HomeMy WebLinkAboutProposal to Provide Cable Television Franchise Renewal Consulting Services RICE, WILLIAMS ASSOCIATES
PROPOSAL TO PROVIDE
CABLE TELEVISION FRANCHISE RENEWAL
CONSULTING SERVICES
TO THE CITY OF ITHACA, NEW YORK
June 12, 1997
Prepared by:
Rice, Williams Associates
601 Pennsylvania Avenue,NW 774-C Walker Road,P.O.Box 765
Suite 900 Great Falls,VA 22066
Washington,DC 20004 Phone:(703)757-0570
Phone:(202)737-2400 Fax:(703)757-0573
TABLE OF CONTENTS
I. SCOPE OF SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Project 1 - Overview for Cable Television Franchise Renewal Process . . . . . . . . I - 1
Project 2 - Overview for Municipal Ownership Study . . . . . . . . . . . . . . . . . . . I - 4
PROJECT 1 - CABLE TELEVISION FRANCHISE RENEWAL . . . . . . . . . . . . . . I - 6
Task I: Initial Briefing on Legal, Economic, and Regulatory Matters . . . . . . . . . I - 6
Overview/Implications of The Cable Act/Telecommunications Act . . . . . . I - 6
Broad Economic, Regulatory, and Legal Issues . . . . . . . . . . . . . . . . . . I - 7
Identification of Local Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . I - 8
Local Cable TV Service Performance/Goals . . . . . . . . . . . . . . . . . . . . I - 9
Task II: Community Needs Assessment and Consumer Market Survey . . . . . . . 1 - 10
Community Needs Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . I - 11
Consumer Market Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 12
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Task III: Technical Evaluation of the Existing Cable System . . . . . . . . . . . . . 1 - 13
Test Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 15
Technical Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 16
Task IV: Review of Cable Operator Compliance with the Cable TV
Ordinance/Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 16
Task V: Updating Relevant Ordinances . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 18
Task VI: Preparation of a Request for Renewal Proposal . . . . . . . . . . . . . . . . 1 - 19
Task VII: Evaluation of Renewal Proposal . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 21
Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 22
Technical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 23
Service Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 25
Public, Educational, and Government Access and Other Institutional
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 25
Final Evaluation of Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 26
Task VIII: Drafting the Franchise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 27
Task IX. Assistance with Public Hearings and Negotiations . . . . . . . . . . . . . . 1 - 28
OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 29
A. Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 29
B. Franchise Fee Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 31
PROJECT 2 - MUNICIPAL OWNERSHIP STUDY . . . . . . . . . . . . . . . . . . . . . . 1 - 33
Task 1: Initial Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 33
Task II: Consumer Market Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 35
Task III: Institutional Needs Ascertainment . . . . . . . . . . . . . . . . . . . . . . . . 1 - 36
Task IV: Preliminary Technical Analysis and Cost Assessment . . . . . . . . . . . 1 - 37
Task V: Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 39
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II. FIRM QUALIFICATIONS AND EXPERIENCE . . . . . . . . . . . . . . . . . . . . . II - 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II - 1
Current Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II - 1
Key Strengths of Our Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 2
Qualifications and Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 3
Cable Television Franchise Renewals: Qualifications . . . . . . . . . . . . . . . . . . 11 - 5
Representative Cable TV Franchise Renewal Clients . . . . . . . . . . . . . . 11 - 7
Examples of Franchise Renewal Assignments/Results . . . . . . . . . . . . . 11 - 7
.. Consumer Satisfaction Surveys and Community Ascertainments:
Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 12
Consumer Satisfaction Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 12
Community Needs Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 12
Representative Consumer Survey and Needs Ascertainment Clients . . . II - 13
Telecommunications Network Design: Qualifications . . . . . . . . . . . . . . . . . 11 - 14
Representative Telecommunications System Design Clients . . . . . . . . . . . . . II - 15
Local Cable/Telecommunications Regulatory Support:
Qualifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 17
Representative Rate Increase Analysis Clients . . . . . . . . . . . . . . . . . 11 - 18
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - 18
III. PERSONNEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III - 1
IV. FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV - 1
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I. SCOPE OF SERVICES
Project 1 - Overview for Cable Television Franchise Renewal Process
From the request for proposals, we understand that the City will be taking a very thorough
approach to the renewal of the cable television franchise in New York. Rice, Williams
Associates hasWorked with many consortiums in the past, and found such arrangements to
be beneficial to all concerned. The cover letter to this proposal discusses some of the
.. possible benefits of a consortium based approach. We have addressed the City of Ithaca
throughout the proposal, but would be happy to work with other area communities. Rice,
Williams Associates is prepared to assist the City in carrying out its franchise renewal
•• process in a manner that we believe will meet your needs for maximum efficiency,
thoroughness, and effectiveness.
Rice, Williams Associates has unique capabilities to assist the City in this area.
■ We have and are conducting renewal proceedings for numerous municipalities
including:Department of Public Utility Control,Connecticut;Kalamazoo,Michigan;
Atlanta, Georgia; Owensboro, Kentucky; Baltimore, Maryland; Bayonne, New
Jersey; McAlester, Oklahoma; Wichita Falls, Texas; Charlotte, North Carolina;
Titusville, Florida; Tallahassee, Florida; Wilmington, Delaware; Sarasota, Florida,
and Fairborn, Ohio. (See Background for further listing.)
■ We have been extremely successful in working with our client cities to obtain
renewal agreements that have state-of-the-art rebuilds, substantial provisions for
.. access, fiber and coaxial institutional networks, and long term regulatory authority.
For example, in Atlanta, Georgia, and Greensboro, North Carolina, the cable
companies agreed to provide sophisticated institutional networks.
■ We have worked for cities which have had requests for competitive franchises in
several states, including Florida, Pennsylvania,North Carolina, and Georgia.
■ We are working with cities where the current cable provider is in a renewal process
and the telephone company has requested a franchise.
■ We successfully negotiated a settlement for Bayonne, New Jersey after the City
_ preliminarily denied the cable company. Bayonne has a franchise for a rebuild which
will be two-way active to the home, excellent access equipment and services, state-
of-the-art equipment and services clauses, and strong consumer protection
provisions.
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■ Commissioners that regulate cable television for States of New York and New Jersey
have called franchises we have worked on in those states the best renewal packages
in the state, ground breaking, and leaders for other cities to follow.
■ We have conducted scores of community needs assessments and consumer market
surveys on behalf of municipalities. These assessments and surveys provide a solid
basis for designing effective cable/telecommunications plans and for ensuring that
operators meet consumer needs. Additionally,we have assisted cities in planning for
access and institutional networks.
■ We are performing full rate regulation services for many clients.
■ We are extremely familiar with the requirements and authorities placed on cities by
the Cable Communications Policy Act and the various interpretations of the Act held
-� by cable companies. This familiarity was gained by negotiating with many MSO's
on behalf of cities. In addition,we have experience with the preliminary denial and
administrative hearing processes of the renewal process under the Cable Act.
■ We have experience assisting cities with ongoing regulatory compliance analysis.
_ We are assisting several cities in assessing consumer service standards,franchise fee
reviews,and technical testing to assess compliance with construction and operating
requirements.
■ We have worked with a number of cities and counties with multiple franchises and
are familiar with establishing regulatory structures that are fair,but consider size and
.. other pertinent aspects of the systems. Some of these cities and states are
Hillsborough County, Florida; Charlotte,North Carolina;Talbot County, Maryland;
and the State of Hawaii, Office of Cable Television.
■ We have assisted in negotiations that have resulted in agreements for companies to
provide fiber optic institutional networks and to have fiber optics as a part of the
cable system architecture.
■ We have conducted major reviews of cable company compliance with its city
franchise such as five year reviews conducted for Raleigh, North Carolina and
Baltimore, Maryland. These reviews included customer satisfaction, system testing,
financial, and other compliance issues.
■ We have worked with cities of all sizes such as Cleveland, Ohio; Cambridge,
Massachusetts;Oberlin,Ohio;New Orleans,Louisiana;and Tarboro,North Carolina.
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■ We have conducted many municipal overbuilds and buyout studies including those
for Easton, Maryland; Jackson, Tennessee; Traverse City, Michigan; and Belmont,
Massachusetts.
■ We were the consultants for Morganton,North Carolina which denied a renewal to
TCI and has constructed a state-of-the-art municipal cable system.
■ We have been active in the passage of the Cable Television Consumer Protection and
.. Competition Act of 1992, and the Telecommunications Act of 1996.
The tasks that we propose to carry out for Project 1;the cable franchise renewal process are:
■ Task I: Initial briefing on relevant legal,economic,and regulatory matters that affect
interests of the City of Ithaca including competition, new technologies and
institutional networks.
■ Task II: Community needs assessment and consumer market survey
■ Task III: Technical evaluation of the existing cable system
■ Task IV:Review of cable operator compliance with the cable TV ordinance/franchise
■ Task V: Updating relevant ordinances
■ Task VI: Preparation of a Request for Proposal
■ Task VII: Evaluation of Renewal Proposal
■ Task VIII: Drafting Franchise Agreement
■ Task IX: Assistance with public hearings and negotiations
OTHER SERVICES
A. Financial Analysis
B. Franchise Fee Audit
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�- Project 2 - Overview for Municipal Ownership Study
The RFP also indicated possible interest in investigation of a municipally owned system.
Rice, Williams Associates has prepared a consulting service plan to assist the City of Ithaca
in studying the feasibility of a municipally-owned broadband fiber optic communications
.. system. We have worked and are working with several cities and utilities in municipal
ownership feasibility studies, including studies of the feasibility of municipal overbuilds
of existing cable systems and the feasibility of fiber optic systems serving local government
and other institutions. We have also worked with several cities on fiber optic projects.
Some of our other municipal ownership clients are Bryan, Ohio; Burlington, Vermont;
.. Danvers, Massachusetts; Cambridge, Massachusetts; Easton, Maryland; Springfield,
Missouri; Tallahassee, Florida; Shawano, Wisconsin; Philippi, West Virginia; and Ponca
City, Oklahoma. We are also working with cities and utilities on municipal purchase of
-- operating systems.
Rice, Williams Associates has assisted Springfield, Missouri; Easton, Maryland; Philippi,
West Virginia; and Belmont, Massachusetts and Morganton, North Carolina study and
actually build and operate their own municipally owned cable systems. For these studies,
we analyzed the following areas: a technical analysis of underground and aerial
construction, including channel capacity options and use of fiber optics; financial analysis
of a City system; and structural options. This type of hands on experience in all aspects
of municipal cable feasibility work, from study to system construction, will be of
assistance to the City of Ithaca in examining the opportunities and risks of municipal
ownership. Rice, Williams is currently working with the City of Hope, Arkansas on the
feasibility of a municipally owned fiber optic institutional network serving utility,
telephone, and educational functions.
.. The Project 2;municipal ownership study services Rice, Williams Associates could provide
to the City of Ithaca are:
Task I: Initial Consultation
Task II: Consumer Market Survey (on municipal ownership)
Task III: Institutional Needs Assessment (Not needed if done for the cable renewal
process)
Task IV: Preliminary Technical Analysis and Cost Assessment
Task V: Financial Analysis.
These services for municipal ownership are contained in Part 2 of this proposal.
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We would be pleased to modify our list of tasks, if the City so desires, and to provide
additional services, if needed.
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PROJECT 1 - CABLE TELEVISION FRANCHISE RENEWAL
Task I: Initial Briefing on Legal,Economic,and Regulatory Matters
Rice, Williams Associates will work for the City by providing consultation how the latest
legal, regulatory, technical, and economic developments affecting the
cable/telecommunications industry impact the City's management of its rights of way. We
will be pleased to be working with staff and the City Cable Commission that are extremely
knowledgeable in this area.
Overview/Implications of The Cable Act/Telecommunications Act
Since Rice, Williams Associates has worked on behalf of cities to advocate cable rate re-
regulation legislation,we are very familiar with all of the provisions of the Cable Television
Consumer Protection and Competition Act of 1992 ("1992 Cable Act") and the
Telecommunications Act of 1996. At our initial consultation sessions with the City,we will
share the insights we have obtained as a result of this experience over the last several years.
Specifically, we will provide the City with overviews of:
■ Practical implications of the Cable Communications Policy Act of 1984
■ The current status of cable TV regulation, including:
• Rate regulation for basic cable service
• Regulation of prices for cable equipment
• FCC rule makings related to the 1992 Cable Act
■ How the Telecommunications Act of 1996 affects the City's renewal process, for
example:
• Factors for approval of a second franchise
• Process for renewal
• Areas in which municipalities are allowed to establish requirements of the
cable operator
• Factors for denial
■ How the Telecommunications Act of 1996 affects telecommunication competition
in the City
■ Rate regulation and the impact of Social Contracts
■ The FCC's recent OVS decision; potential impact on the status of existing cable
operators; role of utilities
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■ Consumer protection issues, including anti-buy through, negative option billing,
consumer notice of free movie options; uniform rate structures; customer service
standards and privacy provisions
■ Must-carry and channel positioning provisions, including:
• Carriage of noncommercial stations and low-power TV
• Maintenance of public,educational, and government access channels on the
basic tier
• Retransmission consent
■ Requirements for operators, including EEO, emergency announcements, home
wiring, leased access, and ownership and control.
During our initial consultation sessions, our first objective will be to inform the City about
all practical implications of the 1992 Cable Act and the Telecommunications Act of 1996,
and to make recommendations to the City's procedural and material compliance with it.
We will work with the City to confirm the specific procedures that must be followed prior
I 6m to and during the cable franchise renewal processes in the City of Ithaca,New York.
Broad Economic, Regulatory, and Legal Issues
With the recent passage in Congress of the Telecommunications Act of 1996 to deregulate
the telecommunications industry on a much broader scale, it is important for the City to
understand the impact that this new bill will have. We would discuss the potential impacts
within a broad context of industry dynamics, court decisions, and other pertinent rule
makings. Thus, our initial consultation sessions will also address:
■ Implications of industry changes upon franchising authorities, for example:
• Telephone company entry into cable
• Cable TV operator entry into telephone and data service
• Consolidation among cable industry players resulting from recent mergers
and acquisitions
• Technology developments that alter the prospects for cable television
■ Recent legal/regulatory developments, including House and Senate proposals
affecting the telecommunications and cable industries,and how these changes would
have an impact upon franchise authorities
■ Newly adopted FCC technical standards
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.. ■ Pertinent court cases affecting franchise authorities'regulatory power.
Rice,Williams Associates will give special attention to advising the City about the potential
�- impacts of emerging industry, economic, regulatory, or legal outcomes upon future
telecommunications/cable TV plans and policies that the City might be considering. Most
importantly, Rice, Williams Associates will identify specific areas in which proposed
telecommunications legislation and court decisions may have an impact upon the City's
ability to regulate cable and other telecommunications.
Throughout the period in which we perform service to the City, Rice, Williams Associates
will keep City informed of emerging regulatory issues and policy making initiatives in which
the City may want to participate or comment.
Identification of Local Policy Issues
Rice, Williams Associates will also provide insights and advice on policy issues related to
local telecommunications franchise administration and regulation. We will place highest
.� priority upon providing advice and consultation on the City's most pressing issues.
Drawing upon our firm's extensive experience in working with other franchising authorities,
we are familiar with a complete range of local policy issues of concern to local policy
makers. We are prepared to address the implications of any of the following:
■ Use of streets
■ Organizational structures for access center
■ Rights-of-way management
■ Extension of service
■ Technical requirements
■ Upgrade to expand channel capacity
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■ Regulatory structure
■ System financing provisions
■ Fees
■ Access programming and facilities
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■ Access provisions
■ Buy-back options
■ Transfer of ownership
■ Competitive Access Providers
■ Institutional networks and services
■ Consumer service practices
■ Competition for the franchise.
~ Investigation and analysis of some of these policy issues may require embarking upon
special research, conducting public hearings, and/or requesting information from the cable
company. Should any of these activities be required, Rice, Williams Associates will work
` closely with the City to coordinate research, develop information requests, and develop
schedules and procedures to enter information most appropriately into the public record and
related procedures. We will also be available to attend the City's public hearings.
Rice, Williams has several municipal clients which have received requests and/or have
granted second franchises. We are well aware of the primary issues including how to achieve
a level playing field that meets subscriber, City,and institutional needs. Of particular public
benefit in construction of fiber based systems is the provision of fiber optic capacity for City
•- utilization. We have negotiated on behalf of municipalities with many companies and have
been successful in obtaining a large amount of capacity for our clients. We can advise the
City regarding methodologies for obtaining competitive services.
We will advise the City on obtaining Internet access. NCTA and FCC initiatives to have
Internet provided to the schools will be reviewed and we will discuss strategies for receiving
Internet access for the schools and public buildings.
Local Cable TV Service Performance/Goals
Although we would assess the cable operator's compliance with the local cable ordinance at
a later step in the franchise renewal process, the City would provide Rice, Williams
Associates with an broad overview of the cable operator's track record of regulatory
compliance, cable service, and support for access channels and programming.
In addition,we would be briefed on the City's goals for the future to ensure that we have a
full, complete understanding of the City's objectives as we work together to design the
franchise renewal process.
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In the initial consultation session, we would address the technical and financial
considerations of reaching the service goals identified by the City. As part of subsequent
tasks discussed in this proposal, Rice, Williams Associates would work with the City to
.. assess the technologies required to meet the community's future communications needs.
Task II: Community Needs Assessment and Consumer Market Survey
_ Rice, Williams Associates is firmly committed to the belief that local cable communications
can provide:
". ■ A vehicle for community dialogue on local issues
■ A cost-effective method to disseminate information and services to the public by the
-- City, local governments and public institutions
■ Improved entertainment, information, and service options to the public.
An important step in the cable refranchising process is the City's estimation of its "future
cable-related community needs and interests," as stated in the Cable Communications Act
of 1984, the Cable Television Consumer Protection and Competition Act of 1992, and the
Telecommunications Act of 1996. Rice, Williams Associates will assist the City in
conducting a thorough assessment of municipal, community, and consumer demand for
enhanced local programming,additional communications capabilities,and improvements in
other types of cable service.
Rice, Williams Associates would conduct two types of surveys:
■ A community needs assessment, which would consist of a workshop and survey of
the current and potential users of the government, public, and educational access
channels and facilities and other existing and proposed institutional services such as
data communications, traffic signalization, video surveillance, and telephone line
replacement, among many others
■ A consumer market survey that would measure cable subscriber satisfaction on a
wide variety of issues including repair, installation, picture quality, among others,
demand for expanded cable service, Internet access, facilities, special services,
competition,and local government,education,and community access programming.
The methodologies for performing each of these activities follow.
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Community Needs Assessment
Rice, Williams Associates will work with City staff and the City Cable Commission to
identify the local government departments, schools, public service agencies, and other
organizations to be surveyed for this ascertainment. If desired, an information seminar
would be held to inform organizations about the potential of using cable access channels.
Rice, Williams Associates will consult with the City on the design and administration of the
survey used in the ascertainment. The specific outcomes of the survey would be to identify:
■ The community's need for public,educational,and governmental access channels and
programming support over the long term
■ Public buildings and institutions that currently or in the future want to utilize access
and institutional channels,video equipment, and cable drops
•.• ■ The need to replace or upgrade access equipment,facilities, and access services that
are currently being provided
.. ■ Interest in and benefit from utilization of institutional telecommunications capacity
■ Current and future demand by the City for use of an institutional network. This
would include identification of specific ways in which the City would achieve cost
savings via intra-governmental communications and cable/fiber optic delivery of
information and public services
■ Identification of current and potential applications, such as:
• energy management
• closed-circuit training program delivery to work sites
• security services
• delivery of library information
• data transmission
-- • traffic signalization
• video surveillance, and
• leased telephone line replacement.
Mailed questionnaires will be used to collect the information. Once the data has been
collected and verified, Rice, Williams Associates analyze the results and provide a report,
and a summary to the City, including specific recommendations.
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This activity would provide data to evaluate how well the current cable operator is
supporting public access and how future needs for public, educational, and government
access might be met. Once we have identified potential improvements to enhance the quality
-- of service cable television service,Rice,Williams Associates would then assess the technical
and financial feasibility, public benefit, and cost-effectiveness of implementing these
potential improvements.
Our activities will support the City's decision making on the scope of the access support,
technical parameters, and services to be specified in any new cable franchise agreement.
Additionally, full documentation of city and community needs and interests enables the City
to present the strongest case during final franchise agreement negotiations.
