmative Action Program" t4 Recycled Paper OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 January 22, 1992 Barbara L. Lukens American Community Cablevision 519 W. State Street Ithaca, NY 14850 TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 Dear Ms. Lukens: I am in receipt of a copy of your letter of January. 15, 1992 addressed to the City in which you advise us that ACC is increasing the rates for basic service from $12.58 to $13.95 with a five percent franchise fee to be collected in addition. When the five percent franchise fee is added in, the rate which customers will be paying is actually $14.65, a penny more than the maximum set forth in the franchise agreement. As I read Section 19.1 of the franchise, ACC agrees not to raise the basic rate higher than the $14.64 charge. Section 20.1 states that the City shall be entitled to receive from ACC, not from the consumer, the franchise fee. Therefore, I would assume that the maximum that ACC can charge the consumer, including the franchise fee, is the $14.64 charge. Accordingly, I believe that the increase you are proposing actually brings your rates over the maximum set forth in the franchise agreement. You further state in your letter of January 15, 1992 that the rates for basic cable service are related to overall increases to ACC for general operating costs. I would appreciate your forwarding to me a financial statement setting forth your general operating costs for 1990, 1991 and projected for 1992 to demonstrate that the 58 percent increase since December of 1989 is actually related to overall increases for general operating costs I expect that Common Council will be discussing this issue and I would appreciate a response as soon as possible. Very t Guttman City Attorney cc: Mayor Benjamin Nichols Tom Terrizzi, Cable Commission Peter Hess, Cable Commission "An Equal Opportunity Employer with an Affirmative Action Program" to, Recycled Paper AMERICAN COMMUNITY CABLEVISION March 9, 1992 Mr. Peter Hess City of Ithaca Cable Commission City Hall 108 E. Green Street Ithaca, NY 14850 Dear Peter: This will respond to your letter of February enclosed resolution of the City of Ithaca Cable 17, 1992 and the Commission. As your letter notes, there have been several discussions between representatives of the City and ACC regarding ACC's responsibility to activate additional access channels and the source of the funds to pay for the equipment required for such activation. We thought that real progress had been made toward reaching a mutually acceptable resolution of these issues. However, it appears from your letter that some of these issues remain unresolved and we believe it would be in the best interests of the City, ACC and our customers to continue our attempts to resolve them. In an attempt to further those efforts, ACC is willing to agree to activate a second public access channel as soon as practicable, despite our view that such activation is not required, nor is there an existing need for an additional public access channel. We believe that the alleged need for the activation of this channel arises from the continuing repetition of public access programming and excessive use of access channel time by certain individuals. We doubt that it was ever intended that any individual should have, in effect, his or her own personal access channel. And certainly the best interests of our customers are not served by such a situation. Any resolution of the outstanding issues regarding access channel activation should include limitations on the repetition of programming and on the use of the access channels by any one individual. While we are willing at this time to activate a public access channel, we continue to believe that the funds for the equipment required to activate such a channel are properly to be allocated from the 2% of revenues designated for access equipment under Section 14.1C(3). 5 4s_y Cb) 519 West State Street Ithaca, New York 14850 607-272-3456 We again urge that, in the interests of reaching an amicable resolution of these issues, we continue our discussions. Sincerely, fC Barbara L. Lukens, General Manager enc. BLLImkk • b hours calls. ACC has contracted with The new company a newas w started answering service service representative by a former for after that his from another cable company, and ACC customer k�rowledge of the industryfeelso Potential service calls will enhance and ability to trouble service. ACCs after ; shoot hours customer In addition, this new portion of our calls company will be able during student exit and entrancet0 toake some our telephone answering statistics and customer quality, help us service o ACC will once supporter Chamber Orchestras concert again be the major su a9, annual youth of the Cayuga which is scheduled for o ACC is workingCwith schools, the Cayuga Nature Global Ithaca to recognize Center Re -Leaf efforts. and celebrate the Discover and the this effort to enhance We'll tell you more y Channel's this theythe community's about {tee details of develop, awareness of environmental o ACC will be holdin senior citizen g a seminar on how to hook-up a VCR at the center on Geneva Street on 3/26. REPORT OF AMERICAN COMMUNITY CABLEVISION MARCH 10, 1992 a March 9, 1992 104 Treva Avenue Ithaca, New York 14850 Mr. Peter Hess, Chairperson Ithaca City Cable Commission 131 Westhaven Road Ithaca, New York 14850 Dear Mr. Hess: Please accept this letter as my formal request for consideration of my appointment to the Community Access Advisory Board. A few days ago I spoke to Mr. Rick Gray and he advised me to send you a letter indicating my desire to be on the Community Access Advisory Board. As I mentioned to you in our earlier phone conversation, I feel that I have a great deal to offer from my almost 17 years of cable experience and would truly welcome the opportunity to contribute to the future of Community Access. While I was employed by ACC I worked very hard on the new Access Studio and I am very proud of the end result. iIt is a great concern of mine to see that Access continues to grow and remains an important part of our community. Thank you very much for your consideration. If you have any questions please do not hesitate to phone me at 272-7717. CR-) Joseph R. Powers 325 W. Buffalo St Ithaca, NY 14850 April 28, 1992 To the CAA B: I am a city of Ithaca resident and would like to become a member of the Cable Access Advisory Board. If there are any questions, please write to ma at the above address or call nye at (607) 272- 7257. Thank you. Sincerely, Jeanlorancy GROTON HOUSING AUTHORITY CENTER VILLAGE COURTS 200 W. SOUTH STREET TELEPHONE GROTON, NEW YORK 13073 607 - 899-5887 April 13, 1992 Mr. Peter Hess City Cable Commission 108 East Green Street Ithaca, New York 14850 REGARDING: CHANNEL 13 Dear Mr. Hess, yi irst746rds" in regards to"Chanri eI `hEMEANING;=" ares DISGUSTING AND For the life of me I .cannot understand how any City, Village or Town would allow the garbage on public television that is being allowed on our paid television programs. We have sixty (60) Senior apartments in our building, and I have heard the comments in regards as to you never can get anywhere by phone or mail to complain. This morning, after seeing for myself the program that was on last night around 7:30 P.M. where' the part I did see was a man "urinating" on the side of a van, and setting fire to the side of the van with his cigarette lighter. I have seen other such disgusting programs, (while flicking through the channels looking for something decent to watch) only to see at one time two boys seeing whose "private parts" were bigger. Need I say more???? I could go on and on with all the complaints that our Seniors have+in this building alone, let alone other people I have spoken with. Why is it so hard to find anyone "In charge" of the CITY CABLE COMMISSION????? WHO IS IN CHARGE OF ALL OF THIS GARBAGE BEING SHOWN ON OUR PAID T.v. CABLE? AND THE WORSE PROGRAMS, WHICH ARE NOT "SCREENED" ARE CHANNEL 13 , SO WHOEVER IS IN CHARGE OF CABLE COMMISSION IS THE ONE RESPONSIBLE FOR THIS FILTH. PLEASE, COME FORWARD AND STATE YOUR REASONS, AND STATE A PHONE•NUMBER AND ADDRESS WHERE A GROUP OF PEOPLE CAN EASILY COMPLAIN IN ORDER TO CORRECT THIS SITUATION. I will be waiting to hear from you, or ANYONE in charge of this problem. Ellen E. Day: Administrator/Manager PLANNING COMMITTEE OF THE CRAB 1992 AGENDA 1. Additional staff person at beginning of year five of the franchise [Feb. 1, 1993]. Job description? Techie? Educational / I -net needs? 