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HomeMy WebLinkAbout1990/12/27 - Minutes - Adjourned December 27, 1990 CITY OF RANCHO CUCAMONGA CITY COUNCIL Adjourned Meetin~ A. CAX,L TO ORDER An adjourned meeting of the City Council met on Thursday, December 27, 1990, in the Council Chambers of the Civic Center, located at 10500 C~vic Center Drive, Rancho Cucamonga, California. The meeting was called to order at 6:04 p.m. by Mayor Dennis L. Stout. Present were Councilmembers: William J. Alexander, Charles J. Buquet II, Diane Willjams, and Mayor Dennis L. Stout. Also present were: Jack Lam, City Manager; James Markman, City Attorney; Ralph Hanson, Assistant City Attorney; Jerry B. Fulwood, Deputy City Manager; Brad Bullet, City Planner; and Debra J. Adams, City Clerk. Absent was Councilmember: Pamela J. Wright. , · , · · , B. ADVERTISED PUBLIC HEARING B1. CONSIDERATION OF TIMES MIRROR'S APPLICATION FOR A CABLE TELEVISION FRANCHISE (Continued from December 19, 1990) (1205-01 CATV) Please refer to the transcript of this item which is attached and referred to as Exhibit "A" for discussion that took place. (Note: The recess to Executive Session occurred at 6:06 p.m. and the meeting was called back to order at 6:15 p.m. by Mayor Dennis L. Stout.) RESOLUTION NO. 90-493 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, GRANTING A CABLE TELEVISION FRANCHISE TO TIMES MIRROR CABLE TELEVISIONOF RIVERSIDE COUNTY, INCORPORATED, DBA DIMENSIONS CABLE SERVICES MOTION: Moved by Buquet, seconded by Alexander to approve ResolUtion No. 90- 493 as amended. Motion carried unanimously, 4-0-1 (Wright absent). (i) City Council Minutes December 27, 1990 Page 2 Cl. C. COMMUNICATIONS FROM THE PUBLIC Pat Price, 8531 Calle Corrabe, thanked the City Council for the action they took ~egarding the cable franchise. , , , , , D. ADJO~ MOTION: Moved by Buquet, seconded by Alexander to adjourn. Motion carried unanimously, 4-0-1 (Wright absent). The meeting adjourned at 8:07 p.m. City Clerk Approved: February 6, 1991 City Council Minutes December 27, 1990 Page 3 llriS'g CERTIFIED COURT REPORTERS I~arrett · Dawson · Me[man CERTIHED CB?Y BEFORE THE CITY OF RANCHO CUCAMONGA CITY COUNCIL CONSIDERATION OF TIMES MIRROa'S APPLICATION FOR A CABLE TELEVISION FRANCHISE PUBLIC HEARING Date and Time: Thursday, December 27, 1990, 6:00 p.m. Place: The City of Rancho Cucamonga City Council Chambers 10500 Civic Center Drive Rancho Cucamonga, California Reporter: Patti L. Curtin Shorthand Reporter 1630 E, Palm Street P.O. Box 11466 Santa Aria. CA 92701 4 ) 558-9400 213) 637-3550 FAX (714) 836-5195 City Council Minutes December 27, 1990 Page 4 APPEARANCES DENNIS L. STOUT, Mayor WILLIAM J. ALEXANDER, Mayor Pro Tem DIANE WILLIAMS, Councilmember CHARLES J. BUQUET, II, Councilmember JACK LAM, City Manager JAMES MACKMAN, City Attorney ['~~,,CFATIFIED COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX(714) 836-~;19'~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 city Council Minutes December 27, 1990 Page 5 TRANSCRIPT OF PROCEEDINGS Rancho Cucamonga, California; December 27, 1990; 6:00 p.m. MAYOR STOUT: Adjourn meeting of the Rancho Cucamonga, City Council. Will you please stand and join us in the Pledge of allegiance. (Whereupon, the Pledge of Allegiance was recited.) MAYOR STOUT: Roll call. Buquet. COUNCILMEMBER BUQUET: Here. MAYOR STOUT: Alexander. COUNCILMEMBER ALEXANDER: Here. MAYOR STOUT: Stout, here. Williams. COUNCILMEMBER WILLIAMS: Here. MAYOR STOUT: Wright is absent. Advertised public hearing. Item 1, consideration of Times Mirror's application for a cable television franchise. This was previously continued from December 19th, 1990. Is there a staff report, please? MR. LAM: Yes. Mr. Markman first. MR. MARKMAN: Mr. Mayor, Members of the Council. At one time as I understand, while I was on vacation, about a week ago, there was potential litigation involving this matter. Now, there is pending litigation involving CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 City Council Minutes December 27, 1990 Page 6 this matter as there was an application filed this morning for a temporary restraining order sought by other cable companies, DCA and Simmons, to preclude essentially this meeting and hearing from happening. While that temporary restraining order was denied, we would like to update the City Council in Executive Session, with respect to discussions related to that litigation at this time, prior to conducting the hearing. MAYOR STOUT: All right. How do you wish to proceed? MR. TOPRIGHT: Recess the meeting at this time to Executive Session, and we'll have that litigation update and then come out and recommence the process. MAYOR STOUT: All right. Ladies and gentlemen, at the request of the City Attorney, the Council will recess very briefly for an Executive Session regarding possible litigation over this matter. Thank you. (Whereupon, a recess was held.) MAYOR STOUT: At this time we're ready to proceed. Before we begin with the staff report, however, Mr. Markman, I understand that we are in receipt of certain exhibits which, for the purpose of record tonight, need to be marked. Is that correct? MR. MARKMAN: Yes, because we're going to try to ['i'i~CERTIFIED COURT REPORTERS (714) 558-9400 1(800) 729 M AND M FAX(714) 836-5195 City Council Minutes December 27, 1990 Page 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 keep a very tidy record here, also for those who do speak to the Council this evening, there's certified shorthand reporter sitting in front of the City Clerk, recording this verbatim. So that people who speak at the same time as other people, can't be recorded. Gestures and expressions can't be recorded. So you have to speak clearly and say what you want to say, so the reporter can record it. And because we do have this sort of record, and a court proceeding, Mr. Mayor, we will identify for the record the written materials presented this evening only -- not the other evening but this evening only, to the City Council. The first of which is the December 19th, 1990 staff report, which consists of three pages, and a Proposed Resolution 493. There's an Amendment Resolution 493 that's been distributed to the Council. And if you do get to the point where you wish to consider adoption of that, I will indicate for the record what the amendments were. You also have the proposed franchise -- non-exclusive franchise agreement attached. The attachments to that. And you also have some legislation with an Exhibit A, Exhibit B, and a copy of A.B. 543 is Exhibit C to that. You also have a copy of an Exhibit D, which CERTIFIED [~~REPORTERS COURT (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 5 City Council Minutes December 27, 1990 Page 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is A.B. 2892. That's the entirety of the staff report. In addition, and I'm going to mark that as A, to be a little bit formalistic this evening. Council has also received three items of correspondence since the last hearing. And not in any order of receipt, but just the way I have them before me, the first which I am marking B for the record, is a letter on Comcast Cablevision letterhead. This one being addressed to the Councilwoman Pam Wright. And I assume that there are others addressed to the other Councilmembers that appear to be identical letters. And this is -- I have a two-page letter. I don't know, does that confer with the rest of Council? COUNCILMEMBER BUQUET: Mine is three pages. COUNCILMEMBER WILLIAMS: Mine is three pages. MAYOR STOUT: I have three pages. MR. MARKMAN: The copy I have is only two. COUNCILMEMBER BUQUET: You have Pam's letters. MR. MARKMAN: Yes. It's dated 12/20/90, three pages long, signed by Bob Coleman, General Manager. So that should be marked Exhibit B. A letter from Comcast on this matter. As Exhibit C, I have a telecopy transmittal from Minot Weld Tripp, Jr., who is an attorney in San Francisco, attached to which is another letter. This one [CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 856-5195 City Council Minutes December 27, 1990 Page 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 is dated December 26th, 1990, three pages long, addressed to the Mayor and City Council, and signed by Minot W. Tripp, apparently on behalf of DCA Cablevision. That would be C. And the last item in that -- of correspondence this evening is Exhibit D, is a one-page letter dated December 27th, 1990, addressed to the Mayor and City Council, signed by William S. Dickinson, Chief Executive Officer, .DCA Cablevision. Council has all those materials before it as part of this record and I would ask the Mayor to order those made part of the record this evening. MAYOR STOUT: All right, consider that done. Also would indicate that at our previous meeting, there was certain correspondence presented to the City. I understand the City Clerk is in receipt of that. And for purposes of the record tonight, we won't go through it and inventory it. But there are certain correspondence on file with the City Clerk from last meeting, correct? CITY CLERK ADAMS: Yes. MAYOR STOUT: All right. The procedure used tonight will consist of a staff report which will be presented by the city staff and consultants. There will be a public hearing. The public hearing will be conducted COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX (714) 836-5195 1 2 3 4 5 6 7 8 city council Minutes December 27, 1990 Page 10 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in the following manner: Those will be allowed to speak first who are in favor of the granting of this franchise agreement. Followed by those who are in opposition to the granting of the franchise agreement. At the conclusion of that, the proponent will be given a very brief rebuttal and the public hearing will close. At that time it would be the opportunity for the Council to discuss the agreement and then make a decision. At the conclusion of the public hearing, there be no further public testimony after that. All right. Can we have the staff report, please. MR. FULWOOD: Mr. Mayor, Mr. Carl Pilnick, who is our cable TV consultant will be giving a staff report and I will be then available to answer any additional questions. MAYOR STOUT: Thank you, Mr. Fulwood. MR. PILNICK: Mr. Mayor, Members of Council. I'm Carl Pilnick, president of Telecommunications Management Corporation in Los Angeles. And I've been working with the City off and on as the City's cable television consultant for some five or six years. With respect to the matter under consideration today, the City received, a number of months ago, an unsolicited application for a franchise from Times Mirror Cable Television. And at that time, Times Mirror's CERTIFIED COURT REPORTERS (714) 558-9400 1(800) '29 M AND M FAX(714) 836-5195 City Council Minutes December 27, 1990 Page 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 objective was essentially to serve a new development. The so-called Terra Vista Development that is under construction. And the company did not propose to cable any other areas except that particular new development. After discussion -- discussions between staff and Times Mirror, I think staff's feeling was that the City would not be well served if the only requirement that was put on Times Mirror was that they would be serving a new development. We felt that in order to justify an award of another franchise, in a city where you already have three companies providing cable service, that there should be some benefits that would not be obtainable without that particular franchise. And so, one area that the staff focused on was the ability to achieve complete service to all of the residents to the City, which has not happened up until now. So that we did go through discussion and negotiations with Times Mirror, and they agreed as part of their franchise agreement, to serve all of the -- all of unserved homes that exist now in the so-called Red Hill area. And those homes are identified in the franchise agreement. This was -- again, I would like to point out CERTIFIED COURT REPORTERS (714) 558-9400 ! (800) 729 M AND M FAX (714) 836-'~195 City Council Minutes December 27, 1990 Page 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 this was not something that Times Mirror was really thrilled about. They were not, I think, enthusiastic about serving in areas where the unserved homes were relatively few a number, scattered among other developments that were served by other cable companies. And this was not an objective that the company had. It was the City's position, I think, that this benefit, if they would agree to that, would justify perhaps another franchise in the City. So that those discussions led to the draft agreement that you will be considering tonight. I wish to point out a couple of other things that are relevant. First, the state law that all of you are now familiar with, A.B. 543 and its successor, A.B. 2892, does make the question of timing, granting of the franchise, critical. There is is January 1st deadline, after which the present version of the State Law A.B. 543 becomes '- makes it much more difficult for the City to grant an additional franchise, because of the new version of the law, will state that if one of the present operators, even if they are not serving a particular area, certifies that they are ready, willing and able to serve that area, that would trigger a requirement on the City to impose an overbuild, a commitment by Times Mirror. CERTIFIED COURT REPORTERS (714) 558-9400 | (800) '~29 M AND M FAX Ctl4) 8.