Consumer Market Survey
,,. Our consumer market survey provides a means to receive input on the existing and potential
cable services from a cross-section of subscribers. This survey would be designed to
determine:
■ Customer satisfaction with installation, sales, repair work, response time, picture
reception, billing, appointment scheduling, and outages
s
■ Consumer interest in specialized subscriber terminal options, such as picture-in-
picture
a Consumer penetration of computers
■ Consumer interest in competitive cable service
... ■ Public interest in telecommunications competition
■ Consumer interest in expanded cable services,increased channel capacity,additional
local access programming, additional programming, and special offerings -- for
example, computer services
■ Consumer interest in Internet access,computer services, personal business services,
government interactive services, and interactive programming.
The approach to determining customer satisfaction and needs that we recommend is as
follows:
Following discussions with City staff and the City Cable Commission, and a review of
existing program and service offerings,a questionnaire would be designed by Rice,Williams
Associates. Rice, Williams Associates will insure that the survey provides a valid
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representation of cable subscribers. The survey design will be cross-sectional. A random
sample of residents will be scientifically generated to ensure that representative results are
obtained from all geographic areas.
The data from the survey will be elicited, coded, and verified to ensure valid results.
Computer data analysis will be used to calculate relevant frequency distribution,
r- corresponding Statistics and any relevant cross tabulation of data.
Pre-tests will be conducted prior to the start of the project with input as to specific language
and question content.
All telephone interviews are conducted using trained and monitored interviewers. Call backs
are made at the completion of the survey process to assure compliance with proper survey
procedures.
The sample will yield statistically valid results at the ninety-five percent(95%) confidence
interval,and a not-to-exceed two-tailed error level. The error level is based on the standard
.. error of the estimated percentages for the sample which is the difference between the survey
results obtained with the sample and the result that would be obtained by a complete census
of the population. This means that for any question in which fifty percent (50%) of the
respondents answered"yes," the true population value lies in the interval between forty-five
and fifty-five percent(45%-55%),and that ninety-five percent(95%) of all samples would
yield results within this interval.
A report on the findings of the consumer market survey will be prepared for the City to
provide a solid basis for analyzing the existing cable operation and documenting the interest
in new offerings. All surveys will be accompanied by a report summarizing and interpreting
the relevant data, including recommendations for incorporating the results into the public
record and using them as the basis for future planning and evaluation.
.... Task III: Technical Evaluation of the Existing Cable System
Rice, Williams Associates will conduct a technical analysis to determine the level of
technical performance achieved by the existing cable system, compare the findings to
industry standards,and analyze proposed options for upgrading and/or rebuilding the system.
We would devote special attention to assessing the useful life remaining of the following
types of equipment and systems:
■ Tower and antennas
■ Satellite earth stations
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RICE, WILLIAMS ASSOCIATES
October 7, 1997
Mr. H. Matthys Van Cort a 'ig97
Director of Planning &Development
City of Ithaca DEPARjpENT OF
108 East Green Street IN
Ithaca,NY 14850
Dear Mr. Van Cort:
Please accept this letter as the response to your letter of August 29, 1997.
1. Legislative Review
Review provisions of the Cable Communications Policy Act, review of the
Telecommunications Act and related FCC decisions.
As indicated in our proposal, we would review the provisions of Cable Communications
Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of
1992 ("1992 Cable Act"), and the Telecommunications Act of 1996, and related FCC
decisions with the City during the initial consultation with the City. The cost for Task I -
Initial Consultation is $1,560. Please see pages I-6 - I-10 of our proposal.
2. Customer Information
Survey of customers and focus groups to identify community needs.
A telephone-based consumer market survey was included in our proposal at a cost of
$11,500. Please see pages I-10 - I-13 of our proposal. The telephone based survey will
provide the most reliable information regarding consumer needs and interests. We selected
this methodology as it is not self selecting as mailed surveys are and the results are
considered valid by the cable industry.
We would be pleased to add conducting focus groups to our proposal should this be deemed
necessary by the City. We would propose conducting five focus groups and preparing a
report on the results for a cost of$4,500. As determined by the City, we would be prepared
to conduct more or fewer groups. We will work with the City to determine the optimum
configuration for the groups. Focus groups could include: general consumers; educational
institutions; government departments and bodies; public access users; businesses, and other
601 Pennsylvania Avenue,NW
Suite 900 774-C Walker Road,P.O.Box 765
Washington,DSC 20004 Great Falls,VA 22066
Phone:(202)737-2400 Phone:(703)757-0570
Fax:(703)757-0573
Mr. H. Matthys Van Cort
October 7, 1997
Page 2
community leaders. For the focus groups we will prepare the focus issues and questions after
discussions with the City. The questions will focus on the main issues for the process
including, channels,future services such as digital and Internet; institutional network needs;
interconnection access equipment, facilities, financing, and access organizational structure.
3. Plant
Technical audit, planned changes to plant and changes to programs and services.
Task III of our proposal includes the technical evaluation of the system which includes a
review of company plans for the future and our recommendations,at a cost of$9500-$13000
and$6,500 for a technical evaluation of the current I-net. Please see pages I-13 - I-16 of our
proposal.
4. Accounting, Financial Analysis
Financial analysis, franchise fee payment review and review of local property tax
deduction.
A description of the financial analysis and the franchise fee audit is included in our proposal
under Other Services.Please see pages I-28-I-32 of our proposal. The cost for these services
is $6,890. In addition, we would review the local property tax deduction for$2,405.
5. Compliance Review
Review for compliance with existing franchise including payment of all fees.
In Task IV of the proposal, we indicated that the cost for compliance analysis would be
between$3,200 and$6,200. Please see pages I-16 -I-17.
6. PEG
PEG analysis, development of not for profit access management organization.
Public and governmental analysis is included in several tasks within our proposal from the
viewpoint of subscribers and local organizations. RWA would also recommend and assist
in the development of a not for profit access management organization.
7. I-NET
Institutional network and expanded community needs.
Institutional network analysis was covered in our proposal in Tasks, I, II, III, VI, VII. A
more detailed assessment of I-net needs would include in-depth interviews with individuals
representing organizations. The cost for such additional interviews of pre-screened I-Net site
users if deemed necessary would be $3,120.
Mr. H. Matthys Van Cort
October 7, 1997
Page 3
8. New Agreement
New franchise and agreement franchise renewal negotiation.
Task VII and IX describe the work we would conduct on the behalf of the City for drafting
the franchise
9. Municipal Ownership
Strategic and long-run plans of the community,competitive options.
RWA proposed a municipal ownership feasibility study as Part II of our proposal. The task
called Initial Consultation for Municipal Ownership would provide a great source of current
information on municipal ownership and other competitive options. Focusing on"strategic"
and "long-range plans" would, of course, be premised on a thorough feasibility study.
10. Consultant Fee
Payment of consultant fee by Time Warner.
During the initial consultation,we will discuss the City and Company interpretation of the
law and related court cases. Options to discuss are including it as a requirement in the RFRP
and/or making it a major issue in negotiations. Past experience and existing franchise and
ordinance will be discussed
Sincerely,
lean Rice
Partner
JR/jms
Attachment
THE TELECOMMUNICATIONS
INVENTORY
RICE, WILLIAMS ASSOCIATES
Analyzing the types of telecommunications networks,services,and competitive
alternatives that are already in place and in use within the community is an
important component of building any local government telecommunications
plan. Taking this telecommunications "inventory" is the first step towards
making the local government's telecommunications initiatives more concrete.
This chapter discusses how a local government might conduct this
inventory as it progresses toward two complementary goals:
• To develop a framework for a broad telecommunications policy for the
local government that promotes competition and fair deployment of
.services
• To provide the foundation for planning the next phase of the local
government's own internal telecommunications network for more efficient
implementation of local government functions.
The first goal involves high-level policy making, while the second per-
tains to functional, day-to-day operations; nevertheless, the framework for
taking a useful inventory for local government planning remains the same.
56 Telecommunications:Planning for the Future
Tablell Elements of an Effective Telecommunications Inventory
Policy Level Operational Level
Inventory goal To provide data to support broad To provide data to plan more
economic and social planning efficient telecommunications
initiatives support for public sector
operations
Technical Level of telecommunications Physical and logical network
inventory competition within the components
community Service contracts
Network/service deployment
Potential market entrants/new
services
Environmental User applications driving growth Public sector telecommunications
inventory State regulatory authority and utilization
(external) competition initiatives Public sector user needs
Capabilities Local regulatory authority Internal telecommunications staff
inventory Local regulatory capabilities Network design/management
(internal) Existing policies/licenses capabilities
Financial resources
Y�T
Result Establishment of plan that aligns currently existing policies(if any)
Identification of public sector and private sector resources that might
be utilized within a comprehensive telecommunications network plan
Table 1 introduces the key inventory elements that will be addressed in
detail within this chapter and suggests the role each plays in providing data
upon which to build highly effective telecommunications plans.
When a local government conducts its inventory across these two
dimensions simultaneously—the broad policy dimension and the internal
network dimension—the result is that it will identify a broad range of pub-
lic sector and private sector resources and capabilities around which a more
comprehensive network can be designed.
This chapter first describes procedures for conducting a technical, envi-
ronmental, and capabilities inventory to achieve a local government's broad
policy making goals. Then follows a discussion of inventory procedures to
support internal telecommunications network planning. Chapter 6, "Set-
ting Goals and Analyzing Alternatives,"provides the methodology for com-
bining and analyzing the results of these two initiatives.
The Telecommunications Inventory 57
Inventory to Support Policy Development
Defining the existing telecommunications environment within the commu-
nity is the first step toward effective formulation of a telecommunications
policy that encourages competition, supports economic development, and
provides necessary services to all constituents.
Increasing competition among players in telecommunications markets,
new federal and state telecommunications regulations, and rapid advances
in transmission technology are three trends that challenge local govern-
ment policy makers in mapping and defining this changing market. The
following"inventories"will help them understand how supply and demand
are reflected in the local economy and decide upon the appropriate role for
the local government in the process:
• Technical inventory—defines the range of telecommunications service
providers competing in the community (i.e., supply of services)
• Environmental inventory—focuses on the degree to which demand from
telecommunications users, actions of state regulators, and the new
federal telecommunications legislation are fostering growth and com-
petition in telecommunications services (i.e., demand)
• Capabilities inventory—addresses the local government's authority and
resources to regulate current and future telecommunications services
and providers.
The Technical Inventory
At a very basic level, simply defining the number of telecommunications
service providers operating within a community and understanding the ser-
vices each provides is useful to policy makers. This supply-side inventory
will identify commercial and public sector providers of telecommunications
service. Table 2 presents a very broad classification of the types of service
providers that are likely to be operating in a large metropolitan or subur-
ban area.
Defining the local telecommunications service market. This sum-
mary is a useful sketch from which to begin drawing a profile of a local
commercial telecommunications market. Policy makers should identify:
• The number of service providers in each of the categories shown in
Table 2
• The names of service providers and contacts at each company
58 Telecommunications:Planning for the Future
•The types of network facilities owned by each, for example:
■ The degree to which fiber is utilized
■ The degree to which networks interconnect with local exchange
carrier(LEC)facilities
■ Points at which LEC interconnection occurs
•The geographic reach of these networks within the community
• The types of services offered (e.g., voice, data, video)
•The degree to which additional companies are reselling services over
facilities owned by others
• The estimated local revenue generated by each service provider, indi-
cating the percentage that is generated by consumers versus business
users.
Although local revenues generated may not be information readily available
from service providers in a community, even rough estimates based upon
discussions with different service providers can produce a valuable indica-
tion of the total market for telecommunications services in the community.
Although most entries in this technical inventory will be commercial
Table 2 Categories of Telecommunications Service Operators
Type/ Facilities-Based Non-Facilities-Based
Technology Operators Operators
Wired Local exchange carriers(LECs) Long-distance service resellers
• Twisted pair Long-distance carriers Local service resellers (future?)
• Coax Cable television operators
• Fiber Competitive access providers
Wireless Cellular carriers Wireless resellers
• Radio Paging services
• Microwave Competitive access providers
Specialized mobile radio services
Personal communications networks
(PCN)
Wireless cable (MMDS)
Direct satellite services
The Telecommunications Inventory 59
service providers, it is important also to include any private non-commer-
cial networks that are owned,operated, or shared by organizations or insti-
tutions that might be encouraged to pool facilities in the future:
• Universities or other educational institutions
• Hospitals and health care facilities
• State or county agencies located in the community
•Area public safety organizations
• Public utilities
• Other non-profit organizations.
Some of these entities may be operating their own facilities (e.g., fiber
optic links among hospital facilities in a campus environment). Others may
be leasing facilities from commercial operators or other non-profit organiza-
tions and institutions. (A more detailed discussion of how to inventory the
local government's own internal telecommunications infrastructure is pro-
vided later in this chapter.)
Determining future services and networks. New federal telecom-
munications legislation, strategic repositioning by service providers, state
regulation, and technology improvements will undoubtedly cause the list
and type of service providers in the community to change over time. To en-
sure that policies that are enacted today provide the best environment for
local telecommunications development,local government policy makers must
understand and anticipate the types of changes that might occur. Table 3
summarizes some of the potential shifts of which policy makers should be
aware.
As discussed in Chapter 3, recent federal telecommunications legisla-
tion has opened to all of the above players markets that were formerly closed
to them. Local government planners must keep in mind, however, that new
competition rules alone do not dictate whether a particular service provider
will feel that entry into a particular market is a good business move. Much
depends upon the size of the market, the level of existing competition, the
difficulty and expense of building and/or leasing the necessary network
facilities, and whether such activity is likely to be profitable.
Thus, in developing an idea of the eventual shape of the telecommuni-
cations market in their particular community,planners will find it useful to
find out more about the plans of each of the current service providers over
the next two to three years.A local government can approach local service
providers directly to discuss the following issues:
60 Telecommunications:Planning for the Future
Table 3 Potential Changes Affecting Service Operators
Telecommunications
Service Providers Emerging Issues
Local exchange Entry into the long-distance market
carriers(LECs) Provision of video services to homes
Subject to increased competition from CAPS for business
revenues
Competition in the local market(i.e., loss of monopoly)
Long-distance carriers Potential entry into local service market(as permitted by
competition rules)
Cable television operators Entry into local service market(i.e.,consumer telephony)
Provision of high-bandwidth data connections
(i.e., Internet connections)
Investments in telecommunications businesses
(e.g.,wireless,satellite)
Competitive access Entry into local private-line and switched services
providers Vigorous price competition for LECs
Wireless carriers Competition to traditional telephone companies
(cellular, paging, PCN) Entry of PCN into existing cellular markets
Migration from analog to digital networks
Wireless cable(MMDS) Competition posed to cable TV
Direct satellite services Proliferation of small-dish TV receivers and direct satellite
services
Competition posed to cable TV
• The degree to which each will be upgrading its network technology
• Whether geographic network expansion is planned(e.g.,whether com-
petitive access providers will run fiber to new parts of town)
• The types of new services that will be offered over the next two years.
Smaller communities should recognize that many of the types of net-
works and service providers discussed here may not be present in their local
markets. For example, competitive access providers (CAPS) and wireless
cable operators are not active in all cities of all sizes. Understanding the
reasons that competition to the local telephone and/or cable company has
not emerged is very important. Planners should approach particular types
of service providers in other,larger places and discuss the reasons that they
have not chosen to enter the local market.
Fact-finding through discussion with all types of network operators will
The Telecommunications Inventory 61
provide local staff with a thorough understanding regarding the plans,technical
issues, business issues, competition, strategic thinking, and financial
constraints affecting commercial and public sector network operators. The
insights gained in this manner will provide:
•A valuable framework for assessing a community's relative standing
as a market offering a diverse supply of telecommunications services
•A basis for judging the realism of telecommunications proposals that
will be presented to the local government over time.
Environmental Inventory (External)
Two primary factors that influence the extent and nature of telecommunica-
tions services in any local market are:
• The demand for various types of telecommunications services from
users—consumers, businesses, and the public sector
• The degree of competition that is allowed by state regulators and new
federal legislation.
These are forces outside the control of local government regulators and
are therefore termed "environmental" factors. Taking an inventory of tele-
communications use in the community and understanding drivers of future
demand for telecommunications services can be conducted through a formal
analytical process; taking an "inventory"of competitive opportunities insti-
tuted at the state level is done qualitatively via a less formal method.
Inventory of local telecommunications use. Utilization of telecom-
munications networks has been increasing, driven by lower prices to end
users and proliferating computer and data applications that are enabling
businesses to conduct business very efficiently over great distances. Inter-
est in the Internet, online services, and telecommuting is driving network
usage from homes as well as businesses.
Earlier chapters of this book have discussed the importance of high-
quality telecommunications infrastructures to the economic well-being of
most communities, particularly those with information-intensive business
sectors and institutions. Local government officials must understand how
local businesses and institutions actually use telecommunications services
in order to understand how the local government might play a role in
enhancing the appropriate infrastructure.
This "inventory" approach identifies the degree to which:
• Different sectors of the local economy are utilizing different applica-
tions and network configurations
62 Telecommunications:Planning for the Future
• Communication links are contained within the community,versus long-
distance or international links
• Consumer demand for telecommunications is growing.
Business and institutional users. Large businesses and institutions,such
as health care facilities and universities, are the most significant users of
high-bandwidth telecommunications capacity and are the leading innova-
tors; thus, these types of users have the most to gain from deployment of
state-of-the-art networks within a community—networks that facilitate LAN-
to-LAN interconnection,high-speed data transmission,and networked mul-
timedia applications.
Local government planners should probe the types of networks used by
some of the larger,more important businesses and institutions—for example,
the degree to which:
• Services other than plain telephone service are being utilized
• Dedicated lines (i.e., private networks) are used
• Local links connect the primary site to:
• Other sites within the community(e.g., manufacturing plants, data
processing facilities, health clinics)
Long-distance carrier point-of-presence
• Demand will vary over the next two years:
Different applications
a Different types of network services/capacity required.
Results from these discussions can be used to generalize about other
companies or institutions in these sectors. This inventory will yield valu-
able insights regarding the typical pattern of telecommunications use in the
community and the trends that various sectors believe to be important.
Consumer demand. Discussions with service providers should yield some
insight into the factors driving consumer demand for voice and data ser-
vices within the community.Although wireline and wireless operators may
be reluctant to reveal exact usage statistics, they should be able to provide
general observations on consumer(vs. business) trends in the community:
• Growth in wireline and wireless voice services(e.g., static,increasing,
or decreasing)
The Telecommunications Inventory 63
• Demand driven by increased Internet and online connections from home.
Inventory of federal and state regulation. Where competitors have
been allowed to enter markets long dominated by telephone company mo-
nopolies, telecommunications users have benefitted from lower prices and
better response time for service. Regulators in states such as California,
Illinois,and New York have pioneered telecommunications competition rules,
setting an example that other states have followed. Recent federal telecom-
munications legislation has built upon this base, affirming the goal of maxi-
mizing the benefits of competition.
Local government planners must familiarize themselves with the new
federal law in order to understand how it might affect their local markets.
The law recognizes that competition cannot be expected to emerge without
the existence of fair ground rules: rules that protect the newcomer from
unfair advantages that might be used against it by the dominant player in
the market.
The local government's inventory of federal competition initiatives should
include:
• The ground rules for fair competition
• The competitive market conditions that must be met before a service
provider is no longer considered a monopoly.
Analysis of the local market will include:
• The degree to which competitive market conditions have been met in
the community
• Identification of companies (or types of companies) that are likely to
enter the local telecommunications markets as new competitors.
In many states, regulators have already established ground rules for
fair competition that are grandfathered under the new law.Competitive access
providers (CA-Ps), for example, have been allowed to compete against tele-
phone companies in many cities.Many state regulators felt that CAPs would
not have a chance to compete successfully unless they were given permis-
sion to interconnect with the telephone company network.Today,most states
have specific provisions for interconnection (i.e., virtual co-location) of fa-
cilities.
The first services offered by CAPS were high-capacity, dedicated lines,
which linked users via optical fiber either to nearby buildings or to the long-
distance carrier point-of-presence.Today, state regulators are working with
all of the players to iron out the details of how competition can be expanded
to switched service:
64 Telecommunications:Planning for the Future
• How LECs should unbundle network components so that interconnec-
tion charges are fair
• How competitors should be compensated for using each other's net-
works to connect calls
• How customers will be able to keep the same telephone number as
they move (known as "number portability").