2. Video formats supported by Access. How many? Add Hi -8mm? Phase out U -Matic :3/4"? Gradually? All at, once? Never? 3. Audio during video bulletin board. Is it needed? Equipment requirements to provide local audio programming? Policies for users? Similar to video policies? Can it fill other needs? Cable cast meetings? Record audio of live shows? 4. Mid-season correction of reservation policies. Too tight? To lenient? .Just right? 5. General operational needs and requirements for efficient operation and administration. Scheduling computer and/or other equipment needs? Standards of service to users? System to equitably permit pub.. educ., and govt. use of I - net? Are problems of heating and air conditioning behind us? 6. Equipment. repair delays. Should Access staff be more involved? ' Change iri parts ordering procedures? Recommendations to ACC? New Public Access channel. Should the two channels he distinguished by first -run vs repeats? Series ;. individual programs? Some other criterion? Equipment needs of new channel? Audio? C.G. or computer?' 8. Greater use of Government channel. Ways to involve more local governments? Committee? More useful video bulletin board? System to transfer information from clerks to Access computers? Audio of meetings? 9 Satellite receiver dish for Access. Appropriateness for additional access programming? Who makes requests for what type of programming? How? Equipment? 10. Additional studio and/or other production space. Where? Institution on I -net? Availablity to other [not of that institution] users? Problems of administration? Long-term reservation of equipment? Would ACC permiit? 11. Using playback Amigas for more than bulletin boards and channel I.D. User created promotional spots? Integrating channel I.D. with evening schedule? User, friendly software to permit this? BASIS OF FRANCHISE FEE PAYMENTS. FRANCHISE FEE BASIS 1991 ****************************************************************** Basic Service Revenue (1) Tier Revenue Equipment Rental Revenue (2) Installation Revenue Pay Service Revenue (3) Pay Per View Revenue Service Upgrade Revenue Home Shopping Service Revenue NOTES: $1,200,601.47 459,043.45 183,819.09 134,013.79 391,381.86 36,314.09 3,042.02 4,001.27 TOTAL REVENUES (4) $2,412,217.04 (1) Basic Service includes commercial/bulk, accounts. (2) Equipment Rental reflects remotes and (additional outlet) converters. (3) Pay service includes pay services for commercial/bulk accounts. (4) A rate of 5% is applied to the total revenues to determine franchise fees due. (Less NYSCCT Rate .359% for period 1/91-3/91 and .277% for period 4/91-12/91). Revenues as shown above are taken directly from the billing reports for City of Ithaca addresses. City of Ith a Cable Commission Minutes of March 10, 1992 meeting' Present: Cable Commission members: Peter Hess, Jim Ferwerda, Mary Euell (secretary) ACC representative: Barbara Lukens Common Council Eason: John Efroymson 1. Meeting called to order. 2. Minutes of the Feb. 11, 1992 meeting approved. 3. Chair's Report: An Educational Access Advisory Board meeting was held. Peter Hess reported that eight people, including representatives from Cornell, Ithaca College, the Ithaca City School system, Groton, and George Junior Republic attended. The meeting focused on information -sharing and possible uses for Educational Access. There was discussion of equipment problems and sources. In addition, some concern was expressed about the limit of one representative to the Advisory Board per institution as established by the Educational Access charter. Doubt was expressed that one person could adequately represent the multiple and varied interests of the entire Cornell campus. This issue was not resolved at the meeting. 4. Announcements: Bill McCormick objected to the idea that no broadcast crunch exists at Cable Access at this time. He asserted that at least four channels are needed to allow for repeat broadcasts ofAccess programs so that such programming has a chance of reaching a substantial audience. He pointed out that this is especially true since Access programs must compete for viewers with mainstream, prime-timelTV broadcasting. Bill also raised the question of complete activation of all I -NET locations to provide increased opportunities for off - `site production of programming. - . 1 5. ACC report: Barbara Lukens reported that a new answering service will be handling customer service calls during off -hours. It will be staffed by operators familiar with Cable operations, who may be able to walk customers through some basic troubleshooting over the phone. Barbara also reported, in response to Bill McCormick's concern about I -NET sites, that all equipment is in place for the I -NET. She stated that Boynton Junior High, City Hall, the Public Library, Cornell University, Ithaca College, and the County Courthouse are now active, and that a line has just been installed at GIAC. Jim.Blizzard is contacting I -NET sites to encourage them to request hook-ups. 6. Public . Comment: - Bill McCormick noted that since only one`working switcher is currently available, only one off-site program can be done at atime. He stated that although ACC says all equipment is in place for off-site live production, in fact it seems never to be available. Jim Ferwerda suggested that Cornell groups wishing off- site production facilities to broadcast from Cornell should request such services from Cornell Communications since it is unrealistic to expect Access to provide broadcast potential from an unlimited number of Cornell sites. Bill also urged that the Cable Commission take the initiative to establish policy and set goals for the promotion and growth of Cable Access and that the Commission communicate goals and policies to the CAAB for consideration and recommendations. He raised questions about the City's priorities for the development of Access and about methods for measuring success. John Efroymson stated his belief that instead of assuming such policy and goal -setting responsibilities for Access, the Cable Commission should empower the CAAB to be more active in establishing Access -1- rf-rrjr '•-•" Jim Ferwerda noted that a p&1t1 signedbyi6a1 rsidents iingROasbckgr&ihd WRVOsoundfor, Cable 13 bulletin board, had ben subrmtted to ACC:=T-Hefeiiiiesied Barbara pointed out that n1y3Oa die 87 petition signatures belorigediodalile'lslibiciibirS'and-thil the - - others probably get WRVO on radio: She stated that ACC already provides a considerable amount of - FM radio programming, receives no income from it, and does incur some cost in providing it. Barbara - says ACC doesn't feel it makes sense at this time to include WRVO. Peter Hess stated that WRVO offers an interesting variety of talk radio that is issue -oriented and would be a worthwhile additiOn to the range of listening options now available (d) Barbara reported that the Learning Channel is now off Channel -13. She stated that ACC does not yet have all the equipment needed to bring WSKG on the air and that there may be some question about whether WSKG fits the "non-commercial" criteria applied to public access. Barbara raised the potential problem of inserting other programming during WSKG pledge drives. These questions require further consideration. (e) The Commission requested an update on the Ed Sargent radio station issue. Barbara stated she has reviewed the contract with ACC's attorney and the contract revisions have been delayed for various reasons. She will pursue and report on progress. Minutes prepared by Mary Euell. DRAFT City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 Barbara Lukens, General Manager American Community Cablevision 519 W. State ST. Ithaca, NY 14850 Date DearBarbara, We believe that two aspects of your computation of franchise