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Build-Out Commitment above 15%. However, the provisions related to Quarterly <br />Meetings and Additional Build-Out Based on Market Success are designed to quicken <br />and increase CenturyLink’s initial Build-Out Commitment. The franchise also has <br />provisions requiring that residents of each member city be included in an equitable initial <br />build commitment and that a significant number of households below the medium income <br />of the city also be included in the initial build-out. CenturyLink must also use its best <br />efforts to complete its initial build faster than two years. <br /> <br />Another issue related to the reasonable build-out is whether the penetration rate triggering <br />additional build-out is reasonable. CenturyLink claims that it needs a penetration rate of <br />27.5% in order to commit to an additional mandatory build in the City. This penetration <br />number is based on internal CenturyLink return on investment models. Given Comcast’s <br />penetration rate in the City is around 40-50%, a penetration rate of 27.5% may be <br />difficult to obtain and, therefore, it is possible that CenturyLink may not be required to <br />build-out more than its initial commitment. <br /> <br />Economic redlining or “cherry picking” was identified as a concern through the public <br />hearing process. As the Report noted, cherry picking is prohibited by the Federal Cable <br />Act. See 47 U.S.C. § 541(a)(3). The proposed CenturyLink franchise prohibits cherry <br />picking, identical to the Comcast franchise. To ensure compliance, CenturyLink has an <br />additional $500 per day penalty/liquidated damage for violating the build-out and <br />economic redlining provisions of the Franchise. <br /> <br />The Report also described the State’s level playing field statute, which requires <br />competitive cable franchises not to be more favorable or less burdensome than an <br />incumbent’s franchise as it relates to franchise fees, support of public, educational, and <br />governmental access television and the area served. CenturyLink is required to pay a <br />franchise fee of 5% of its Gross Revenues (Identical to Comcast Franchise). The <br />Franchise Area is the entire city (Identical to Comcast Franchise). The Public, <br />Educational, and Governmental (“PEG”) Access Requirements of the CenturyLink <br />franchise meet, and in places exceed, Comcast’s franchise commitments. <br /> <br />The CenturyLink PEG commitments are summarized as follows: <br /> Number of Access Channels. CenturyLink will provide 16 Access <br />Channels (greater overall number of Access Channels than Comcast). <br /> Format of Access Channels. CenturyLink will provide all 16 Access <br />Channels in HD if the Commission sends them in HD format (Comcast <br />will provide one Access Channels in HD over time). <br /> Electronic Programming Guide. CenturyLink will have similar <br />requirement as Comcast. <br /> Channel Placement. CenturyLink will make all Access Channels <br />accessible at Channel 15 through the “North Suburban Mosaic.” The <br />Access Channels will be physically located in the 8000s. (Comcast has no <br />mosaic and is required to have the HD Access Channel located near the <br />broadcast channels).