Local government planners should be aware of the progress being made
at the state and federal level to determine these types of fair-competition
ground rules.Although local governments may not play a direct role in the
establishment of such rules, their determination may affect the timing of
market entry by new competitors.
The new federal legislation sets the stage for competition to provide
local services—a business long operated as a monopoly by local telephone
companies. Several cities are currently experimenting with models for local
competition. Rochester,New York,provides a good example of how competi-
tion could emerge. In this community, the local telephone company has
organized itself strictly as a common carrier and is leasing its network to all
service providers at wholesale. Competitors include:
•A fully separated subsidiary of the parent company that owns the tele-
phone network
•A facilities-based long-distance carrier as well as long-distance resellers
• The local cable company
•A subsidiary of a fiber-based competitive access provider.
Although the future shape of the competitive telecommunications mar-
ket remains unclear, the Rochester model suggests that new competitors
may not put extensive emphasis on building new networks to every home;
rather, the competitive framework in Rochester is based more on the eco-
nomics of service, sales, and marketing.
The lesson for local government planners is that they must anticipate
many different models for competition over the next several years and ana-
lyze the potential role of the local government in each.
Capabilities Inventory (Internal)
Local governments across the U.S. have had significant experience in fran-
chising cable television service. Since the emergence of CAPs, many cities
have written ordinances that regulate the institution of CAP service in the
area. Under the new federal telecommunications legislation, telecommuni-
The Telecommunications Inventory 65
cations and media companies have permission to enter each other's former
monopoly businesses. Local government regulators are faced with an
entirely new set of market issues and changes to the traditional regulatory
structure.
This portion of the inventory activity serves mainly as an issues check-
list to be used by the local government as it considers its regulatory author-
ity and capabilities under the new law. Broadly, the internal capabilities
inventory addresses:
•Assembly of the existing body of policies and licenses for telecommu-
nications and media companies that the local government has
instituted
• Identification of the local government's ability to regulate or other-
wise participate in the establishment of new telecommunications and
media competitors within the community.
Unless the local government has a large telecommunications staff,
review of existing telecommunications and media franchises is typically
provided by consulting firms specializing in local telecommunications
issues.The first step for the local government is to understand the extent to
which it has legal authority to regulate or license new telecommunications
activities, for example:
• Telephone company provision of video services via the telephone com-
pany network in competition with the licensed cable TV operator
• Cable TV company provision of leased lines for private networks in
competition with the telephone company
• Distribution of video programming direct to homes via wireless trans-
mission technologies—that is, satellite or wireless cable
• Networks constructed for distribution of other wireless voice and data
services (for example, personal communications networks).
Whether or not a service is facilities-based will affect licensing deci-
sions for new competitors. Cable franchises and CAP franchises have tradi-
tionally included fees to cover use of public streets and property. In many
cases,the local government will retain some powers involving rights-of-way.
For example, traditional licensing provisions on rights-of-way included:
• Line placement
• Sharing of underground conduit
i
66 Telecommunications:Planning for the Future
•Joint planning with other carriers and utility companies
• Reconstruction of streets
• Insurance issues.
Local governments will have to understand the new rules of competi-
tion and their implications locally to ensure that actions by the local gov-
ernment do not hinder competition under the law, as facilities-based and
non-facilities-based competitors enter the local market.
Information derived from the technology, environmental, and internal
capabilities inventories will drive formulation of a broad telecommunica-
tions policy that sets the stage for competition and development of the local
infrastructure. The following section addresses the local government's in-
ternal telecommunications capabilities. This aspect of the telecommunica-
tions inventory will complement the process of assembling a comprehensive
local government telecommunications plan(detailed in Chapter 6).
Inventory to Support Development of a Public Sector
Telecommunications Network
The core purpose of the inventory activities described below is to provide
sufficient data to plan more efficient telecommunications support for public
sector operations. A chief characteristic of the inventory activities
described below is the reliance upon personal interviews and other types of
systematic data gathering.
The operations segment of the telecommunications inventory follows
the same conceptual model as outlined above, but focuses strictly upon the
internal operations of telecommunications networks owned,leased,or oper-
ated by the local government.
• Technical inventory—defines the technical components of the existing
network and contracts for service from other suppliers (i.e., supply of
telecommunications services to the local government)
• Environmental inventory—examines public sector use of the existing
network and looks ahead to future utilization patterns (i.e., demand
for service from departments, agencies, public safety, and health
sectors)
• Capabilities inventory—examines the role of telecommunications staff
in managing, maintaining, planning, expanding, and financing the
network.
The Telecommunications Inventory 67
Inventory procedures described here are similar to those followed by
most telecommunications managers planning, upgrading, or consolidating
any private network. Like most other network operators,local governments
should strive to maximize resources,eliminate redundancy in facilities,use
telecommunications to streamline the work being performed by local gov-
ernment workers,and allocate enough resources(budget permitting)to meet
the challenges faced in the public sector in the coming years.
Technical Inventory
The purpose of conducting a technical inventory is to understand the nature
of existing telecommunications and computing networks operated by the
local government.This inventory focuses on the operators of major data centers
and networks within the local government. Coupled with the output of the
environmental inventory (i.e., the manner in which local government
departments use these facilities), the data collected will provide the local
government with input required to map a technology/applications migra-
tion strategy to meet needs for the coming years.
All departments and agencies of the local government should be included
in the technical inventory to determine the degree to which each supplies or
is supported by existing networks and telecommunications services. When
completed, the technical inventory will map:
• The number and type of networks supported by each local government
department
• The types of interconnections within and between local government
departments or other locations/organizations
Locations connected
Transmission circuits utilized
Special characteristics
Quantification of network hardware and components.
In order to collect information most effectively, it is useful to distin-
guish the suppliers of information within local government from the users
within local government. Suppliers of internal data will have the responsi-
bility for organizing the manner in which information is distributed; thus,
major information-processing centers will play a larger role in the choice
and acquisition of telecommunications and computing resources. Thus, the
technical inventory should begin by focusing upon any department known
68 Telecommunications:Planning for the Future
to have a computing center of significant size, working down to sectors of
the local government organization with comparatively minor facilities, as
shown in Table 4.
Identification of major data centers and overview of key network
facilities. The first step in the technical inventory is to identify locations
of key databases serving local government departments. Large, sophisti-
cated call centers that depend on information processing systems (e.g., 911
facilities) should also be included within this first phase of the inventory.
Discussions with each significant data center (or call center) operated
by the local government should identify the general characteristics of the
computing environment:
• The general architecture of each data center. Distributed computing
environments(e.g., client server architectures) are rapidly proliferat-
ing within the U.S., but many applications within local governments
continue to rely upon mainframes.
• General locations of key elements of the information system, for
example, mainframes, minicomputers, file servers
• Data protocols
• Names and locations of the departments that use these information
systems.
Locations connected. The information gathered at this stage of the in-
ventory provides a broad understanding of the nature of the local government's
networks—where the information is being sent and how it is being sent.
One aspect of the inventory should focus upon the extent to which the infor-
mation being processed within a department is being received or sent by
workers on other floors and other local government buildings. For example,
the inventory should identify the degree to which each major data center or
call center uses:
• Direct connection of terminals to the primary computer
• Local area networks(LANs),which are commonly used in most offices
to link desktop computers or terminals into a data network so that
data can be more easily shared and manipulated
• Other connections provided by a telecommunications carrier, for
example:
■ Switched circuits that are priced according to usage(i.e.,dial-up lines)
The Telecommunications Inventory 69
• Point-to-point, dedicated circuits that are leased from the carrier for
a fixed fee
These latter dedicated point-to-point links function as the local
government's
• Metropolitan area network (MAN) that connects different buildings
within the local government's network
• Wide area network(WAN)that connects sites over long distances—for
example,public safety departments are often interconnected with state
databases via the state's WAN.
Network planners should also be asked about the general topology of
the transmission network, that is, whether the general topology is a star,
mesh, bus, or other configuration.
Table 4 Technical Inventory Approach
Priority User Type General Information Sought
1 Major data center supplying Locations connected
information to many internal users Transmission circuits obtained
Special requirements
Data center/network hardware
1 Major call centers, handling many Dedicated transmission links
incomingloutgoing calls with the Special telecommunications
public(e.g., 911) requirements
Call center hardware
2 Departments/agencies supplying Locations connected
video transmissions for internal Transmission circuits utilized
applications (institutional network)
Special requirements
Video hardware
2 Significant user of information Locations served
supplied by other departments or Transmission circuits required
outside sources; reprocessing data Special requirements
for further distribution Hardware inventory
3 Departments or agencies using only Hardware inventory(e.g., desktop
simple telecommunications or computers,telephones)
computing technology(low-tech
departments)
70 Telecommunications:Planning for the Future
Ransmission circuits used. To evaluate whether greater efficiencies can
be achieved by reconfiguring portions of the existing network or by switch-
ing suppliers, the inventory must next examine the technical nature of the
links more closely. The inventory should document the number and type of
dedicated circuits used by each data center:
•Whether the type of circuit is twisted pair, coax, or fiber. For some
applications (e.g., dispatch of repair trucks by utilities),wireless con-
nections might also be used.
• The number of dedicated circuits/total bandwidth per link(e.g., DSO,
DS1)
• Nature of applications on circuits (e.g., data, voice).
In each case,sources and pricing of telecommunications capacity should
also be identified:
• Suppliers (e.g., telephone company, cable company, CAP, municipal
utility, local government-owned fiber or microwave network)
• Nature of service contracts (e.g., duration of agreement, stipulation)
• Fees charged to the local government by the telecommunications car-
rier for these dedicated links.
Special characteristics. In planning for the future, it is important to
understand the special characteristics that are necessary to achieve opti-
mal performance of the information system. Thus, discussions with data
center planners and managers should capture insights on why certain net-
work arrangements have been made, for instance,why a dedicated line has
been chosen instead of a dial-up line.In another example,users who require
higher reliability of circuits will often use optical fiber links when they are
available.
The inventory should note any special transmission features that have
been implemented, such as:
• Security features to protect databases from hackers and other privacy
precautions
• Performance minimums that are required by the data center as it evalu-
ates transmission options
0 Network management systems
The Telecommunications Inventory 71
•Alternate routing,back-up systems,or other precautions for emergencies
or power outages.
Quantification of network hardware and components. The technical in-
ventory should include a detailed listing of the physical components that
compose the local government's network—that is, the number and type of:
• PBXs and multiplexers (if any)
• Other network components, such as modems, CSUs, and/or DSUs
•Workstations and personal computers
• Other components to facilitate communications in the local computer
network, such as bridgers and routers
• Other communications devices, such as fax machines and printers
• Telephones and other customer premise equipment.
For major equipment items, it is also necessary to inventory the types
and nature of service contracts that are in force.
Inventory of other telecommunications users. As Table 4 summa-
rized, the subsequent stages of the technical inventory focus upon second-
ary and tertiary users.
A technical inventory of users generating video transmissions will focus
upon quantifying very different types of facilities than those used by large
data or call centers. The bandwidth required for video is significant; thus,
the technical inventory should also provide information on:
• The frequency of video transmissions
• Suppliers of telecommunications capacity for video
• Contracts in force to assure availability of capacity for the long term.
Many local government departments and agencies are relatively low-
tech users of computer and telecommunications technology.For these users,
the technical inventory can be limited to:
• Counting hardware, such as desktop computers and telephones
• Noting the degree to which dial-up or dedicated data lines are utilized
day-to-day.
72 Telecommunications: Planning for the Future
The manner in which these low-tech users might expand their internal
facilities to achieve higher productivity is a critical topic addressed in the
environmental inventory discussed in the following section.
Environmental Inventory (External)
The key factor that influences the development of the local government's
internal communications network is the demand for various applications
and services by the entire range of local government departments and agen-
cies. Local government telecommunications users are likely to expand their
use of systems and networks from a single, successful application to addi-
tional applications over time.A local government may not be able to afford
to implement every application desired; nevertheless, taking an inventory
of these"environmental"factors is a necessary input to determine the plan
for future system development.
The process for carrying out this environmental inventory is similar to
that described earlier in this chapter for commercial telecommunications
users in developing policy; however, this process focuses upon internal
departments and agencies.
This environmental inventory will document the manner in which
users prioritize their plans for the future, and serve as a key input to the
comprehensive planning process described in Chapter 6.
The scope of this investigation should include public sector organiza-
tions and institutions that reside within the community but that do not
come directly under local government supervision:
• Universities or other educational institutions
• Hospitals and health care facilities
• State or county agencies located in the community
•Area public safety organizations
• Other non-profit organizations.
This inventory provides a demand-side baseline against which future
development can be measured.The survey should focus on documenting the
following for each department, agency, or public sector organization:
• The broad goals or mission of the organization
• Existing applications supported by telecommunications and comput-
ing facilities
The Telecommunications Inventory 73
• Telecommunications links established with other organizations or
agencies
• Planned growth in telecommunications utilization, if any, to achieve
the organization's goals in the next three to four years. For example:
E-mail and Internet utilization
* High-speed LAN-to-LAN interconnection
x Dedicated local or long-distance circuits
• The organization's rationale for this increased telecommunications
utilization
• Planned system integration activities with other internal or external
systems
• Presence of financial capacity to implement this plan.
This inventory should consider the long-range telecommunications
infrastructure needs of the public sector. It must include indications of the
extent to which applications could be adopted over the long term if the
facilities, funding, and personnel were available. For example:
• Long-term need for additional applications, such as:
Teleconferencing or training via desktop multimedia or two-way video
Telemetry or monitoring
• Increased or higher-performance telecommunications capacity for:
* Dedicated links
F Telecommuting
* Wideband interconnections to other organizations
Disaster recovery
• Potential need for integration/interoperability with other public
sector systems
74 Telecommunications:Planning for the Future
• The priority for these applications for staffing and budgets in the
future—that is,are they deemed critical in meeting the organization's
goals in the long term.
From this investigation will come information as to the:
• Telecommunications users in the community likely to be driving
future public sector telecommunications growth
• Future capacity requirements
•Types of infrastructure required (e.g., wireline, wireless, broadband)
to accommodate future demand
• Priorities for spending and the need for a more comprehensive facili-
ties plan.
Capabilities Inventory(Internal)
The capabilities inventory focuses upon the degree to which the internal
telecommunications staff working for the local government is currently pro-
viding the services necessary to plan for and maintain the local government's
existing network. The idea is to establish a baseline of information as to:
•The centralization versus distribution of network planning and
operations activities for the local government's telecommunications
and information systems
• Management organization of telecommunications and systems func-
tions
• Functions of existing staff
•Manner in which various tasks are carried out.
The local government should identify how the following tasks are
carried out:
• Network design and planning
■ Systems and telecommunications
• Emergency and contingency planning
• Security
The Telecommunications Inventory 75
• Facilities/capacity purchasing
• Day-to-day network management and technical support
K Network configuration
Work orders
F Repairs
Help desk for users
Trouble shooting
• Inventory management
• Operations management.
This investigation provides a baseline for the current level of activity
among telecommunications and information-systems experts within local
government. The documentation of user demands for future telecommuni-
cations and systems improvements should be compared against the capa-
bilities of the internal staff to plan for,implement,and manage these enhanced
applications.
This side-by-side analysis of the future technical demands and the skill
set of the current telecommunications department will show where there
are gaps in the internal capabilities of the local government staff to carry
out potential upgrades and enhancements. Where gaps occur, the local gov-
ernment must choose whether to engage outside consultants,hire additional
specialists, or train current staff in new disciplines as new situations arise.
Naturally, all plans for improvements and expansions will be mitigated
by the financial and personnel resources available to the local government.
Setting priorities for upgrades and expansion in a comprehensive manner is
addressed in the following chapter.
.t
SETTING GOALS AND
ANALYZING ALTERNATIVES
RICE, WILLIAMS ASSOCIATES
Use of the information gathered in the telecommunications inventory (de-
scribed in Chapter 5) occurs throughout the planning process undertaken
by the local government—a process that relies heavily upon public partici-
pation and input.
As shown in Table 1, the information regarding future demand (infor-
mation gathered in the environmental inventory)is used to provide a framework
for the capacity and nature of the telecommunications network and policy
needed over the long term. After considering the current state of the net-
work, services, and other facilities in existence today(information from the
technical inventory), a clear picture emerges of what the local government
must obtain for its constituents through policy making,encouraging compe-
tition, or obtaining facilities itself.
Information pertaining to the local government's internal policy mak-
ing and regulatory, financial, and telecommunications management capa-
bilities guides the local government in assessing the types of outside resources
required to achieve this vision.
This chapter outlines the processes and analysis that a local govern-
ment should undertake to support a telecommunications plan that reflects
78 Telecommunications: Planning for the Future
the best interest of the public and acquires the facilities it needs to operate
most efficiently:
• Setting goals and objectives to drive the telecommunications policy
making and the local government's internal network design,based upon
public input
• Designing alternatives for consideration
•Analyzing and choosing from among the options that best meet the
local government's goals and objectives.
Table 1 Use of Information Gathered in Inventory
Future Demand (Environmental)
Goals of telecommunications users
User applications driving growth
New competition initiatives
V
Current Supply(Technical)
Local telecommunications networks in community
Service providers
Local government facilities/service contracts
Other public sector facilities
T
Gap in Networks/Services/Capabilities Required for Future
V
Local Government Resources(Capabilities)
Regulatory authority
Internal telecommunications staff capabilities
Network management
Network planning
Financial resources
T
Result
Establishment of plan that aligns currently existing policies(if any)
Identification of public sector and private sector resources that might be used
within a comprehensive telecommunications network plan
Setting Goals and Analyzing Alternatives 79
Setting Goals and Objectives
Understanding the needs of telecommunications users is critical to develop-
ing a plan that is realistic and appropriate. The public participation activi-
ties suggested here are relevant both to developing broad telecommunications
policy as well as to setting the agenda for the public sector's own telecom-
munications network development.
Advisory groups can help create consensus on the specific objectives of
the ultimate plans. Possible approaches include establishment of a:
• Citizen task force, which can include representatives from key busi-
ness segments in the community and large public sector telecommu-
nications users
• Local government telecommunications task force, which can include
representatives from the large data centers being operated by the
local government, other important telecommunications user groups,
and other public sector organizations that might share facilities on
the local government network.
Although both parties will be addressing similar issues,the first group's
principal focus will be to determine the goals to be achieved from broad
policy making, while the second group will focus on determining the goals
for the local government's internal network. The creation of broad state-
ments of purpose will keep each group focused through subsequent, more
detailed steps of the planning process. (See Chapter 7 for examples of the
use of advisory groups.)
Setting Objectives for Telecommunications Policy
Although the establishment of a broad-based citizen task force is recom-
mended,no single approach to telecommunications policy planning will suit
all local governments. Regardless of which approach is used, the local gov-
ernment should convene a working group to identify the broad goals of the
local government's plan.
Typically,communities engage in telecommunications and media licensing
in order to:
• Ensure the public interest is served by enhancing the community's
telecommunications infrastructure,addressing business and consumer
needs, and guarding the public interest
• Promote maximum levels of competition, reducing costs to customers
and expanding service
• Receive fair compensation for use of public property and streets
80 Telecommunications:Planning for the Future
• Fill gaps in federal and/or state regulation and policy.
In order to craft a local telecommunications policy that is suitable to the
particular characteristics of the community, the citizen task force (or what-
ever planning body is responsible for this step) should receive information
pertaining to:
• The current status of telecommunications competition locally
r
Telecommunications Policy Objectives for, an;Jose;California
41
The following telecommunications policy objectives were adopted by the city
council of Sab'Jose California, in November 1993'to guide the city's involvement
inthe telecommunications arena:
1. Rapid infrastructure Development=lt is in the best interest of the City's residents
and businesses to encourage and support the most rapid installation possible of
leading edge networks within San Jose and all of Silicon Valley.This support
might include special handling of project applications,system marketing,
regulatory relief,and other incentives.
2. Competitive Service Delivery—It is in the best interest of the City's residents and
businesses to develop a competitive marketplace for the provision of telecom-
munications services. In the absence of a competitive marketplace,greater
regulatory controls will be required to prevent potential excesses of a monopoly
which utilizes the public right of way.