~6-5195 10 City Council Minutes December 27, 1990 Page 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Which means that you would have to make Times Mirror then serve all of the homes served by the existing operators, which obviously would be much more difficult, economically, for any company to justify. We felt that on staff's part, that no useful purpose would be served at this point in requiring an overbuild of existing homes, particularly when there were a sizeable number of homes that had never gotten service at all. And we felt that the priorities, therefore, should be universal service to everyone in the City first, and then concerns about competition, as possible, later consideration. Because of that, the Times Mirror draft agreement does not require them to provide service to any home where another cable operator is serving. And for that reason, it's hard for me to accept that that additional franchise would cause any economic harm to any of the existing cable operators. Because if Times Mirror were to serve only homes that were not served now, it would not take a nickel of revenue away from the existing operators. The new developments, obviously, are the most attractive portion of this franchise and possibly are attractive to the existing operators, too. ['~~CERTIFIED COURT REPORTERS (714) 558-9400 1 (800) '729 M AND M FAX (714) 836-5195 11 City Council Minutes December 27, 1990 Page 14 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And there has been, as you will hear more, no doubt, a good deal of indignation about developers making private deals with cable companies. I will be happy to answer questions about that later. But all I want to point out going in, is that this is nothing new in the cable industry. That developers have been doing this for many, many years and using whatever clout they had while the property was still private, and rights of way were not dedicated to the public to benefit on their own. And I think, not only as this developer perhaps has done this in this case, but I think there are other instances in the City where some of the existing cable companies have basically been faced with the same situation. There are situations that I am aware of in other communities where developers are even deciding to build their own cable systems or threatening to build their own cable systems, to extract even more from cable companies. But the point that I want make is it's nothing new. Perhaps the prices have gone up, but the practice is something the cable industry is very familiar with. I think it's still my opinion, and I assume staff's, that the award of this franchise would benefit those residents who don't have service. I think it would, ,,CEKTIFIED COURT REPORTERS (714) 558-9400 1 (8OO) 729 M AND M FAX (714) 836-5195 12 City Council Minutes December 27, 1990 Page 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 even though there's no direct competition required, it would, judging by what I have seen in the last week or two, it would stimulate the companies to, perhaps be much more cooperative with the City and much more responsive than we have found them to be in the past. So we don't see any direct harm that would come from this, either to the public or to the existing cable companies. We do see some significant benefits in terms of service in areas that have been neglected for a long period of time. I would be very happy to answer any questions or perhaps at the end of the public hearing you may wish to ask more. MAYOR STOUT: Are there any questions at this time? Thank you very much. MR. MARKMAN: Mr. Mayor, I think the Council should be focused in view of what Mr. Pilnick has already testified to and what you're going to hear on the criteria of state law imposed on you in considering this resolution and agreement tonight. The easiest one to read is on Page 43 of your agenda, which is Government Code Section 53066.3(a) states, the seven, or eight, if you consider additional matters, a criteria, there are seven criteria listed there, which the Council should consider this evening. C~FIED COURT REPORTERS (714)558-9400 ! (800)729 M AND M FAX(714) 856-5195 13 City Council Minutes December 27, 1990 Page 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Considering this matter. The first is whether there will De a significant positive or negative impact on the community being served, which includes the community not now cabled, but already having residences in it. Secondly, whether there would be an unreasonable adverse economic or aesthetic impact upon public or private property within the area in question. Whether there would be an unreasonable disruption or inconvenience to existing users or the other impacts listed in Criteria 3. Whether the applicant has a technical and financial ability to perform, which I am sure the applicant will make you aware of one way or the other. Whether there is any impact on the franchising authority's interest in having universal cable service. That's the Council's interest in having all the City served. Whether other societal interest generally considered by the Council would be met. And I suppose you can translate that into the public health, safety and welfare as you see it. And eight, whether there are additional matters which you think are relevant to you. Those are the criteria. The resolution presented does recite the fact that you have considered those criteria, and I would ask the Council to keep those CEKHFIED COURT REPORTERS (714) 5~8-94oo ! (800) '~29 M A~ND M FAX (714) 836-519~, 14 City Council Minutes December 27, 1990 Page 17 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in mind as the testimony comes in. MAYOR STOUT: at this time? open. Is there anything further from staff MR. MARKMAN: No. MAYOR STOUT: All right. The public hearing is Is there a representative from Times Mirror that would care to address the Council first? MR. STUCKEY: Yes. Thank you, Mr. Mayor, Councilmembers. I am Mark Stuckey, vice-president of Southwest District for Times Mirror Cable Television. Times Mirror Cable Television, Riverside County is a wholly-owned subsidiary of Times Mirror Cable Television, which is a wholly-owned subsidiary of the Times Mirror Company. Times Mirror Company is a media and information company, established in 1873 with annual revenues of over $3 billion. The Times Mirror Company focuses on three lines of business, print media, electronic media and professional information and book publishing. Print media includes several major city newspapers, including the Los Angeles Times. In electronic media, the company includes cable television and four network affiliate broadcast television stations. Times Mirror Cable Television is tne llth CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 15 City Council Minutes December 27, 1990 Page 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 largest cable operator, serving over 1.1 million customers in 13 states. We are headquartered in Irvine, California, and have four cable systems in Southern California, serving over 250,000 customers in the Palos Verdes, South Orange County, north San Diego County and most recently in Sun City and Riverside County. We are proud of our commitment to customer service and to technical excellence. We are fully committed to National Cable Television Association's customer service standards. In fact, we've placed great emphasis on customer service for several years now. We are one of few cable television companies which has a corporate department devoted fully to customer service and improving.the quality of customer service. And have established regional training facilities to train all of our new and existing customer contact representatives. One of our training facilities is located nearby in Laguna Niguel. We take full advantage of that in scheduling our people in for training and repeat training. We use sophisticated telephone systems which gives us the ability to monitor customer contact. The quality of our constant help while we're handling customer calls, and gives us management tools to handle call volumes. COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX (714) 836-5195 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 city council Minutes December 27, 1990 Page 19 One of the common complaints about cable television companies is getting the phones answered. We think we do a pretty good job. We are also one of the few cable television companies who doesn't contract for its customer service and management information systems. We own and operate our own computer system located in Irvine, so that all of our cable systems are on line and allows us to tailor our customer service to our customers' needs. We also have rigorous testing methods to assure adherence to quality customer service and the technical performance of our systems, including continuous measurement of telephone answering, customer contact and annual in touch market research of our customers. Where we cover, not only customers' perceptions of the quality of our service~ the quality of pictures, but also evaluating the programming cost benefit of our product and a number of other issues affecting our customers. So customer service is real important for us, and certainly we intend on providing the highest level of service here in Rancho Cucamonga. Earlier this year we began negotiations with the Lewis Company to serve the new developments. We have done considerable research on the City of Rancho Cucamonga. We have certainly been impressed. We've ['i7~CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 17 City Council Minutes December 27, 1990 Page 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 attended several Council meetings. Impressed with the community programs going on. We think this is a desirable place for people to live and certainly increases our interest in doing business here. We initially met with city staff back in March. In our meetings with city staff and the city's consultant, we negotiated boundaries for a cable franchise area, in terms of conditions for a franchise agreement. As you've heard. I know one of the key concerns of city staff was to insure provision of cable television to all residents of the City. During our negotiations, we were asked to include service on the western side of the City in the Red Hill area. We agreed to do that. We are in agreement with the franchise before you tonight and certainly interested in moving ahead. I would like to introduce with me in attendance this evening, of Dick Waterman director of corporate affairs; Rose Perez, our corporate legal counsel; and John Purdy, director of new development. We are all available tonight to answer any questions you have. I will keep my comments pretty brief and end them at this point. Again, I'd be please to answer any questions that you have, thank you. CERTIFIED COURT REPORTERS (714)558-9400 I (800)729 M AND M FAX(~I4) 836-5195 18 City Council Minutes December 27, 1990 Page 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MAYOR STOUT: Are there any questions of the applicant at this time? Thank you. Is there anyone else at this time that would like to speak in favor of the franchise agreement? Please state your name and location or address for the record, please. MR. PILMAN: Thank you, Mr. Mayor. My name is Dan Pilman. I am a resident of Rancho Cucamonga. My address is 10387 Monte Vista Street. Mr. Mayor, Members of the Council. I probably won't be as eloquent as Times Mirror, their counsel was. But I would like to bring a voice of the people to you, from Rancho Cucamonga, in regards to the type of service we are receiving from the existing cable television franchises. We are receiving terrible service. I have spoken with you personally on the phone, Mr. Mayor. I have left a message for Mr. Buquet. And I think that I am not unusual in my dissatisfaction with the existing cable companies. I'd like to offer a couple observations and suggestions that the Council may take in deciding if they are going to give this franchise to Times Mirror. First of all, look at what Mr. Pilnick said. He is accurate. The last month, I bet you have not heard from the cable CERTIFIED COURT REPORTERS (714) 558-9400 I (800) '~29 M AND M FAX ('7,14) 8.~6-5195 19 City Council Minutes December 27, 1990 Page 22 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 television companies as much as you have since Times Mirror wanted to come in and take over. Competition is good. I suggest that the TRO was not issued today, simply because the judge saw, Number 1, there was no irreparable harm that would ensue if a TRO was not issued. And Number 2, competition is what makes service good. I appreciate what Times Mirror said about their emphasis on customer service. That is what we want in our neighborhood, is to be able to sit down in the evening and simply get what we bargain for; a clear picture on our television set. I would like to suggest that Mr. Pilnick and Mr. Buquet, whoever else is on the committee to negotiate with Times Mirror, that they set a standard at this time, start right now. And that is that you negotiate at arms length with these new franchises in that you, since there is -- the regulation of the fees has been, I guess, deregulated, for lack of a better word, I would like you to enter into a negotiate with them where a clause would be placed into that franchise. And this -- get the clause where it is specifically on the satisfaction the customers -- the franchise are receiving. And if they are not -- if the customers are not receiving the satisfaction, if they are not receiving COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX(714) 836-5195 20 City Council Minutes December 27, 1990 Page 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what they pay for, then there should be a clause on, not upping the rates, and there being a termination of that franchise. I don't know if this is legal, what I'm suggesting. But I suggest that if I were to enter into any contract with any company, and if I wanted to get the benefit of my bargaining, it would simply be to try to hold something over them where, as soon as signed on the dotted line, I wasn't out in the cold. I think this Council has the perfect opportunity to do that. I think the Council also should take note at what the companies now in existence are doing to your constituents. Last meeting I was here, there were over 75 people here to discuss this issue. I appear to be the only one here that came tonight in support of, at least, Times Mirror, or any other company that wants to give us the service that we deserve. If they want to take you to court, that's what we are paying the City attorney for. I think you are going to have some support from your constituents, to go ahead and let these big companies fight it out. But get us the service that we certainly pay for. As I say, I don't know if what I suggested is legal. I don't know if it can be incorporated into a contract. But I would like my elected officials to enter .CERTIFIED COURT REPORTERS (714) 558-9400 ! (800) '729 M AND M FAX ('714) 836-5195 21 City Council Minutes December 27, 1990 Page 24 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 into a contract to try to get me the service that we deserve. Thank you, very much. MAYOR STOUT: Thank you, Mr. Pilman. Is there anyone else that wishes to speak in favor of the franchise agreement? All right. At this time I will allow those who wish to speak in opposition to the franchise agreement. MR. BRUGUGLIO: Good evening, Mr. Mayor, Members of the Council. My name is Sal Bruguglio, and I'm with the firm of Mannerino and Bruguglio. I am here on behalf of both DCA Cable and Simmons. Our presentation will be in three parts. My function this evening is simply to restate the company's legal position. The actual presentation, as far as the company is concerned, from a business standpoint, there will be a separate presentation by the representative of DCA Cable and a representative of Simmons to do that. I do have in the audience, for questions, if the need requires, Mr. Dickinson, who prepared the letter which was handed to you this evening. I have Mr. Tripp, who signed the earlier letters, for you, in the event you have questions for them. Mr. Betman is here on behalf of Simmons. [iyCERTIFIED COURT REPORTERS (714) 558-9400 1 (800)729 M AND M FAX(714) 836-5195 22 City Council Minutes December 27, 1990 Page 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I