HomeMy WebLinkAbout02 RENEWAL COX COMM 08-16-99 NO. 2
AGE DA 8-16-99
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTON, CITY MANAGER
PUBLIC WORKS DEPARTMENT
PUBLIC HEARING TO CONSIDER THE RENEWAL OF A CABLE TELEVISION
FRANCHISE AGREEMENT WITH COX COMMUNICATIONS, INC.
SUMMARY:
In accordance with the procedures established by the adoption of City Council Resolution No. 99-49, the
City Council will conduct a public hearing to consider the renewal of the CATV franchise for Cox
Communications, Inc. The purpose of the hearing is to identify the City's future cable-related needs and
to review the performance of the franchisee during the current franchise agreement.
RECOMMENDATION:
Staff reconmaends that upon conclusion of the public hearing, City Council authorize staff to prepare
and send a letter requesting a franchise agreement renewal proposal from Cox Communications, Inc.,.
which responds to the issues identified by the City Council, citizens and staff..
FISCAL IMPACT:
Cox subscribers pay a 5% franchise fee, which amounts to approximately $179,000 in annual revenue to
the City. There is no fiscal impact associated with this action.
BACKGROUND:
Cox Communications ("Cox") has requested that the City commence formal franchise renewal
proceedings prior to franchise expiration on July 1, 2001. This request triggers the procedures required
by the Federal Communications Act of 1934 (the "Act") as amended by the Telecommunications Act of
1996.
On June 21. 1999, the City Council adopted Resolution No. 99-49 setting the specific procedures to
utilize while processing the franchise renewal. The resolution directed staff to set a public hearing to
discuss issues related to the renewal of this franchise agreement. Additionally, staff will recommend in
the near future that the same procedure be initiated by the City Council to consider Media One's
franchise renewal. The formal process follows the steps identified in Attachment A to this report.
Media One and Cox are the only CATV service providers in the City. Both franchises are non-exclusive
agreements whereby the City has granted each provider the right to use the public right of way to
.>rovide cable television services. Cox service area is generally east of Browning Avenue. Cox
Communications current franchise agreement began July 2, 1986 and was for a term of fifteen years.
That agreement was the renewal of an agreement with Community Cablevision Systems (wholly owned
by The Irvine Company) dated August, 1973. Prior to that date, the franchise was awarded to
Community Cablevision Systems by the County of Orange to the then unincorporated area noxv known
as East Tustin.
Staff offers the following general observations regarding past franchise performance by Cox:
GENERAL CUSTOMER SERVICE
Staff receives very few calls (averaging less than one per week) regarding customer service issues such
as billing, service interruptions or equipment maintenance. Citizen complaints received by staff and
referred to Cox for resolution are handled promptly with almost no return calls from citizens to staff.
Cox telephone service calls are promptly answered by knowledgeable personnel and with minimal hold
times.
SERVICE OFFERING/PROGRAMMING
Cox service offerings have significantly increased in recent years and, as such, staff receives very few
calls regarding services or programming. Cox has a state-of-the-art system that is well maintained. The
current channel capacity is over 100 channels and Cox also provides Intemet access and local telephone
services. The major exception to this issue continues to be Cox's inability to provide consistent
coverage of City Council meetings. Staff has communicated this issue to Cox on numerous occasions
but the issue has not been adequately resolved at this time.
Currently, Cox and Media One utilize a field connection in the vicinity of Browning Avenue and Bryan
Avenue to push the signal from Media One to the Cox system. Cox's high bandwidth system and Media
One's older lower bandwidth system are incompatible if connected directly and require special electronics
to convert the signal. This connection has proven to be tenuous.
Cox engineers have been trying to resolve this problem at the physical point of connection to no avail and
they have concluded that Media One cannot provide an adequate signal into the Cox system due to the
systems' disparity. Cox engineers have contacted Media One staff in an attempt to arrange to provide a
direct fiber optic connection between each system head-end (the point at which signals are distributed to all
users). Cox says that because of on-going staffing and management changes at Media One, they have been
hindered in constructing this link. More recently, staff has been experiencing this same communications
problem with Media One. Media One has replied that it is in the process of reorganization.
In reviewing past performance, staff recommends that the following issues be addressed by Cox in its
franchise agreement renewal proposal:
1. Provide live coverage of City Council meetings and a regularly scheduled rebroadcast at least 2
times, including 1 broadcast during a weekday prime time and 1 broadcast during the weekend.
2. Provide a full time loCal access channel dedicated to the City of Tustin with coordinated or joint
programming provided by Media One and Cox.
3. Modify the Agreement to permit Cox to provide service in the entire City.
4. Provide assurances in the agreement for paYment of franchise fees for dataYintemet services
5. Explicitly agree to utilize current Federal Communications Commission requirements for
customer service.
6. Subject the agreement to future City ordinances and City Code amendments.
7. Provide free Intemet access to City facilities, libraries, and schools in the Cox service area.
8. Agree to provide open Internet access in Tustin should it become available to any municipality in
the State of California.