3. Universal Access—It is in the best interest of the City's residents and businesses
to ensure the broadest access possible to advanced telecommunications services
and resources.This access will require both physical and economic consider-
ations, as has previously occurred with both telephone and cable service
delivery.,
4.Public Resource Utilization—It`is in the best interest of the City's residents and
businesses to require equitable and consistent fees and taxes associated with
private use of the public right of way. Franchisefees,the utility users tax,and
public access to systemcapacity are all mechanisms for ensuring appropriate
art¢faii4fiscal policies and structures are developed and implemented..: ,
5`Regulatogi Slmpl ti– It" :t
1� n tl best f 6terest of the City's residents and
klusinesse to support the leastburdensome ancf overlapping.regulatorysystem
r_>
possible,while recognizing toca['governmentr�firiique responsibtlitestyith
regard to iraintaining and
way
managing the public right of :'
Setting Goals and Analyzing Alternatives 81
•The manner in which the federal telecommunications law might
affect competition among service providers locally over the next five
years
•The types of public sector and private sector applications that will be
driving telecommunications demand locally over the near term and
long term
• How the key sectors of the local economy currently use and plan to use
telecommunications.
Discussion of these issues will focus the group upon telecommunica-
tions development issues that are critical toward supporting the local economy.
The group will consider where the economy is now and how it should be
shaped for the future.
Discussing the impact of increased competition among service provid-
ers—potentially more choice in local,long-distance,and broadband services—
will trigger thoughts on the types of policies and initiatives that will support
this new service environment.
The planning group should focus on how to bring the existing telecom-
munications policies established by the local government(if any)into align-
ment to support this vision. Groups that have a clear sense of purpose are
highly effective; thus, it is critical for the planning group to craft a broad
statement of purpose for the local telecommunications policy that will guide
subsequent decision making and planning.
Setting Objectives for the Local Government's Network
Understanding the broad goals and the information and communication needs
of the telecommunications users in the local government is the first step
toward planning a better, more efficient use of available facilities and net-
work capacity. The information provided to the local government telecom-
munications task force should summarize:
• The principal goals of the:
• Primary user groups within local government
■ Other public sector service organizations that are currently sharing
facilities or might consider sharing in the future
• The existing interconnections among these groups
• Short-term and long-term requirements (e.g., anticipated expansion
or contraction of demand)
82 Telecommunications:Planning for the Future
• Telecommunications links
• Information systems improvements
• Rationale for these expansions and/or changes in facilities and
capacity
• Categorization of future plans into higher and lower priorities.
The most important, broad goals driving the operation of local govern-
ment should be acknowledged in order to provide a clear direction for any
future decision making regarding telecommunications expansion. Just as
corporations are firmly linking information systems development to high-
level corporation strategy, the local government telecommunications task
force should clearly identify the social, political, and economic goals being
pursued. For example:
• Economic development initiatives
• Reduction or expansion of sectors in the community's workforce
• Highest priority goals for the local school system
• More efficient delivery of social services.
The local government telecommunications task force should keep in mind
how the highest priority goals will be supported by specific telecommunica-
tions initiatives that it will recommend.Having a firm understanding of the
primary and secondary public sector priorities will guide prioritization of
the telecommunications facilities to be obtained and projects to be autho-
rized and financed.
After identification of these broad goals, more specific goals can be ad-
dressed—more specific goals and missions of the telecommunications users
as well as specific goals related to technology implementation. Information
from the inventory should summarize how technology and information sys-
tems are being used to support the particular missions of the local government's
departments and agencies. Later phases of the planning process will deter-
mine whether consolidation of facilities or communications capacity could
bring greater productivity or financial savings.
Discussing telecommunications and information systems goals is very
important, since many IS decisions (e.g., LAN interconnection, data center
consolidation)will have a direct impact upon the telecommunications trans-
mission capacity and configuration required. The planning group should
acknowledge any significant local government-wide information-systems/
communications initiatives currently in effect, since these will be key fac-
Setting Goals and Analyzing Alternatives 83
tors in mapping out future system design.Examples of such initiatives might
include:
• Making productivity improvements
• Reducing information systems costs
• Systems integration projects
• Efforts to migrate data off mainframes
• Linking schools with video or Internet connections.
The outcome of these planning activities should be a clear statement of
the broad goals for local government telecommunications,accompanied by a
statement of more detailed telecommunications and IS goals for the short
term and long term.
Designing Alternatives
Once the local government telecommunications task forces have identified
broad goals for their planning initiatives, each isolates the more specific
issues that require discussion and decisions:
• The range of potential policies and powers that could be included within
the broad telecommunications policy
• The technical alternatives that could be incorporated within a public
sector network plan.
Alternatives for Broad Telecommunications Policy
Based upon the information gained from the telecommunications inventory,
the policy work group will have a clear picture of the extent to which the
local government has implemented existing regulations and policies. Hav-
ing discussed the intent and objectives of a broad local government telecom-
munications plan and understanding what users and consumers need, the
group can then focus on discussing the types of policies and powers that
should be invoked to encourage existing and future telecommunications pro-
viders to develop the most appropriate infrastructure.
To encourage the emergence of different types of competition,individual
local governments will likely seek different solutions. Provisions contained
currently in local government telecommunications policies and licenses typically
pertain to a facilities-based service provider, such as a competitive access
provider(CAP)or a cable TV company. For facilities-based telecommunica-
84 Telecommunications: Planning for the Future
tions service providers, the local government planning group should decide
the specificity of provisions to be included in future licenses and policies:
• The geographic areas to be served and routes used
• The types of customers that should be served
• Facilities construction parameters
• Provisions for use of local government rights-of-way
• Interconnection guidelines or policies for linkage with other carriers
and/or emergency service providers
• Service activation provisions
• Whether penalties will be assessed for nonperformance
• Conditions for revocation of licenses
• Fees to be levied by the local government
• Economic incentives for new service providers.
Many competitors that are expected to emerge under the new federal
telecommunications law will simply lease telecommunications capacity from
existing providers and resell the capacity and other services to end users.
The planning group should consider whether policies or other provisions
should be established to facilitate market entry by these new competitors
and provide protection for users. For services that are targeted to consum-
ers, the planning group should consider the advisability of including:
•Anti-discrimination provisions
• Consumer protection provisions (in particular, how disputes will be
resolved and provisions for unanticipated service outage)
• Provisions for connection of service to public agencies, other govern-
ment users, and public sector institutions.
The planning group should identify the alternative types of provisions
that could be included. For example, methods of assessments for service
providers have sometimes been based upon the service provider's revenue;
in.other cases, they have been based upon the length of the network. When
local government boundaries are crossed by a service provider, the license
Setting Goals and Analyzing Alternatives 85
must indicate how an equitable allocation of fees will be achieved with neigh-
boring municipalities or counties.
Reviewing the telecommunications policies and licenses in other com-
munities will provide a menu of provisions to be considered for inclusion in
the local government telecommunications plan.Appendices A and B present
a model telecommunications ordinance and model agreements for imple-
menting it.
Alternatives for the Public Network
The telecommunications inventory provided the local government network
task force with information on which telecommunications users within local
government are currently linked and which might be linked in the future.
Understanding the nature of current relationships among local government
information/telecommunications users is critical.As part of its mission, the
planning group should map the existing communications links among local
government departments and other users, showing:
• Capacity/type of dedicated links
• Providers of these links
• Broad indicators of other public network use (e.g., incoming call vol-
umes at call centers, current utilization of wireless services).
This exercise will show the traffic capacity of current dedicated links,
how much capacity is typically used, and concentrations of traffic at various
points throughout the city or county. Taking into account the various users'
communications and information systems plans (e.g., investments or up-
grades planned) for the next five years, the planning group can determine
whether the current telecommunications capacity is sufficient to accommo-
date future expansion.
Next, the group should map several future configurations of interde-
partmental and/or public sector telecommunications linkage, as suggested
by the telecommunications inventory. The objective of this activity is to de-
velop a broad sketch of how different entities might interoperate or exchange
information under several future scenarios.
The task force should broadly identify:
• Whether future information system upgrades will affect the types of
telecommunications links and interconnections required
•Whether expansion of user applications at specific points requires new
links to be established.
86 lelecommumcations:Manning for the ruture
The telecommunications inventory will identify the locations of impor-
tant types of telecommunications equipment(e.g.,PBXs,multiplexers)within
the local government's current private network.At this point,the group will
be able to determine whether integration of user facilities or consolidation
of traffic would cut costs, increase efficiency, or in any way serve local gov-
ernment users better.
A key issue will be whether interoperability of communications equip-
ment and systems will enable the type of consolidation suggested. Should
equipment incompatibility present a problem, planners should investigate
the cost of purchases or replacements necessary to achieve satisfactory
interoperability.
As different public network possibilities are examined, the task force
will discuss the relative merits of:
• Use of public network facilities for voice traffic and dial-up data
• Advantages of operating a private network:
Leasing facilities from a commercial carrier
• Building facilities with local government funds
* Entering into an agreement for sharing facilities with another
private network operator or utility.
Many local governments, for example, have examined the feasibility of
using dark cable/fiber capacity offered by the cable television operator for
data and video transmission(see the Wadsworth, Ohio, case study in Chap-
ter 7, for example). This type of institutional network arrangement may
require investment of special equipment either by the local government or
the cable operator, but has been successfully implemented in many commu-
nities on behalf of the local governments and schools.
The task force should examine the locations where a private network
makes sense and identify the pros and cons of various network configurations
to link in user groups. The planning group should identify its options for
suppliers of these different links and estimate costs of the different sce-
narios for each of the departments involved.
The development of alternatives should include observations on how
the local government would handle:
• Network management
•Emergency back-up protection for critical data call centers
Setting Goals and Analyzing Alternatives 87
•Availability of additional capacity if growth of traffic occurs more
rapidly than anticipated.
Analysis Based on Goals and Objectives
The refinement of the local government telecommunications policy will be
made through discussion of the various alternative provisions in light of the
local government's broad economic and social objectives.The specifics of each
community's situation will determine how much or how little is required or
outlined in the local government telecommunications plan. For example:
• Some communities may place a high priority on establishing frame-
works for contributions of facilities to schools and other public sector
organizations from cable operators and CAPs, while others may not.
• Some communities may be growing high-tech industries and service
centers,while others may be in areas where there is less demand from
users for telecommunications capacity.
• Some communities may choose to target specific geographic areas for
infrastructure development and provide incentives for telecommuni-
cations service providers to do so; other communities may prefer to
leave choices on infrastructure for the marketplace to decide.
Decisions on the best network for the local government's own internal
use can be made by proposing several network alternatives that all have
merit. The alternatives should be analyzed based upon how well each:
• Meets the applications needs of the users for the long term with sufficient
capacity, connectivity, and growth and expansion capabilities
• Provides a cost-effective solution, that is, how well the proposed net-
work would enable the department to reach its stated objectives:
• Make productivity improvements
■ Function compatibly with information systems and upgrades
■ Lower departmental costs.
Much of this evaluation will be affected by the user's plans for informa-
tion systems and/or voice lines that require dedicated circuits. The ultimate
88 Telecommunications:Planning for the Future
ranking of how well each alternative suits the user will be based upon how
well this choice supports the objectives of the local government department.
The cost of each alternative network solution is a critical evaluation
point, as is the cost of not implementing the network as proposed.The plan-
ning group should understand:
• The cost of current service contracts and arrangements
• The cost of maintaining local government owned and operated facili-
ties
• Costs associated with use of any shared facilities.
When each of these evaluation points is established,the planners should
list all of the proposed network arrangements and combinations, document-
Private Interest in Public Communications
In the current climate of competition and market development, many private
telecommunications companies are willing and even eager to work with local
governments to encourage citizens to use new means of communicating.The
Mosaic Projectsupported by GTE is an example.
Five southern California cities are participating in this public-private partner-
ship with GTE and a local non-profit organization to create and update home pages
for the Internet that profile the positive features of the five cities. Each city has
contributed$5,000 and GTE has contributed an equal amount toward each home
page.
The Mosaic Project is one of GTE's long-term strategies"to help people become
generally indoctrinated to the information age,"GTE Program Manager Steve
Wright explains. "We need to understand how our customers relate to it.That's why
we're excited about this exercise.
"We know the future of our business is electronic messaging.A lot of local
governments have never been on the Internet.They're not sure what it means or if
it's a good idea.With government entity participation in this project,we're trying to
- leam what telecommunication services will sell."
The Mosaic Project"is more than putting a,home page on the Internet,"Wright
emphasized."From the home page we can go to a number of interactive forms of
gthe information age that are more complex, ranging from online databases to,
� permtt'proCesstng"�
A Weight said his company intends to work closely with local government
f
.offictats as they determine how they can use the information superhighway to better
� �serve,tFielr constituents.
5ourcer`California County,)anuarytFebruary 1995.
Setting Goals and Analyzing Alternatives 89
ing the pros and cons of each. This evaluation will serve as a record of the
group's thinking and planning, a useful checklist for future network and
planning evaluations.
Because technology and telecommunications capabilities evolve so rap-
idly, network and systems planning is an ongoing process for all public and
private enterprises. The local government should establish schedules for
updating and revising these plans to reflect the changing needs of the local
government and the local economy.
Based upon the local government's overall goals, as established by both
working groups, the internal telecommunications task force should rank
implementation of network components and new applications that have highest
priority and greatest likelihood of success (e.g., intelligent highway, video
arraignments, school teleconferencing). The planning group should identify
funds and resources available for telecommunications projects and set imple-
mentation schedules for these. Evaluations should identify appropriate
solutions toward achieving the departments' goals.
In cases where transmission capacity is available from a facilities-based
carrier, the local government should negotiate for lower rates or facilities
for public sector use.Arrangements for use of the network can often be made
when the carrier is negotiating with the local government for use of public
rights-of-way, an event that could become more common as telecommunica-
tions competition increases in both large and small markets.
RICE, WILLIAMS ASSOCIATES
JUL 1 11997
DEPARTMENT OF
July 9, 1997 PLANNING&DEVELOPMENT
Mr. Thys Van Cort
Planning & Development Director
City of Ithaca
108 East Green Street
Ithaca NY 14850
Dear Thys,
Please substitute the attached resume of Jim Reeve for the technical personnel included in
our proposal to the City. Mr. Reeve has over twenty years of experience with cable television and
telecommunications system testing evaluation and design. He will personally be conducing the
technical evaluation for the renewal process as per our proposal.
Thank you for your attention to this matter.
Sincerely,
Jean Rice
JR/jms
Attachment
601 Pennsylvania Avenue,NW 774-C Walker Road,P.O.Box 765
Suite 900 Great Falls,VA 22066
Washington,DC 20004 Phone:(703)757-0570
Phone:(202)737-2400 Fax:(703)757-0573
1W
RICE, WILLIAMS ASSOCIATES
June 12, 1997
u
Mr. H. Matth s Van Cort
Y
Director of Planning & Development JUN 1 3 "r" U
City of Ithaca
108 East Green Street PLAN�NG R EENT OFy�EidT
Ithaca, NY 14850
Dear Mr. Van Cort:
Enclosed please find a proposal to provide cable/telecommunications consulting services.
We have responded to the RFP for cable television franchise renewal and the feasibility of a
municipally-owned cable system. The franchise renewal process is an excellent opportunity to
obtain the necessary and appropriate development of public, educational, and government access
programming, as well as a variety of institutional telecommunications service through the
development of a fiber optic institutional network.
Rice, Williams Associates has worked with several consortiums on cable television
franchise renewals, rights-of-way management, and telecommunications planning studies. In all
cases, the consortium model has worked very well. A consortium of franchising authorities may
bring greater leverage to the negotiation table, in addition to facilitating more consistent and
broader based telecommunications planning. Finally, a consortium may realize cost savings in
consulting fees.
As always, Jean Rice or myself would be pleased to discuss the proposal or other issues
that may arise. Please do not hesitate to call with comments or questions.
Sincerely,
_D6� c
A I
Don C. Williams, Ph.D.
Partner
DCW/jms
Enclosures
601 Pennsylvania Avenue,NW 774-C Walker Road,P.O.Box 765
Suite 900 Great Falls,VA 22066
Washington,DC 20004 Phone:(703)757-0570
Phone:(202)737-2400 Fax:(703)757-0573
A �
16V
RICE, WILLIAMS ASSOCIATES
November 18, 1997
n �y7 F, !
Mr. H. Matthys Van Cort Z Q �L)
Director of Planning& Development
City of Ithaca PLANNING&DEVELOPMENT
108 East Green Street
Ithaca,NY 14850
Dear Mr. Van Cort:
Jean Rice and I enjoyed meeting with the Cable Refranchising Committee on October 15.
It is a very exciting time in telecommunications and the Committee is aware of many of the
opportunities the refranchising process and the development of a telecommunications ordinance may
present to the City.
The Committee requested that RWA provide additional references and materials and sought
information on the financial analysis, financial audit and financial projection analysis in our
proposal.
As indicated in my letter of October 7, 1997, RWA provided a financial analysis and a
franchise fee audit as part of our proposal. The paragraph from that letter follows:
Accounting, Financial Analysis
Financial analysis, franchise fee payment review and review of local property tax
deduction.
A description of the financial analysis of the company's past and current operations and
the franchise fee audit is included in our proposal under Other Services. Please see pages
I-28 - I-32 of our proposal. The cost for these services is $6,890. In addition, we would
review the local property tax deduction for $2,405.
As indicated in our proposal, the financial review will begin with an examination of the
company's records and audited financial statements. If further information is needed, a request for
additional information would be prepared for the City to provide to the company. The information
received from this request would be analyzed together with the previous records of financial
statements from both the local operating entity and the parent company. Our report will include a
review of the following areas: revenue development; expense trends; operating ratio; interest
expenses;management fees and/or payments to parent;leverage measures;cash flow;free cash flow;
and internal rate of return.
601 Pennsylvania Avenue,NW 774-C Walker Road,P.O.Box 765
Suite D 7 20004 3 Great Falls,VA 22066
Washington, Phone:(703)757-0570
Phone:(202)737 2400 Fax:(703)757-0573
Mr. H. Matthys Van Cort
November 18, 1997
Page 2
The audit of franchise fee payments includes an audit of payments to the City's access
organizations (See page I-31) of our proposal.
In Task 7, RWA proposed as part of the Evaluation of the Company Proposal, a financial
analysis of the cable operators projections. Please see page I-21 - I-22 of our proposal. The
financial analysis of company projections is subject to manipulation by RWA as to the effects of
differing expense and revenues assumptions, as well as other variables.
As we discussed with the Committee, it is difficult to gauge the precise number of
negotiation meetings that will be required. The greater the needs of the community for funding
of local public, education and government programming, and the development of an institutional
network, the greater the possibility of lengthening negotiations. One could reasonably assume ten
negotiation sessions in Ithaca. I would estimate $15,000 for the above negotiation sessions which
would include preparations of agendas, position notes for the City side, and teleconferences to
refine ordinance and franchise language to conform to what has been agreed to. Our services for
negotiations would be provided on an hourly cost basis. The $15,000 cost would not be exceeded
except by written authorization by the City.
In addition, you indicated the Committee desired references to call in addition to those
provided on Page II-18 of our proposal, that had been involved in a consortium, as well as a
reference for a city that has had an ordinance and franchise agreement in effect for a few years that
was drafted and negotiated by RWA. These references follow:
Mr. Jesse L. Warren
City Attorney
City of Greensboro
One Governmental Plaza
Greensboro, NC 27402-3136
(910) 373-2320
Consortium
Mr. Jim Kier Mr. Ralph L. McClellan
County Manager Assistant to the Manager
Greenwood County Admin. Township of Northampton
Suite 102 Park Plaza 55 Township Road
600 Monument St., Box P-103 Richboro, PA 18954-1592
Greenwood, SC 29646 (215) 357-6800
(864) 942-8502
Mr. H. Matthys Van Cort
November 18, 1997
Page 3
Finally, the Committee requested copies of franchise agreements and ordinances prepared
and negotiated by RWA. Please see attached. We have provided them to the City of Ithaca with the
hope that the documents will not be distributed beyond City staff and Committee members.
Once again, should the Committee members or City staff have any additional questions,
please do not hesitate to call.
Sincerely,
"T)66C�j4i-p'�-
Don
C. Williams, Ph.D.
Partner
DCW/jms
Enclosures
JIM REEVE
SENIOR ENGINEER
Mr. Reeves, an associate of Rice, Williams Associates, has over twenty years of experience with
cable television and telecommunications system testing evaluation and design.