don't intend to relitigate what we all spent some eight hours doing today in Department 1. I do take some exception to Mr. Coleman's comments concerning the irreparable injury and the denial of the TRO. Having been there all day myself, I know what happened. Mr. Hanson, on behalf of the City, did an excellent job in representing the City at every stage. Being a resident myself, I was glad to see that, from a personal standpoint. The TRO was denied, and it was denied specifically and only on the basis that there was an agreement on behalf of Times Mirror and the City, that DCA Cable and Simmons had their procedural rights preserved for purposes of challenging in the litigation. And I must tell you, the decision to file this lawsuit was done very, very reluctantly. It was -- there were hours spent on conference calls between the corporate headquarters, on whether to do this or not. It was very reluctant. It was a decision that very hard to reach. We did not want to do that, and we don't want to go forward with the litigation if we don't have to. I think it's clear that the ruling and the agreement that stands now, is that there is a minimum of a 60-day moratorium on Times Mirror, if the Council decides to CERTIFIED COURT R~RTERS (714) 558-9400 1 (800)729 M ~ND M FAX(~I4)836-5195 23 City Council Minutes December 27, 1990 Page 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 grant this franchise; whereby Times Mirror can take no action. And again, this is my analysis of the judge's ruling. Obviously, if the City's Attorney's position is different, that's fine. There's a minimum of a 60-day moratorium, where Times Mirror cannot do anything as a franchisee to provide service. They cannot get permits for poles. They cannot trench. They cannot do engineering. They can't do any of those things. And the 60 days is a minimum. Pending what takes place within those 60 days, that moratorium can be extended for an indefinite period of time. The result could be a much longer delay for the Red Hill residents in getting them cable service. Further, if we are forced to go forward with the litigation and Simmons and DCA prevails, then the City will be -- if the City grants a franchise today, that will be voided and you will be back to Square One. The delay of Red Hill could be potentially be from two to four years from now. Those are the stakes the City Council must consider from my standpoint, from a legal position. By going forward and granting Times Mirror, a franchise today, I think it was clear from the judge's comments, that the City has not met the letter of the law, regarding Government Code Section 6066. If you had [ivi~iCERTIFIED COURT REPORTERS (~14)558-9400 I (800)~29 M AND M FAX(~I4)836-SI95 24 City Council Minutes December 27, 1990 Page 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 published full-page ads, every day, from the 19th to today, you've not met the letter of the law. In the judge's own words, to put all your eggs in one basket on the theory of, quote, substantial compliance, is risky. And the cost will be to the Red Hill homes. And the cost could be four years. As far as the business aspect at this point, I would like to turn it over to either Mr. Berman or whoever from -- Mr. Berman. Okay. Mr. Berman from Simmons, and then I think we have Mr. Tripp from DCA. Thank you. MR. BERMAN: Good evening, Mr. Mayor, Councilmen, Mr. Attorney, Mr. Lam. Obviously, I have an uphill battle to explain that you should change your mind about providing TM, Times Mirror with a franchise this evening. I don't want to go through pointing fingers of why, wherehow and whatever of not doing the pocket areas or, for generic sake, the Red Hill area. Times Mirror -- Comcast has been the franchisee in that area. I've not been directed to specifically look into it, except maybe for one or two parts. If there is no passage this evening to Times Mirror, we will have on your desk, signed, that we will serve the Red Hill area, or those parts that are not CERTIFIED COURT REPORTERS (714) 558-9400 ! (800)729 M AND M FAX(~!4) 836-5195 25 City Council Minutes December 27, 1990 Page 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 filled in. Or unless DCA has other parts that they want to do as well. We will commit to them. We have never had a problem. I was asked directly before, why they contended to that. There's other areas which I also want to go into, and some areas that Mr. Pilnick mentioned, that lead me astray as far as economic harm, or if there would be,, I don't know his economic study. We have come in here, Simmons that is, in 1988. We took over a sick company. We have worked hard to replace the antennas. We have an ongoing program to rebuild old areas. It has caused some discomfort to some of our subscribers, because we have to shut some of the area off as we are rebuilding it, and it causes some contention, sometimes for a day, sometimes for a week. And in those cases, we have renumerated the people back or at least give them credit. But we have worked hard. Our future lies to the east. This cuts off some of our future, our growth. Therefore, if we have no economic harm, I haven't seen a study that shows I don't. Now, where is there additional economic harm. Now, we have a company that came in, an unsolicited bid to Lewis Homes, about $550 per dwelling unit. Whether they get the unit as a customer or not, that's what they are coming into. It's got to fit into a rate scheme somewhere. (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 26 City Council Minutes December 27, 1990 Page 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 If I have also areas that I am going to go into, and I find I am bidding against the big guy, I may be successful at a thousand dollars a unit. Next time another company may be successful at $1200 a unit. There's only one place that this head-to-head competition comes down to. It's the subscribers behind us, because ultimately all costs go downhill. And it goes to the subscriber. This does not make economic sense. I'd like to point out that in looking at the areas of the map, and it should be possibly noted that maybe those areas are encroached on another system, if I can understand what those outlined areas are. There may be other systems in there. If that is so, they are the designated areas. Another point, I don't know whether the City realizes it, but it may be waiving its rights based on the franchise agreement as it reads, to any possible rate regulation of Times Mirror, if in such case rate regulation is re-established by either the federal government, FCC or whomever, of upward authority. Title 7 also states that you should have at least your initial rates. They are not stated in this franchise. By omission, you possibly may be giving away rate regulation to that company. However, my company has that stated in there, and I am still susceptible, if and (714) 558-9400 1 (800)729 M AND M FAX(714) 896-5195 27 City Council Minutes December 27, 1990 Page 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 when rate re-regulation would come in. That's another reason not to grant it, because that is not in there. Another case that's not in there, is to service public schools, or I should say, public buildings throughout the area. This is also by omission. Now, I will tell you how, such a terrible job that Simmons has done, that we have dedicated close to $100,000, going into public buildings. Though we only have to do our ISA, or initial service area, we are putting them in and they are not in our initial service area. But if I follow the letter of the law, according to my franchise, I've overspent a lot of money. But you have omitted in their franchise agreement, for public buildings. Now, we try -- we worked hard to be a good citizen, a good corporate citizen. We have not stopped anything at any time from Day 1 that we've taken this system over. We have re-invested every penny that we have made, back into this system, to improve it, to make it better. Yes, some people have been upset at times because the way the pictures look. Sometimes you have to take them off to make them better. I don't want to sit here, I'm not an attorney, to espouse law. ['i~~'.CERTIFIED COURT REPORTERS (714) 558-9400 ! (800) 729 M AND M FAX ('~14) 836-5195 28 City Council Minutes December 27, 1990 Page 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 One of the thoughts was, that possibly the law, to be enacted after the first of the year, was actually -- was not an amendment to the present law. It's just a clarification. That's something to take into consideration. I'd like to look -- I'd like you to look into those items. I don't think we are, as the case was stated, that Times Mirror has a more stringent franchise. However, a lustrous franchise. You've left things out which, by omission, gives them more freedoms than we will ever have, based on Title 7. I hope you reconsider. Thank you. MR. TRIPP: Good evening, ladies and gentlemen. I'm Minor Tripp, the general counsel of DCA Cablevision, a member of the partnership committee and an officer and director of the corporate general partner of that company. I am the author of one of the letters that you have before you and am here to reiterate what is set forth in that letter, and also to point out Mr. Dickinson's committment, that we are prepared, to cable the uncabled areas in Area B. In fact, if City policy is to provide cable service to the Tetra Vista tract and to Area B, that policy, I think, would be best served by denying the present application. CERTIFIED [~i~'~R EPORTERS COURT (714) 558-9400 ! (800) '~29 M AND M FAX ('~14) 856-5195 29 City Council Minutes December 27, 1990 Page 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The application before you, is, as we have suggested, deficient both in substance and in the procedure by which it has been adopted. As I said in my letter to you, we are a small company. We have worked at cabling the southern section of Rancho Cucamonga, our initial service area, including large areas of very expensive underground. We did that, because the form of our franchise provided that when we were done, that when the initial service area was finished, we would have a citywide franchise. And your own cable ordinance said that any developer had to allow a cable company with a functioning citywide franchising into its development. What has happened in the past several months, is that one developer has decided that it doesn't have to do this. That it can refuse access to a licensed cable company, notwithstanding the provisions of your ordinance. We think that what they've done is a violation of that ordinance and our concern is that with this application process, if the City approves this franchise, the City would, in effect, be endorsing that violation, by agreeing that it's proper conduct for the developer to shut us out of the area that, in effect, we've spent millions of dollars to have the right to enter. COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 836-5195 City Council Minutes December 27, 1990 Page 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 We respectfully ask that you not do it. We think it's not fair. We will move to cable the Red Hill area. We would have done so sooner, even though it was outside our initial service area, except for the problem arising from the fact that the area is surround by a Comcast cable system. And that the City seemed continually to be in negotiations was Comcast, which makes it very hard for us to undertake a building program when, you know, we can start on Day 1 and get our lines part way there and then somebody can give Comcast a franchise and they can overbuild us before we get there. But on any kind of an arrangement where there's some feeling that we can go forth and build the area, and not that there will never be a competing franchise, but that perhaps there will not be any additional franchises for some reasonable period of time to permit us to build, we are prepared to go build that. And that committment is before you in writing, tonight. The procedure by which this has been adopted, I think is really something that needs to be looked at. It is at the heart of the lawsuit. The procedural objections by stipulation of Times Mirror in the City are preserved for further litigation, if a franchise is granted tonight. CERTIFIED COURT REPORTERS (714) 558-9400 ! (800) 729 M AND M FAX (714) 836-5195 31 City Council Minutes December 27, 1990 Page 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It has not been a process that complies with your own Ordinance 220 or with state law. Your ordinance calls for an application. Your ordinance calls for a public record. It now turns out, although we have been asking for documents for months and received nothing except a copy of a one-page letter dated in November, which staff told us was the application, but three or four business days ago the complete copy of the Comcast application referenced to Ordinance 220, which was filed last April, suddenly surfaces. If that document had been available earlier, if it had been available for public inspection and comment, a lot of these issues could have been addressed, could have been put to bed. If the City is going to adopt a policy that favors developers cherry picking their own cable systems, at least it should be after an open hearing, after full debate. And after considering such questions as, is this rule unique to cable service, or does it apply garbage collection, police protection and other potential services. Just how far is the principle that any developer's supposed to be able to be hand in glove with any company, whether or not it's operating in this City. COURT REPORTERS (714) 558-9400 I (800) ?29 M AND M FAX (714) 836-5195 32 City Council Minutes December 27, 1990 Page 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And who it is, and what service they are providing. You know, in the face of an ordinance, is that really something that you wish to adopt. Anyway, as you know, it has been our contention that the application has been deficient in terms of the material submitted. That it's been deficient in terms of the materials placed on the public record. That the notices have been technically deficient. And that all of that, put together, amounts to a fundamental denial of public hearing and of due process. We feel that this hearing is not considering fairly and with an opportunity for adequate public input, the issues mandated by A.B. 543. We feel that the proposed franchise further fails to comply with A.B. 543 and that it probably franchises two TMC areas, which are actually being served by other cable companies. We object to the substance of the proposed franchise because it completely omits any rate provisions, as other people have indicated. And because certain requirements that were imposed on both Simmons and our company, for instance, providing access to government buildings and having an