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Home My WebLink About1984/01/24 - Minutes - AdjournedJanuary 24, 1984 CITY OF RANCHO CUCAMONGA CITY COUNCIL MINUTES Adjourned Meeting An adjourned meeting of the City Council was held on Tuesday, January 24, 1984 in the Lions Park Community Center, 9161 Base Line Road. The purpose of the meeting was to present a cable television needs assessment. Mayor Mikeis called the meeting to order at 7:05 p.m. Present were Councilmembers: Richard M. Dahl, Charles J. Buquet II, James C. Frost, and Mayor Jon D. Mikels. Absent - Phillip D. Schlosser. Also present were: City Manager, Lauren M. Wasserman; City Attorney, Robert Dougherty; and Assistant to the City Manager, Robert A. Rizzo. BACKGROUND Mr. Carl Pilnick, President, Telecommunications Management Corporation, presented a background report on the present cable television service in Rancho Cucamonga. There are currently four cable television companies permitted to operate in the city. These companies were franchised by the County of San Bernardino prior to incorporation of Rancho Cucamonga, and some companies will be able to operate for another 10 years or so. Cable service is being provided to approximately 4-5,000 homes (about 25% of the residents) in Rancho Cucamonga. The city's task is to provide service to the remaining 75% and to standardize areas served by the four companies. Approaches to take would be to establish standards not affecting the four companies, but future companies, and to establish new requirements when their franchises are up for renewal. STATUS REPORT Cable is regulated at two levels: federal (FCC) and state. The FCC established franchise fees at 3% of the gross receipts and 5% of gross receipts under waiver conditions with FCC approval. The FCC preempts rate regulations. Once the city could regulate rates for basic service. The city cannot regulate rates for movie channels and pay television, but can regulate services that generate less revenue. The city cannot regulate contact of programs. The state regulations prevent the city from asking for advances and allows cable to deregulate. The city is not able to do much with respect to control of rates. Pending legislation will make it difficult not to rene~ a franchise once a company is selected. The burden of proof is on the city to prove the cable company is not operating in an acceptable manner. The city can award a franchise to no company, one company, or more than one company. Cable companies need 30-40% of owners subscribing to break even. If more than one company is franchised, a monopoly may eventually occur with the most solvent company having control. When this happens the customer has no other choice if not satisfied with the service. The city can establish procedures to be sure cable services will be updated. The city can regulate the use of the system for public benerrs. Kinds of service provided by cable television is one way entertainment, two way, and closed circuit. Entertainment services would consist of movie channels which are most profitable. The city cannot regulate movie channels regarding rates and contents. Non-entertainment services would include school City Council Minutes January 24, 1984 Page 2 interconnection and government programming, which cable companies are not happy to provide. The purpose of this needs assessment meeting is to focus on non-entertainment services. Mayor Mikels stated there is estimated to be a 12% reduction in transportation due to cable services and asked if it were feasible to conduct business by cable methods rather than transportation. Mr. Pilnick replied it would be very feasible. The Portland Fire Department has been conducting fire training sessions among all their stations via cable and has found it to be very cost effective in saving time and money. Councilman Frost asked if cable television could be handled like the telephone to provide service to inaccessible areas in the city. Mr. Pilnick replied that those in inaccessible areas must be considered when establishing a cable service. Requirements could be established tha- would state that a cable company would have to provide service to everyone in the area with no exceptions and serve everyone at the same price. Mr. Pilnick also stated that FCC rules prohibit a telephone company from operating a cable company in the area that they service. The telephone company could build a system and lease the capability to a company. He feels with deregulation of the telephone company, they will attempt to get into the cable television business. Councilman Dahl stated in our particular area several cable companies serve some areas and other areas are not being served at all. Mr. Pilnick stated we could require cable companies not to limit service to certain areas and standardize the system throughout the city. He stated we could grant a franchise for the 75% unserviced at this time or grant a franchise for the entire city. The question is whether the new company is willing to compete in areas already serviced by a cable company. Councilman Buquet stated he would like a compatible system throughout the city and aksed if we have control of cable companies to service areas compatible with new develoment. Mr. Pilnick stated the following alternatives: 1. Franchise part of the city or the entire city. 2. Franchise one company or more than one company. 3. Require a construction schedule as part of the franchise agreement; establish penalties if not ~omplied with. 4. Require the cable company to serve all areas. 5. Franchise the entire city and ask if they would compete in areas already served. 6. Franchise a company to serve the 75% not served now and require them to expand into the 25% area when the other franchises are up. Councilman Buquet was concerned about the service presently being provided to the 25~ - are we locked in. Mr. Pilnick stated we have some legal restraints and need to standardize service. Councilman Buquet asked how to deal with the problem now. Mr. Pilnick stated we establish an ordinance for regulatory capability and set standards. Councilman Buquet asked at what point is the non-profit point. Mr. Pilnick stated a franchise granted will probably be granted forever because of the difficulty in getting the company out. To be assured of future service, when granting the franchise provide in the ordinance and franchise agreement that the cable company make provisions for upgrading their system. Councilman Buquet asked if the city could own the public access and allow the cable company to use municipally owned ducts. Mr. Pllnick stated this would be a good thing to do and would reduce costs to construct the system. Councilman Buquet asked if the city could take over cable television operation in the city. Mr. Pilnick stated not usually in suburban areas. Developers usually deal with privately owned property and we cannot franchise if only private streets are used. City Council Minutes January 24, ~984 Page 3 Mayor Mikels opened the meeting for public input. Those addressing City Council were: * Karen Hogoboom - wanted customer service considered when establishing a cable franchise. * Ulla Bauers - requested considerati'-~ of public service aspects, anticipate the needs of the future, and c~ain from applicants their past performance records. * Herb Younger - include in the cable agreement two way communication from homes. * Ralph Hogoboom - consider another company to replace Acton. He also requested a copy of the proposed franchise. · Sharon Romero - requested international capabilities. S~AR~ Mr. Pilnick summarized by stating the next procedure would be to establish a regulatory ordinance which establishes general guidelines, but does not include specifics. Then ask companies to submit proposals, select company or companies, and negotiate a franchise agreement which will have all the specifics. The time element would be one month to establish an ordinance, two to three months for proposals, one to two months for evaluating the proposals, and establishing the agreement, for a total of 6-9 months. ADJO~PJ81ENT Motion: Moved by Buquet, seconded by Dahl to adjourn. unanimously 4-0-1. The meeting adjourned at 8:35 p.m. Respectfully submitted, M~n~ Acting Deputy City Clerk Motion carried qlr'T-