While most of the issues identified above are somewhat standard, issue 8 refers to area of cable industry
regulation that is legally uncertain. Cable companies currently have exclusive control over use of their
systems for provision of Intemet access. For example, Cox Communications currently provides Internet
access via the ~Home service. Other Intemet service providers, most notably America On-Line (AOL),
are demanding access to local cable systems to provide their own services. Generally, cable companies
are refusing this access. The federal government has been slow in providing rules governing this service
issue because of the current movement to deregulate the telecommunications industry. Few cities have
challenged the current policy stalemate. The City of San Francisco recently considered requiring open
access but, decided instead to negotiate with AT&T to upgrade the cable system and require open access
when it become available in other municipalities. This is the approach that staff is recommending the
City Council pursue.
In accordance with the specifications of Resolution No. 99-49, Cox Communications proposal shall be
due no later than 120 days after receiving notice from the Public Works Director informing them of
issues identified at this public hearing.
Tim D. Serlet ~'
Director of Public Works/City Engineer
Senior Management Analyst,
Public Works Department
IDS:JM:ccg: Cox franchise renewal 8-16-99.doc
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Attachment "A"
RESOLUTION NO. 99-49
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA ESTABLISHING A PROCESS FOR
CONSIDERATION OF CATV FRANCHISE RENEWAL.
WHEREAS, the CommunicatiOns Act of 1934 as last amended by the
Telecommunications Act of 1996 provides for the renewal of existing CATV franchises and
authorizes the City to require a renewal proposal and to set deadlines therefor; and
WHEREAS, Cox Communications ("Cox") has requested that the City initiate renewal
of its CATV franchise; and
WHEREAS, the City Council wishes to establish a uniform process for consideration
of CATV franchise renewal according to law.
NOW, THEREFORE, THE CITY COUNCIL OF THE CiTY OF TUSTIN, CALIFORNIA,
finds, determines and orders as follows:
SECTION 1'
(A) The City Clerk is hereby directed to publish notice of a public hearing a.t,.-a
regular meeting of the City.' Cou'ncil'in the next 60 days on the question of the' renew~-I"0f
Cox's CATV franchise. 'The Director' of Public works shall select the date of the meeting,.f, or
the hearing and shall provide it to the City Clerk within 2 weeks of June 21, 1999. The
Director of Public Works shall notify Cox in writing of the meeting date selected.
(B) Upon receipt of a request by a Cable Operator for a CATV franchise renewal
within the six (6) month period commencing with the 36th month before the franchise expires
or upon determination of the Public Works Director, or the Director's designee, that renewal
procedures under this Resolution are warranted, the Public Works Director, or the Director's
designee, shall request the City Clerk to publish notice of a public hearing before the City
Council to consider renewal of the CATV franchise.
(c)
The City Clerk's notice shall state that the purpose of the hearing will be to'
(1) Identify the future cable-related community needs and interests, and
(2) Review the performance of the cable operator under the franchise during
the current franchise term.
The DireCtor of Public Works shall notify the cable operator of the public
hearing time and date.
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SECTION 2:
Within fifteen (15) days of completion of the public hearing process required by
Section 1 above, the Public Works Director shall notify the cable operator Of the completion
of the hearing held under Section 1 above, and shall direct the cable operator to submit a
franchise renewal proposal, which shall contain the material required by Chapter 4 of the
Tustin City Code, the cable operator's proposal for operating the cable system, providing the
required facilities and' equipment, upgrading the system, and other issues raised at the public
hearing held under Section 1 above. The notice shall further provide that the cable
operator's proposal is due ninety (90) days from the date of the notice required by this
Section.
SECTION 3'
Within ninety (90) days of receiving the cable operator's proposal pursuant to Section
2 above, the Public Works Director, or the Director's designee, shall report and recommend
to the City Council whether to approve or deny the renewal of the franchise. The City
Council shall approve a renewal by ordinance. If the City Council finds it in the best interest
for the City to deny the renewal, the City Council shall adopt a resolution containing a
preliminary assessment stating that the City should not renew the franchise
SECTION 4:
If the City Council adopts a .resolution assessing that the City should nOt renew,ti~e
franchise, the Public Works DJ'rector-shall request the City Clerk to publish notice of a public
hearing at a special meeting of the City Council to consider denial of renewal of the
franchise. Said special meeting shall take place within thirty (30) days of adoption of the
statement of non-renewal. At the conclusion of the public hearing, the City Council may deny
renewal of the franchise if it makes adverse findings in reviewing the following factors:
A. Whether the cable operator sUbstantially complied with the material terms of
the existing franchise and applicable law, and the City provided the cable operator sufficient
notice and an opportunity to cure any failure to comply.
B. Whether the quality of the cable operator's service, including signal quality,
response to consumer complaints, and billing practices, was reasonable in light of
community needs, and the City provided the cable operator sufficient notice and an
opportunity to cure any defects. In reviewing this factor, the City cannot consider the mix or
quality of cable services or other services provided over the system (content).
C. Whether the cable operator has the financial, legal, and technical ability to
provide the services, facilities, and equipment as set forth in its proposal.
D. Whether the cable operator's proposal is reasonable to meet the future cable-
related community needs and interests, taking into account the cost of meeting such needs
and interests.
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PASSED A~NI~. ADOPTED at a regular meeting of the City Council of the City of Tustin
on the
ATTEST:
CITY CLERK
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