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Home My WebLink About1996-12-23 97-61 RESOLVECOUNCIL ACTION Date: 12-23-96 Item No. 97-61 Item/Subject: RSSOLW, Approving an extension of Franchise Agreement with A -R Cable Services - Me, Inc. t0 Provide Cable Television Service to June 30, 1997 Responsible Department: Legal Commientary: See attached memo DR WFAn PAR Manager's Caimenta:(b i,N k4P�vVUmlar hM%�A N mwY�. n 3 kG%duu.�riuJ^ry 'u'^. -M SY OJ i�r. �P iG/Imi..Q wDuilPw/��`Ma7vYi.n�2ne( - a��uN Associated Infoxnation: Memo, Resolve Legal Approval: �mY Slli.T _Introduced For _ Passage _ First Reading Pageof Referral 97-61 Approving an Extension of Franchise Agreement (TITLL) Psalue................ .............. .... _.._......... ..._..._..._............... .... _..... ... ..._._..._.. with A -R Cable Services - ME, Inc. to Provide Cable Television Service to June 30, 1997 By City Council dthe VOW of Ba . BBBOLVBD. WHEREAS, A -R Cable Services - ME, Inc. ("A -R Cable") is the holder of a Cable Television Franchise Agreement originally granted by the City of Bangor to Coastal Cable Carp. on May 1, 1981; and WHEREAS, A -R Cable's franchise, as previously extended by Council Resolve 96-181, will expire on December 31, 1996; and WHEREAS, A -R Cable has requested a renewal of its franchise; and WHEREAS, the City of Bangor is a member of a consortium of. communities that are negotiating franchise renewals with A -R Cable; and WHEREAS, extension of the current franchise agreement until June 30, 1997 is necessary to allow further negotiations with A -R Cable, NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Bangor: The cable television franchise currently held by A -R Cable under the original franchise agreement dated May 1, 1981 is hereby extended to June 30, 1997. The franchise fee to be paid by A -R Cable to the .City of Bangor during the extension period shall be percent of A -R Cable's gross revenues from sale of its services in the City of Bangor, excluding charges for installation fees and deposits. Assigned to Councilor Aube Decmebet 23, 1996 'r _ CITY OF BANGOR Approving an Extension of Franchise Agreement (TITLL) Psalue................ .............. .... _.._......... ..._..._..._............... .... _..... ... ..._._..._.. with A -R Cable Services - ME, Inc. to Provide Cable Television Service to June 30, 1997 By City Council dthe VOW of Ba . BBBOLVBD. WHEREAS, A -R Cable Services - ME, Inc. ("A -R Cable") is the holder of a Cable Television Franchise Agreement originally granted by the City of Bangor to Coastal Cable Carp. on May 1, 1981; and WHEREAS, A -R Cable's franchise, as previously extended by Council Resolve 96-181, will expire on December 31, 1996; and WHEREAS, A -R Cable has requested a renewal of its franchise; and WHEREAS, the City of Bangor is a member of a consortium of. communities that are negotiating franchise renewals with A -R Cable; and WHEREAS, extension of the current franchise agreement until June 30, 1997 is necessary to allow further negotiations with A -R Cable, NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Bangor: The cable television franchise currently held by A -R Cable under the original franchise agreement dated May 1, 1981 is hereby extended to June 30, 1997. The franchise fee to be paid by A -R Cable to the .City of Bangor during the extension period shall be percent of A -R Cable's gross revenues from sale of its services in the City of Bangor, excluding charges for installation fees and deposits. IN CITY COUNCIL 97-61 December 23, 1996 E E S 0 L V E Passed As Amended Amended by inserting "5" in the blank apace Approving an Extension of Franchise provided in A2 Agreement with A -R Cable Services - ME, INC. to Provide Cable Television Service CITY CLERK to June 30, 1997 /J�Q/ 9]-61 All other terms and conditions of the existing franchise shall remain in effect. This extension is without waiver of any rights the City Or A -R Cable may have under the existing franchise, the Cable Communications Policy Act of 1984, as amended by the Cable Television Protection and Competition Act of 1992 and the Telecommuni- cations Act of 1996, or any other law. This extension shall be deemed ineffective unless accepted inwriting by A -R Cable Services - ME, Inc. within ten days after passage of this Resolve. 9]-61 MEMORANDUM December 5, 1996 T0: Bangor City council FROM: Erik Stumpfel, City Solicitor RE: Cablevision Franchise Renewal Negotiations I have received a letter from Harold Parks, who apparently is still performing his duties as Brewer City Manager, regarding recent developments in Cablevision's franchise renewal negotiations n Maine. S&g copy attached. Mr. Parks' letter summarizes recent settlements of Cablevision's franchise renewal negotiations with Lewiston and Auburn, which may provide a basis on which to re -start the stalled negotiations between Cablevision and the 14 member group of Bangor -area franchising authorities. Cablevision's current franchise agreement with the City of Bangor, as previously extended by City Council Resolve 96-181, will expire December 31, 1996. Based on the Lewiston -Auburn settlements, Mr. Parks has recommended that all 19 communities in the Bangor area group extend their current franchise agreements to June 30, 1999, to allow for further negotiations. I have drafted a Council Resolve, attached, which would extend Cablevision's current