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06-09-14-R
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06-09-14-R
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Executive Summary <br />FRC’s Review of Comcast’s Formal Renewal Proposal <br />© Front Range Consulting, Inc.Page 2 <br />to provide the services, facilities, and equipment as set forth in the <br />operator's proposal; and <br />(D)the operator's proposal is reasonable to meet the future <br />cable-related community needs and interests, taking into account <br />the cost of meeting such needs and interests. <br />FRC primarily focused on subsection (D) above where the proposal needs to be <br />evaluated “taking into account the cost of meeting such needs and interests.” The <br />legislative history provides further insights to this “cost” standard where it states <br />“[i]n assessing the costs, the cable operator’s ability to earn a fair rate of return on <br />its investment and the impact of such costs on subscriber rates are important <br />considerations.”2 The RFRP contained numerous requirements to address the costs <br />of the identified needs and interest with respect to the financial impact on <br />Comcast and the impact on subscriber rates.3 <br />Issues Identification <br />FRC has identified five issues with the Proposal. Those issues are: <br />Complete lack of any financial projections to compare the RFRP requirements to the <br />potential earnings by Comcast and the impact on subscriber rates in the NSCC franchise <br />area. <br />Lack of any recognition and financial credit that the current I-Net construction costs <br />have been fully and completely paid for by NSCC subscribers. <br />Lack of any recognition that Comcast has improperly recaptured valuable analog <br />spectrum from the NSCC and will be able to use that recaptured spectrum for its own <br />money-making purposes without compensation to the NSCC and the subscribers. <br />Comcast has proposed that the NSAC be required to use its reasonable reserves <br />accumulated by the NSAC to cover future NSAC operating and capital requirements that <br />will place the NSAC in an exposed financial position which could potentially lead to a <br />financial collapse of the NSAC. <br />Comcast repeatedly complains that operating support cannot be required by the <br />NSCC/NSAC but fails to acknowledge that the Cable Act allows the cable operator to <br />voluntarily offer operating support. Given the public support for the NSAC’s <br />programming, Comcast should have volunteered to pay operating support to the NSAC <br />as part of its proposal. In a recent development, Comcast has agreed to extend a <br />2 See H.R.REP.NO. 98-934, at 74 (1984),as reprinted in 1984 U.S.C.C.A.N. 4655, 4656. <br />3 See e.g.,RFRP Form III.F.
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