fees need to be changed to conform to existing laws and regulations: 1. Our franchise establishes the franchise fee to be paid to the City of Ithaca at "five percent (5%) of ACC's Gross City Revenue" (§20.2 A). According to Executive Law X812(5), which deals with the collection of the statefranchise fee, gross annual receipts are defined as "...any and all compensation received directly or indirectly by a cable company from its operations within the state, including but not limited to...payment for programs received and/ or transmitted, advertising._and anyother monies that constitute income...". According to your report BASIS OF FRANCHISE FEE PAYMENTS, submitted at our request, advertising income is not included in your computation of gross receipts for determining the City franchise fee: In discussions with a representative of the NYSCC, he clearly stated that advertising income should be included in the computation of gross city revenue, as it is in the model set by Executive Law. 2. In a recent Statement of Policy, Docket No. 90389, the NYSCC states the franchise fee "is calculated as a percentage of all revenues received without dedubtion or allocation for such a portion of the revenues as may ultimately be paid for by the cable company to the municipal government in fulfillment of the franchise fee". To use the NYSCC example, which assumes a franchise fee of 3%, a bill where a franchise fee of $.60 is added to a service rate of $20.00 results in the incorrect payment of a 2.91% franchise fee, as $.60 is 2.91% of 20.60. The correct franchise fee must be calculated on the basis of bottom line of the bill. In reviewing my ACC bill, it appears that ACC is calculating the franchise fee similarly to the incorrect example. Please let us know by our next meeting what act -ions you plan to take to resolve these discrepancies. Sincerely, OFFICE OF CITY CLERK APR 1 31992 CITY OF ITHACA 1 D8 EAST GREEN STREET ITHACA, NEW YORK 14850 MEMORANDUM TO: CITY ATTORNEY FROM: C..PAOLANGELI, CLERK DATE: APRIL 13, 1992 SUBJ: MATERIALS RECEIVED FROM ACC PLEASE SEE ATTACHED LE'1"1'hR FROM ACC REGARDING MATERIALS SENT TO THE CLERK'S OFFICE. IF YOU WOULD LIKE TO LOOK THEM OVER, PLEASE LET ME KNOW AND I WILL SEND THEM TO YOUR OFFICE. IF NOT, THEY WILL BE ON FILE IN OUR OFFICE. "An Equal Opportunity Employer with an Affirmative Action Program" TELEPHONE: 272-1713 CODE 607 ACC "Rccdvc ci q -Io -(32 AMERICAN COMMUNITY CABLEVISION April 7, 1992 Callista Paolangeli, City Clerk City of Ithaca 108 East Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: Enclosed please find the following reports which are required by the contract between American Community Cablevision and the City of Ithaca per section 18.5. 1) copies of materials required to be given to subscribers 2) annual performance testing results as submitted to the FCC 3) annual summary of service requests and written complaints received and handled 4) annual summary of outages 5) annual summary of reports submitted to the NYSCCT and the FCC The remainder of the information we are required to submit to the City has been sent previously. If you have any questions, please do not hesitate to contact me. cerely, Barbara x. Lukens, General Manager cc: Peter Hess, Ithaca Cable Commission, w/o encl. 1 519 West State Street Ithaca, New York 14850 607-272-3456 CITY OF ITHACA 108 EAST GREEN STREET ITHACA. NEW YORK 14850 OFFICE OF TELEPHONE: (607) 274-6504 CITY ATTORNEY FAX: (607) 272-7348 MEMORANDUM TO: Callista Paolangeli, City Clerk FROM: Chuck Guttman, City Attorney DATE: .April 14, 1992 SUBJECT: ACC Materials I received your memo regarding materials from ACC. I do not believe I have to review -those' matters and am happy .that.they are filed in your.office. 'An Equal Opportunity Employer with an Affirmative Action Program' tot Recycled Paper i" April 2, 1992 Mr. Charles Gottman City of Ithaca 108 East Green Street Ithaca, NY 14850 r American Television & Communications Corporation A Time Warner Company Corporate Headquarters 300 First Stamford Place Stamford, Connecticut 06902-6732 203 328-0600 RE: American Community Cablevision/TWE Franchise Transfer Dear Mr. Gottman: For your information, we enclose a copy of the petition which we filed with the New York State Commission on Cable Television, seeking the consent of the Commission to the transfer of the franchise to Time Warner Entertainment Company, L.P. We appreciate your cooperation in expediting your approval of the transfer. BLL:pg encl. ith.c Providing entertainment and information choices Very truly yours, szarJoara Barbara L. Lukens 4,,,f(d),1 (11.- 1 "�'� �"�'-��-tii<:r�a::ii�7t`�.13c1�K�i�>t:y :i3::�.t'�.cw• ?r:.•! '3.i.'':.. _..� March 27, 1992 New York State Commission on Cable Television Tower Building - 21st Floor Empire State Plaza Albany, NY 12224 www■ Ar i i r American Television 8 Communications Corporation A Time Wamer Inc. Company Corporate Headquarters 300 First Stamford Place Stamford. CT 06902-6732 203 328-0600 RE: Petition of American Television & Communications Corporation ("ATC") for approval of the transfer of certain franchises - Ithaca system Gentlemen/Mesdames: ATC hereby respectfully requests the approval of the New York State Commission on Cable Television ("the Commission"), pursuant to Section 822 of the Executive Law to the transfer of those certain franchises which are specifically listed on the annexed Schedule A ("the franchises"), and which are presently owned by ATC to Time Warner Entertainment Company, L. P. ("TWE"). As the Commission is aware, ATC is an 82% owned subsidiary of Time Warner Inc. ("Time Warner"). Time Warner has entered into an agreement with Toshiba Corporation ("Toshiba") and C. Itoh & Company, Ltd. ("C. Itoh") to form TWE, a limited partnership organized pursuant to Delaware law, with its principal place of business to be located in New York City. Under the Agreement of Limited Partnership dated October 29, 1991, TWE will own Time Warner's cable television programming businesses, filmed entertainment businesses and cable television businesses, including the franchises. TWE will have a total capitalization of approximately $20 million. Each of C. Itoh and Toshiba will contribute $500 million to TWE and will receive a 6.25% residual equity interest in TWE. Time Warner subsidiaries will own approximately 87.5% of the residual equity of TWE, . as well as certain preferred equity interest in Time Warner which the parties evaluate at approximately $5 billion. Through subsidiaries, Time Warner will maintain control of the operations of the businesses that comprise TWE. Warner Bros. Inc., Home Box Office, Inc., Warner Cable Communications Inc., Warner Communications Inc. and ATC, all Time Warner subsidiaries, will all be general partners of TWE. ATC and Warner Communications Inc., will be the managing general partners of TWE. C. Itoh and Toshiba or subsidiaries thereof will be limited partners in TWE with rights to participate only in decisions regarding certain extraordinary partnership matters, including the merger, consolidation or dissolution of TWE. Thus, control of the franchises will not change. The Providing entertainment and information choices • franchises are now under the control of Time Warner and will remain so after the proposed transfer to TWE. There will be no change in the personnel, policies or operation of the cable television franchises as a result of the transfer to TWE. ATC, as an operating division of TWE, will continue to operate the franchises. Responsibility for the day-to-day management of the cable television franchises will remain with the same personnel who currently manage those operations. In addition, in conjunction with the formation of TWE, Time Warner has agreed to purchase the 18% of ATC's Class A common stock that it does not presently own. Such purchase by Time Warner, which now owns 82% of ATC and has 93% voting control of ATC, will not result in any change in control of ATC. By this petition, ATC requests approval of the transfer of the franchises listed in Schedule A. For each of these franchises, approval of the local franchising authority is not required or has been