James Reeve has been associated with CTIC since 1979, when his services were first provided to
the firm under a contract support agreement with Atlantic Research Corporation. Now as Senior
Engineer for CTIC, Mr. Reeve is responsible for conduct of all system technical evaluations and
performance appraisals. In addition, he provides advice to local government cable regulators on
a variety of engineering topics including channel capacity questions, the resolution of signal
quality and reliability problems and the feasibility of upgrade or modernization proposals. In
connection with new franchises, renewals or transfer or ownership cases, Mr. Reeve reviews the
technical aspects of the proposals set forth by the companies and makes suggestions as to
improvements, alternatives and modifications to those plans. He inspects the exiting plant and
facilities of present operations, conducts system performance tests and measurements and
interview the cable company's key operating personnel in order to gain an understanding of the
capabilities and limitations that may influence the decision of local government cable
administrators. He has recently provided such services in connection with CTIC programs for
Cleveland Heights, Ohio; Hanover County, Virginia; Cathedral City, California; Collier County,
Florida; Beverly Hills, California; Loudoun County, Virginia; Arlington, Texas; Tempe, Arizona;
Los Alamos, New Mexico; Farmington Hills, Michigan; Tucson, Arizona and Portsmouth,
Virginia.
Mr. Reeve holds a bachelor of science degree in Applied Mathematics and Engineering Physics
from the University of Wisconsin. He also hold a First Class Commercial Radio Operator's
License and is a member of the Cable TV Pioneers. Active in the cable television field since
1963, his professional experience includes appointments with the Hawaiian Telephone Company,
Multichannel Northwest and Atlantic Research Corporation.
As manager of the Atlantic Research Telecommunications Department, Mr. Reeve supervised a
professional services work group engaged in communications network engineering, system
construction and consulting. Additionally, he ad direct responsibility for several closed circuit and
cable television projects. This work included system design tasks, franchise application evaluation
programs, technical appraisals and fair-market valuations. Clients included both foreign and
domestic governments as well as private companies.
Prior to Atlantic Research, Mr. Reeve was Chief Engineer and General Manager for Multichannel
Northwest, the franchised cable operator in Dalton, Georgia. In addition to his operational
responsibilities, he also designed and supervised the construction of system extensions and of both
mobile and fixed teleproduction facilities.
-1-
MR. JIM REEVE
Mr. Reeve began his work in the cable field with Hawaiian Telephone Company where he was
responsible for the design and maintenance of all closed circuit and cable television facilities
operated by the telephone company in the State of Hawaii. At that time, Hawaiian Telephone was
the sole provider of cable television transmission service along the public right of way.
-2-
■ Headend equipment
■ Fiber architecture
■ Fiber optics
■ Distribution trunk
■ Fiber nodes
■ Feeder cables
■ Upstream activation
■ Telephone and data service equipment
■ Institutional network
■ Subscriber and institutional terminals
.. ■ Emergency alert
■ Enhanced services capacity(e.g. telephone, PCS, multimedia)
■ Line extension.
Technical tests would be undertaken of many different aspects of system performance,
including:
■ The current operating status and components of the headend and distribution system
■ Connections,drops and amplifiers to determine the overall integrity and construction
quality of the plant in accordance with National Electrical Safety Code practices.
■ Signal quality, level and the attenuation in the cable itself, and outages
■ Individual trunk and distribution amplifiers to ascertain physical condition to
determine the network performance characteristics.
Test Methodology
After reviewing the NYS Public Service Commision audit of 1996, our first step in the
technical analysis will be to review the most recent proof-of-performance tests and system
I - 14
maps submitted to the City over the term of the current franchise. Such information can also
be requested of the cable company. This record of tests, system deployment,performance,
outage logs, and other information will provide the baseline for the next stage of our
technical review.
Next, we would define the expected performance levels for the system. The expected
performance levels are defined by the operating parameters for the individual elements of the
system such as amplifier output levels, physical spacing, and other operational
characteristics. We would examine the specifications provided by cable system equipment
manufacturers and evaluate whether the City of Ithaca, New York system is properly
adjusted to each manufacturer's specifications.
To analyze the system's theoretical performance capabilities,we will request information on
specific engineering design parameters directly from the cable system engineering staff.
,,. Parameters to be examined will include technical performance specifications of the electronic
amplifiers and passive components, coaxial cable, headend, and subscriber coupling
equipment. A mathematical computer model will calculate the expected performance
characteristics for the cable system based on the number of cascaded trunk amplifiers,
distribution amplifiers, and subscriber tap levels.
�- For the next phase of our technical evaluation,we will prepare the testing procedures for a
spot check evaluation of the system to determine the current operating status of the headend
and distribution system. The specific tests to be conducted will be outlined in our test
procedure protocol. Equipment block diagrams will be provided for each test. Data sheets
will be prepared to summarize the results of the testing at each test location and serve as a
permanent record of test results.
Tests for the following performance parameters will be performed as a part of our proof-of-
performance testing:
■ Carrier-to-noise
■ Visual carrier variation
■ Composite triple beat tests
■ Intramodulation tests
■ Hum modulation
■ Subjective viewing tests.
I - 15
The tests will be based on generally accepted test procedures for key parameters. Rice,
Williams Associates's engineer will select test locations and perform the tests in conjunction
with TWC's technical staff. Our past experience with testing numerous cable systems
indicates that this is the most desirable procedure since it affords us an opportunity not only
to perform the test,but also to evaluate the ability of the cable system staff to perform regular
tests.
In addition,Rice, Williams Associate will inspect the major components of the cable system
headend facility that receive satellite and off-air broadcast signals -- antennas, satellite
dishes,receivers,modulators,and demodulators. Tests will be performed to evaluate picture
quality, clarity, and signal-to-noise characteristics using standard equipment.
Technical Evaluation
The results of our field inspection process and other test results will be summarized and
compared to current FCC specifications, proposed FCC specifications, and all technical
performance claims made in the franchise agreement.
A report will be prepared to document the testing process. The report will include our
ultimate findings on the system's technical performance, and whether it meets or exceeds
them. We will prepare and review possible channel capacity configurations under the current
system design and under upgrade and rebuild scenarios.
Our report will conclude with an analysis of whether a system upgrade or rebuild is
desirable. If we recommend either a rebuild or an upgrade, our report will outline the most
feasible options and provide the list of technical requirements that a system upgrade or
rebuild must match.
Should an inspection and analysis of the institutional network be desired, we would be
pleased to conduct such an inspection.
Task IV: Review of Cable Operator Compliance with the Cable TV
Ordinance/Franchise
Rice,Williams Associates will evaluate the company's compliance with the provisions of the
existing cable TV ordinance and franchise to determine whether the City needs to strengthen
them prior to refranchising or to address any major performance issues or problems. We will
review the City's information and documentation of operator compliance with the franchise
and the quality of the operators service.
I - 16
Some issues will have already been identified by the City as part of our initial consultation
sessions in Task 1. Rice,Williams Associates would analyze cable operator compliance in
detail in a wide range of areas, for example:
■ Construction completion
■ Performance of street work
■ System technical standards
■ Consumer notification requirements
■ Adherence to City procedures(e.g. transfer of ownership or control)
■ Adherence to City consumer requirements(e.g. local office, local telephone number)
■ Insurance, indemnification, and performance bonds
■ Use of poles and facilities agreements
■ System extension, operations, standards, and procedures
■ Availability of books,maps,records,and specially requested information and reports
■ Compliance with state and federal laws
■ Community programming, equipment, and services
■ Consumer billing practices
■ Privacy protection for customers.
After Rice,Williams Associates completes its initial evaluation of the City's franchise and
ordinance and City records on system compliance, we will discuss any major issues and
problem areas and determine whether additional information is needed. If additional
information is required, Rice, Williams Associates will prepare a Request for Information
(RFI) that the City will present to the cable company.
After analyzing the information that is received, we will work with the City to make a
determination of the company's compliance with the legal and technical elements of the
franchise and ordinance and will make suggestions to the City on reimbursement of renewal
related expenditures.
I - 17
—
Task V: Updating Relevant Ordinances
Rice, Williams Associates will also analyze the City of Ithaca, New York cable TV
ordinance and franchise to ensure that the City is in compliance with recent changes in cable
and telecommunications regulatory policy. Provisions to be reviewed and discussed will
—
include:
■ Definitions:
• Regulation of the franchise
• Supervision of the franchise
-- • Performance evaluation
■ Design and construction provisions:
• Construction and technical standards
• Dedicated institutional and access channels
• System construction schedules
• Extension of service
• Special agreements
• Construction reporting requirements
• Use of streets
• Tests and performance monitoring
■ Service provisions:
• Community programming and services
• Timetable for the provision of programming equipment
-- • Personnel and facilities
• Community programming funding structure and payment
■ Schedule:
—
• Services to subscribers
• Services to institutions
• Lockout devices
■ Operation and maintenance
• Required reports
• Required records
• Service calls and complaint procedures
-� • Billing and collection procedures
I - 18
• Antennas and antenna switches
• Grantee rules and regulations
Working with City staff and the City Cable Commission, Rice, Williams Associates will
conduct a general review of the franchise and ordinance to ensure that they contain key
provisions to enable the City to exercise ongoing regulatory authority and administration of
the franchise. , We will identify the specific regulatory and contractual controls that are
available to the City and discuss the degree to which various provisions can be enforced and
are practical.
At the final stage of this process, we will discuss the degree of future regulatory authority
that the City feels desirable. Due to our extensive experience in developing quantifiable
methodologies for regulating customer service, we are capable of recommending how the
City can strengthen consumer protection provisions.
We will work closely with the City to identify areas of oversight in which current regulatory
problems, if any, should be addressed in a revised ordinance. Where the provisions of the
ordinance and franchise are deemed insufficient, we will assist the City in rewriting those
areas of the ordinance and franchise.
Task VI: Preparation of a Request for Renewal Proposal
We will work closely with City staff and the City Cable Commission to develop a formal
Request for Proposal(RFP)to provide cable television service. This document serves as the
foundation for the renewal process,since it establishes priority areas and guidelines for cable
service.
The cable company will be asked for their proposal to response to this document. The
Request for Proposal will request the following information:
■ Ownership experience and financial resources:
• Experience of company and staff
• Financial capability to upgrade or rebuild and operate the proposed system
■ Financial projections:
• Realism of financial projections
• Equity and depreciation
• Completeness and accuracy
I - 19
—
w
�- ■ System design:
• Fiber optic architecture
• Initial coverage and line extension policy
• Reliability and capacity of proposed system design
• Area-wide interconnection capability
• Upstream activation plan
• Underground requirements
• Construction schedule
• Equipment and installation capacity
• Institutional channel capacity
■ Service to subscribers:
• Variety and availability of program offerings
• Variety and availability of consumer services
• Variety of enhanced service offerings
.- • System operation and maintenance plans and personnel
• Billing practices
• Subscriber complaint procedures
• Subscriber privacy practices and procedures
■ Local programming:
• Support for access
• Quality and philosophy of access plans
• Quality of local origination plans
I - 20
• Experience with local programming
Rice, Williams Associates would work with the City to establish a timetable for cable
company submission of proposals, the manner in which subsequent information requests
would be handled, and the time frame for decision making by the City.
Task VII: Evaluation of Renewal Proposal
Rice, Williams Associates will conduct a complete analysis of how well the cable company
proposal meets the specifications stated in the RFP. The responses to the RFP will be
checked for thoroughness,internal consistency,and accuracy of financial and technical data.
A major factor for the City's determination of whether to award a franchise will be whether
the applicant illustrates the financial, legal and technical ability to provide the services
proposed. We will take a rigorous approach to our analysis of each component of the
•- proposal as well as conduct a review of the integrated whole. Our analysis will include:
■ Economic analysis of the cable system operations, its potential for growth, and price
elasticity in the consumer market.
■ Technical analysis, including a review of plans for rebuilds, construction, and
interconnection
■ Service package analysis to evaluate the overall diversity and provision of service to
consumers
■ Public,educational,and government access evaluation to assess channel allocations,
facilities support, and related services.
•— The remainder of this section provides further detail of the methodology we will use to
perform these analyses.
Financial Analysis
Rice, Williams Associates will conduct a financial analysis of the proposal, which will
include a review of company's financial proforma and capital spending. The financial
analysis will be consistent with the spirit of the Cable Act, which states:
"...the cable operator shall ensure (A) that the safety, functioning, and
appearance of the property and the convenience and safety of other persons
not be adversely affected by the installation or construction of facilities
I - 21
60
�- necessary for a cable system; (B) that the cost of the installation,
construction, operation, or removal of such facilities be borne by the cable
operator or subscriber,or combination of both for any damages caused by the
-- installation,construction,operation,or removal of such facilities by the cable
operator; and(C)that the owner of the property be justly compensated by the
cable operator for any damages caused by the installation, construction,
operation,or removal of such facilities by the cable operator. Sec. 621.(a)(2),
47 U.S.C. Sec. 541(a)(2)."
— This approach evaluates the applicant's financial capability to provide services,facilities,and
equipment and provides for better understanding by the City of the cable operator's plans for
the system.
Our first step in the analysis will be to describe and analyze the system's basic subscriber
— characteristics, which includes such factors as homes passed, subscriber levels, and
penetration. Next, we will examine the cable operator's financial proforma in detail. This
analysis should have great relevance to the City,since franchise fee payments are based upon
�- gross receipts that rise or fall according to the sales performance of the system. Our
approach provides the City with a profile of the cable operator's plans for the future, since
the proformas contain data from Year 1 forward ten or fifteen years.
We will provide detailed examination of operating expenses from two perspectives. The
operating expense budget will be reviewed from the viewpoints of:
■ Adequacy. For example, are staffing levels and the salaries budget adequate to
provide satisfactory service to subscribers? Are projected expenses for community
programming sufficient?
•. ■ Efficiency. For example, are amounts allocated as corporate overhead expense
reasonable or excessive?
Capital spending plans will be reviewed to determine the rate of reinvestment in plant and
equipment. Are capital expenditures consistent with normal industry practices on
replacement and maintenance? In conjunction with an analysis of balance sheet data,we will
calculate rates of return on invested capital.
In addition, we will assess the overall financial ability of the company to meet the future
needs of the community. We will review income statements and sources and uses of funds
statements to assess the cable operator's profitability. Because financial inability to perform
is basis for denial of a franchise application, long-term corporate and cable system financial
stability will be assessed during the analysis.
I - 22
r..
the reliability and general operation of cable systems. For example,the hardware used,such
as cable,taps, and other passive elements, and amplifiers tend to be rugged and of standard
construction. In contrast, the placement of cable, cable splicing, and other such
implementation decisions can greatly influence the ultimate performance of the system. We
will review the construction manual,provided by the applicant,for adequacy and consistency
with current industry practice.
The key elements of system design are the transport system, bandwidth and transmission
characteristics,processing equipment,satellite receiving equipment,and overall system level
design criteria. These and other factors involved in the overall system design will be
reviewed,including subscriber terminal equipment, system reliability and maintenance, and
interconnection to neighboring cable systems and facilities. We will also analyze the cable
operator's plans to activate upstream capacity on the network.
.- Specialized items, such as standby power,subscriber terminals,fiber optics, and emergency
alert systems,will be analyzed to determine whether they reflect state-of-the-art technology
and how they will be integrated within the entire network. Interconnection plans that might
be included in the plan will also be reviewed. Another area that will be reviewed is how the
design will impact overall technical system performance.
If an institutional network is included in the applicant's proposal,Rice, Williams Associates
will perform an additional technical design analysis similar that conducted for the technical
components of the consumer cable system. The technology used, fiber optics and coaxial
.. cable, will be reviewed for its capacity and compatibility with existing data terminal and
processing equipment. Our report will examine transmission characteristics between the
subscriber network and any institutional network as proposed. Due to our experience in
developing institutional networks for many cities,we can assess whether the cable operator's
stated operational plan for this network is reasonable and suitable for the purposes to which
it will be used.
Our technical report to the City will include an overall description of the system proposed
by the applicant, the system characteristics, system channel capacity, program reception
facilities,the number of plant miles,and any special equipment noted in the application,such
as off-premises equipment. The report will include our analysis and judgment of whether
the system, its components, and equipment reflect state-of-the-art technology and are able
to perform reliably.
Our final report to the City will integrate the results of the financial analysis with our
technical findings to determine the financial viability and practicability of the proposed
system design and construction schedule.
I - 24
Service Analysis
Rice, Williams Associates will review the services proposed by the applicant. Our report
will provide charts summarizing the applicant's proposed signal carriage and channel
allocations, including the manner in which various services will be tiered. The categories
of service that,will be described and analyzed are:
■ Local broadcast signals
■ Imported television broadcast signals
.. ■ Satellite services
■ Pay cable service
■ Nonbroadcast television channels
■ Channels designated for public, educational, and government communications
■ Channels designated for local origination
■ Audio services
■ Nonbroadcast audio simulcasts
■ Other services proposed by the applicant.
For our report to the City,we will evaluate the overall diversity and provision of service to
�- different classes of users to be served by the cable operator.
Public, Educational, and Government Access and Other Institutional Services
Rice, Williams Associates will evaluate applicant's proposal for:
■ Public, educational, and governmental access facilities, equipment, and services
■ Institutional network and services.
We will begin our analysis by determining whether the proposed operating budget for either
or both of these activities falls within the confines of the services aspect of cable under the
access provisions of the Cable Act or whether the applicant anticipates that franchise fees
will be utilized.
I - 25
Access and other related public benefits will be evaluated in a thorough, comprehensive
manner,and will entail an analysis of the applicants equipment package,budget,operational
support and expenditures and adequacy of the overall plan. We will review the operator's
plans and City's plans in this area and analyze the degree to which both match.
The operating budget specified by the applicant will be analyzed to determine the levels of
funding for equipment, annual services, and overall funding. Our analysis will identify
whether the applicant's financial contribution is tied to per-subscriber values, percents of
gross revenues, or to minimums that will be provided. If requested by the City, we will
analyze the operating budget for the amount allocated to staff for maintenance,training, and
public relations and/or advertising.
Rice, Williams Associates will also provide a detailed review of the facilities and equipment
that are proposed to be offered. We will examine the initial capitalization,replacement costs,
.. and any renovation expenditures.
We will also review the channel allocation proposed for access programming and
institutional networks. We will work with the City to determine whether access channel
allocations are adequate to meet community needs.
Final Evaluation of Proposal
_ With the conclusion of the analyses described above,Rice,Williams Associates will conduct
a review summarizing and incorporating all of these analytical elements. We will summarize
whether the applicant has met the minimum requirements as set forth by the RFP. This will
be important in ensuring that residents receive the services that are needed and that the City
is protected in the future. Any unmet minimum requirements will be identified in our report.
We will alert the City to unanswered questions in any of the areas examined. If additional
information or clarification of any information provided in the proposal is needed, Rice,
Williams Associates will prepare clarification questions for the City to submit to the
company.
If we judge that an applicant has an inability to perform in any of the three areas, we will
provide the City with a full explanation of our basis for making this determination to ensure
that the City has firm, reasonable grounds in making an official determination and
proceeding as appropriate.
We will work with the City in making a determination of whether the applicant's proposal
meets the future community needs. Based on this information, Rice, Williams Associates
will make recommendations to the City on the renewal proposal and degree to which the
proposal is compatible with the goals established by the City.
I - 26
... Task VIII: Drafting the Franchise
Rice, Williams Associates will prepare a franchise which is based on the research conducted
for this process,our experience and the needs of the City. This franchise will consist of the
following:
■ Grant of franchise
■ Right of City to issue franchise
■ Effective date of franchise, effect upon existing franchise
■ Term
■ Franchise nonexclusive
.- ■ Incorporation of the cable ordinance by reference and resolution of conflicts
■ Incorporation of proposal by reference
■ Definitions
■ Service area
■ Use of streets
■ System and capacity
■ Construction
■ System construction schedule
■ System services after rebuild
■ State-of-the-art
■ PEG access
■ Institutional network
■ Tests and performance monitoring
■ Subscriber information and policy
■ Equal employment opportunity and affirmative action
■ Rates
■ Franchise renewal
•• ■ Police powers
■ Franchise fee
■ Regulation
�- ■ Remedies
■ Cooperation
■ Waiver
■ Cumulative provision
■ Notices
■ Captions
■ No joint venture
■ Entire agreement
■ Severability
Working with City staff, Rice, Williams Associates will conduct a general review of the
franchise and ordinance to ensure that they contain key provisions to enable the City to
I - 27
exercise ongoing regulatory authority and administration of the franchise. We will identify
the specific regulatory and contractual controls that are available to the City and discuss the
degree to which various provisions can be enforced and are practical.