immediate office in the community, are not contained in that franchise. Again, if you are to issue a franchise, it CERTIFIED COURT REPORTERS (714) 558-9400 1 (800)729 M ~ND M FAX(714) 836-5195 33 City Council Minutes December 27, 1990 Page 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 should be a franchise which provides a truly level playing field with the other companies. We suggest to you that the failure of this proposal and of the notice of procedure to comply with Ordinance 220 and with A.B. 543, should preclude any action by the City. We also suggest to you, as a question of serious public policy, aside from its possible illegality, the unique indemnification agreement, which is contained in this document. Which purports to give a private company complete control over litigation by the City. Which by its term says, that if an action is brought, the City cannot settlement it, even should it wish to do so, without the consent of the private company. And we ask you to consider beyond, whether such an agreement is technically lawful, whether such an agreement is even remotely good policy. In short, we believe the proposed franchise violates the letter and spirit of our franchise, of your ordinance and of state law. We suggest the only way to proceed fairly with this, is either to deny this application or to go back, start over again with a fair, open and public process, where all issues will be placed on the table. Where the public's business will be conducted in public and not behind closed doors. And we respectfully ask you ["~CERTIFIED COURT REPORTERS (714) 558-9400 I (800)729 M AND M FAX(714) 836-5195 34 City Council Minutes December 27, 1990 Page 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 tO do that. Thank you. MAYOR STOUT: Thank you, Mr. Tripp. Is there anyone else that would care to speak at this time, in opposition to the franchise agreement? MR. GRAHAM: Mr. Mayor, Members of the Council. My name is Clayton Graham. I reside at 9955 **Robers Court. I'm the general manager for DCA Cablevision here in Rancho Cucamonga. I will be very brief. Our company did complete our initial service areas that were spelled out in the franchise requirements. Upon completion of those pocket -- of those initial service areas, we proceeded to do engineering, do feasibility studies, et cetera, on the pocket areas that were spelled out in the Red Hill area. Some of those areas we have completed. We did engineering. We have submitted -- had submitted applications to the phone company, telephone company for attachment on the poles to provide service into some of the pocket areas. From a business standpoint, we were trying to move forward at a local level. We knew that Comcast was negotiating with the City. And at that point, because of their proximity on the pocket areas, it was a tough business call to move forward, as had been mentioned earlier. Thank you. MAYOR STOUT: Thank you, Mr. Graham. CERTIFIED [Ti~REPORTERS COURT (714) 558-9400 ! (800) 729 M AND M FAX (714) 836-5195 35 City Council Minutes December 27, 1990 Page 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. DICKINSON: Mr. Mayor, City Council. My name is William S. Dickinson, 909 Rich Drive, in Concord, California. I'm the CEO of DCA Cable. I'm going to try to be just a little bit brief and try not to be so emotional, since this thing impacts me greatly. I challenged Mr. Pilnick any day of the week, if he wants to stand in my shoes and tell me that this franchise has no economic impact on me, then I will be happy to give my position to him and I'll take his. This has a tremendous economic impact to me, because it impacts me through my bankers. I came into the City of Rancho Cucamonga before you had an ordinance and started serving the people in this community, under a county ordinance. And when you passed your cable television ordinance, I was one of the companies that agreed to accept a franchise from the City and to carry forward and try to bring service to the people of Rancho Cucamonga. And we took the area, it's on the southern side of Rancho Cucamonga, an area that is very expensive to build, because it required undergrounding of all of their power cable system for a major portion thereof, by cutting the streets throughout the area. And we proceeded to do that under the agreement of your franchise, that having done that, that CERTIFIED COURT REPORTERS (714) 558-9400 1(8oo) 729 M AND M FAX(714) 896-5195 36 City Council Minutes Decen%ber 27, 1990 Page 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 we would be allowed to continue to build in those new areas as they developed, because of the economic impact that we had. We agreed to service your City Halls, your schools, as we went along. And you're currently right now attempting to try to put service into this City Hall. We did not have at the time it was put in, the opportunity to get into an open trench to bring our cable here. And we attempted to bring it here by utilization of an aerial run, and we are not able to that under your present ordinance. And we have agreed and are in the process of working with your staff to bring service to this building, at our own costs and expense. You are not requiring this new franchisee to do any such thing. It is not in this franchise. It is not in this franchise, any rate regulation, that we had imposed upon us. And which we had to go through in the early stages of. what we did. We have been providing service to our customers, within the City of Rancho Cucamonga, at a rate below that provided by anyone else in this area. We still continue to do that. We have offered on time to time, to be able to service the pocket areas and have continued to move towards serving those areas. It's expensive. It is not economically reasonable. But we have said we would continue to do so CERTIFIED COURT REPORTERS (714)~8-9400 1(800) ~29 M AND M FAX(~14) 836-5195 31 City Council Minutes December 27, 1990 Page 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and we offered it again tonight. And I say "again" because we have previously. We didn't set a time date on it. We'd only do that if we go through our banRers, an~ they have agreed, we can do that. So we will provide service. We have been providing the service in the Lewis Homes, ever since we've been here and they started construction. And now all of a sudden we are no longer there. We no longer can serve those people and go into the trenches. There is no wav that we can get a return on the investment that we have put in Rancho Cucamonga in the next 15 years. And I will lay it out for you, any day you want to look at it, on the record. We have spent millions of dollars in bringing service to this community, and would like the right and the ability, under our franchise, to be able to enjoy some economic benefits of what we brought to this community. And if you grant this franchise to our competitor, who can obtain his programming at a cheaper rate than I can, who can do various kinds of services that he claims, but he has had no office in this City for over a year. He has not agreed to provide one. We do. What services is he going to provide. The franchise that I have in front of me doesn't require him CERTIFIED COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX ('714) 836-5195 38 City Council Minutes December 27, 1990 Page 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 tO provide any particular level of service. Says he'll build a system that can provide it, but he's not required to under this franchise. I have not yet seen his application for this franchise. An attorney has received that. And I believe my attorney received the Fax copy of that. But after consistently asking your staff for copies of that information, we have not received it. That's why we believe that we are being unfairly treated in this situation. And I beg of you, if nothing more, if reconsideration to what you are doing -- considering tonight and not grant the franchise as it is currently structured. I thank you. MAYOR STOUT: Thank you, Mr. Dickinson. Is there anyone else who would like to speak as an opponent of the franchise agreement? MR. COLEMAN: Good evening. I am Bob Coleman, general manager of Comcast Cable. I would like to say it's a pleasure to finally be able to speak tonight and be part of the proceedings. I think as our first proponent spoke tonight, or actually second, the citizen of Rancho, I would like to expand, if you will bear with me for a minute, on some of the proceedings, because I believe the public has not been exposed to what may have been going on and not -- I don't CERTIFIED ~R EPORTERS COURT (714) 558-9400 I(800) 729 M AND M FAX(~I4) 836-5195 39 City Council Minutes December 27, 1990 Page 42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 want say, "behind closed doors," but what's been going on in negotiations, or they are not aware of what it's actually been doing. If you will bear with me for a second, I'd like to make the public aware that actually we began our first proposal back on May 26th of 1987. In that proposal we offer to build these areas within 12 months. So it is not that we have not built the areas or not ever offered to build these areas. It's not that we have not wanted to build them. It took the City until August -- I am sorry, later that year until I think it was forwarded, until, I think it was June, until things were rejected. Said, "No, we can't go with this franchise. You'd have to meet with us." At that point negotiations fell apart. We came back over the last three years, been negotiating with the City, to try to get a franchise. And most of these cases we're going a six-month period, between proposal and rejection. So while we're -- we're hearing tonight about a rushing of weekly process. We are going at this point saying, now it's important to do this very quick. Before -- I mean, our last proposal was in July, we received our response in November. I have copies of that tonight if you'd like to see that. Before we were CERTIFIED COURT REPORTERS (714) 558-9400 ! (800)729 M AND M FAX(714) 836-5195 40 City Council Minutes December 27, 1990 Page 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 rejected. So we're all of a sudden rushing. Before this wasn't a matter of public urgency. Looking back at the things that we've done, we have always said we'd like to build these areas. Nowhere along the way have we said -- and, in fact, most of these areas are in the Comcast area. The two other members tonight, are really showing their concern for the City, and their public concern. But to say that they'll come in and build in an area that primarily isn't even their ISA, it's in ours. We will take that responsibility, but we'll also say we have offered to build these areas. To my knowledge, no one has ever formally requested in writing as per the proposals, to any of us, to build these areas. I think that is something that's been missing. During the negotiation process, it became very clear to us that Title 7, the enabling ordinance had many, many flaws in it. Some of those were just the deal, provisions had been overturned by federal law, specifically the Cable Act. Other things were just blatantly wrong, and we pointed those out. What we were told was Title 7, even though it may be superceded, if it has, then we are not going to change it. So whatever superceded would become effective, (714) 558-9400 ! (800) 729 M A~ND M FAX (714) 8.~6-5195 41 City Council Minutes December 27, 1990 Page 44 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 and if it was challenged, it would be thrown out. So there was no need to change Title 7. We found -- we were stunned when we received the Times Mirror proposal. Because all along we were told no changes could be made. We had to agree to exactly the same thing as DCA and Simmons. Imagine our surprise when we took the ordinace as you granted -- you are considering tonight, and found you took out rate regulations. Found out you made numerous changes throughout the whole thing. Changed "shalls" to "may." Granting a lot more latitude to this fourth operator than the people who are already here making committment to your community. Title 7 represents a problem to all the operators here tonight. And I think the real solution is not another franchise, is to go back and look at Title 7. Bring it into compliance with federal law. Make it change where it does work for all the operators. There's a provision in Title 7, for instance, that prohibits any political cable casting on access channels. That is a violation of law. We pointed that out. We said, "We would like you to change that." We were told, "Well, if it's a violation, it will be changed later." Basically we're -- all we have asked for is to make Title 7 in compliance. CERTIFIED COURT REPORTERS (714) 558-9400 1 (800) "29 M AND M FAX (",14) 836-~,19~ 42 City Council Minutes December 27, 1990 Page 45 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 At one point, up to December of 1988, we were told anything that was wrong in Title 7, we could fix in the franchise. And we worked diligently with the city staff to make those changes. When it came down to the end, very surprised move, December of 1988, we were suddenly told, the City decides not to make any changes anymore. And all the negotiations that we worked for, over the last six months disappeared. We were told, exactly, we had to go back and accept exactly what the other two had agreed to. Again tonight, we are looking at something totally different. You've limited your franchise cost in this agreement with Times Mirror, to out of pocket versus reasonable. You're allowed to provide service in Area A, at the same time you're providing service from Area B. That's something you haven't granted to the other two operators. They were required to build their areas before they could go anywhere else. Title 7 requires an office in the City. You are saying it's okay if they don't build an office for 12 months. That's just not fair. Ultimately, one other thing to consider, is Title 7, which I have here tonight, requires a written approval from the grantor. And if you will allow me to read this into the record. One second. (714) 558-9400 ! (800) 729 M AND M FAX ('vl 4) 836-~ 195 4~ City Council Minutes December 27, 1990 Page 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Grantee shall utilize existing poles, conduits and other facilities whenever possible. It shall not construct or install any new, different or additional poles, conduits or other facilities, whether on public property or on private-owned property, as we have in this case, until the written approval of the grantor is obtained. To my knowledge, there is no public approval, written approval to a grantor for this area in Lewis Homes. Naturally, Lewis Homes would say, "We placed the conduit, it's ours." But you have Times Mirror sending letters out in August of this year saying, "We are your cable company," to the people in Lewis Homes. They are not even a grantee at this time. I think you have many, many conflicts. And I think all three operators tonight have pointed out that this is just not the right thing to do. I hope you will agree with me. We reiterate, we are very willing to build this area. We will start building construction the day after a franchise is granted. We are the best, capable of building it. We have the designs. We have the people. We have the contractors in line. We have the materials. It's been budgeted for three years. Every year we plan to build this on the contention that the (714) 558-9400 I (800) '729 M AND M FAX ('714) 8.