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HomeMy WebLinkAbout11/23/1998 � • Telecommunications Advisory Committee City of Apple Valley November 23, 1998 7:00 P.M. City Hall Minutes 1. Call to Order A quorum was not achieved and no official meeting could be held. Discussion among those present was called to order at 7:03 p.m. by David Westbrook. Members Present: Dale Rodell, David Westbrook, John Magnusson (arrived at 7:05) Members Absent: Rollin Bible, Jerry Brown, Scott Hugstad-Vaa Others Present: Gary Humphrey (arrived at 7:21), Charles Grawe, Dennis LaComb, John Erar, Thomas Creighton, Jane Bremer (arrived at 7:12), Carol Wold- Sindt, Roselyn Pautzke 2. Franchise Renewal U�date Mr. Creighton distributed a copy of a draft franchise ordinance. He clarified his earlier communication prior to the meeting regarding capital grants. Specifically, while he and Ms. Bremer agreed to present the concept of capital grants to the company, Ms. Bremer did not recommend the capital grants as part of the franchise. Mr. Creighton said he and Ms. Bremer agreed to language on almost all issues. The major outstanding issue is the amount of the capital grants and the PEG fee imposed by the Cities. The Marcus corporate officials have not yet responded to Mr. Creighton's latest proposal for capital grants. The challenge according to Mr. Creighton is to explain to the company that capital grants are common in other Metro communities. Mr. Creighton said the annual capital grants are also an issue. He lowered his proposal to $20,000 annually for Apple Valley and $12,500 annually for Farmington and Rosemount. Mr. Creighton said there are two other outstanding issues which merit discussion. The first is the definition of "gross revenues". In the past, cable television services were the only services and included in "gross revenues". Now, the cable company can provide other services such as internet access through the cable television cable system. The attorneys for both parties agree that if the federal law prohibits inclusion of the revenues for other services under gross revenue, then the revenues for those services are excluded. Mr. Creighton advocates a position which allows the Cities to include such services in gross revenues until federal law prohibits inclusion. He clarified if the law doesn't prohibit it, the Cities should be able to do it. Ms. Bremer advocates a position that the Cities can only include such services in gross revenues if a future law is passed authorizing inclusion. � • Mr. Creighton said the second issue is the reimbursement of legal costs to the Cities when the cable company transfers ownership. Mr. Creighton supports full reimbursement since it is a matter outside of the Cities' control. Ms. Bremer will take this proposal to the corporate officers. Mr. Creighton said they discussed institutional networks. He and Ms. Bremer have agreed to use the same agreement used between Fiberlink and the City of Lakeville. The franchise will allow the Cities of Apple Valley, Farmington, and Rosemount to sign similar agreements. Mr. Creighton went through the draft franchise ordinance, highlighting areas of importance. Section 1.2 defines the terms used in the Franchise. Basic Cable Service and Cable System are the definitions used in federal law. The definition of Cable Service is still under discussion for gross revenues. The definition of Franchise Fee expressly excludes capital costs and the PEG fee. As previously mentioned, the definition of Gross Revenues is still under discussion. All other definitions are largely standard. Section 2.3.c creates a nonexclusive agreement. Section 2.5 sets the term for 15 years. Section 2.10 requires cable installation to public buildings. Mr. Creighton noted the buildings to be connected by Fiberlink are yet to be determined. Section 3.4 requires the undergrounding of newly constructed facilities. Section 4.1 defines the system design to be 750 MHz and minimum of 80 video channels. The system will be designed to have an average of 500 homes per fiber node. Section 5 defines the customer service provisions. Section 6 relates to the three access channels. Under the new franchise, the cable company would provide a channel and a playback facility, but no studio or editing equipment. Section 6.4.c will include any capital grant agreement. There were several questions regarding access. Ms. Pautzke asked if an educational channel will be provided. Ms. Bremer said a single educational channel will be made available at this time which would be shared by the different schools. The company is considering two options--1) make the signal discrete so different signals are received in different geographic locations (as with Cities) or 2) add additional channels for school districts. Ms. Bremer noted the first option is quite expensive. Mr. Erar expressed his concern the ordinance be approved prior to January 1, 1999. If an agreement could be reached in the next week, the ordinance could still be passed before the first of the year. Mr. Creighton clarified the basic cable rate will not decrease when the public access studio is shut down. Mr. Creighton noted the current basic cable rate is less than the m�imum allowed by federal law, so it would be very difficult to try to force a rate reduction. Ms. Bremer noted the current capital grants proposed by Mr. Creighton would cost $2.00 per month, per subscriber. Mr. Creighton continued with an explanation of the ordinance. Section 73 defines a 5% franchise fee. Section 8.1 requires a$50,000 performance bond and Section 8.2 requires a$50,000 construction bond. Section 8.3 requires a letter of credit of $10,000. Section 8.3.e is still under discussion regarding the City's ability to draw on the letter of credit during the time period in which the cable company is appealing a notice of violation. Section 9.1 allows the City to revoke the franchise, including when the company is • • bankrupt. Section 9.S.d is still under negotiation regarding the sale or transfer of ownership. Mr. Creighton said the issues not highlighted are generally boiler-plate language. Mr. Creighton requested to meet with the City Administrators on Friday, December 4 to discuss future buildings to be constructed and connected by Fiberlink. Mr. Erar again expressed concern over the timing of the approval. Mr. Creighton said the City and company could exchange letters of intent to allow a short extension if necessary. Mr. Erar said he wants to have an agreement before the Farmington City Council on December 7th to go through the franchise. Ms. Bremer said she will reject the capital grants part of the franchise. Mr. Creighton responded that if the capital grants are not included, he will recommend non-renewal. He clarified if the company is not willing to meet the Cities' needs, he will recommend to not renew the franchise. Mr. Erar said he would support Mr. Creighton's position in Farmington. Ms. Bremer responded the capital grants will cost Farmington subscribers $1.86 per month. Mr. Creighton noted this is spread over a single year and should be amortized over seven or eight years of the 15 year franchise. Mr. Magnusson said the Cities' position is considerably less than what had been proposed with Lakeville a year ago. Mr. Creighton suggested the company provide a counter offer. Ms. Bremer said she will try to work out an acceptable amount. 4. Adjourn Mr. Rodell moved, seconded by Mr. Magnusson to adjourn the meeting. Motion carried unanimous. The meeting was adjourned at 8:16 P.M..