granted. Request for approval by the Commission of the transfer of franchises for the Town of Danby and the Town of Ithaca where requests for approval are still pending before local franchising authorities will be sought subsequently. Respectfully submitted, AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION By:OZ-14-17#f), . Joh F. Gault utive Vice President SCHEDULE A Franchises held by American Television and Communications Corporation d/b/a American Community Cablevision Franchise Town of Candor Village of Candor Town of Caroline Village of Cayuga Heights Town of Dryden Village of Dryden Village of Freeville Town of Groton Village of Groton Town of Lansing Village of Lansing Town of Newark Valley Village of Newark Valley Town of Newfield Village of Trumansburg Town of Ulysses City of Ithaca nystate.2 Local Approval Obtained Not required, Not required, Not required, 1/20/92 1/6/92 1/6/92 Not required, 12/16/91 12/16/91 Not required, Not required, Not required, Not required, Not required, 2/3/92 Not required, 3/4/92 notice given notice given notice given - 12/3/91 - 12/3/91 - 12/3/91 notice given - 12/3/91 notice given - 12/3/91 notice given notice given notice given - 12/11/91 - 12/3/91 - 12/3/91 notice given - 12/3/91 notice given - 12/3/91 ACC AMERICAN COMMUNITY CABLEVISION March 13, 1992 Ms. Callista Paolangeli City Clerk of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 MAR 181992 MAR 1 81992 Dear Ms. Paolangeli: Effective May 1st, 1992, the monthly rate for cable television service to commercial accounts who _sell televisions will be $60.00. We believe that this flat rate is a workable solution to what has up to now been an unmanageable and unenforceable policy on rates and numbers ofoutlets in retail stores. Previous to this change, the rate which was based on the number of TV sets encouraged "creative wiring" by some dealers to provide cable service to more sets than were in our records. Following discussions with some area dealers, we agreed to what we think is a more fair and manageable rate for both parties. In fact, since having announced this new flat rate, we have attracted retailers who had not formerly subscribed under the old pricing structure. As is stated in the retail agreement that we've developed, our #1 concern is that the interior wiring to a store not leak signal. Beyond that, our shared goal is to meet the needs of our customers. We would hope that the store make full use of cable to demonstrate TVs, including stereo, VCRs and FM tuners. We will charge one flat fee of $60.00 per month regardless of the number of televisions connected to cable. Our goal is to work with retailers in developing the best possible relationship with the customers we share. Display of cable product on their TVs benefits us both. As such, we're willing to follow up with a converter and remote for their use. In: addition, they receive their choice of any 2 tier channels, (channels 21-45). Christop Cr J. Dle Marketing/Operations Manager cc: The Honorable Ben Nichols Mr. Tom Terrizzi, Chair of the Cable Commission CJD/mkk 519 West Sta ,' Street Ithaca, New York 14850 607-272-3456 MAR 31929 • �1 Rotation duties: Meeting chair - Peter Minutes taker - Mary CITY OF ITHACA TV CABLE COMMISSION Meeting March 10, 1992 7:30 PM City Hall Agenda 1. Call to Order 2. Approval of minutes of February 11, 1992 meeting. 3. Chair's report -Educational access meeting 4. Announcements 5. ACC Report 6. Public Comment 7. Cable Access Advisory Board Report 8. Old business a) Negotiations with ACC regarding access questions b) Rate and franchise fee determination c) Annual agenda d) ACC service standards 9. New Business a) Reviewing the franchise b) NATOA membership 10. Adjournment City of Ithaca Cable Commission Minutes of February 11, 1992 Meeting Present: Commission members: Peter Hess, Chair; Mary Euel; Jim Ferwerda; Tom Terrizzi. CAAB Chair, Rick Gray ACC Representatives: Chris Doyle, Asst. Manager; Lauren Stephanelli, Access Coordinator. 1. Minutes of the January 14, 1992 meeting were approved as submitted. 2. ACC Report: None was submitted. Mr. Terrizzi asked Mr. Doyle about employee demonstrations that took place in front of ACC last week. One allegation made by ACC employees was that ACC management was compiling misleading information regarding customer service standards. Employees charged that customer telephone calls to ACC are not answered within 30 seconds as represented. Mr. Doyle said he had not heard the allegation. He said it was not true and said he would supply the Commission with information regarding the record keeping for ACC's customer service standards. 3. Public Comment: Robin Palmer said that Bill McCormick swore on a Channel 13 show before 10:00 p.m. He said that he was expecting more problems in the future. He wanted to see the Commission's proposed regulations regarding speech that have been under consideration since last April. Mr. Terrizzi said that they will be released soon but that they will probably not satisfy Mr. Palmer's concerns. 4. CAAB Report: a) Access channels are still offset by one channel due to a technical problem. ACC ran a test that didn't work for those sets that have a tan converter box. The problem can only be corrected by changing each converter. ACC will notify subscribers of the offset. b) The Educational Access Advisory Board was established. A March 10, 1992 meeting is scheduled to organize the EAAB. c) Rick Gray was elected as CAAB Chair. Peter Hess, the outgoing Chair, was thanked for all his work on the CAAB. d) Activation of Channels: The CAAB rejected the proposal submitted by Mr. Hess, on behalf of the Commission, regarding the activation of new access channels. The CAAB felt that the Commission should not compromise what they felt was the clear language of the franchise regarding the activation of channels. Mr. Gray inquired whether the calculation of gross city revenues included the advertising revenues from channel 7. Mr. Hess stated that the Commission would inquire into the calculation of the the gross revenue figure. d) The Commission agreed that at future meetings, there would be only one public comment period and that each member of the public would be limited to five minutes, with extensions to be granted by the chair. e) Mr. Hess suggested that the Commission discuss, 'at a future meeting, establishing a n annual agenda. He suggested several possible items: establishing contacts with other municipalities; pursuing the creation of a budget fro Commission operations and conference attendance. The meeting was adjourned at 9:20 p.m. Minutes prepared by Tom Terrizzi Peter Hess City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 Ivy W. Parish, Controller American Television and Communications Corp. National Division 160 Inverness Dr. West, Suite 300 Englewood, CO. Dear Ivy Parish: I have received a copy of your report dated January 24, 1992, showing the gross revenues collected by ACC in the City of Ithaca in 1991. To assist us in verification of these figures;: we would like to know the formula you use to calculate the amounts' and the numbers that were used in making these calculations for 1991. Thank you, Peter Hess, Chair, City of Ithaca Cable Commission cc: Barbara Lukens, General Manager, ACC Charles Guttman, Esq., City of Ithaca Attorney Ftb 19 Dear Barbara, Peter Hess City of Ithaca Cable Commission 108 E. Green St. Ithaca, NY 14850 February 17th, 1992 In your letter to me of December 20th, you discussed the history of the long standing impasse over the purchase of transmission equipment for access channels out of the access capital budget, and outlined a proposal for resolving it. You recalled your expectations arising from the June 12th meeting of company and City representatives and their attorneys, namely that ACC would "write a letter to the City stating what equipment was required for transmission of a video channel and...that the City would make a recommendation on the point at which additional channels would be activated" based on use and need. My recollection is that these "expectations" were ACC's proposals. You also referred to the meeting that you, Tom Terrizzi, and