~6-'~195 44 City Council Minutes December 27, 1990 Page 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 franchise will be granted. Every year we have gone another year without doing it. We would like to build this area. You have three operators existing tonight that have all said that to you. I don't think you are suddenly seeing a plethora of operators come out of the closet, because of this competition. I think you are seeing operators come out of the closet that have bten here all along and have been very active citizens in this community. I would like to introduce Jim Bequette, our regional vice-president from Comcast, at this time. MR. BEQUETTE: I'm Jim Bequette, the regional vice-president of Comcast. My office is in Seal Beach, California. From my office we serve over 250,000 customers in Southern California. Comcast is the third or the fourth largest cable company in the United States, depending on whose numbers you accept. We also have a reputation as one of the best cable companies in the United States, and are almost a pure cable company. We don't have a lot of other businesses like the Times Mirror Company. 95 percent of the revenue of Comcast is from cable. And we've been in the business for 27 or 28 years. And Comcast has never sold a cable company which is what iCERTIFIED COURT REPORTERS (714) 558-9400 ! (800) 729 M AND M FAX ('714) 836-5195 45 City Council Minutes December 27, 1990 Page 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 very few others can say. We are totally committed to customer service. We have a training center, state of the art training center in Newport Beach, California, for just the training of our personnel in our Southern California systems. We have won more Ace Awards for excellence in local programming in our Southern California systems, than any other cable company. In fact, we're Number 2, naticn~lly, for our system in Orange County, which has won 13 Ace's, which is what's awarded, the equivalent to an Oscar or an Emmy to the others, which is a cable award. So we have an outstanding reputation for service, for our financial capabilities. Wall Street recognizes us as the best cable system. Many analysts recommend a buy on our stock when most of the others are not in a buy position. And we are totally committed to outstanding customer service. Comcast purchased Group W in 1986, is how we come to have the franchise, which was a county franchise here. We've never -- Group W nor Comcast, has never had a City franchise. In 1987, it was over -- we purchased in '86. So in 1987 when we surveyed what we had, there was over 110 miles in San Bernardino County, in the cities that we acquired that had not been built. Most of it in Uplands, TiCERTIFIED COURT REPORTERS (714) 558-9400 ! (800) 729 M AND M FAX (714) 836-519~ 46 City Council Minutes December 27, 1990 Page 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Ontario and Montclair, plus these pockets that have been discussed tonight, here, in Rancho Cucamonga. The franchises in the other three adjoining systems, Uplands, Ontario and Montclair, were up for -- were expiring at the time. In March of 1987, we renegotiated each one of those three franchises. And the day after the Council, the last one of those three cities passed -- approved the franchise, I signed the contract the next day for the construction of the 110 miles. And it was completed by February the next year, serving over 10,000 people that the predecessor cable companies had not seen fit to build. We were prepared in 1987 to do that, in Rancho Cucamonga. The capital request was actually laying on my desk and we were proceeding to try to establish the franchise in here, since we were only operating under a business license. And which was grandfathered in under a county franchise before the City was constituted. And that money has been appropriated for building out what the Red Hill areas, you called it, and the other pockets, that has been appropriated 1978 -- 1987, 1988, 1989 and 1990. The money is there, if we could negotiate a reasonable franchise. And many of the cable companies in the early '80's went into cities, who were first awarding CERTIFIED COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX (714) 836-5195 47 City Council Minutes December 27, 1990 Page 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 franchises, and made all these wild promises, which they reneged on later on. Comcast did not enter into that game. Comcast takes seriously, the contractual relationship we have in each and every franchise. We do not close our eyes to some of the provisions which are not good business practices. And in Title 7, there's some provisions in your ordinance that we could not live with. And over the period of time we had many discussions, and I believe it was last fall, there was a meeting with the staff and your cable consultant, where the bulk of these were resolved. And we thought we were going to have a franchise in 1989. And a few weeks later, before the document was received, we had a call and everything we agreed to had been wiped out. We had tried again this year and we finally received a letter just the other day, that said we can't agree to anything. So that I believe that Comcast has, in very good faith, for 1987, '88, '89 and '90, for four years tried to negotiate a reasonable franchise, which a conscientious cable company would live up to and not close their eyes to the some of the provisions and hoped they wouldn't be enforced. Comcast has not engaged an attorney. We really take it serious and I know the other companies did CF-A~FIED COURT REPORTERS (714) 558-9400 I (800)729 M AND M FAX(714) 836-5195 City Council Minutes December 27, 1990 Page 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 tOO, but we have not engaged an attorney. But if the franchise is awarded to the Times Mirror Company, we will have to take two actions. One, we will pursue our franchise under the provisions of the Cable Act of 1984. Since we haven't been able to do it in the prior four years, but we will pursue it and invoke the provisions of the Cable Act of 1984. And the other thing, we will turn the whole matter over, including any franchised awarded to Times Mirror to our attorney for review, because we believe that some of the findings found in their franchise, we were flat out told that it couldn't be done. And we will be reviewing that for possible discrimination against us as a company. I thank you for your time, and we sincerely request that you review the entire franchise relationship matter with Comcast. We have the money. We have been prepared for four years to build out those pockets. We did it in the other cities. And I, in closing, would like to say, we are here and ready to serve if we can negotiate a franchise which is reasonable, like we have in the other cities. Thank you. MAYOR STOUT: Thank you. Is there anyone else who wishes to speak in opposition of the franchise agreement? COURT REPORTERS (714) 558-9400 ! (800)729 M AND M FAX(714) 836-5195 City Council Minutes December 27, 1990 Page 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 All right. At this time if the proponents would like to give a very brief rebuttal, I will entertain that and then we will close public testimony. MR cmtt~v~v: u~,,~r Councilmembers, I will keep it brief and I won't go into discussing a lot of the items that came up. To be frank, I don't think a number of the issues raised apply to whether or not we should be granted a franchise. There were a couple of comments made about different -- COUNCILMEMBER ALEXANDER: Excuse me, one second. For the record, should we identify for the record who is speaking again? MAYOR STOUT: Yes. MR. STUCKEY: I'm sorry. Mark Stuckey, vice-president, Times Mirror Cable Television of Riverside County. MAYOR STOUT: Thank you. MR. STUCKEY: We didn't request any changes in Title 7, under which our franchise was written and hopefully granted. Although Section 9.1 of our franchise agreement binds us to both that agreement and Title 7, all the provisions of Title 7. For example, if the City were allowed at some point in the future, to regulate rates, we would be bound Fivi~CERTIFIED COURT REPORTERS (714'1 558-9400 ! (800) 729 M AND M FAX ('Y14) 836-~195 50 City Council Minutes December 27, 1990 Page 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 by the provisions in Title 7 that deal with rate regulations. Title 7 also refers to service to public building within our franchise service area. We again, we comply with Title 7. They don't need to be addressed again in the -- in our franchise. They are addressed in Title 7. It dealt with -- excuse me, I'm trying to follow my notes here. Public buildings, rate regulations. Again, I am not sure what was behind some of the comments on changes, why we have something different. We've agreed fully with the provisions of Title 7 in our franchise. In terms of serving the Red Hill area, I think it's pretty clear that granting of a franchise to us, definitely assures the City that the Red Hill area is going to be served one way or the other. Thank you. MAYOR STOUT: Okay, the public hearing is closed. All right. At this time we move on to the Council discussion. We will start by asking staff to comment on any of the areas that were covered that they feel the City Council should have information about. MR. MARKMAN: Mr. Mayor, I have some -- since lawyers talk, I guess lawyers have to finish and then Mr. Pilnick, I am sure, is going to have some remarks. But CERTIFIED COURT REPORTERS (714)558-9400 ! (800)729 M AND M FAX(~!4) 836-~195 51 City Council Minutes December 27, 1990 Page 54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 there were some notes I made, I think the Council should be aware of. I was -- it was remarkable to me that one of the attorneys who spoke, spoke of the level playing field being available to all the cable companies. I must have heard that phrase 300 times in negotiating in another city, of refranchising from that cable company, which is a different cable company owned by a Dr. Tao, Century Cable. They kept talking about the level playing field in granting new franchises. And what they're talking about in this case, and the reason why a lawsuit was brought, as I think the Council is aware, or should be made aware of again, is the fact that for two years the cable companies have been lobbying into existence, in California law, a set of criteria for additional franchising that creates anything but a level playing field. It creates a loosey goosey criteria that can lead to lawsuits. Any time the City considers granting an additional franchise, and now as of January 1, there's a provision of law going into effect in California, which I am sure will be litigated on a federal antitrust basis, requiring, essentially, anybody whose franchising -- new franchising in a city where franchises already exist, to build out the entire city within a certain amount of time. CERTIFIED COURT R~RTERS (714) 558-9400 I (800),29 M AND M FAX(714)836-$19S 52 City Council Minutes December 27, 1990 Page 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Something which no franchising in the City of Rancho Cucamonga has ever been required to do. Something that if you consider a city like Los Angeles, is almost an inconceivable task. Something that fences out the competition. And we're hearing all sorts of arguments about one publication instead of two, prior to the meeting a week ago, which I believe, personally, is disingenuous on the part of companies who have gotten up here tonight and admitted they were aware of the consideration of Times Mirror for months. Not for a week or days, but four months. And they pursued a copy of the actual written application, which evidently was misplaced by the staff for months, and have known of this process for months. Yet filed a lawsuit this morning and tried to preclude the Council from evening considering anything tonight, for tonight, for the sole purpose of pushing this matter into next year, so that they could force any new franchisee to build out the entire City of Rancho Cucamonga to be considered. And yet we get an attorney, and principal, one of those companies coming up before you asking for a level playing field. I think he's asking for the tilt to go his way rather than their way, if you wanted to [i'i~CERTIFIED COURT REPORTERS (714) 558-94OO I (800) 729 M AND M FAX (714) 8.