At the final stage of this process, we will discuss the degree of future regulatory authority
that the City feels desirable. Due to our extensive experience in developing quantifiable
methodologiesfor regulating customer service, we are capable of recommending how City
can strengthen consumer protection provisions. We will work closely with the City to
identify areas of oversight in which current regulatory problems, if any, should be addressed
in a revised franchise. Where the provisions of the franchise are deemed insufficient,we will
assist the City in rewriting those areas of the franchise.
Rice, Williams Associates will develop a franchise which will reflect negotiated agreement
and provide for increased public service components over the term of the contract.
Task IX: Assistance with Public Hearings and Negotiations
Rice, Williams Associates will be prepared to assist the City in public hearings throughout
entire franchise renewal process. We will be available at public hearings to make opening
remarks, which sets the regulatory framework for the hearing in layman's terms, and to
answer questions as needed.
Also, we are able to consult with the City in developing the hearing process,the agenda for
public hearings, and participation in the hearings. We participate in many public hearings
and council workshops each year and are well equipped to advise the City on the most
effective formats for these sessions.
Most importantly, Rice, Williams Associates will represent the City in its negotiations to
develop the final franchise agreement. We have extensive experience in providing this type
of assistance to cities,and have had great success in helping our clients to achieve their goals
-- for renewal.
OTHER SERVICES
A. Financial Analysis
Rice, Williams Associates will conduct a financial analysis of the cable operations. This
analysis will include an analysis of past operating experience and the company's ability to
continue to operate.
I - 28
r..
The financial review will begin with an examination of City records and the company's
audited financial statements. If further information is needed, a request for additional
information would be prepared for the City to provide to the company. The information
received from this request would be analyzed together with the City records.
A thorough report,with exhibits, will be prepared. This report will include a review of the
following areas:
■ Basic Assumptions
• Subscriber penetration levels
• Service rates
■ Revenue Sources
• Basic revenues
-- • Pay revenues
• Non-subscriber revenues such as installation,converter deposits,other special
services
■ Operating Expenses
• Personnel costs
` • Marketing,promotion, and billing expenses
• Plant costs
• Converter maintenance costs
■ Programming Expenses
• Local programming expenses
• Satellite signal fees
• Pay cable fees
■ Capital Expenditures
• Capital expenditures
• Construction schedule
■ Financial Expenses
• Interest rate assumed on loans
• Amount of equity,projected, and actual
• Desired rate of return on equity investment.
Special attention will be paid to the business structure of the applicant as it relates to the
parent corporation. Related issues to be reviewed include: interest expenses; availability of
credit; tax rates; and management fees and/or payments to parent.
I - 29
r..
r- After the financial analysis is complete, Rice, Williams Associates will examine the cable
company's financial standing. The company's operating efficiency will also be analyzed in
comparison with industry norms. Line item data will also be reviewed in comparison with
�— industry norms. Additionally, in-house financial data files are also used as a basis for
analysis.
Rice, Williams Associates would also be able to conduct a review of the revenues being
provided to the City. To initiate this review,we will review the City's franchise fee reports
and payments, as well as any financial statements provided by the cable company over the
last two years. These statements will be checked to ensure cable revenue sources, such as
subscriber fees, installation, home shopping, and advertising revenues are included. The
.. amounts denoted for specific revenues would be compared with company financial
statements and typical industry ratios.
Any issues of typical revenue sources that are missing or at odds with similar systems can
be brought to the attention of the City. In addition,we could sample revenue documentation
from the cable company to assess the general accuracy of franchise payment. We will work
with the City on a sampling method designed to ensure that revenue from City subscribers
is being counted by the company for City franchise fees. One city we worked with received
a one million dollar payment for back franchise fees.
Rice,Williams Associates can provide these financial services and provide assistance to City
accounting staff for some of the review.
We conduct financial analyses of present operations or prospective operations for most of
the municipalities we work with. Some of the cities we have conducted financial analyses
for are: Altoona, Pennsylvania; Atlanta, Georgia; Charlotte, North Carolina; Cincinnati,
Ohio; Ithaca,New York; and an eleven city consortium outside of St. Louis, Missouri.
I - 30
B. Franchise Fee Audit
A franchise fee audit which will audit the revenue records of the cable company to determine
whether the City received the proper amount of the franchise fee from all sources. This task
will be based on our firms day-to-day working knowledge of cable companies financial
statements and revenue sources.
The following items, for a three year period, will be required to be reviewed at the cable
—
company to conduct a complete a review of the City of Ithaca cable television franchise fee:
■ Complete records of the fee calculations, including worksheets used to determine the
amounts and sources of revenues.
■ Backup and source documents for the various categories of income.
■ Records allowing the tracking of individual revenue items to their inclusion in the fee
calculation.
■ Records allowing the tracking of revenues included or the fee calculations back to
source of receipt.
■ Reconciliations, if any,of revenue reported to the City of Ithaca to revenue reported
—
for financial payments.
■ Third party payor documents, such as Home Shopping Channel, showing amounts
paid to cable operator.
■ Payment calculations for the City and the City's access organization(s).
Other items may be required after performance of our initial inquiries. Rice, Williams
Associates may expand or contract the scope of our review based upon initial findings.
—
The audit will be conducted to determine the following:
■ Whether the franchise fee calculations used to pay the franchise fee are consistent
with the definitions and terms of the franchise.
■ Whether the Company has been up to date on service area changes from annexation.
(Note: City to provide test dates and locations for this analysis.)
■ Whether there have been any methodological errors in calculating payments to the
City and the City's access organization.
I - 31
A final report will be prepared for the City which provides detailed proforma, information
on Company revenues, reconciliation of audit finding and general ledgers, and other
pertinent information. A notice of default will be prepared, if required.
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•.• PROJECT 2 -MUNICIPAL OWNERSHIP STUDY
Task 1: Initial Consultation
We wish to assist Ithaca and the City Cable Commission officials in continuing their efforts
to be thoroughly informed about current broadband fiber optic telecommunications options
so that citizens and institutions can be offered the best telecommunications services and the
best cable television service in the coming decades. Therefore, Rice, Williams Associates
will conduct consultation sessions with the City of Ithaca to review the legal, financial,
technical and policy aspects of municipal ownership of broadband fiber optic
communications as they relate to the Ithaca community. Additionally, we will review the
state of the industry and changes in the regulatory environment as they relate to municipal
ownership and operations of telecommunications facilities.
During the consultation session, special attention will be given to informing local officials
about the practical implications of the Cable Television Consumer Protection and
Competition Act of 1992, the Telecommunications Act of 1996, and the corresponding
-- FCC rulemakings might affect Ithaca's future broadband fiber optic communications
activities. For example, the current Cable Act expressly acknowledges that a government
unit may own a cable system, but requires that editorial control regarding programming
be exercised through an entity separate from the ownership entity. It also provides that,
if a franchise is revoked for cause or if renewal is denied, a municipality may acquire
ownership of the cable system or effect a transfer of ownership of the system to another
party. Rice, Williams Associates is well informed on the practical implications of
telecommunications law and is working with several cities on studying municipal
ownership in the current changing regulatory and economic environment.
Rice, Williams Associates will also discuss current opportunities for using broadband fiber
.. optic communications systems for the integration of voice, video and data. This is an
exciting area of development and offers both near term and long range benefits to electric
utilities, and city governments and schools. Finally, Rice, Williams Associates will
-- discuss the technical, financial and practical aspects of using a fiber optic system for
communications among institutions in the community such as local and state government
offices, hospitals and others.
Dr. Williams is a nationally recognized authority on municipal ownership and has made
presentations at numerous conferences including at the New Jersey State League of
Municipalities, the American Public Power Association, the South Carolina Association
of Municipal Power Systems, and the Iowa Association of Municipal Electric Systems.
Ms. Rice, president of the firm, has been in the field since 1973 and has made
presentations on the 1984 Cable Act, the Cable Television Consumer Protection and
Competition Act of 1992, and related issues at several cable conferences, including
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•. conferences of the National League of Cities, the U.S. Conference of Mayors, the National
Association of Telecommunications Officers and Advisors, and State Municipal
Telecommunications Officers and Advisors, and State Municipal League conferences.
A comprehensive analysis will focus on the following recent legal and regulatory
developments:
■ Municipalities as telecommunications service customers and providers
■ Structural and organizational options for a municipally-owned system
■ FCC rules on rate regulation
■ FCC rules on home wiring
■ Direct Broadcast Satellite (DBS) as a competitive force
■ FCC rules on access to programming
■ Staffing and construction options
■ Financing possibilities
■ Case histories of municipal ownership success and failures
■ Business plans of telephone companies
■ Trends in cable system sales and acquisitions,valuation of systems,and implications
for franchising authorities.
■ Rolla Cable System, Inc., v. City of Rolla,No. 89-2101 C (2).
■ Consolidated Television Cable Service,Inc. v. City of Frankfurt,No. 88-1278
■ Paraimuld Cablevision. Inc. v. City of Paragould, Arkansas,No. 90-1820
■ Warner. Inc. v. City of Niceville,No. PCA85-4414-RV
Issues related to building a broadband fiber optic communications system and/or
_ overbuilding a current cable system operation will also be identified and discussed with local
officials. Items to be discussed may include channel capacity, local programming and
facilities,energy management and data transmission,institutional services, system financing
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provisions, and consumer service practices. The technical and financial considerations
associated with these items and state-of-the-art technology will be discussed in detail.
State-of-the-art technology will be addressed, including channel capacity, addressability,
energy management services, monitoring services, data applications, fiber optic terminal
equipment, and ring and star network designs. These are included because Rice, Williams
Associates feels strongly that technologies with increased capacity and new services should
be analyzed to determine how best to meet government, educational, business, and citizen
needs in the long term. Technical capacity and design will be especially important to ensure
that the system can satisfy future needs.
Task II: Consumer Market Survey
Rice, Williams Associates could design a market survey for the City of Ithaca to determine
resident interest in an alternative cable television system, and resident willingness to switch
to a proposed municipal system. This information will provide basic data for the financial
analysis, such as penetration rates.
The survey will be designed to assess current customer satisfaction so that the City may
assess the quality of existing service. The survey will also address the interest in, and
economic viability of, a competing cable system. This type of market survey is especially
important in an existing cable market to determine the elasticity of revenues. The survey will
enable the City of Ithaca officials to forecast potential demand for a second cable system.
Furthermore, residents can be asked about their opinions concerning potential the City of
Ithaca ownership of a competing system and satisfaction with a wide range of current cable
and telecommunications options. Rice, Williams Associates, based on the results, will
determine the extent to which demand parallels the findings of the market studies in other
similar situations.
A questionnaire will be designed by Rice, Williams Associates. The survey design will be
cross-sectional. This design is one in which a random sample of respondents is used to
describe a larger population. In this particular case, a random sample of City residents will
be used. To obtain a statistically valid representation of the views of local households, a
sample will be randomly selected using random start and systematic selection thereafter
based on all working telephone numbers serving the City. This method ensures that the
respondents are representative and geographically dispersed throughout the City of Ithaca.
A mail survey,while easier,will not yield statistically valid results without significant survey
cost increases.
The data from the telephone survey will be elicited, coded, and verified to insure valid
results. Computer data analysis will be used to calculate relevant frequency distributions,
corresponding statistics and cross tabulations of the data. A report on the findings of the
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.. consumer market survey will be prepared for the City of Ithaca. These findings will provide
the basis for subscriber and revenue projections.
Rice, Williams Associates has conducted demographic analyses and consumer market
surveys for clients involved in renewal, franchising and alternative ownership processes.
Some of the market surveys we completed for cities include those for: Albany, Georgia;
Atlanta, Georgia; Jackson, Tennessee; Charlotte, North Carolina; Wilmington, Delaware;
Rocky Mount,North Carolina; and Sarasota, Florida among many others.
Task III: Institutional Needs Ascertainment (If one is not performed as part of the
franchise renewal process)
A institutional needs assessment will consist of:
■ workshop and a survey of current and potential users of the Cities' governmental,
public, and educational access channels and facilities, and other existing and
proposed institutional services, including E-mail,voice mail, use of real-time video,
electronic document distribution, placing SCADA on a hardwire system, LAN
bridging, and using a Wide Area Network.
The results of the survey will be used to identify potential improvements that could enhance
the quality of service to Ithaca citizens and institutions. The identified improvements would
be reviewed in conjunction with the technical and financial analyses to assess their
feasibility, cost effectiveness and overall public benefits. Following is a description of the
institutional needs assessment.
Institutional Needs Assessment. Rice, Williams Associates will assist the Cities in
conducting a thorough assessment of municipal, educational, and community needs. The
information collected through this process will provide part of the basis for Cities decision
making on technical, and service parameters of a new telecommunications infrastructure.
Rice, Williams Associates can conduct a survey to assess the Community's future cable
communications needs for public, educational and governmental access programming and
the need for replacement equipment,new facilities,and access services. The survey will also
analyze interest in institutional telecommunications needs and detail current and future needs
of for a fiber optic institutional network. The results of the survey will be used to identify
potential modifications and improvements that could enhance the quality of service to Ithaca
citizens and institutions. The identified improvements and modifications will be reviewed
_ in conjunction with the technical and financial analyses to assess their feasibility, cost
effectiveness and overall public benefits.
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—
Rice, Williams Associates is firmly committed to the belief that local telecommunications
communications can provide:
■ A vehicle for community dialogue on local issues
■ More cost effective delivery of information and services by the Cities and public
.. institutions.
■ Improved entertainment and service options to the public.
The community needs assessment will aid in evaluating current provisions for public,
educational,and government access and in meeting future needs for public,educational and
government access. Rice, Williams Associates will work with the City in identifying local
government departments, schools, public service agencies, and other organizations to be
surveyed. Rice, Williams will work with the City to develop an interview format for
interviews with local officials and institutions and will assist in tailoring the format to
address the needs of specific types of organizations.
Rice, Williams Associates will design the ascertainment survey and will administer the
survey. A seminar can be held to inform organizations about the potential of a fiber optic
telecommunications system. We have conducted numerous seminars for our clients. Survey
questions will be designed to identify public buildings and institutions that would now or in
the future be able to utilize access and institutional channels, video equipment, and cable
.., drops. Items will be included to assess the adequacy of existing facilities and services, and
to identify ways in which the City can achieve cost savings in intra-governmental
communications, and delivery of information and public services. A review of institutional
applications will be conducted to determine whether the City's local institutions will benefit
from institutional channel capacity or an institutional network. Examples of institutional
applications include energy management, closed-circuit training program delivery to work
sites, security services,delivery of library information, interactive video, distance learning,
Internet connections, LAN connections, and data transmission. Specific items will be
included based on consultation with the City.
Once the data has been collected and verified, Rice, Williams Associates will conduct an
analysis of the results. A report and interpretive summary will be provided to the City,
including specific recommendations. The results will also be important to the City in
developing realistic and effective plans for future services and requirements.
Task IV: Preliminary Technical Analysis and Cost Assessment
Rice, Williams Associates will work with the City of Ithaca to develop a preliminary
engineering analysis which will complement the telecommunications needs of the
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—
.. community. This study will include a review of aerial and underground wiring requirements.
Capital cost estimates for initial capital expenditures and replacement capital expenditures
will be determined.
Rice, Williams Associates will review broadband fiber configurations for Ithaca. Rice,
Williams Associates has worked with fiber optic technology including the use of fiber in
completing construction of municipally-owned cable systems serving Morganton, North
Carolina and Belmont,Massachusetts. During the course of providing construction review,
coupled with our fiber experience in reviewing designs,we have gained practical experience
,. with this fast growing technology. We have reviewed a number of fiber optic systems
proposed by private communications firms on behalf of our client cities.
s
We believe that trunking portions of an institutional network system should be constructed
using fiber optics. Typically used to provide a high-quality, low-distortion path between
.. hub sites or major network nodes, fiber optics is the technology of choice due to a lower
active equipment requirement. This translates into fewer devices needed to convey signals
over a given distance,enhancing reliability.
w
Working with the City of Ithaca staff and the City Cable Commission, the most
advantageous and cost-effective design will be selected. The design will include the capacity
and configuration of the network. Following are types of equipment that will be included
in the overall cost estimates:
■ Tower and Antennas
■ LAN Interconnects
■ Fiber Optics
■ Central Computer
■ Optical Cable Boxes
■ Satellite Earth Station
■ Headend Equipment
■ Fiber Optic Plant
■ Feeder Cables(for service to residential homes)
■ Institutional Network
■ Subscriber and Institutional Drops
■ Institutional Terminals
■ Emergency Alert
■ Local Programming Equipment
■ Leased Telephone Line Replacement
The cost estimates for capital expenditures and construction will be based on the latest costs.
The cost estimates for constructing a new system in relation to providing entertainment
services and those for telemetry will then be utilized to develop proforma financial
statements. The implications of pole spacing for an overbuild will be analyzed. Special
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'— attention will be given to this area as it has potentially high cost implications. We will
discuss various options that are employed elsewhere with the City staff. This review would
provide an estimated cost. If the City decides to proceed, we may recommend a complete
walk out of the electric system. The overall capital costs of the system will be an important
element in determining the economic viability of an overbuild.
If the City of Ithaca desires, Rice,Williams Associates can also conduct an evaluation of the
present technical system to determine the feasibility and cost of a potential system buy out.
Rice, Williams Associates believes that a good technical design is the backbone of any
broadband fiber optic system and that it should reflect the current and anticipated needs of
Ithaca. Rice, Williams Associates conducts this type of technical analysis for most of its
clients.
Task V: Financial Analysis
Rice,Williams Associates will conduct a financial analysis of a broadband fiber optic system
owned and operated by the City of Ithaca. The financial analysis will include but not be
limited to an examination of:
■ For Cable Television Services and/or Fiber Optic Institutional Network
■ Basic Assumption
• subscriber penetration
.- • service rates
■ Revenue Sources
•• • basic revenues as a percent of total revenues
• pay revenues as a percent of total revenues
• nonsubscription revenues such as installation,advertising,converter deposits,
other special services
■ Operating Expenses
• personnel estimates
• numbers and costs
_ • marketing,promotion and billing expenses
• converter maintenance costs
• power and distribution system maintenance costs
■ Programming Expenses
• local programming expenses
_, • satellite signal fees
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�. • pay cable fees
• automated programming fees
■ Capital Expenditures
• plant expenditures
• subscriber terminal expenditures
• converter costs
■ Financing Expenses
• interest rate assumed on loan
• desired rate of return on equity investment
The system projections will be calculated for a fifteen year period. The following proforma
financial statements will be provided: capital expenditures statements; revenue statement;
income statement; and sources and uses of funds statement.
The financial analysis will also include an overall assessment indicating revenue and capital
expenditures, projected operating ratios, cash balances and cumulative cash, anticipated
system worth at the end of 15 years, and rate of return.
Rice, Williams Associates has conducted financial analyses for many cities and utility
departments including Tallahassee, Florida; Danvers, Massachusetts; Belmont,
Massachusetts; Morganton,North Carolina;Ponca City, Oklahoma; Easton, Maryland; and
Burlington, Vermont, and has developed a computer model for this analysis which allows
the financial projections to be recalculated with different interest rates with varying purchase
prices, different levels of subscriber penetration, or changes in the other factors as may be
requested. Additionally, in-house financial data files are also used as a basis for analysis.
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II. FIRM QUALIFICATIONS AND EXPERIENCE
II. FIRM QUALIFICATIONS AND EXPERIENCE
Rice,Williams Associates: Overview
Rice, Williams Associates is a telecommunications consulting firm that specializes in
helping city and county governments to achieve the best levels of service for their
constituents in the rapidly changing communications environment.
Background
We have been successfully working with government clients since 1981, when we began
assisting cities of all sizes with cable TV franchising. We were one of the first firms to work
exclusively for cities to draft cable TV ordinances,establish necessary public processes, set
up fair bidding procedures, evaluate technical system designs, and conduct successful
•. negotiations on behalf of the franchising authorities.
We are also proud of our track record in helping cities and counties to plan for, obtain, and
utilize institutional networks and public, government, and educational access channels.
Current Services
In recent years, the cable TV and telecommunications environment has undergone dramatic
change -- changing regulation, law, media ownership, alliances, technology, and services.
Rice, Williams Associates has been in the forefront of assisting city and county governments .
to understand the impact of these changes upon their jurisdictions.
We offer an extensive range of services:
■ Cable TV franchise renewal services
■ Cable TV and telecommunications satisfaction surveys for consumers and businesses
■ Design, utilization planning, and technical performance evaluation of fiber optic
institutional networks and other telecommunications systems
■ Local cable/telecommunications regulation services/support,including cable TV rate
regulation analysis
■ City/county telecommunications planning support.