I had last November 1 lth, saying that Tom and I "did not want to address the issue of. when PEG access channels would be activated". My recollection is that we indicated a willingness to have that on the table, while noting that the • perspective of the Access Advisory Board would be seriously considered before the Cable Commission put its support behind any agreement. In any event, I brought the essence of the proposal contained in your December 20th letter to the January CAAB meeting, with some modifications of my own. At that time, I advocated this compromise which included guidelines regarding the activation of new access channels. This proposal was not well received by the board, and it became clear to me that the Cable Commission would fall short of its responsibility to uphold the franchise if we agreed to anything less than what I feel is clearly guaranteed in the franchise: nine fully functional access channels to be activated on demand. Accordingly, the Commission, at it meeting on February 1 lth, passed the resolution which I am forwarding to you herein. We hope that you will fmd its provisions acceptable. We request a written response from you before the next Cable Commission meeting which will take place on March 10th. Sincerely, Peter Hess cc: Chuck Guttman, City Attorney Members of the Cable Commission John Efroymson, Common Council Liaison Ben Nichols, Mayor Resolution of the Ithaca Cable Commission Regarding Activation of Access Channels Passed unanimouly, 2/11/92 The cable franchise adopted by the City Council of Ithaca on June 8th 1988, submitted to the NYSCC on December 20th 1988 and approved by NYSCC on September 12, 1989 contains the following language: 14.1 A. (1) Nine downstream channels shall be designated for, public, governmental, and educational access. The access channels shall be available for use by New York State, local governments, educational institutions, or members of the public for education and public service programming, municipal services and local expression. The City and ACC have been arguing over whether the word designate means to set aside space in the spectrum (ACC) or to provide activated channelsfor PEG access use (the City). The following language is found in the NYSCC rules "setting minimum standards for the designation and use of channel capacity for public access". Notice of these rules was released on February 24, 1988, and they became effective on September 8, 1988: 595.4 (b) (7) The designation of PEG access facilities shall include the provision by the cable franchisee of the technical ability to playback prerecorded programming and to transmit programming information consistent with the designated use of PEG channels. We have every reason to believe that the drafters of our franchise were familiar with the proposed access rules and the way they construed designation of channels. We must assume that it was the understanding of the signers of the franchise, including ACC, that the franchise required ACC to provide nine activated access channels. After a careful review of the documents pertaining to this matter, it is our opinion that there is no ambiguity in the franchise; that it is incumbent upon ACC provide nine activated access channels as part of its franchise obligations. Therefore, we resolve that the money taken from the access capital budget to activate access channels should be rebated forthwith. Further we resolve, consistent with our prerogatives and our understanding of the needs of the community, that the activation of a second public access channel take place within 60 days from the passage of this resolution. Peter Hess 131 West Haven Rd. Ithaca, NY 14850 February 18th, 1992 Dear Steve, When you were in Ithaca last May, one of the central issues we were trying to deal with was a disagreement between ACC and the City over what was meant by our franchise requirement designating nine access channels. We have had some negotiations with ACC since then but have not resolved our differing interpretations. At our last Cable Commission meeting, the Commission passed a resolution stating our position and asking for what we believe is guaranteed by our franchise. We are awaiting a response from ACC. If they reject our request, we believe they will be in violation of the franchise and State Regulation 595.4(b)(7).. We will then want to petition the NYSCC for a ruling on this matter. In anticipation of this eventuality, I would appreciate your advice on how to initiate a request for a ruling from the NYSCC. I have enclosed copies of ACC's most recent offer to the City, and of the Cable Commission resolution referred to above, along with the cover letter that was sent to ACC's General Manager with the resolution. I would like to discuss this with you by phone. I will call toward the end of next week, in the hope that you will have some time for this conversation. Should you want to contact me, please feel free to call me at work at 607-274-3384. In addition to the items mentioned above, I have enclosed two other items which I thought might be of interest to you: a letter to Rep Matt McHugh about proposed FCC rules concerning"telco entry", and a resolution establishing an educational access committee for our coverage area which we discussed briefly earlier in the year. Thank you for your attention. Sincerely, Peter Hess Chair, City of Ithaca Cable Commission AMERICAN COMMUNITY CABLEVISION February 6, 1992 Ms. Callista Paolangeli City Clerk of,Ithaca City Hall 108 E. Green Street Ithaca, NY 14850 Dear Ms. Paolangeli: c:1i Lam/ (-• =I FFB a1 / 1-.- i-- -'CIT7 CLEwegFprE 1j l hsca, N. Y. The years seem to fly by. It seems like I just finished my last annual letter to you and here it is - time once again to provide you with an update on what has happened over the year at ACC. I recently sent you a letter indicating the gains we have made in the area of customer service. I believe this hiss been of concern to most municipalities, and I want to reassure you that we will strive to do even better. We may not deal directly (on the phone or in person) with every subscriber during the course of a year, but we handle thousands of telephone calls each month and we disconnect and connect the equivalent of our entire subscriber base each year (about 26,000 transactions). Over 92% of the customers we surveyed who have had a service call or installation completed said we did a good to excellent job. That's extremely encouraging, and tells us our efforts to deliver better customer service are paying off. Also notable in 1991 is the fact that ACC completed the rebuild in all communities. All customers now have access to ACC's full range of programming. There will be some further work done in 1992 in several trailer parks, apartment complexesand a few neighborhoods where buried cable needs to be replaced. On the programming front, several additions occurred. Additions to our tier service were Nostalgia Television, El Entertainment, The Monitor Channel and Mind Extension University. Additions to our basic service were The Marketplace, Educational Access and SCOLA (Satellite Communications for Learning - a cooperative effort on the part of Cornell University, Ithaca College and ACC). As always, ACC is pleased to be able to provide increased value to subscribers. 