~6-5195 53 City Council Minutes December 27, 1990 Page 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 recharacterize it fairly. So I don't know about the level playing field. I do want to point out also to the Council, that we considered and now admitted by Times Mirror, that they would be subject to rate regulations, if that's reinstituted under federal law. And any other provisions now left in Title 7, if reinstituted under federal law. That's the reason we are suggesting not taking those matters out of Title 7, because if they were ever reinstituted, we intend for the City to apply them to the franchisees. The other thing we want to point out is that we have two franchise companies that can now build out Red Hill. As was indicated on the record by Mr. Bruguglio, and he is correct, there is a 60-day moratorium that has been placed on the Times Mirror from acting, if you grant them a franchise this evening. And within those 60 days, one of two companies certainly -- or two of two companies can begin the process of building these pocket areas. Obviously they weren't willing to do so before, because they may have been afraid that Comcast would receive a franchise, and they could more easily build it out. Now they are concerned that Times Mirror may receive a franchise. But they always have a concern that :CERT FmD COURT REPORTERS (714) 558-9400 ! (800) '~29 M AND M FAX ('~14) 836-519'5 54 City Council Minutes December 27, 1990 Page 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 they'll expend a certain amount of money and somebody can more easily build it than them. But right now there's obviously 60 days where nobody can build anything in those pocket areas, except the two existing franchise companies. Also Comc~ does not have a franchise, as they indicated. I might point out for the record, if they seek one now, it certainly couldn't be awarded until after January 1. And they would be required to build out the whole City of Rancho Cucamonga. And I'm sure their brethren here are taking their side of this issue, would be pointing that out to you. On the question of the publication, that was a major issue. It's a procedural issue. We feel there was substantial compliance. We also feel the record is now replete with statements to the effect that the litigants long, long ago had notice of this process, when they appeared and said they only had the one week's notice, they were given an extra week. Furthermore, additional notices were supplied for the entirety of that week. So it's hard for me to believe that anybody can come in here tonight and say that they didn't have that two weeks' notice, that this matter would be considered, or the time to properly prepare to make the presentation to the Council. The other thing about the unavailability of COURT REPORTERS (714) ¢~58-9400 I (800) '729 M AND M FAX (714) 836-5195 55 City Council Minutes December 27, 1990 Page 58 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 the application, while the application was misplaced and we agreed with that and we thing that that's a shame and it shouldn't have been misplaced and should have been more easily supplied. I still haven't heard anyone get up and tell us what was in the application that could be cited to this Council as a reason to deny this franchise. An application is an application. It describes the company. It describes what it is, what it has, what system is being proposed and so forth. I mean, if there's magic in the fact that they couldn't read the application sooner than they were allowed to, because of the misplacement of it, then we haven't heard why. All we've heard is that something was misplaced and that they didn't read an application. They all stated that for months they have known that Times Mirror was negotiating a franchise that would come to hearing. I guess my final comment is, on the indemnification agreement, it is not unusual to see these. Where cities, for example, condemn offsite property on behalf of developers. And the developer has to pay for the acts -- you know, has to pay for the legal cost, appraisal cost and the acquisition cost, as would be the case here. As if this were an insurance company giving us (714)558-9400 1 (800)729 M AND M FAX(714) 856-5195 b6 City Council Minutes December 27, 1990 Page 59 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 first dollar insurance. If anything goes wrong with this process, it is not unusual for the party putting out the money to decide on what basis the matter will be settled, particularly if it's settled through the payment of their own money. I certainly don't think anything is invalid or really even unusual about that indemnification. From our point of view, it protects the public coffers against the litigation that has already been instituted in and around this procedure. And I guess those are all the comments I feel compelled to respond to. And I think Mr. Pilnick may have other responses he wants to give to you. MAYOR STOUT: Before Mr. Pilnick comes up, I have a couple questions I want to ask you. First of all, the generic question, in your opinion as a city attorney of Rancho Cucamonga, does this franchise agreement meet our ordinance and the state law, as you -- MR. MARKMAN: Yes. In my opinion the substantive franchise does both of those things. I'm not going to make a judgment on whether one could feel whether it's fair or unfair compared to the others. MAYOR STOUT: No. MR. MARKMAN: And I don't think anyone has alleged, CERTIFIED COURT REPORTERS (714) 558-9400 1 (800)729 M AND M FAX(~14) 836-519~ 57 City Council Minutes December 27, 1990 Page 60 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in and of itself, it's invalid. Again, I want to point out, it has a blanket clause incorporating the enabling ordinance. If not restated in here, including the reinstitution of rate regulation. And Times Mirror has recognized that on the record. So it's all applicable. All those regulations are applicable. They are just not paraphrased or restated. MAYOR STOUT: The second question I have is, it was alleged by Comcast -- well, first of all, it's my understanding that their county franchise agreement is supposed to expire sometime in the near future, is that correct? MR. MARKMAN: Fulwood -- MR. FULWOOD: MAYOR STOUT: I'm not sure of the facts. Maybe Mr. January 17th, 1991. Next month. There's been some allegation about a 1984 state law, of some sort, or federal law, that he indicated that they are going to obtain a franchise agreement. under that law? I'm unfamiliar with that law. MR. MARKMAN: I don't have the familiarity with it where I would want to respond as to what the gentleman said. Or whether it, in fact, through litigation or otherwise, he could obtain what I think probably is the right to continue to serve the area he's serving. I don't think he would allege or suggest that CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FA.X (714) 836-5195 58 City Council Minutes December 27, 1990 Page 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would give him the right to serve another area that he's not now serving, which includes, of course, Red Hill. But those are items -- that's the first time I heard of that and it hasn't been alleged in any of the lawsuits filed to date. So I can't fully respond. MAYOR STOUT: All right. MR. MARKMAN: I don't think -- with respect to that, I don't think it has a direct impact on the Council's decision this evening, in any event. MAYOR STOUT: Does anyone else on the Council have any questions of Mr. Markman at this time? All right. Mr. Pilnick. MR. PILNICK: Thank you, Mr. Mayor. Some of my responses might be a little bit chaotic, because they'll be in the order in which I wrote them down rather than perhaps in logical order. I would like to respond to your first point that you made a moment ago. I believe that what the Comcast representative was referring to was a letter that Comcast sent to the City, perhaps about two weeks ago. Which basically invoked their right to follow the renewal procedures under the 1984 Federal Cable Act. That doesn't give them any particular automatic franchise. All it does is set up procedures that the Cable Act calls for in case of renewal. And I'm CERTIFIED COURT REPORTERS (714) 558-9400 I (800) 729 M AND M FAX (714) 856-5195 59 City Council Minutes December 27, 1990 Page 62 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not sure that that would have substantive effect on anything, particularly if they don't like the ordinance under which the City is operating right now. A number of comments have been made about the level playing field, Mr. Markman referred to. And also that some of the things in the Times Mirror agreemnent were taken out of the agreement, which were in the previous agreements. And it's little astonishing to me, I think. We took out those areas, such as listing of rates, simply for the very reasons that the people have already pointed out, that rates have been deregulated by the Federal Cable Act. And, therefore, there was no point in putting rates into a new franchise that was agreed to after the Cable Act became effective. It would be completely meaningless. We took out a listing of services for that very same reason, because the Cable Act prohibits cities to specify particular services. So it surprises me a little bit, for them to object, that by taking out a listing of rates, somehow or other, we are losing the right to reregulate rates if Congress gives you that right, which I don't think wi ~ happen, in any event. But apart from that, I think you have 3ust as CERTIFIED COURT REPORTERS (714) 558-9400 ! (800)729 M AND M FAX(TI4) 836-5195 City Council Minutes December 27, 1990 Page 63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 much ability to reregulate, as you would have by -- if the rates were listed. Those arguments to me don't make much sense. There were a number of comments again about the comparison of the substantive parts of the franchising agreements. Some discussion of -- they had to meet certain requirements. And it's true that when we negotiated or tried to negotiate with Comcast, we used the Simmons and DCA agreements as models. And we tried to negotiate something that would be very similar to those models. With Times Mirror, I think what has happened in the agreement, is that in almost every substantive respect, the agreement with Times Mirror is much more stringent than anything in the DCA or Simmons franchises. I would just like to go through a few of the items simply to be specific. In the DCA, Simmons agreement, for enforcement capability, there was a security fund of $20,000, initially. Reduced to $5,000 upon completion of initial construction. I am not even sure whether any of that security fund is still in force at this point. With Times Mirror, there is a $250,000 initial security fund, of which at least $25,000 must be in cash, reduced to $25,000 upon completion of initial [7iCERTIFIED COURT REPORTERS (714) 558-9400 1 (800) 'r29 M AND M FAX (714) 836-5195 61 City Council Minutes December 27, 1990 Page 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 construction. So that the ability to enforce -- or the company's requirements in terms of cash value is something like 12 times as high as anything in the Simmons or DCA agreement to begin with. There is a $100-a-day maximum liquidated damages limit in the Simmons and DCA agreeements. There's a $500-a-day limit in the Times Mirror agreement. With the DCA and Simmons agreements, there was an automatic requirement, an automatic provision there, that when the companies completed service within their internal service areas, they could then serve any other homes in the City. With the Times Mirror agreement, all it says is that when they complete their initial service area, then the City agrees to sit down in good faith and negotiate a possible expansion of their agreement. But there's nothing in the agreement that enables them automatically to serve any other part of this City, which is much more restrictive than has been placed on the other cable companies. The system requirements, there's a 60-channel system as compared to a 52-channel system for the other two, which reflects the fact that in five years, essentially, we are trying to keep up with the state of 25 the art. CERTIFIED COURT REPORTERS (714) 558-9400 I (800) '29 M AND M FAX ('/I 4) 836-S 195 62 City Council Minutes December 27, 1990 Page 65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 There's the hold harmless provision, which I think has been discussed previously. But essentially, it's a provision which was obviously designed to protect the City. And I'm not a lawyer, so I won't speak from a legal viewpoint. But to me it makes absolutely no sense for the City to be spending its general funds for what essentially is a conflict between two cable companies, or three cable companies. Between the ins and the outs. Essentially, this is a situation where the City is caught in the middle as a result of the state law, and the timing and everything else. And I think it would be foolhardy of the City to basically take the position that there's an unlimited treasury of general funds that can be used to fight some cable company's franchising battles. I think I've -- I can go through more, but I think I've indicated major areas. And I think if you go through the franchises, and I prepared a chart, item by item, you will see that in no case that I can see, was Times Mirror's franchise any more lenient. In many cases it was much more stringent. And that is part, as I see it, of the intent of the state law. The intent of the state law, which to me is a protectionist law, obviously, is basically to m,ake it COURT REPORTERS (714)558-9400 ! (800)729 M AND M FAX(~I4) 836-5195 City Council Minutes December 27, 1990 Page 66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 difficult or impossible for the second cable company coming in to compete. And there's nothing in that state law that says you cannot make the provisions of the new franchise more stringent. As a matter of fact, that's the intent of the law, although it's not specifically stated. Everything in the law is intended to prevent you from granting a more lenient agreement to a new company. And that's the so-called level playing field that everybody is talking about. But I think in this agreement, no one who reads it and compares it with the DCA and Simmons agreements, can take the position that Times Mirror is being done any favors. Also, to make a comment about the application. I fully agree with Mr. Markman about the question of what are the contents of the application that are so meaningful. I'll also point out that when we finally got a franchise agreement with both DCA and Simmons, we negotiated those agreements so that regardless of what an application -- an application is a proposal by company. And it, in my cases, is favorable to the company. And it perhaps will propose only those things that the company wants to propose. And it's the (714) 558-9400 ! (800) 729 M AND M FAX (714) 836-Si95 64 City Council Minutes December 27, 1990 Page 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 responsibility, as I see it, of the City, to negotiate additional benefits for the City, if it can do so. So as I was part of those negotiations was DCA and at that time the predecessor to Simmons, I remember clearly that we negotiated those agreements. They were not simply the rubber stamping of an application that the companies might or might not have put in. So I think the whole question about the application and where it was and why wasn't it available, is pretty much a red herring, as I see it. A couple of other comments on some of the statements that have been made here. I want to reiterate something that Mr. Markman said. There is nothing, as I see it, to prevent, certainly, DCA and Simmons, from cabling those unserved homes right now. And I see no reason why it takes a big conference, based on the presumption that you will not grant the Times Mirror franchise, to sit down and then work out something to do something, which in my opinion, should have been done five or six years ago. With respect to the Comcast comments. I think my recollection is a lot different from what I've heard. Yes, it's true that we started negotiating quite some time ago. And we ran through a number of cycles. And perhaps the reason, as I see it, that [7iCERTIFIED COURT REPORTERS (714) 558-9400 1 (800) 729 M A.ND M FAX (714) 836-5195 65 City Council Minutes December 27, 1990 Page 68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 negotiations sort of came to a halt, six or eight months ago, was simply the position that was taken by Comcast. That unless you change your regulatory ordinance, to suit them, they were not even going to talk about a franchise agreement. And that comment was made a number of times, that the franchise agreement was not the