■ Development of ordinances for Competitive Access Providers
■ Cable TV system transfer of ownership assistance
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■ Municipal cable TV ownership and overbuild feasibility studies.
Key Strengths of Our Firm
Rice, Williams Associates has a very high satisfaction rating from the clients it has served
in developing successful cable television franchises and negotiating refranchise agreements.
Our years of experience have taught us the most effective methods of working with
franchising authorities and how to support them in their telecommunications-related
endeavors.
There are several reasons that our clients are very satisfied in working with our firm:
■ Successful track record. We have been extremely successful in working with our
client cities to obtain renewal agreements that have state-of-the-art rebuilds,
substantial provisions for access facilities and support, expanded institutional
networks, and long-term regulatory provisions.
■ Direct involvement of experienced advisors. The principals of our firm,Jean Rice
.. and Don Williams, Ph.D., are directly involved in the management and fulfillment
of every client assignment. Each has over fifteen years experience in advising,
strategizing, and negotiating for city and county governments, bringing uniquely
informed perspectives to every assignment.
■ Ability to back up opinions and assertions with hard data. Due to its long history
in serving franchise authorities and reviewing cable TV service proposals, our firm
has an extensive database on cable system characteristics, subscriber rates,operating
expenses, capital expenditures, and financing alternatives in many different cities.
This resource enables us to compare local cable system characteristics with those of
similar-sized cities across the country and to support our positions when we are asked
to negotiate,testify, and provide documentation for our clients.
■ In-depth understanding of the issues facing local regulators and franchising
authorities. As a Washington, D.C.-based firm that has been active in public-sector
professional associations,we take pride in keeping up with the regulatory and legal
changes affecting local governments and helping our clients to interpret the impact
of these changes. We understand the issues from the public-sector perspective and
continually seek ways to improve our clients' abilities to manage change to their
constituents'best advantage.
■ Extensive interaction with clients. Because we communicate frequently and fully
with our clients,satisfaction with our performance is high. We are there when clients
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_ need us, working directly on site to support public officials at public hearings,
community forums, and negotiations.
_, ■ Our highly individualized service approach. Rice, Williams Associates provides
a high level of personal service to each of its clients. We recognize that many local
officials confront unique sets of circumstances; thus, we place an emphasis on
working with clients to define tasks that will achieve the best results in the most cost-
effective manner.
Qualifications and Experience
The following page contains a representative list of the cities, counties, and non-profit
organizations with whom we have worked. As shown, our clients range in size from major
urban areas to smaller communities throughout the U.S.
The following sections provide details about our qualifications to perform the tasks described
in Section 1 of this proposal. Specifically, we present our experience in performing:
■ Cable television franchise renewals
.. ■ Cable TV and telecommunications consumer satisfaction surveys and other
community ascertainments
■ Evaluations of technical network design
■ Local cable/telecommunications regulation support.
This section concludes with a list of references for the firm. Additional references are
available upon request.
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REPRESENTATIVE CLIENTS
... Arkansas Maine Raleigh
Hope Portland Rocky Mount
Tarboro
Alaska Maryland Wilson
Metlakatla Baltimore
Easton Ohio
California Montgomery County Belmont
Los Angeles Talbot County Cincinnati
Santa Monica Cleveland
Massachusetts Delaware
Connecticut Belmont Fairborn
Norwich Cambridge Oberlin
Department of Public Utility Danvers Springfield
Control, State of Connecticut Longmeadow Worthington
Wakefield
Delaware Oklahoma
Wilmington Michigan McAlester
Seaford Detroit Ponca City
Grand Haven
District of Columbia Grand Rapids Area Consortium Pennsylvania
Washington, D.C. Kalamazoo Altoona
Monroe Carlisle
Florida Portage Central Bucks Consortium
Clearwater Southfield Erie
Hillsborough County Traverse City Lower Merion Township
Longboat Key Pottsville
Manatee County Missouri Upper Merion Township
Panama City Beach Hannibal
Pinellas Park Springfield South Carolina
City of Sarasota Clinton
Sarasota County Nebraska Georgetown
Tallahassee Lincoln Laurens
Titusville Union
New Jersey
Georgia Bayonne Tennessee
Albany Morristown Jackson
Atlanta Piscataway
r. DeKalb County Texas
Savannah New York Sherman
Washington Ithaca Wichita Falls
Westchester Consortium
Hawaii Vermont
State Cable Office North Carolina Burlington
Cary
Iowa Charlotte Virginia
Iowa City Fayetteville Culpeper County
Harlan Fort Bragg Fredericksburg
Greensboro Front Royal
Kentucky Greenville Manasses
Owensboro Greenwood Consortium Suffolk
Prestonburg Kill Devil Hills
Laurinburg West Virginia
._ Louisiana Morganton Philippi
New Orleans Nags Head
Pope Air Force Base
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�- CABLE TELEVISION FRANCHISE RENEWALS: QUALIFICATIONS
Our long background in working with franchising authorities to obtain the best cable
television service for their constituents enables Rice, Williams Associates to structure the
franchise renewal process and to offer support effectively and efficiently.
We have guided cities through the cable TV franchising and franchise renewal process
successfully since 1981. Thus, our firm is well prepared to provide the City with a needs
assessment at each step of the process that we outlined in Section I of this proposal.
Informative briefings and strategic advice on relevant legal, economic, and regulatory
matters affecting the cable franchise renewal process. We are thoroughly familiar with
the implications of the national, state, and local issues that we will discuss with the City
throughout the duration of this assignment:
■ The range of relevant legal/regulatory developments, including House and Senate
competition legislation, court decisions, FCC rulemakings, and rate regulation
issues.
■ Implication of industry changes, such as telephone company entry into cable, recent
mergers and acquisitions among cable industry players, and technological
developments.
■ Local policy issues, such as the local regulatory structure, service extensions, and
franchise fees.
Rice, Williams Associates is well informed on the implications of the Cable Television
Consumer Protection and Competition Act of 1992, since we supported and advised the
U.S. Conference of Mayors and the League of Cities on the advantages and disadvantages
of the various proposed provisions of this legislation as it was being developed. We
worked closely with these associations to support continued regulatory authority for
franchising entities in the 1992 Act, and continue to advise these organizations on new
legislative changes being considered by the current Congress.
From our long track record in reviewing proposals offered by independent cable companies
and large MSOs, we thoroughly understand the range of services offered to cities
throughout the U.S. by the key industry players. We have seen first-hand the impact of
ownership consolidation throughout the industry, rate increases and rollbacks, and
introduction of advanced services and networks.
Structuring and supporting the franchise renewal process. We have and are currently
conducting renewal proceedings for numerous municipalities throughout the U.S.,
including Atlanta, Georgia; Owensboro, Kentucky; Baltimore, Maryland; Bayonne, New
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Jersey; McAlester, Oklahoma; Wichita Falls, Texas; Charlotte, North Carolina; Titusville,
Florida; Tallahassee, Florida; Wilmington, Delaware; Monroe, Michigan, and Fairborn,
Ohio. The listing below describes in more detail the services that we have performed for
different clients and the results achieved.
_ Franchise compliance, financial, technical, and service evaluations. Rice, Williams
Associates has developed an extensive database of service offerings and performance
records of cable operators throughout the U.S. -- a knowledge base that assists our clients
in developing realistic expectations on the type of service that their constituents should
expect in today's market.
Since Rice, Williams Associates has assessed the financial plans of many franchise renewal
applicants, we are very experienced in evaluating a variety of financial plans, proformas,
MSO ownership structures, and smaller, independent cable company ownership structures.
Experience with public hearings and negotiations. We have participated in many types
of public hearings and are well prepared to advise on the most effective format, to develop
agendas, and to answer questions in layman's terms.
We have extensive experience in assisting with final negotiations with cable companies,
and have been extremely successful in working with our client cities to obtain renewal
agreements that have state-of-the-art rebuilds, substantial provisions for access, fiber and
coaxial institutional networks, and long-term regulatory authority.
Commissioners that regulate cable television for States of New York and New Jersey have
called franchises developed by Rice, Williams Associates the best renewal packages in
those states, providing an example to other cities. For example, our firm successfully
negotiated a settlement for Bayonne, New Jersey after the City preliminarily denied the
cable company. Today, Bayonne has a franchise for a rebuild which will be two-way
active to the home, excellent access equipment and services, equipment and services
clauses, and strong consumer protection provisions.
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WW
Representative Cable TV Franchise Renewal Clients
Among the many cities we have assisted in cable TV renewals/refranchising are:
Delaware Maine North Carolina
Wilmington Portland Cary
Charlotte
Florida Michigan Greensboro
Tallahassee Kalamazoo Greenville
Titusville Monroe Kinston
Laurinburg
Georgia Nebraska Rocky Mount
Atlanta Lincoln
Washington Ohio
New Jersey Fairborn
Hawaii Bayonne Worthington
State of Hawaii Morristown
Pennsylvania
Kentucky New York Altoona
Owensboro Ithaca Erie
Westchester Consortium
Examples of Franchise Renewal Assignments/Results
The following examples of the work we have performed for several of these clients
illustrate the ways in which the skills of Rice, Williams Associates are applied to the
specific circumstances of each individual project.
Client. City of Atlanta, Georgia
Project.
To provide general assistance in the renewal process
Tasks Performed:
Implementation of a consumer market survey
Assistance with and community ascertainment
Financial analysis
Technical review
Development of updated ordinance
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Assistance in negotiating a new franchise agreement
Analysis and preparation of stipulations for transfer
Process: Informal renewal process
Results Achieved for City:
State-of-the-art cable system
Extensive fiber optic institutional network
Substantive PEG commitment
Quality regulatory framework
Client: City of Greensboro, North Carolina
Project:
To assist in the cable renewal/refranchising process.
Tasks Performed:
Analysis of operator compliance
Consumer and community needs ascertainment
Review of financial standing
Technical analysis of the existing system
Ordinance and franchise development
Assistance in negotiating
Process: Formal renewal process
Results Achieved for City:
Completely rebuilt cable system
Public, educational, and government access support
Service to all residential areas
Upgrade of customer service
r..
Construction of an extensive institutional network
Client: State of Hawaii, including Islands of Oahu, Hawaii, Maui, Kauai,
Molokai, and Lanai
Project:
To assist in the cable renewal/refranchising process
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.. Tasks Performed:
Consumer surveys
Institutional ascertainment for local programming
Preparation of production equipment packages.
Results Achieved for State:
Franchise areas received public, educational, and government access support
Statewide programming interconnect plan implemented
Client. City of Tallahassee, Florida
Project:
—
To assist throughout the cable refranchising/renewal process
Tasks Performed:
Implementation of a consumer market survey
Assistance with and community ascertainment
Financial analysis
,.. Technical review
Analysis of the system rebuild proposal submitted by the cable company
Draft of questions for the cable company
Assistance in negotiating a new franchise agreement
Analysis and preparation of stipulations for transfer
Process: Renewal process
Results Achieved for City:
Rebuild of cable system
Fiber optic institutional network
PEG access funding
Clear regulatory authority
Line extension policy
-- Client. City of Bayonne, New Jersey
Project.
To assist in the administrative hearing process on denial of renewal
To provide expert testimony
To negotiate a settlement
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—
Tasks Per
Analysis of operator strategies
_ Analysis of local needs
Development of franchise and settlement language
Negotiate settlement terms
Process: Formal administrative hearing on denial.
_. Results Achieved for City:
Rebuilt cable system
Two-way activation to the home
Educational and public access studios
Government access equipment
Institutional network for government and education
Service to all households
Client. City of Ithaca, New York
Project:
To provide refranchising assistance
To prepare FCC waiver for rate regulation
Tasks Per
-- Implementation of community needs assessment and consumer surveys
Evaluation of the past performance of the cable system
Alternative ownership financial analyses
Development of a Request for Renewal Proposal
Evaluation of company proposal
City cable TV ordinance development
Final franchise agreement assistance
Technical tests to determine eligibility to regulate rates
Preparation of an FCC waiver
Process: Formal renewal process
Results Achieved for City:
Rebuilt cable system
Institutional network for government and education sectors
Public access staff
New access studio
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Client: City of Altoona, Pennsylvania
Project.
To assist throughout the cable refranchising process
To prepare a FCC waiver on the applicability of the competitive rulemaking
Tasks Performed:
_ Analysis of operator compliance
Consumer and community needs ascertainment
Review of financial standing
Technical analysis of the existing system
Ordinance and franchise development
Assistance in negotiating
Technical test to determine if the City would qualify to seek waiver to regulate cable
rates from the FCC
Process: Formal renewal process.
Results Achieved for City:
Rebuilt cable system
Senior citizen discount delivery
_ Access support
Upgrade of customer service
—
e-
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—
•.- CONSUMER SATISFACTION SURVEYS AND COMMUNITY
ASCERTAINMENTS: QUALIFICATIONS
Rice, Williams Associates has conducted scores of community needs assessments and
consumer market surveys on behalf of municipalities. These assessments and surveys
provide a solid basis for designing effective cable/telecommunications plans and for
ensuring that operators meet consumer needs.
Rice, Williams Associates staff have the statistical training, practical survey experience,
and in-house computer capability to ensure reliability of results.
Consumer Satisfaction Surveys
Rice, Williams Associates is experienced in conducting consumer surveys to provide
franchise authorities with insights on local satisfaction with cable TV service. Although
we have often performed these surveys as part of franchise renewal processes, we are also
called upon to undertake these during the course of a ten-year or fifteen-year franchise to
determine consumer satisfaction levels with ongoing cable TV service.
We design our satisfaction surveys to measure consumer attitudes on:
■ Installation
■ Sales
■ Repair work
■ Response time
■ Cable TV picture quality
■ Billing
■ Programming
In franchise renewal assignments, we also test for consumer interest in and willingness to
pay for expanded services, increased numbers of channels, and other special offerings.
We take care that all surveys provide a valid representation of all residents, and use
generally accepted statistical sampling and analysis methods to produce the highest quality
report. Due to our database on consumer attitudes in a wide variety of cities, we are able
to provide valuable insights regarding the degree to which local attitudes support or deviate
from the norm.
Community Needs Assessments
Rice, Williams Associates is also very experienced in conducting needs assessment to
determine the levels of utilization of proposed or existing access programming channels
and institutional networks.
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We are experienced in conducting seminars, where requested, to educate and inform
noncommercial organizations and individuals on potential uses, financing alternatives, and
management of these different types of community communications systems.
We are experienced in conducting surveys of potential government, educational, and public
access users to determine how these groups intend to begin or expand use of the cable
channels allocated for these purposes. Rice, Williams Associates is experienced in
analyzing these survey results and interpreting the levels of equipment, facilitate, channel
capacity, and funding that will be required to support existing or future demand for access
channel use.
We also have an extensive background in planning utilization of institutional networks.
We use a proven methodology to gather information from users and analyze how use of
an institutional network could either reduce costs over current leased-line
telecommunications service or provide new communications capabilities.
Representative Consumer Survey and Needs Ascertainment Clients
Rice, Williams Associates has conducted community needs assessments and consumer
market surveys in many cities, including:
Delaware Massachusetts North Carolina
-- Wilmington Cambridge Charlotte
Danvers Greensboro
Florida Wakefield Greenville
Clearwater Kinston
Tallahassee Maryland Raleigh
Titusville Baltimore Rocky Mount
Georgia Michigan Ohio
Albany Monroe Springfield
Atlanta
Washington Nebraska Oklahoma
r„ Lincoln Ponca City
Hawaii
State of Hawaii New York Pennsylvania
�. Ithaca Altoona
Kentucky Upper Merion Township
Owensboro
Tennessee
Jackson
II - 13
-
TELECOMMUNICATIONS NETWORK DESIGN: QUALIFICATIONS
Since our firm began, Rice, Williams Associates has been active in encouraging clients to
examine ways that local telecommunications systems might enhance the delivery of local
programming, community information, and innovative services to consumers and
businesses.
We have conducted a wide range of consulting assignments that assist local governments,
educational institutions, and non-profit organizations in the design and implementation of
institutional networks to support video, data, and voice applications -- experience that
demonstrates our qualification to conduct all technical analysis required for the City's cable
TV franchise renewal.
•.. Rice, Williams Associates has assisted many localities that want to:
■ Expand/improve utilization of an existing institutional network
■ Develop a network plan that can be incorporated as part of a cable system's rebuild
■ Determine a way to activate unconnected, existing facilities via cable, microwave,
or broadcast links.
We are highly qualified in the following areas:
■ Institutional system design. We have had significant experience designing I-nets
that incorporate cable TV and other communications technologies, such as ITFS,
low-power broadcast, and microwave. Typically we work with our client to agree
.. upon a broad conceptual design for the system (e.g. connectivity locations,
functionality) and then commence the detailed technical design (e.g. performance,
interface standards).
■ Implementing, monitoring, and evaluating networks. We have worked with
many clients to develop a full-scale implementation plans, including defining day-
to-day operation/maintenance responsibilities for the network.
_ ■ Management/utilization plans. We have performed many consulting assignments
to improve the management and utilization of access channels and institutional
networks.
—
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.. REPRESENTATIVE TELECOMMUNICATIONS SYSTEM DESIGN CLIENTS
Rice, Williams Associates has performed technical design work for a variety of clients,
•. including the following:
Client. City of Baltimore, Maryland
Project:
To analyze the telecommunications needs of the City
'— To develop plans for a fiber optic network
To assist in negotiations with the cable operator.
Tasks Performed.-
Assessment
erformed.Assessment of the video and data needs of the schools and major City departments
Analysis of the overall telecommunications infrastructure in the City
Analysis of the potential routing and technology for a fiber optic network
Negotiation with the cable operator to provide the institutional network
Client. Amherst College, Hampshire College, Mount Holyoke College, Smith
College, and the University of Massachusetts.
Project.
To conduct a feasibility study for a telecommunications system to interconnect five area
colleges
Tasks Performed.
Needs ascertainment including the academic and administrative divisions of each college
Analysis of costs for each division of each college
Recommendation on system technology and design
Results Achieved for Consortium:
Recommended system was designed for integration with the local area networks of these
colleges
11 - 15
r
Client: City of Longmeadow, Massachusetts
Project:
To conduct a technical evaluation of the local cable institutional network
Tasks Performed:
Implementation of technical tests and monitoring of the system
Evaluation of existing user equipment
Assessment of compliance with the local cable franchise
Recommendations on the system and equipment
Client: Southern Pennsylvania Public Broadcasting Council, Harrisburg,
Pennsylvania
Project:
Ascertainment and design of a multi-technology institutional network to serve
one-quarter of Pennsylvania, including five major population centers including
Harrisburg and Hershey
r
Tasks:
Ascertainment of telecommunication needs of local governments, educational
�- institutions, hospitals, and social service agencies
Network design
Results Achieved:
Network design in an interactive hub configuration
Incorporated cable TV, ITFS, microwave, and low-power television facilities
r
r
Client: Lakeshore Technical Institute, Cleveland, Wisconsin
Project:
To analyze the telecommunication needs
To design a system to interconnect five towns near Green Bay
Tasks Performed:
Coordination of educational seminars
Design and implementation of the ascertainment process
Design of the technical configuration
11 - 16
r
Results Achieved.-
Operational
chieved.Operational system utilizes cable television, two-way microwave for teleconferencing, and
ITFS
LOCAL CABLE/TELECOMMUNICATIONS REGULATORY SUPPORT:
QUALIFICATIONS
_ Many of our clients rely upon Rice, Williams Associates for ongoing support for their
local cable TV and telecommunications regulation activities -- further demonstration of our
qualification to provide the City with the most effective insights on drafting franchise
ordinances and compliance provisions to support your long-term goals.
We understand the types of regulatory and legal provisions that are necessary to:
■ Providing assurance that franchise fees are being remitted to franchising authorities
properly
■ Evaluating ongoing cable operator performance
■ Ensuring compliance with current rate regulation guidelines.
_ Rice, Williams Associates undertakes many types of special and ongoing assignments for
its clients, including:
■ Franchise fee audits. We are experienced in reviewing cable operator franchise
fee reports and financial statements for our clients. Our experience across the
country in conducting detailed financial reviews of cable operations provides us
with a working knowledge of revenue sources and typical financial ratios. In one
instance, we were able to achieve a $1 million payment to our client in back
franchise fees.