519 West State Street Ithaca, New York 14850 607-272-3456 As of the end of December, 1991, the subscriber City of Ithaca was as follows: basic subscribers (all) tier subscribers Subscribers with any or all HBO/Cinemax/Disney 8321 5276 2202 breakdown in the Many customers` subscribe to a mixture of the above services and would be counted in more than one category. Everyone must subscribe to basic service to be eligible to subscribe to the additional services. Attached to this letter is a list of the line extensions which were built in 1991. ACC builds line extensions based on the following: 1) those which meet minimum density requirements 2) upon receipt of aid in construction from residents 3) other contractual obligations 4) other business reasons Also attached is a list of ACC's rates (as of 3/1/92). As of March 1st,published rates will no longer include the required franchise fee. The franchise fee will be assessed on the published rates for the appropriate services. These franchise fees will continue to be shown on the customer's cable statement as a separate line item. When compared to other forms of entertainment and information, I think you can agree that the value of cable is superior. For about 80 cents a day , you have immediate access to world news, business news, documentaries, sporting events, concerts, the weather and more. There is truly something for everyone on cable. ACC is considering an increase to the rates charged to and/or for public gathering places such as bars and student lounges, as these are very different uses of our services from strict residential viewing. If a decision is made to make such a change, we will, of course, inform you in advance. cerely, Barbara L. Luken C4 General Manager cc: The Honorable Ben Nichols Mr. Tom Terrizzi, Chair of the Cable Commission de: Master - Ithaca Rate Guide for ACC. Effective 3/1/92 1) Cable connection (aerial) (rate is good for up to 2 outlets if work is performed at the same time. More than 2 outlets will be charged at an additional $20.00 each.) 1A) Cable activation (no truck roll needed) 2) Cable connection (ug) plus our cost to bury (or customer may bury ACC will provide) (See note on #1 about 3) Commercial connection 4) Outlet relocation 5) Additional outlet connection (Assumes a separate truck roll and is for up to 2 separate outlets per trip. More than 2 outlets will be charged at an additional $20.00 each.) the drop cable the cable which additional outlets.) rev. 1/14 $40.00 + tax $20.00 + tax $40.00 + tax time &•mat'ls per result of on-site survey 6) FM outlets are treated as additional outlets 7) Reconnection if we've disconnected for non-payment 7A) If tech. collected balance owed 8) Seasonal reconnect 9) Install A/B switch (separate trip) (free at time of connection) 10) VCR hookup (separate trip) (free at time of connection) 11) Transfer fee (for customers moving within the service area and who have no break in their service) 12) Service upgrade 13) Side grade (drop one service to add another).. 14) Account name change (free of chg in cases of death or divorce) $40.00 + tax $40.00 + tax $40.00 + tax $20.00 + tax $20.00 + tax $20.00 + tax $20.00 + tax $20.00 + tax $ 5.00 + tax $ 5.00 + tax. $10.00 + tax 15) Purchase A/B switch 16) Parental control code or key 17) Remote control 18) Universal remote control 19) Additional outlet(s) (fee for converter for each A/0 of: $3.00 for non -addressable, $6.00 for addressable) NOTE: ACC HAS A POLICY OF PROVIDING ONE CONVERTER 20) Basic cable service (ch 2-13, 17-20, 53-55) 21) Tier cable service (ch 21-45) 22) HBO or Cinemax 23) Disney 24) Pay-per-view movie 25) Pay-per-view event 26) Bulk residential (e.g. apts., institutions) 27) Commercial (retail) basic bars, student lounges TV dealers TO $ 9.95 + tax no charge $3.95/mo $5.00/mo no charge A CUSTOMER AT NO CHARGE. $13.95/mo $ 9.13/mo 27A) Commercial (retail) tier bars, student lounges 28) Commercial (non-residential) basic (hotel, motel, B & B) $13 2 - 50 outlets 51 - 100 outlets 101 or more outlets 28A) Commercial (non-residential) (hotel, motel, B & B) HBO or Cinemax Disney 29) Commercial (non-residential) (dormitory, fraternity/sorority) 30) Late payment fee 31) Fee for NSF check $10.50/mo $ 9.95/mo $ 3.95/mo mkt. price as negotiated $13.95/mo as negotiated $ 9.13/mo .95/mo for 1st outlet each $ 5.50/mo each $ 4.50/mo each $ 4.00/mo each $4.50/mo each $3.00/mo as negotiated $5.00 $25.00 ACC does not require a deposit from its customers under normal circumstances. A deposit may be required from customers who come up for a non-payment disconnect more than once in the same calendar year. When a customer has cable connected, the first month's service is prorated - therefore each customer could pay a different amount to ACC at the time of connection. Fees may be discounted for special promotions. So. Titus Ave. 296' Floral Ave. 340' Total City of Ithaca 24 passings 24 passings 636' .12 mi 48 passings 40 homes per mile CABLEVISION Mr. Charles Guttman City of Ithaca 108 East Green Street Ithaca, NY 14850 Dear Mr. Guttman: This will respond to your letter of January 15, 1992 regarding the transfer of the franchise to Time Warner Entertainment Company. L.P. ("TWE"). The transfer of the franchise from American Television and Communications Corporation ("ATC"), a subsidiary of Time Warner, Inc. ("TWI") to Time Warner Entertainment has not yet taken place. It is anticipated that it will occur at some time after April 10, 1992.upon satisfaction of certain conditions although the precise date has not yet been set. As regards your other questions, I will take them one at a time; however, I would like to note that the senior officers of Time Warner and ATC will be senior officers of TWE so there should be no appreciable change in our current positions. ATC supports local access facilities in many of its operating systems. This support varies with the needs and interests of the communities served. We believe the requirements of the franchise agreement with the City of Ithaca, at a minimum, meet the access needs of the community. TWE will support access in Ithaca in accord with the existing franchise. While we do not believe our views on programming choices or pending legislation are relevant to any legitimate matter of concern with respect to the transfer, we are willing to set forth our position. Time Warner has been very public in its position that the choice of cable television programming is the exercise of a First Amendment right and therefore can not be controlled by government entities. TWE will continue this commitment to uphold the protection of the First Amendment. Time Warner opposes current proposal for additional Federal regulation of the cable television industry. .Some of our reasons are as follows: 519 West State Street Ithaca, New York 14850 607-272-3456 '9 "D 0074T G` Such regulation would likely choke off investment in new programming and new technologies. -- Prior rate regulation by municipalities did cause this dearth of investment to the customer's disadvantage. Retransmission consent would require cable to pay local broadcasters for the right to transmit their signals even though broadcasters have been given free spectrum to deliver their signals and cable's retransmission of local signals extends the reach and quality Of those signals. This surcharge could lead to higher cable bills without an accompanying benefit to customers. As stated in prior. correspondence, the transfer to TWE is only a transfer .of franchise title from one Time Warner entity to another. There will be no change in control of the franchise or management, personnel or policies of the system in Ithaca as a result of the transfer. The transfer should be transparent to both municipality and customer. Thank you for consideration of our application for the transfer. arbara L.