problem, the problem was the regulatory ordinance. Now, the ordinance does have some provisions that have been pre-empted by the Cable Act, which was passed after the ordinance was adopted here. And it's true, we all recognize that some of those things in the ordinance that deal with rates and services and so forth, are pre-empted. And, therefore, I think anyone would assume they are not enforceable at this point. But that's only part of the issue. They were a great many other changes that Comcast wanted, that had nothing to do with pre-emption of the Cable Act, that had to do with what they felt were too restrictive provisions, that would somehow or other get in the way of operating their business. And when we pointed out that there were two other companies that were operating their businesses and somehow or other did not seem to feel any restrictions [7iCERTIFIED couRT REPORTERS (714) 558-9400 I (800)729 M AND M FAX(714) 836-5195 66 City Council Minutes December 27, 1990 Page 69 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because of that ordinance, that -- basically that argument didn't hold. There still is a letter that I have to copy of, from Mr. Bequette, as of just a couple of weeks -- about a week or so ago. Which basically -- no, I am sorry, I am talking about the letter of July 31st, which I have here. And it still lists a number of items, 13 in this particular letter, which the company insisted had to be changed before they would consider negotiating a franchise agreement. And most of these, all of these 13 had nothing to do with the Cable Act. They listed a variety of additional ones that they felt were pre-empted by the Cable Act. And their bottom line was, essentially, we do not believe in undertaking contractual obligations which are not in keeping with good business practices. They gave us a copy during the negotiations of the ordinance for the City of Upland. And essentially, I guess, suggested that we would be well off to consider that one. I read that ordinance. I have a copy of it here. I think that it's a sweetheart ordinance for the cable company. Basically I would not recommend that the City make changes along those lines. I feel that most CER'HFIED COURT REPORTERS (714) 5'58-9400 I (800) '729 M AND M FAX ('714) g36-~, 195 67 City Council Minutes December 27, 1990 Page 70 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of the items that are in the ordinance that are not pre-empted, are not unreasonable. And most companies have found that they could live with these in other communities. So I view this, as not a question of the City being unreasonable, the ordinance. I view it as a question of a company that basically said, you play it under our rules or we don't play at all. We have also been told tonight that there was budget money available for serving the unserved homes. We've heard a number of times -- now, I think it may be true, there was no written request to serve those unserved homes. But verbally they have been told that many times. And I don't think that they are unaware of that. We have heard many times that this piece of the Comcast system was essentially the tail of the dog. That it was just an appendage to the larger portions of the system that severed the surrounding communities. And that, therefore, it was not very high priority. And there were no real plans for expansion, and there was no enthusiasm for pushing the franchise negotiations to a conclusion. So I draw the conclusion that it was not City that was obstinate or prevented a franchise from being negotiated. My opinion is that it was the company. :CERTIFIED COURT REPORTERS (714) 558-9400 1 (800)729 M AND M FAX(714) 836-5195 bd City Council Minutes December 27, 1990 Page 71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I will be happy to answer any questions, if you have any. MAYOR STOUT: MR. PILNICK: Are there any questions of -- Oh, I would like to -- Mr. Mayor, I would like to make one more comment. And that is with respect to the items in A.B. 543 that Mr. Markman has mentioned. And I will simply give you my opinions on each of these items. Item Number 1, you are supposed to consider whether there will be significant positive or negative impacts on the community. If by "the community" you mean the residents, I think that in my view there would be significant positive impact. In the sense that first you will get homes served that have never been served. And secondly, I think even the threat of competition has already indicated to me, at least, that there are significant benefits that can acrue. Secondly, whether there would be an unreasonable adverse, economic or aesthetic impact on public or private property, in the area. If we're just talking about the rights of way of public property, I don't see any more significant impact with one more cable company, particularly with a good section of their system being underground. Whether there will be an unreasonable adverse [TiC ERTIFIED COURT REPORTERS (714) 558-9400 1(800) 729 M kND M FAX(714) 876-5195 69 City Council Minutes December 27, 1990 Page 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 economic or -- I am sorry, whether there will be an unreasonable disruption or inconvenience -- let me touch on the one I just mentioned a minute ago. If you are talking about adverse impact on other cable companies, there may well be. And I would not quarrel with Mr. Dickinson if he sees an adverse impact. I am willing to take his word for that, since his company has the right to make that judgment. I don't think that any franchise that's granted by any community to a cable company, carries with it the implication that the community has an obligation to make sure that that company is profitable forever. And that that company is never threatened by competition forever. I think, just the fact that competition is beginning to happen in a few communities, usually the ones with a lot of future growth, is good for the community. It may not be good for all the cable companies, and I think there are lots of economic data that indicates that competing for the same customers is economically adverse to all the companies involved in it. But I'm not sure what priority you want to give that. And how you want to weigh the benefits of competition to the community versus possible adverse impacts to one or more of the existing companies. Whether there will be an unreasonable CERTIFIED COURT REPORTERS (714) 558-9400 I (800) "729 M AND M FAX (7! 4) 836-¢, 195 70 City Council Minutes December 27, 1990 Page 73 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 disruption or inconvenience to existing users or future users of the rights of way, I don't see that. The public utilities who have the poles are perfectly competent in protecting their own rights of way. The underground areas are the areas that the City is generally concerned with. And I think -- I don't see that putting additional cables in the ground is necessarily going to have an adverse impact on the users of the rights of way of present. Whether the franchise applicant has the technical and financial ability to perform, I won't make a judgment on that, but I think you can determine that on your own, on what's been made available to you with respect to the resources of Times Mirror. ~ Whether there is any impact on the franchising authority's interest in having universal cable service, and that's one of the major items we've been talking about. I haven't met a community yet that I've worked with that does not want universal service. And usually companies find one reason or another not to serve or to delay serving those portions of the community that, for one reason or another, either are in low density areas or in underground areas that they feel they simply do not want to serve. And I think you not only have an interest, I (714) 558-9400 ! (800) 729 M AND M FAX(714) 836-5195 71 City Council Minutes December 27, 1990 Page 74 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 2 3 4 5 6 7 would hope that you would have an obligation to try to get universal service. There's been a lot of talk about cream skimming and a new company coming in, just picking a particular location and skimming the cream. There's truth in that. There's also truth in the statement that the cable industry in general has been a cream skimming industry, simply on the basis that most companies have come in and served the areas that are most profitable first, and deferred all other areas until it suited their convenience. Finally, whether other societal interests generally considered by franchising authorities will be met. I can't comment on that. Whether the operation of an additional cable television system in a community is economically feasible, again, all I can say there is, I suspect that if we get real competition for the same subscribers, that one or more companies will be adversely affected economically. Whether that's a reason not to grant another franchise will be up to you. Thank you, I will be happy to answer any questions, now, if there are any. MAYOR STOUT: Are there any questions at this time of our consultant? COUNCILMEMBER ALEXANDER: Two very brief questions. CERTIFIED COURT REPORTERS (714) 558-9400 ! (800) "29 M AND M FAX ('~14) 836-5195 72 City Council Minutes December 27, 1990 Page 75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MAYOR STOUT: Yes. BY COUNCILMEMBER ALEXANDER: Because I know that you are quite well aware of cable companies in other communities. Would you say that to have four cable companies operating within a community is an exorbitantly high amount of cable companies for a service area? MR. PILNICK: Well, I live in Los Angeles and we have 12 companies. Of course, it's a much bigger city. I don't think the issue is whether four is too much. I think the issue is service. If you had four companies competing throughout the city for all of the same subscribers, that could be a very chaotic situation. What I see you have now is three monopolies. You don't have competition. And the question is whether the fourth company coming in will result in four monopolies or whether it will result in the beginning of competition. And also an important question is, will the competition last. Because if one company is bought out or forced out, you are back in the same situation again. But I don't think that simply four is -- or three is a magic number. I think it depends on what service areas will be and whether there is genuine competition between the cable companies. CERTIFIED COURT REPORTERS (714) 5'i8-9400 I (800) 729 M AND M FAX ('~!4) 836-5195 73 City Council Minutes December 27, 1990 Page 76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 COUNCILMEMBER ALEXANDER: One other thing that was stated during the course of conversation from the other cable companies, and although I've only been on the subcommittee that dealt with cable, for a couple years, I know that you've been involved longer and certainly Mr. Buquet has. Do you feel that there's been any roadblocks thrown up by the City to have these companies go in and provide service to the unserved areas or those islands or areas of Red Hill? MR. PILNICK: I am not aware of any. I don't know all of the discussions between staff and the cable company representative. But from my part, I've heard over a period of years, from staff members, the difficulty that they were having in getting those companies to respond to the fact that there were pockets that were not served. And lots of excuses but no action. COUNCILMEMBER ALEXANDER: Thank you. MAYOR STOUT: Any further questions of Mr. Pilnick at this time? Thank you. At this time, to give you some kind of an idea of the magnitude of the cable -- I call it a problem because I mean that in the truest sense of the word, the cable problem in this city. This City Council had designated a subcommittee to work with our city staff and CERTIFIED COURT REPORTERS (714) 558-9400 I (800)729 M AND M FAX(~I4) 836-~!95 74 City Council Minutes December 27, 1990 Page 77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the cable companies to attempt to provide the best possible levels of service available. So at this time, I'm going to ask for our subcommittee to discuss their feelings about this, if they wish, and also to make their recommendations to the Council with respect to what we ought to do. COUNCILMEMBER ALEXANDER: Problem is -- I was just going to say, my statement would probably be the briefest, because Mr. Buquet has been involved in this for a long period of time. There's been a lot of testimony and a lot of opinions given this evening. However, I will say that I think it's only a group of people's fault that we're even here in this situation tonight. My personal feeling is that we would have had the ability to not even deal with the Times Mirror, had the work and committments, and certainly verbal committments that I have been privileged to, at several meetings, that areas of the City providing service to the citizens would have been met. I haven't seen any true action. I have not seen any roadblocks, personally, thrown up by the City, the Council or the staff, to get areas in the community served. Right now there's a lot of people that don't have cable service. F'i~~CERTIFIED COURT REPORTERS (714) 558-9400 I (800)729 M AND M FAX(714) 836-5193 City Council Minutes December 27, 1990 Page 78 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Of the City. existing. My personal opinion is, that's not the fault It's the fault of the companies that are COUNCILMEMBER BUQUET: I've had the pleasure, possibly dubious distinction of serving on the cable subcommittee for the Council, since it was originally set up. And Mr. Pilnick and I have had a number of meetings over a number of years, in trying to -- and we talked about this at the very beginning, was the intent of the cable activity, as far as on the part of City, was for the purpose of universal service throughout the City. That each'and every household that wished to subscribe to cable would have the opportunity to do so. One of the interesting aspects with the cable industry, is that they have the unique benefit of having the privileges of a public utility, by virtue of the protections that they have through federal law and some of the other pre-emptive measures that they've been able to get to cover their operations~ while not having to have the responsibilty and accountability as public utilities do in the State of California, to Public Utilities Commission. As a result of that, is that you get things like rate regulations knocked out. You get things like consumer affairs boards or review processes, other than at the local county level, which are almost ineffective, i7]CERTIFIED couRT REPORTERS (714) 558-9400 ! (800) '729 M AND M FAX ('714) 8.2,6-~i!9$ /6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 City Council Minutes December 27, 1990 Page 79 knocked out of the loop. So we basically are at the mercy of whatever the latest