■ Five-year performance analyses. To ensure compliance with the franchise and
cable ordinance, we are experienced in assisting clients in carrying out periodic
compliance reviews during the course of the ten- or fifteen-year cable TV
franchise. These independent assessments demonstrate the degree to which
customer service requirements are being met by operators.
■ Rate increase analysis. We have assisted many franchising authorities in handling
the rate increases requested by local cable operators. We have reviewed and
analyzed FCC Forms 393, 1200, 1205, 1210, 1215, and 1220 for our clients. We
have assisted clients to request additional information where warranted, and have
provided input to final decision making on these requests.
11 - 17
Representative Rate Increase Analysis Clients
Florida Kentucky Ohio
Clearwater Owensboro Fairborn
Pinellas County
North Carolina Pennsylvania
Iowa Cary Doylestown
Iowa City Greensboro Northampton Township
Rocky Mount
REFERENCES
Please feel free to call some of our former clients for reference on the quality of our work
in cable television franchise renewals and other assignments.
Ms. Claudette Harrell Ms. Doris Boris
City Administrator Cable Communications Administrator
City of Tallahassee City of Charlotte
City Hall, 300 South Adams St. 600 East Fourth Street
Tallahassee, FL 32301-1731 Charlotte, NC 28202-2855
(904) 599-8292 (704) 336-3064
Ms. Jeanne Treff The Honorable Jesse L. Warren
City of Livonia City Attorney
Department of Community Resource City of Greensboro
33000 Civic Center Drive P.O. Box 3136
Livonia, MI 48154 Greensboro, NC 27402-3136
(313) 421-2000 (919) 373-2320
Mr. Drew Shaffer Mr. Thomas Peeler
Broadband Telecommunications Manager, COMPAS:
Specialist City of Morganton Public Antenna
City of Iowa City System
410 East Washington Street 203 West Meeting Street
Iowa City, IA 52240-1826 Morganton, NC 28680-1029
(319) 356-5046 (704) 438-5397
11 - 18
III. PERSONNEL
Rice, Williams Associates will assign the following project team to assist the City of Ithaca,
:. New York in the tasks specified in Section I Scope of Services:
■ Jean Rice, Partner
■ Don Williams, Partner
■ Lee Afflerbach, Senior Engineer
■ Kenneth Jenkins, Engineer
■ John Weesner, Rate Analyst
■ Paul Langley, Certified Public Accountant
■ N. Frank Wiggins, Attorney
■ Robert A. Beizer, Attorney
As demonstrated in the resumes that follow,these individuals provide a unique combination
of experience in cable including,renewal,regulation,compliance analysis, survey research,
transfer evaluation,technical review, financial analysis, and legal proceedings.
JEAN RICE
PARTNER
Jean Rice, Partner, founded this Washington, D.C. based telecommunications consulting
firm. The firm has assisted over 200 cities since its founding in 1981. Ms. Rice has been
nationally recognized for her work in the cable communications field, providing advice on
legal,regulatory, and community service aspects of this industry since 1972.
She has served as the principal consultant for many projects undertaken by Rice, Williams
Associates in cable franchising and renewals, telecommunications system design and
utilization planning, performance evaluation, rate increase analysis, municipal ownership,
overbuild feasibility studies, and access channel utilization.
Ms. Rice has often played a key role in negotiating the final cable refranchising agreement,
and emphasizes a close working relationship with her clients throughout the refranchising
process. Among the cities with which Ms.Rice has consulted are Atlanta,Georgia;Altoona,
Pennsylvania; Baltimore, Maryland; Bayonne, New Jersey; Charlotte, North Carolina;
Department of Public Utility Control, State of Connecticut; Ithaca,New York; Morristown,
New Jersey; Tallahassee, Florida; Titusville, Florida; Fairborn, Ohio; Worthington, Ohio;
Greensboro, North Carolina; Owensboro, Kentucky; Iowa City, Iowa; and the State of
Hawaii, Office of Cable Television.
A recognized spokesperson within the industry,Ms. Rice has addressed conferences hosted
by the National League of Cities, the International City Management Association, the
American Public Power Association, the National Association of Telecommunications
Officers and Advisors,the American Library Association,the National Federation of Local
Cable Programmers, and state municipal leagues. She has made numerous presentations on
.. the impacts of the 1984, 1992, and 1996 cable and telecommunications legislation at these
conferences.
._ Ms. Rice has published many articles on the subject of municipalities and cable television,
and was the editor of Cable Television Refranchising and Renewal, published by
Communications Press.
Ms. Rice has a long track record in assisting governments and non-profit organizations in
telecommunications matters. Prior to founding Rice, Williams Associates, Ms. Rice served
as Telecommunications Management Specialist for the National Telecommunications and
Information Administration of the U.S. Department of Commerce. In this position, she
assisted states, cities, educational institutions, and public broadcasting stations in the
planning, development, and implementation of telecommunications systems.
III - 2
Ms. Rice also served as Senior Municipal Consultant with the Division of Municipal
Assistance and Policy Development at the New York State Commission on Cable Television.
In this capacity,she worked with municipalities during franchise and renewal processes,rate
hearings, and performance reviews.
Ms. Rice received her M.A. in Communications from the University of Wisconsin at
Madison. She received the Phi Beta Merit Award and the H.V. Kaltenborn Fellowship in
Communications. She is also the recipient of the George Stoney Award in Humanistic
Communications from the National Federation of Local Cable Programmers.
—
111 - 3
DON WILLIAMS
PARTNER
Don Williams, Ph.D., Partner,has been the firm's principal consultant to clients in the areas
of cable television franchise renewals, municipal ownership of cable, overbuild studies,
institutional networks,and ongoing regulatory assistance. He is responsible for development
of Rice, Williams Associate's extensive database, which enables comparative analysis of
cable system performance among similarly-sized operations in many cities.
Dr. Williams is responsible for design and coordination of the consumer market surveys,
community needs ascertainments, telecommunications plans, and financial analysis
undertaken by Rice, Williams Associates. Dr. Williams' research for the firm has also
included completion of a comprehensive study on municipal and cooperative cable system
ownership for the Benton Foundation and a study on post-divestiture telecommunications
taxation for the City of New Orleans.
Dr.Williams has designed and managed surveys to measure consumer satisfaction with cable
TV services for many of our clients,including Atlanta, Georgia; Charlotte,North Carolina;
Clearwater, Florida; the State of Hawaii; Ithaca, New York; Iowa City, Iowa; Wellesley,
Massachusetts; Raleigh,North Carolina; Sarasota,Florida; and Wilmington,Delaware. He
has also designed and conducted market and financial studies for commercial, government,
and other institutional network users in cities such as Greensboro,North Carolina; Albany,
Georgia;Lincoln Nebraska;Tallahassee,Florida;Jackson,Tennessee;and Washington,D.C.
Dr. Williams has conducted municipal ownership feasibility studies for Tallahassee Florida,
Ponca City,Oklahoma;Jackson,Tennessee;Belmont,Massachusetts; Springfield,Missouri;
Traverse City, Michigan; Phillipe, West Virginia; and Morganton,North Carolina; among
others.
He is a nationally recognized expert on cable and has made presentations at numerous
conferences including the New Jersey State League of Municipalities, the American Public
Power Association, the Florida Innovations Group, the South Carolina Association of
Municipal and County Attorneys, the South Carolina Associations of Municipal Power
Systems,the Iowa Association of Public Power,ICMA, and North Carolina Electric Cities.
Dr. Williams holds a Ph.D. in Political Economy from the University of Massachusetts at
Amherst and an M.A. degree with honors from the University of Wisconsin at Madison.
111 - 4
r, LEE AFFLERBACH
SENIOR ENGINEER
Mr. Afflerbach, an Associate of Rice, Williams Associates, is a communications system
engineer with 25 years professional experience in the design of cable, broadcast, and land
-- mobile radio systems. He has designed and evaluated cable television networks and
conducted feasibility studies for many of our clients.
On client assignments for Rice, Williams Associates, Mr. Afflerbach develops technical
standards, carries out the cable system tests required, and performs the technical analysis
required for franchise renewals and municipal ownership studies. He has worked for many
of our clients, including Altoona,Pennsylvania;Ithaca,New York; Los Angeles, California;
Charlotte,North Carolina; and Tallahassee, Florida.
Prior to his work for Rice, Williams Associates, Mr. Afflerbach served on the staff of the
MITRE Corporation,where he was responsible for evaluating the broadband system design.
At MITRE, he worked on establishing procedures for cable television franchising and the
interactive TICCIT two-way demonstration in Reston,Virginia.
Mr. Afflerbach is very familiar with implementation of public-sector applications on many
types of telecommunications networks. Under funding provided by the Law Enforcement
Assistance Administration (LEAA), Mr. Afflerbach performed and managed
communications design studies for federal, state, and local law enforcement agencies
including the Federal Bureau of Investigation(FBI), the Drug Enforcement Administration
(DEA), the New York State Police, and the Georgia State Police. His role on these
assignments included performing user requirements analysis, system design, and
specification preparation for land-mobile radio, computer-assisted dispatching, and 911
emergency telephone systems.
He also served as an on-site technical advisor to the West German Federal Aviation
Administration in Frankfurt, West Germany for five years in support of a major engineering
project. Mr. Afflerbach participated in the feasibility studies, requirements analysis, and
specification program phases of the ZKSD program, which developed a new high-speed
flight data processing system for the Federal Republic.
Mr.Afflerbach has professional affiliations with many telecommunications and engineering
organizations, including the Institute of Electrical and Electronic Engineers(IEEE); IEEE--
Broadcast Society, IEEE -- Computer Society;National Society of Professional Engineers
(NSPE); Maryland Society of Professional Engineers (MSPE); Licensed Professional
Engineer - Maryland and District of Columbia; and National Association of
Telecommunications Officers and Advisors(NATOA).
111 - 5
KENNETH E. JENKINS
ENGINEER
Mr. Jenkins,an Associate of Rice, Williams Associates, has over 14 years of technical and
engineering experience with cable television systems and local area network (LAN)
broadband communications. His experience includes component- and system-level
specification development, system design, construction, quality control, and other
operational functions.
In his work for Rice,Williams Associates,Mr. Jenkins conducts technical field surveys and
audits of cable television networks and evaluates the need for upgrades and rebuilds of
existing cable systems. He draws upon his extensive computer-modeling experience to
evaluate system performance and to perform feasibility studies on a wide range of
telecommunications systems, including fiber optic networks.
Mr. Jenkins has extensive experience in recommending system components. His past work
includes developing networks and products to provide telemetry and control functions and
video services for traffic-flow monitoring and control systems in Rochester,New York, and
at various airports throughout the United States.
Mr. Jenkins has been involved with and served on IEEE broadband network standards-
making committees. In addition,he has professional affiliations with the Society of Cable
Television Engineers and with the National Cable Television Association, serving on the
Engineering Committee and various subcommittees.
Mr. Jenkins received his civil engineering degree from Pennsylvania State University, and
he has authored papers and conducted seminars on the key aspects of broadband networks,
.. system design, and performance criteria.
III - 6
—
JOHN WEESNER
RATE ANALYST
Mr. Weesner,an associate of Rice,Williams Associates,has a broad range of experience and
capabilities in the areas of utility facility design, operations and rate and tariff regulation.
He has conducted rate analysis for industrial companies,municipal, state and federal entities
and independent power developers. Projects included load forecasting, billing analysis,
contract negotiations, alternate energy project feasibility analysis, site selection and
development, rate and tariff design/analysis, expert witness testimony and utility facility
inspection and valuation.
Previously,he was executive engineer with national consulting engineering firms (ENR top
100) serving municipal and cooperative utilities and industrial clients. He managed projects
involving retail and wholesale utility ratemaking and policy development; conducted
negotiations with senior management of private utility suppliers regarding costs of service,
rate/tariff design, terms and conditions and other tariff matters; prepared reports for clients
seeking compliance with federal and state laws including activities required by PURPA,
PIFUA,and the FLA Energy Efficiency and Conservation Act; and participated/testified in
proceedings before the FERC,the DOE and state public service commissions and municipal
authorities.
Mr. Weesner also served as a senior utility analyst for Washington, DC-based public utility
consulting firm. Client work involved analysis and contestation of utility rate changes at the
state and federal level;preparation of testimony for regulatory proceedings; design of retail
_ rates, preparation of short and long range load and energy forecasts, operating system
evaluations and power supply procurement studies.
For the East Florida Municipal Power User Group, he provided cost of service and rate
design analyses and negotiated with wholesale electric power supplier as to rate level and
contract terms and conditions in proceedings conducted before the Federal Energy
Regulatory Commission. Millions of dollars in power costs were saved as a result of these
activities in FERC Dockets ER78-19,ER81-588,ER82-793 (re:Florida Power&Light Co.).
He has worked with numerous cities, including the following projects. In the City of
Bushnell,he performed Triennial Electric and Water System Survey in accordance with the
applicable covenants of the City's Bond Resolution and provided a cost of service study and
electric rate design report. For the City of Starke, he redesigned rates as part of an interim
rate study to meet new rate design criteria mandated by the Florida Public Service
Commission.
111 - 7
For the City of New Smyrna Beach - Utilities Commission, Mr. Weesner assisted the
Commission with compliance with the Power Plant and Industrial Fuel Use Act of 1978 in
the following areas:
■ Prepared a comprehensive report detailing the requirements of the Act as it applied
to the Commission.
■ Developed and prepared for filing with the DOE the Conservation Plan required by
the Act.
Developed and prepared for filing with the DOE the exemption requests provided by
the Act.
For each municipal electric system for the Cities of High Point, Wilson, Rocky Mount and
the Greenville Utilities Commission, over a two-year period, Mr. Weesner provided the
following assistance in these areas related to Title I and II of the Public Utility Regulatory
Policies Act of 1978:
■ Developed "Staff Position" for each of the ratemaking and rate administration
standards and served as the expert witness in evidentiary hearings conducted by each
system.
■ Provided an analysis of the "lifeline rate" standard and rendered an opinion with
.. respect to whether or not each system's rate structure was in conformance.
■ Prepared comprehensive report that detailed the cost of service reporting
requirements(accounting costs, marginal costs and load research data)of the Act.
■ Provided suggestions as to individual/joint load research programs and conforming
modifications to accounting procedures.
■ Prepared initial ERA Form 166 report on progress of activities required by the Act.
■ Prepared exemption requests for Section 133 cost of service filing requirements.
For ElectriCities, he provided cost of service and rate design analyses and negotiated with
wholesale electric power supplier for rate level and contract terms and conditions in
._ proceedings before the Federal Energy Regulatory Commission. Millions of dollars of
power costs were saved by these activities in Dockets ER81-550 and ER83-765 (re: Carolina
P&L Co.); Dockets ER81-388,ER82423 and ER83430(re: Virginia Electric Power Co.).
He also provided for ElectriCities an analysis of federal requirements regarding the
relationships between the member municipal systems and small power producers and
111 - 8
_ cogenerators and designed form letter for related responses to regulatory agencies. Also for
ElectriCities, Mr. Weesner prepared testimony for filing before the North Carolina Utilities
Commission in Docket E-100, Sub 41 concerning the rates to be paid by electric utilities for
.. purchases from small power producers and cogenerators.
Mr. Weesner has a Bachelor of Science from the University of Virginia and a Master of
Engineering Administration(Management/Finance)from George Washington University.
Following is a list of Mr. Weesner's federal rate regulatory experience.
FEDERAL ENERGY REGULATORY COMMISSION:
Expert Testimony: Docket ER 77-347: Wisconsin P&L Co.
(Rate& Tariff Docket ER 78-583: Mississippi P&L Co.
Issues) Docket ER 78-584: Mississippi P&L co.
Docket ER 84-355: Virginia E&P Co.
Expert Testimony: Docket RM 87-012: Generic re: cogeneration and small
power facilities
Protests and Docket ER 78-19 : Florida P&L Co.
Interventions: Docket ER 81-588: Florida P&L Co.
Docket ER 82-793: Florida P&L Co.
Docket ER 82-701: Florida Power Corp.
Docket ER 81-550: Duke Power Co.
Docket ER 82-732: Duke Power Co.
Docket ER 82-743: Carolina P&L Co.
Docket ER 83-765: Carolina P&L Co.
—' Docket ER 81-388: Virginia E&P Co.
Docket ER 82-423: Virginia E&P Co.
Docket ER 83-430: Virginia E&P Co.
Docket ER 90-540: Virginia E&P Co.
111 - 9
_ PAUL D. LANGLEY
CERTIFIED PUBLIC ACCOUNTANT
Education:
B.S. in Business Administration, George Mason University 1979
J.D. George Mason University School of Law 1994
Licenses:
_ C.P.A. Commonwealth of Virginia 1981
Virginia Bar Association 1994
_ Mr. Langley entered the field of Public Accounting in 1979, in the Northern Virginia area.
Mr. Langley performs reviews of Cable Television franchise fees for Rice, Williams
Associates and has performed numerous reviews for a variety of MSO's. Other major areas
of concentration include taxation and business planning. Major clients included real estate
developers, publishers, professional corporation, and government contractors.
Representation before the Internal Revenue Service led to development of many forensic
accounting techniques.
III - 10
N. FRANK WIGGINS
ATTORNEY
Frank Wiggins concentrates in litigation and administrative law. He practices primarily in
the Federal courts and before the Federal Communications Commission, the Federal Trade
.. Commission, and the Postal Rate Commission as well as the U.S. Postal Service.
Mr. Wiggins' FCC-related practice spans virtually all elements of the Commission's
jurisdiction. He has done broadcast-related work, both transactional and regulatory,
regulatory, operations, and transactional work in the cable area for cable systems, cable
networks,and network programmers,telecommunications litigation,both administrative and
in courts and both litigation and transactional work involving satellite communications.
Mr. Wiggins received his B.S. from Iowa State University in 1969, and earned his J.D.,
magna cum laude, from University of Michigan in 1972, where he was a member of Order
of the Coif and served as Associate Editor for the MICHIGAN LAW REVIEW.
III - 11
_ ROBERT A. BEIZER
ATTORNEY
Robert A. Beizer has practiced in communications law, representing broadcasters, cable
operators,and common carriers before the Federal Communications Commission, for over
.. 25 years. Long active in bar association activities, Mr. Beizer served as President of the
2000-member Federal Communications Bar Association in 1992-3, and remains a frequent
lecturer before bar and industry groups.
In 1964-65, Mr. Beizer clerked for Judge Robert P. Anderson, United States Court of
Appeals for the Second Circuit. From 1968-84,he taught a communications law seminar at
the University of Virginia Law School. In 1994, he was appointed the first Distinguished
Practitioner in Residence at the Institute for Communications Law Studies of Columbus
School of Law, The Catholic University of America.
Mr. Beizer received his B.A., magna cum laude, from Harvard University in 1961, and
earned his LL.B. from Yale Law School in 1964.
111 - 12
IV. FEES
Rice, Williams Associates offers a flexible fee schedule to enable the City to select the scale
_ and scope of service that the City feels is most appropriate. All Rice, Williams Associates
fees are based on our costs and are levied on a service-by-service basis. Our hourly rates are
as follows:
■ $130.00 per hour for Consultants.
Following are the fees for the tasks described in this proposal:
Project 1 -Cable Television Franchise Renewal
Task I: Initial Consultation $1,560
Task II: Community Needs Assessment $7,500-10,500*
and Consumer Market Survey $11,500
Task III: Technical Evaluation of the Existing Cable System $9,500-13,000*
_ (Per headend/per system)
Technical Evaluation of Existing I-Net $6,500
Task IV: Review of Cable Operator Compliance with the Cable TV
Ordinance/Franchise $3,200-6,200*
Task V: Updating Relevant Ordinances $5,200
Task VI: Preparation of a Request for Proposal $3,850
Task VII: Evaluation of Renewal Proposal $5,500
Task VIII: Drafting Franchise Agreement $4,600
Task IX: Assistance with Public Hearings $1,560
(Per hearing)
Project 2 -Municipal Ownership Studv
Task I: Initial Consultation $1,560
Task II: Consumer Market Survey (on municipal ownership) $11,500
Task III: Institutional Needs Assessment (Not needed if done for the
cable renewal process) $5,500-10,500*
Task IV: Preliminary Technical Analysis and Cost Assessment $15,000
Task V: Financial Analysis $12,500
Travel and Expenses At Cost
*Dependent upon scope and work already accomplished by the City and Cable
Commission..
Note: Costs for services listed under 10ther Services"will be provided upon request.
IV - 1