✓Lukens, General Manager c: John Fogarty, ATC Stamford Peter Hess, Cable Commission Marcia Simmons, ATC National Division Tom Terrizzi, Cable Commission OFFICE OF CITY ATTORNEY CITY OF ITHACA 1OB EAST GREEN STREET ITHACA, NEW YORK 14B50 January 22, 1992 Barbara L. Lukens American Community Cablevision 519 W. State Street Ithaca, NY 14850 Dear Ms. Lukens: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I am in receipt of a copy of your letter of January 15, 1992 addressed to the City in which you advise us that ACC is increasing the rates for basic service from $12.58 to $13.95 with a five percent franchise fee to be collected in addition. When the five percent franchise fee is added in, the rate which customers will be paying is actually $14.65, a penny more than the maximum set forth in the franchise agreement. As I read Section 19.1 of the franchise, ACC agrees not to raise the basic rate higher than the $14.64 charge. Section 20.1 states that the City shall be entitled to receive from ACC, not from the consumer, the franchise fee. Therefore, I would assume that the maximum that ACC can charge the consumer, including the franchise fee, is the $14.64 charge. Accordingly, I believe that the increase you are proposing actually brings your rates over the maximum set forth in the franchise agreement. You further state in your letter of January 15, 1992 that the rates for basic cable service are related to overall increases to ACC for general operating costs. I would appreciate your forwarding to me a financial statement setting forth your general operating costs for 1990, 1991 and projected for 1992 to demonstrate that the 58 percent increase since December of 1989 is actually related to overall increases for general operating costs I expect that Common Council will be discussing this issue and I would appreciate a response as soon as possible. Very t e Guttman City Attorney cc: Mayor Benjamin Nichols Tom Terrizzi, Cable Commission Peter Hess, Cable Commission "An Equal Opportunity Employer with an Affirmative Action Program" t4: Recycled Paper OFFICE OF CITY ATTORNEY CITY OF ITHACA 108 EAST GREEN STREET ITHACA, NEW YORK 14850 January 22, 1992 Barbara L. Lukens American Community Cablevision 519 W. State Street Ithaca, NY 14850 Dear Ms. Lukens: TELEPHONE: (607) 274-6504 FAX: (607) 272-7348 I am in receipt of a copy of your letter of January 15, 1992 addressed to the City in which you advise us that ACC is increasing the rates for basic service from $12.58 to $13.95 with a five percent franchise fee to be collected in addition. When the five percent franchise fee is added in, the rate which customers will be paying is actually $14.65, a penny more than the maximum set forth in the franchise agreement.. As I read Section 19.1 of the franchise, ACC agrees not to raise the basic rate higher than the $14.64 charge. Section 20.1 states that the City shall be entitled to receive from ACC, not from the consumer, the franchise fee. Therefore, I would assume that the maximum that ACC can charge the consumer, including the franchise fee, is the $14.64 charge. Accordingly, I believe that the increase you are proposing actually brings your rates over the maximum set forth in the franchise agreement. You further state in your letter of January 15, 1992 that the rates for basic cable service are related to overall increases to ACC for general operating costs. I would appreciate your forwarding to me a financial statement setting forth your general operating costs for 1990, 1991 and projected for 1992 to demonstrate that the 58 percent increase since December of 1989 is actually related to overall increases for general operating costs. I expect that Common Council will be discussing this issue and I would appreciate a response as soon as possible. Very t Guttman City Attorney cc: Mayor Benjamin Nichols Tom Terrizzi, Cable Commission Peter Hess, Cable Commission 'An Equal Opportunity Employer with an Affirmative Action Program' tO Recycled Paper ACC AMERICAN COMMUNITY CABLEVISION January 15, 1992 Ms. Callista Paolangeli, Cle City of Ithaca City Hall 108 E. Green Street Ithaca, NY 14850__ 't 1 t •, f. JAN 1 71992 Dear Ms. Paolangeli: American Community Cablevision would like to inform the City of Ithaca of rate changes which are being instituted as of March 1st, 1992. Basic Cable ACC is increasing the rate for basic service to $13.95 which is less than the $14.64 maximum set forth in the franchise agreement. The 5% franchise fee will be collected in addition to the $13.95. Since December of 1989 until now our total basic channels have actually increased by 58% while the cost per channel has decreased by 16%. 1989 customers paid 87 cents/channel for 12 channels @ $10.48 1991 customers paid 75 cents/channel for 17 channels @ $12.68 1992 customers will pay 73 cents/channel for 19 channels @ $13.95. The basic cable service "grew" in 1991. An educational access channel was added along with. SCOLA (Satellite Communications for Learning). The latter was a cooperative effort between Cornell University, Ithaca College and ACC. Rates for basic cable service are related to overall increases to ACC for general operating costs. Not unrelated is the demand for better programming and cable's response to those demands. For example, 519 West State Street CNN's unequalled coverage of the Gulf War. ESPN's spectacular sports coverage, including exclusive NFL games and Major League Baseball games. Ithaca, New York 14850 607-272-3456 C-SPAN's and CNN's continuing coverage :of the presidential race ( while the big three nets. consider;. cutting back on their coverage!) In addition, ACC has responded to customer expectations for service. For example, We continue to be in compliance with strict National Cable Television Association customer service standards (Self-imposed standards!) We continue to invest in upgrading our phone system to provide still quicker response times. Continual training and supervision has resulted in more efficient staff members. Their proper handling of customer calls and service and installation response has resulted in an overall "good" to "excellent" rating by 92% of those customers surveyed. Remote Control The monthly fee for a remote control will be. increasing from $3.00 per month to $3.95 per month. This fee has not been increased since we began offering a remote. The 5% franchise fee will be collected in addition to the $3.95. ACC has plans to offer a universal remote control both for rent and/or for purchase at some time during the first quarter of 1992. We are announcing this to our subscribers via our annual newsletter which is being mailed now. In addition, ACC makes its remotes available in the cable store for the programming of customer owned "learning" remotes. Non-payment Customers who are disconnected for non-payment have been charged $20.00 for reconnection. Beginning April 1, 1992 these customers will be charged the standard $40.00 (plus tax and franchise fee) connection rate. As always, if our technician collects the customer's payment when s/he arrives to disconnect service, (thereby eliminating the need to physically disconnect and/or reconnect the cable) a $20.00 collection fee is charged. ACC has made an effort to work with customers who are having difficulty paying their cable bills by setting up• limited payment plans and by reducing their current service to the basic cable service level. After the deficit is paid off and the customer is able to maintain the payments, the customer is allowed to upgrade. his/her service level. Other. In order to make fee structures more equitable among communities, franchise fees for pay-per-view movies and events and for converter rentals will be added to the stated rates for those services where applicable. Hotels and motels will be charged the basic rate for their first television set and a nominal fee per additional set. This is not really a departure from our past practice but more clearly states the rate to be paid for the initial set. (ACC has not always increased the fee for the first set as the basic rate has increased). American Community Cablevision has an outstanding offering of television programming for its customers and charges reasonable rates for the same. In comparing ACC to other New York communities' rates, I believe you will find that Ithacans enjoy a higher level of viewing at more reasonable rates. Sipcerely, , Y � ` .