version of the federal revisions that are there. I really found it interesting to listen to all the comments that were made by representives of the cable industry. And I'm not going to tell you that it was the longest consecutive string of BS that I've heard since a candidate's forum, other than the honest statements that were made by a few people that I think honestly didn't know otherwise. But there were so many contradictions to what I have personally observed and listened to, in meetings that I have been there in the process of negotiations. And it's a direct contradiction to the actions that I have seen thus far. Mr.. Pilman's comments were echoed by a good number of people. I've been inundated with phone calls from residents. I feel that the existing cable company's maybe have opened up a Pandora's Box because there are a lot of people out there very unhappy about the present state of affairs. And I believe you are going to see that this issue is going to come back to the forefront in the City, and you have no one to blame but yourselves in that CERTIFIED COURT REPORTERS (714) 5'~8-94OO I (800) '~29 M AND M FAX('~I4) 836-%!95 77 City Council Minutes December 27, 1990 Page 80 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 regard. If all of those people who had contacted me and indicated they represented other people in certain areas were here, present this evening, this room would be standing room only. And you will see that in the future, I am sure. We cannot revoke franchises for poor-performing companies, because when you pull the plug, so to speak, there's no one there to provide the services. So we are at the mercy of the cable companies. I think the key aspect is, we're talking non-exclusive franchises here. And any cable company that comes in and thinks that they have a lock on the territory, that they have, better go back and read the first portion of the franchise agreement. I was disappointed to hear veiled threats and innuendoes to the effects that by the Council moving forward with the granting of a franchise to Times Mirror, that the existing homes, approximately 1,000, that cannot get service at this time, possibly would face a delay of two to four years, which I would see more as a punitive measure than anything else. References that -- complaints about the sweetheart deal, supposedly made with a private developer in respect to access to their residential project, I found that interesting because of the fact that one of the cable COURT REPORTERS (714) 558-9400 ! (800)~29 M AND M FAX(714)836-5195 78 City Council Minutes December 27, 1990 Page 81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 companies that is here, protesting so loudly in that particular area, had the same deal worked out, except apparently the price went up. So I find that a direct contradiction. Feasibility studies and comments and rhetoric as to going out and serving those areas and the good faith efforts of those representatives from Comcast for good faith negotiations to move forward, I would say, frankly, came down more the situation of negotiation by confrontation and extortion. And I am very much offended by the process that has occurred. I don't feel that the representatives from the company that is presently about to go out of compliance for a franchise agreement, has been in good faith. In fact, it's been quite the contrary to that. Everybody has been aware of the fact that we have been trying to get these areas served. And I've seen more activity, Mr. Mayor and Members of the Council, in the last 30 days, as far as, quote, unquote, cooperation and interest of serving the public and the citizens, than I have seen in a number of years sitting on this cable subcommittee. So, apparently, we have struck a nerve somewhere. I am not one that is in favor of going forth on something when someone likes to threaten that there CERTIFIED COURT REPORTERS (714) 558-9400 ! (8430)729 M AND M FAX(~14) 836-519~ City Council Minutes December 27, 1990 Page 82 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 might be potential litigation, but I would like to remind the Council that we have an obligation to the people that we represent, many of those that could not be here this evening, to insure that at some point in time, in the near future, and I would like to say in our lifetime, hopefully, that we can provide all of the governmental facilities with cable access. That we can provide all she residential areas with cable access. And I believe that this is a step forward in that direction. And let them slug is out in the courtroom, that's their prerogative. I believe that we need to keep forward as far as what our long-term goal was in the beginning. MAYOR STOUT: So is it the recommendation of the subcommittee that this franchise agreement be approved? COUNCILMEMBER BUQUET: That would be our recommendation. MAYOR STOUT: before we vote? Diane, did you have some comments COUNCILMEMBER WILLIAMS: No. Coming new onto this, I have had to catch up. But I do have the comments from fellow residents, and when I was walking precincts, I did have many comments of -- not so much regarding the franchise; as, please, please, get us good service. And maybe this will be a step in the right CERTIFIED COURT REPORTERS (714) 558-9400 ! (8oo) 729 M ~ND M FAX (714) 836-~ 195 ~J City Council Minutes December 27, 1990 Page 83 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 direction, maybe by encouraging the competition. MAYOR STOUT: I just have a couple of brief comments. I view this whole situation almost like Rancho Cucamonga being a large tank, and you have these four sharks swimming in this tank. And unfortunately, the only think that they have to feed on, are the residents. And they're all floating there, begging for their lives, to get some kind of decent cable service. And we've been, basically, told to stay out of the tank. To stay by the side and watch this whole thing go on. It's extremely frustrating. I was angry when I heard the mention of the word label, "level playing floor." Because when I was in Washington last year, I was talking to our congressional representative about the lobbying efforts that have been going on, on behalf of the cable industry. And if you want to talk about an unlevel playing floor, where's the residents and who represents their rights in Washington D.C., and also who represents their rights in Sacramento. Based on the legislation that I've seen, obviously no one represents their rights. The cable companies have had their way for years now. And the only people that have suffered are the residents. We have the opportunity here now to at least try and get some cable CERTIFIED COURT REPORTERS (714) 558-9400 1 (8oo) '~29 M AND M FAX (714) 836-5195 81 City Council Minutes December 27, 1990 Page 84 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 service over to Red Hill, where nobody has wanted to serve that area, not being economically feasible, I guess, from a businessman's point of view. One of the things that we've heard tonight is the fact that there's economics involved in this. Well, that's what America is all about. There's economics involved throughout the country. There are businesses competing all throughout the country. Unfortunately the rules have been written, changing January 1st. At least it's my understanding, to try and prevent a little bit of that competition which was supposed to make this a better system. That's why I assume we're here tonight acting before the first of the year. It's a -- and I'll tell you, if you talk to the constituents that I have in this City, I have yet to hear one single.resident of this City, and I'll tell you, as the mayor of this City, I am basically the lightening rod for most of the problems around here. I have yet to hear one single resident say one good thing about a cable company. And that's all of them combined. And I don't know what you've been doing out there to make those people so angry, but you have been doing a good job of it. With respect to the economic harm. I have heard some mention of that tonight. I don't CERTIFIED Tier EPORTERS COURT (714) 558-9400 I (800) "29 M AND M FAX ('~14 ) 8F,6-~ ! 95 82 City Council Minutes December 27, 1990 Page 85 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 see this as economic harm. I see it as lack of economic gain. And it's not our business here to make people profitable or to make profit for them. It's our job here to serve the residents of this City. That's our first -- at least, my feeling, our first and primary job. So I think this franchise agreement, as Chuck has indicated, is something that's only necessary because of the lack of attention we have received from our cable companies that we have here already. We don't want to do this. We don't want to have to deal with four different franchises. I mean, it's -- that's bad business for us. But on the other hand, I don't want to have people calling me at home all the time, telling me that they've had such terrible experiences with their cable companies all the time. And then trying to talk to my state legislators, and talk my federal legislators and getting absolutely nowhere. I mean, it's the point now where the special interests from the cable company have so much influence on Sacramento and the federal government, that I have -- I see no hope on the horizon for this ever to get better. And if that's what the cable companies want, they got their way. You know, they basically got their (714) 558-9400 ! (800)~29 M AND M FAX(714) 836-5195 83 City Council Minutes December 27, 1990 Page 86 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 way as far as the law is concerned. This is our only opportunity to try and help the people who live in this City. So for that reason, I am reluctantly in favor of this franchise agreement. But I don't see the new franchise person coming in being much different than the other three. I don't want to single out the good guys and the bad guy, because I don't see any good guys or bad guys. I see all bad buys. And one day, hopefully, somebody is going to do something with our legislature in Washington or Sacramento, and they are going to clean this whole situation up. I have that hope. I don't see it on the horizon, but I have that hope. Because that's the only thing that's going to change this, give us the ability to regulate these people again, and we'll make sure that the service is provided correctly. We have, in my opinion, the best trash service of any city anywhere, because we have good franchise agreements. They were hammered out at arms length, between business people, the City and the business community, working at arms length. They make money. The City residents are happy about the service. It's at a reasonable rate and so CERTIFIED COURT REPORTERS (714) 558-9400 1 (8OO) 729 M AND M FAX (714) 836-$19'~ 84 City Council Minutes December 27, 1990 Page 87 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 forth. And I think we did a darn good job at it. And if we had the opportunity to do that to the cable companies, I think everybody would be a lot happier. Because I'll tell you right now, I am very unhappy about this situation. Okay. Is there someone who would like to make a motion with respect to the proposed ordinance -- excuse me, Resolution Number 9493? MR. MARKMAN: Mr. Mayor, just prior to the motion being made, I do want to point out, so that there's no confusion on the record, what was passed out in the original agenda, the resolution has been modified in two respects, and these are essentially procedural. First, we have referenced as Exhibit A, the agreement which is included in your packet which is the agreement that was negotiated that would be attached to the resolution as Exhibit A. Be sure we understand which franchise we are granting. And that is the franchise in the form of that agreement. Secondly, there is a new Paragraph 3 in this resolution that certifies this Council's consideration of those California Government Code criteria. That's Subsection 53066.3(a) of the Government Code. That list I went over and the list that Mr. Pilnick went over. So your resolution now certifies that you CERTIFIED COURT REPORTERS (714) 558-9400 I (800) '~29 M AND M FAX ('~14) 856-5195 85 City Council Minutes December 27, 1990 Page 88 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 consider those criteria. Those are the only changes from the resolution as originally prepared. MAYOR STOUT: All right. Is there a motion on Resolution Number 90493? COUNCILMEMBER BUQUET: So moved. MAYOR STOUT: Moved by Buquet. COUNCILMEMBER ALEXANDER: Second. MAYOR STOUT: Seconded by Alexander. Indicate your votes, please. CITY CLERK ADAMS: Motion carried unanimously, 4-0-1 with Wright absent. MAYOR STOUT: All right. That concludes Item 1. There's no additional formal business before the Council tonight. Item C, communications from the public. This is the time and place for the general public to address the Council. State law prohibits the Council from addressing any issue not previously included on this agenda. However, the Council may receive testimony and set the matter for a subsequent meeting. Comments are to be limited to five minutes per individual. Yes, sir. please. MR. PRICE: I would like to address the Council, CERTIFIED COURT REPORTERS (714) 558-9400 1 (800) 729 M AND M FAX (714) 836-'5195 City Council Minutes December 27, 1990 Page 89 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MAYOR STOUT: Please come forward and state your name for the record. MR. PRICE: My name is Pat Price. I am a resident of Rancho Cucamonga, living at 8531 Calle Corrabe. I was delighted to come here this evening and learn that I live in a pocket area. And I was also interested to hear the Council's comments with respect to this problem that you've been battling. And I would like to say thank you for your responsible action this evening. MAYOR STOUT: Thank you, Mr. Price. For the record, I see four sets of clapping hands. Hearing no one else that would care to address the Council under this communication from the public section, I will now entertain a motion to adjourn. Is there such a motion? COUNCILMEMBER BUQUET: So moved. COUNCILMEMBER ALEXANDER: Second. MAYOR STOUT: Moved by Buquet. Seconded by Alexander. Indicate your votes, please. CITY CLERK ADAMS: Motion carried unanimously, 4-0-1, with Wright absent. MAYOR STOUT: City Council is in adjournment. (Whereupon, the public hearing was concluded at 7:55 p.m.) FCERTIFIED COURT REPORTERS (714) 558-9400 I (800) "29 M AND M FAX (714) 836-~19~ City Council Minutes December 27, 1990 Page 9C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Dated :. 15 16 17 18 19 2O 21 22 23 24 25 REPORTER 'S CERTIFICATE Shorthand Reporter, do hereby certify that the foregoing proceeding was written by me in Stenotypy, and transcribed into typewriting and that the foregoing is a true and correct copy of my shorthand notes thereof. ,J N 0 991 (714) 558-9400 (213) 637-3550