franchise agreement with the City of Bangor to that date. At the same time, I recommend that the City Council consider taking the following steps to help move these negotiations along: -- Raise h franchise fee paid by to the City of Bangor during the extensions Period from the current 3% to 5% of Cable - vision's gross revenues in Bangor. Five percent is the maximum amount allowed under federal law. The 5% can be rolled back is the final franchise renewal agreement, if appropriate, to the current 3% or to some other level. The interim 5% figure would give Cablevision an added incentive to conclude the current negotiations at an earlier date. The view contrary to a franchise fee increase would point out that franchise fees are treated by Cablevision as a pass-through item, and are billed directly to Cablevision customers, rather than Cablevision. 2 9]-61 -- Resume the local needs assessment regulred under the federal statutory srenewal process. In September 1993, following receipt of Cablevision's written notice that it would seek a renewal of the present franchise agreement, the City opened a four month public comment period, to be followed by two public hearings, to satisfy the requirement for a local needs assessment under federal statutes governing cable television franchise renewals. That process was sidetracked when direct negotiations with Cablevision resumed n late 1993. If direct negotiations are ultimately unsuccessful, federal law contemplates what amounts to a request for proposals process based on local cable needs and interests identified through the local needs assessment process. I recommend that the City Council resume that process by reopening the public comment period and holding the two public hearings originally planned, so that the statutory process will be on track if needed after June 30th. The primary sticking point in our three years of franchise renewal negotiations with Cablevision has been Cablevision's unwillingness to commit to a system -wide fiber optic upgrade as a condition of franchise renewal. wal. While Cablevision's Lewiston -Auburn. agreements may provide a way around this impasse, Bangor should be prepared to go forward with the statutory renewal process commencing July 1, 1997, if no agreement is reached prior to that date. B.S. to Enclosures PC: Edward A. Barrett City Manager 97 -fit CITY OF BREWER cxr x.n Brewer, Maine 04412-2039A7 a 80 N011 Mon $1e" FAX swoo one 0 X ixon 2Do Mewaazs 9 To: Cable Television Consortium Members Attorneys for Member Communities From: Harold F. Farts, City Manager " RE: Cable Franchise t -- - Date: December3,1996 ---=`- At last, some good nemsl! A.R. Cable Services - ME, Inc., better known to us as Cablevision, has reached an agreement with the Cities afAuburn and Lewiston. This agreement may well become the basis upon which we can goforuwrd unth our negotiations with Cablevision. There are two interesting points in this successful settlement that should interest all of us. They are: 1. Tenn and Upgrading of System. The settlamentalionsforanextension of the cwnentfrantchise from December 1, 1996, to March 31,1999 (23 months). By May 1,1998,Cablevision must state whether it will rebuild the system to provide "a fiber optic backbone and a capacity of at least 76 downstream channels, ofwhich at lest 60 will be programmed initially, to be in placeno later than December 31, 2000. If (Cablevision) makes this commitment by May 2, 1998, this Franchise Agreement will be renewed for a further seven year renewal, through March 31,2006". 2. Basisfor LocalFee. the definition of"Gross Annual Revenues"includes all revenue from subscribers, advertisers and other users of the system"... (emphasis added). The Brewer Franchise does net include the ward "advertinrs". This differ¢ace means that ourfranchisefee revenue couldbe substantially higher. Thefranchaefee in Auburn can beas high as 5% and the City retains the discretion ofadjusting thisfee witha 120 day written notice. Our attorney, Matt Ames, is new reviewing in detail the Auburn agreement. He will be in touch with Cablevision to reopen constructive negotiations. In the interun, l believe that it is in our interest to extend ourfranchises with Cablevision to lune 30,1997. In this waywe will all have one common expiration date jurallfourteen members of the consortium. 9J-61 Cable Television Consortium Members Attorneys for Member Communities Ikcember 3,1996 1 believe that it is advisable that all members insist on a written agreement with Cableoisionfor your extension to June 30,1997. Attached is a copy of the agreement between Brewer and Cablevision. Theform and the warding are not as important as the fact that we are all requiring Cableoisum to go through this process..I can sure that the local manager, William Fay, will welcome long terra agreement iffor no other reason than m befree of handling six month extensions with alWthe member communities. Would you pleaseforumrd two (2) copies of your extension agreements to me. I will see that a ropy is sent to Matt Ames. 1 would envision us getting logether in earlyJanuaryfor a telephone cmOrence call with Matt Ames when he can bring us up to speed on the Auburn contract and the results of his preliminary contracts with Cablevision. Pease call me ifyou ham any questions or suggestions. HaroldParks Citymanager HFPhrlg Pc: Brewer City Council Matthew Ames, Esq. File FA, FRYWMI56