� Barbara Z. Lukens, General Manager cc: The Honorable Benjamin Nichols, Mayor Mr. Tom Terrizzi, Chair, Ithaca Cable Commission BLL/mkk RESOLUTION 2 WHEREAS, American Community Cablevision (the "Franchisee") is the holder of a cable television franchise (the "Franchise") for the City of Ithaca; and WHEREAS, the Franchisee is a subsidiary or division of American Television and Communications Corporation ("ATC"); WHEREAS, ATC is a majority owned subsidiary of Time Warner Inc. ("Time Warner"), a widely held New York Stock Exchange company which has offered to purchase the shares in ATC which it does not own (the "ATC Minority Shares"); and WHEREAS, Time Warner intends to create a new limited partnership entity comprised of the business and assets of its filmed entertainment, programming and cable divisions, which entity shall be known as Time Warner Entertainment Company, L.P. ("TWE"); and WHEREAS, Time Warner will retain majority ownership as well as operating and management control of TWE and will operate TWE as a controlled subsidiary of Time Warner employing the assets of ATC including the Franchise and the Franchisee, and the assets of Warner Cable, Lorimar Telepictures, HBO, and Warner Bros.; and WHEREAS, Time Warner intends to offer minority. limited partnership interests in TWE to strategic partners in TWE, including Toshiba Corporation and C. Itoh & Co. Ltd; and WHEREAS, ATC will continue to exist as an operating division of TWE, with the existing management structure remaining at both the local and corporate levels and no change is anticipated in the manner in which the business and operations of the Franchisee are conducted; and WHEREAS, the Franchisee will continue to be the grantee of the Franchise as an operating division of TWE and will continue to operate under the Franchise; NOW, THEREFORE, be it resolved that, insofar as may be necessary or advisable under the Franchise, transfer of the ATC Minority Shares to Time Warner and transfer of the Franchise and the cable television system operating pursuant to the Franchise from the Franchisee to TWE (including any necessary transfers through one or more subsidiaries of Time Warner), are hereby authorized and consented to in all respects. 18.7 RIGHT OF INSPECTION A. The City shall have the right to inspect all books, records, reports, maps, plans, financial statements and other like materials of ACC as provided in this Franchise, at any time during normal business hours. B. The City shall have the right construction or installation work performed provisions of this Franchise and to make s to inspect all subject to the uch tests as it shall find necessary to ensure compliance with the terms of this Franchise and other pertinent provisions of law. C. At all reasonable times and for the purpose of enforcement of this Franchise, ACC shall permit examination by any duly authorized representative of the City, of all Cable Communication System and facilities, together with any appurtenant property of ACC situated within the City and outside of the City if it is utilized in the operation of the City's Cable Communications System. XIX RATE REGULATION 19.1 City having established its right to rate regulation under applicable law, ACC will not raise basic rates higher than the following for a five year period. On February 1, 1988 the maximum rate will be $9.00. On March 1, 1989 the maximum rate will be $11.00. On March 1, 1990, the maximum rate will be $12.10. On March 1, 1991, the maximum rate will be $13.31. On March 1, 1992, the maximum rate will be $14.64. Starting on March 1, 1993, and for each and every year thereafter for the term of this Franchise the maximum rate will be the previous year's maximum allowed rate plus 5 percent or that percentage equal to the rise in the Consumer Price Index, whichever is higher. Additionally, ACC willgive a need -based senior citizen discount of 10 percent to those who qualify for real property tax exemption and others who qualify using mutually agreeable criteria. Effective March 1, 1989, ACC will not charge custoemrs for additional outlets or FM service. 19.2 ACC covenants that it will not bring or fund any lawsuit or other proceeding seeking deregulation of the aforementioned rates prior to March 1, 1991 and further agrees to pay the attorney's fees and other costs of the City incurred in defending any such lawsuit or other proceeding should ACC bring them or fund them prior to March 1, 1991. 19.3 Effective March 1, .1991 ACC may seek basic cable service rates. If at any time any -29- deregulation of additional cable franchises granted by the City, or any additional cable television is authorized to operate within the City, there will be no further regulation of ACC's rates from the date of said grant of any additional franchise or the beginning of construction of such additional system, whichever comes sooner, until the termination of such additional franchise or of the operation of such additional 'system, whichever is later. 19.4 ACC shall file ;with the City schedules which shall describe all services offered by ACC, all rates and charges of any kind and all terms or conditions relating thereto. Thereafter, ACC shall file with the City all changes in services, all rates and .charges of any kind and all terms and conditions relating thereto thirty (30) days prior to all such changes. No rates or charges shall be effective except as they appear on a schedule so filed. XX FRANCHISE FEE 20.1 The City of Ithaca shall be entitled to receive from ACC a Franchise fee of five percent (5%) of ACC's Gross City Revenue. 20.2 The Franchise fee established in 20. tendered as follows: 1 above shall be A. Five percent (5%) of ACC's Gross City Revenue for successive three (3) month calendar periods tendered within forty-five (45) days after each such period. 20.3 To the extent necessary to prevent ACC from diverting revenues from the operation of the Cable Communications System from ACC to Affiliates to the detriment of the City, Affiliates (excluding any affiliate which provides a national or regional programming service) shall be permitted to utilize the Cable Communications System only if a Franchise fee on City revenues derived therefrom is paid. 20.4 In the event that the fees herein required are not tendered on or before the dates fixed in this Franchise, interest due on such fee shall accrue from the date due at an annual rate of three percent (3%) above the prime rate or rates of interest, at the City's primary depository bank. 20.5 Tender or acceptance of any payment shall not be construed as an accord that the amount paid is correct, nor shall such acceptance of payment be construed as a release of any claim the City of Ithaca may have for additional sums including interest payable under this Franchise. All amounts paid shall be subject to audit and recomputation, by an independent auditor -30- chosen by the City, which shall be based on a fiscal year and shall occur in no event later than one (1) year after the fees are tendered with respect to such fiscal year. If, after audit and recomputation, an unpaid fee is owed to the City, such fee shall be paid within thirty (30) days after audit and recomputation and ACC shall pay the costs of the audit. The interest on such unpaid fee shall be charged from the due date at an annual rate of three percent (3%) above the prime rate or rates of interest at the city's primary depository bank during the period that such unpaid amount is owed. XXI . BONDS, INSURANCE AND INDEMNIFICATION 21.1 PERFORMANCE BOND. A. ACC shall provide a performance bond in the amount of $500,000 (five hundred thousand dollars) until construction is completed and shall maintain a performance bond in the amount of $25,000 (twenty-five thousand dollars) for the remaining term of the Franchise. The performance bond shall be provided and regulated in accordance with this Franchise. The performance bond shall be provided within thirty days of the receipt of final operating authority. B. The performance bond shall provi conditions: e the following (1) There shall be recoverable by the.City jointly and severally from the principal and surety, any and all fines and penalties due to the City and any and all damages, losses, costs and expenses suffered or incurred by the City resulting from the failure of ACC to: faithfully comply with the provisions of this Franchise; comply with all lawful orders, permits and directives of any City agency or body having jurisdiction over its acts or defaults; pay fees due to the City; pay any claims due the City as resulting from judicial action; pay any claims, liens or taxes due the City which arise by reason of the construction, operation, maintenance or repair of the Cable Communications System. Such'. losses, costs and expenses shall include but not be limited to attorney's fees and other associated expenses. (2) The total amount of the bond shall be forfeited in favor of the City in the event: (a) ACC abandons the Cable Communications System at any time during the term of this Franchise or any extension thereto; -31-