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HomeMy WebLinkAboutRPT 5 CABLE TV INFO 05-03-93, ) i DATE: MAY 3, 1993 TO: WILLIAM A. HUSTON, CITY MANAGER REPORTS NO. 5 5-3-93 0 Inter -Com FROM: PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION SUBJECT: INFORMATION REGARDING CABLE TELEVISION RECOMMENDATION It is recommended that the City Council receive and file this report. FISCAL IMPACT There is no financial impact. BACKGROUND AND DISCUSSION Recently, there have been several concerns expressed by Council Members and residents regarding recent system and rate changes made by Dimension Cable Services; the new regulations issued by the Federal Communications Commission; and the City's satellite dish antennae installation regulations. The following information is being provided to address each of these concerns. Dimension Cable Services Effective March 1993 Dimension Cable made several pricing and programming changes to their system. The following is a breakdown of their service levels and rates: Basic -- This 17 -channel service provides over -the -air broadcast channels, popular superstations, public affairs and community access programming. The retail price of Basic service was not increased and remains at $13.50. As the minimum level of service, all customers must subscribe to this service before adding additional services. Preferred Dimension -- This 18 -channel service (in addition to the above 17 -channel service for a total of 35 channels) provides popular networks such as CNN, TNT and ESPN. Beginning last month Dimension also added the Bravo and American Movie Classics channels, which were previously sold as commercial -free premium services. A remote control converter with pay-per-view access is also provided with the Preferred Dimension service. The retail price for this service was increased by $1.70, from $10.95 to $12.65. Dimension no longer sells the "two -star" service, which consisted of zhe tier programming and a standard converter without the remote control feature. However, Dimension has continued to offer the service as a convenience to those customers who currently subscribe to this service. The retail price of this service was increased to $9.90 a month from $8.20. Mr. William Huston Information Regarding Cable Television May 3, 1993 Page 2 The retail price of premium services, such as HBO and Showtime have remained the same. Auxiliary service Pricing -- Additional outlet charges have been revised to reflect the cost of providing the service. The fee had not been increased for five years, despite increased operations and labor costs. Sixty-two percent of Dimension's subscribers do not purchase this service and were not affected by the following changes: Additional outlet without converter -- The retail price of additional outlets was increased to $4.00 from $3.40. Additional outlet with remote control converter -- The price of this service was decreased from $14.80 to $9.00. Basic service converter -- Customers who require a converter to expand the tuning capability of their television set may obtain a basic service converter for $2.00 a month. Installation fees -- Standard installation fees were increased from $34.95 to $50.00 and does not affect existing customers. Change -of -service fees -- Customers who request an in-home visit for a change of service will be charged $25.00, an increase from $15.00. Franchise Fee Listing -- A separate line, item displaying the franchise fee calculation was added to the customers' bill in March. The franchise fee is calculated at 5 percent of all recurring services. The appearance of the fee was new to customers. Cable Television Consumer Protection and Competition Act of 1992 The Federal government recently enacted the Cable Television Consumer Protection and Competition Act of 1992 (the 1992 Cable Act) and is in the process of developing rules pursuant to that bill. This summary is an initial attempt to identify key consumer and local government aspects cf the legislation. Rate Regulation The 1992 Cable Act required the Federal Communications Commission, (FCC) to adopt rules regulating the non -premium and non -pay-per-view prices of some cable television systems. Although the FCC has Mr. William Huston Information Regarding Cable Television May 3, 1993 Page 3 released a News Release summarizing the objectives of its rate regulations, the actual regulations will not be written or released until the first week in May, 1993. Until then, it is impossible to predict the impact of rate regulation on the rates of any given cable television system. The 1992 Cable Act forbids governmental regulation of any cable television rates of a system with less than 30% penetration (customers per homes passed) in a given community. In the event that the cable system has a penetration rate of over 30% in the community, a local government will be able to seek certification from the FCC for authority to regulate the Basic Broadcast Service rates and equipment charges. To the extent that a local government has authority to regulate the Basic Broadcast Service and equipment rates, that authority need not be exercised. Rate regulation will be the option of the City. The federal government, not the local government, has jurisdiction over regulation of the Standard Service rates. Standard Service is the level of service which includes cable satellite channels such as CNN, ESPN, USA Network, etc. The City will not have rate regulatory authority over premium services such as HBO, Showtime, The Disney Channel, etc. or pay-per-view movies or boxing events. It is the intention of the FCC to establish per channel "benchmarks" and a basis for equipment pricing. It is conceivable that those regulations may suggest a restructuring of the price of the various component parts of the cable services in Tustin, even if the customer's bill overall is not lowered. The benchmark will be measured against rates in effect as of September 30, 1992, not current rates (on average, rates were 6 percent lower in September compared to today). Companies with September 30, 1992 rates that are above the benchmark will be required to reduce their September 30, 1992 rates to the benchmark or by 10 percent, whichever is less. All cable rates in effect as of April 5, 1993, other than rates for pay-per-view program services and equipment, will be frozen for 120 days. It is important to note that any potential rate reductions will most likely not occur for at least another 120 days because of procedural requirements. Customer Service The FCC established generic national Federal customer service standards for the cable television industry which will become effective July 1, 1993. The City is authorized to enforce the - Federal customer service standards if the City first provides cable operators with an advance 90 day written notice of its intent to do SO. Mr. William Huston Information Regarding Cable Television May 3, 1993 Page 4 The customer service standards established by the Federal government are generic. Specifically, the regulations set standards for, among other things, cable system office hours, service calls, local telephone answering, installation appointments, written customer notifications and timely refunds. Must Carry and Retransmission Consent The 1992 Cable Act required the FCC to develop rules which provides carriage rights on the cable system to over -the -air broadcast stations - even some distant and little viewed broadcast stations. Broadcast stations were also given certain rights to reposition their number location on the dial, negotiate carriage arrangements with the cable operator, and assert their rights even if the result is the deletion of some satellite delivered cable channels already offered by the cable system. Unfortunately, under the rules now promulgated by the FCC, the potential exists for changes in both Dimension and Continental's cable systems which could cause customer frustration and confusion. As this issue is clarified for any given. cable system, both companies will attempt to give the City and residents plenty of advance notice of changes which may take place as early as June 2, 1993. Access Programming The 1992 Cable Act added new liability to the cable operator for the content of various leased, public, educational and government access programs which appear on the cable television system. Specifically, the cable operator may be liable for indecent and obscene programming as defined by the FCC. The cable operator is, however, now entitled to prohibit any public, educational or governmental access programming that contains obscene material, is indecent, or solicits or promotes unlawful conduct. These provisions and rules have been challenged on constitutional grounds in the Federal courts by various potential access programmers. The lease access rules have already been "stayed" by a Federal court in order that the court can look at these issues closely. It is anticipated that the rules relating to public, educational, and governmental access will also be stayed pending a close examination by the courts. If the rules are deemed effective, it is likely that all cable access programmers will be obligated to certify that their programming is not indecent, obscene, or soliciting or promoting unlawful conduct and indemnify the cable operator for liability in the event their programming is found to fall within any of those categories. Mr. William Huston Information Regarding Cable Television May 3, 1993 Page 5 The City will continue to monitor the ACT as the rules are further issued by the FCC, and we will continue to update the City Council on actions that the City may take. Antenna Dish Installation Requirements Section 9271y of the Tustin City Code establishes the following criteria of dish antenna installation: (1) Location: (a) Residential zones: A dish antenna installed at ground level in the rear yard and obscured from public right- of-way view is exempt from the requirement of a use permit. If a useable signal cannot be obtained from a rear yard location, the dish antenna may be located in the side yard of the property or on a building roof subject to issuance of a use permit. (b) Nonresidential zones: A dish antenna located at ground level or on a building roof completely obscured from public right-of-way view is exempt from the requirement of a use permit. Those antennae which cannot be obscured as determined by City staff are subject to issuance of a use permit. (2) Antenna color compatibility: All dish antennae shall be compatible in color with their surroundings and not include signage whether manufacturer's name and other advertising. Antennae shall be painted to match surrounding background if only partially obscured or to match dominant building color if roof -mounted. (3) Height limitations: (a) Residential zones: Dish antennae shall not exceed the maximum building height limit permitted in the zone if roof -mounted nor exceed ten (10) feet in height if ground -level -mounted. (b) Nonresidential zones: Dish antennae shall not exceed the maximum building height limit permitted in the zone if roof -mounted nor exceed fifteen (15) fee in height if ground -level -mounted. (4) Building perr..*ts: A building permit shall be obtained prior to the installation of any dish antenna exceeding three (3) feet in diameter. Mr. William Huston Information Regarding Cable Television May 3, 1993 Page 6 It should also be noted that many of the homeowner's associations in the City of Tustin have additional antenna installation restrictions in their Conditions, Covenants and Restrictions (CC and R's). The City does not regulate any homeowner's association CC and R's. CONCLUSION With the 1992 Cable Act, the cable television industry will be undergoing some significant changes in the near future and the City will again have some limited regulatory powers over the cable systems operating in our jurisdiction. As stated earlier, staff will continue to monitor the legal and technological advancements in the industry and will update you on any impacts they will have on the community. Robert S. Ledendecker Director of Public Works/ City Engineer RSL:KP:klb:cable92 C at' Pitcher Administrative Assistant II