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06-09-14-R
APPROVAL OF AGENDA PUBLIC INQUIRIES/INFORMATIONAL Public inquiries/informational is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda. In addressing the Council, please state your name and address for the record, and a brief summary of the specific item being addressed to the Council. To allow adequate time for each person wishing to address the Council, we ask that individuals limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting, or as bench copies, to allow a more timely presentation. STAFF COMMENTS TCAAP Update Jill Hutmacher, Community Development Director MEMO.PDF, ATTACHMENT.PDF Transportation Update Terry Maurer, Public Works Director MEMO.PDF APPROVAL OF MINUTES Approval Of Minutes April 28, 2014, Special City Council Work Session 04 -28 -14 -WS.PDF CONSENT CALENDAR Those items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Approve Claims And Payroll Sue Iverson, Director of Finance and Administrative Services Ashley Bertrand, Accounting Analyst MEMO.PDF Temporary Permit To Construct For Work In Freeway Park Terry Maurer, Public Works Director MEMO.PDF, ATTACHMENT A.PDF, ATTACHMENT B.PDF PULLED CONSENT ITEMS Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda. PUBLIC HEARINGS Under this Public Hearing section, citizens have an opportunity to discuss ideas regarding TCAAP development. Please be sure to complete a "Request to Appear before City Council" form (available at the back table). Completed forms may be given to the City Clerk. TCAAP Development Discussion Opportunity For Residents MEMO.PDF NEW BUSINESS Renewal Proposal For Cable Television Franchise Cor Wilson, NSCC/NSAC Executive Director MEMO.PDF, ATTACHMENT A.PDF, ATTACHMENT B.PDF, ATTACHMENT C.PDF UNFINISHED BUSINESS COUNCIL COMMENTS ADJOURN Mayor: David Grant Councilmembers: Brenda Holden Fran Holmes Dave McClung Ed Werner Regular City Council Agenda June 9, 2014 7:00 p.m. City Hall Address: 1245 W Highway 96 Arden Hills MN 55112 Phone: 651 -792 -7800 Website : www.cityofardenhills.org City Vision Arden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play. CALL TO ORDER 1. 2. 3. 3.A. Documents: 3.B. Documents: 4. 4.A. Documents: 5. 5.A. Documents: 5.B. Documents: 6. 7. 7.A. Documents: 8. 8.A. Documents: 9. 10. APPROVAL OF AGENDAPUBLIC INQUIRIES/INFORMATIONALPublic inquiries/informational is an opportunity for citizens to bring to the Council ’s attention any items not currently on the agenda. In addressing the Council, please state your name and address for the record, and a brief summary of the specific item being addressed to the Council. To allow adequate time for each person wishing to address the Council, we ask that individuals limit their comments to three (3) minutes. Written documents may be distributed to the Council prior to the meeting, or as bench copies, to allow a more timely presentation.STAFF COMMENTSTCAAP UpdateJill Hutmacher, Community Development DirectorMEMO.PDF, ATTACHMENT.PDFTransportation UpdateTerry Maurer, Public Works DirectorMEMO.PDFAPPROVAL OF MINUTESApproval Of MinutesApril 28, 2014, Special City Council Work Session04-28 -14 -WS.PDF CONSENT CALENDAR Those items listed under the Consent Calendar are considered to be routine by the City Council and will be enacted by one motion under a Consent Calendar format. There will be no separate discussion of these items, unless a Councilmember so requests, in which event, the item will be removed from the general order of business and considered separately in its normal sequence on the agenda. Approve Claims And Payroll Sue Iverson, Director of Finance and Administrative Services Ashley Bertrand, Accounting Analyst MEMO.PDF Temporary Permit To Construct For Work In Freeway Park Terry Maurer, Public Works Director MEMO.PDF, ATTACHMENT A.PDF, ATTACHMENT B.PDF PULLED CONSENT ITEMS Those items that are pulled from the Consent Calendar will be removed from the general order of business and considered separately in its normal sequence on the agenda. PUBLIC HEARINGS Under this Public Hearing section, citizens have an opportunity to discuss ideas regarding TCAAP development. Please be sure to complete a "Request to Appear before City Council" form (available at the back table). Completed forms may be given to the City Clerk. TCAAP Development Discussion Opportunity For Residents MEMO.PDF NEW BUSINESS Renewal Proposal For Cable Television Franchise Cor Wilson, NSCC/NSAC Executive Director MEMO.PDF, ATTACHMENT A.PDF, ATTACHMENT B.PDF, ATTACHMENT C.PDF UNFINISHED BUSINESS COUNCIL COMMENTS ADJOURN Mayor:David Grant Councilmembers:Brenda Holden Fran HolmesDave McClungEd Werner Regular City Council Agenda June 9, 20147:00 p.m. City Hall Address:1245 W Highway 96 Arden Hills MN 55112 Phone:651 -792 -7800 Website : www.cityofardenhills.org City VisionArden Hills is a strong community that values its unique environmental setting, strong residential neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our long -standing tradition as a desirable City in which to live, work, and play.CALL TO ORDER1.2.3.3.A.Documents:3.B.Documents:4.4.A.Documents: 5. 5.A. Documents: 5.B. Documents: 6. 7. 7.A. Documents: 8. 8.A. Documents: 9. 10. Page 1 of 2 DATE: June 9, 2014 TO: Honorable Mayor and City Councilmembers Patrick Klaers, City Administrator FROM: Jill Hutmacher, Community Development Director SUBJECT: TCAAP Update Development and Design of On-Site Infrastructure The team of Kimley-Horn and Associates and Wenck Associates was selected by Ramsey County and the City of Arden Hills for the development and design of the TCAAP Redevelopment Site Infrastructure. Their scope of services addresses design of public infrastructure including roadways, drainage, and stormwater management features, and utilities to support the redevelopment. The consultants will spend the next several months developing preliminary design layouts for the Spine Road, thumb road connection to County Road I, regional stormwater management system, grading plan, mitigated wetlands, and sanitary sewer and water supply systems. Their work will require close coordination with ongoing planning and remediation activities and development of the adjacent interchange on County Road H at I-35W. The preliminary designs will enable the consultant team to develop refined construction cost estimates to assist in the development of an infrastructure financing plan. The consultant team will also ultimately prepare construction documents for public bidding of the site infrastructure improvements. A kickoff meeting for the City Council and the consultant team is scheduled for June 30, 2014. Alternative Urban Areawide Review (AUAR) The public comments period on the draft AUAR and Mitigation Plan ended on May 28, 2014. Comments were received from Mr. Lyle Salmela, the City of Shoreview, the Minnesota Pollution Control Agency, the Minnesota Department of Transportation, the Minnesota Department of Health, the Metropolitan Council, and the Rice Creek Watershed District. Copies of the comments received are attached. City staff and consultants are discussing how the comments should be reflected in the Final AUAR and Mitigation Plan. STAFF COMMENTS – 3A MEMORANDUM Page 2 of 2 Regulations and Policies With City Council consideration of approval of the master plan land use map scheduled for June 30, 2014, staff and consultants are beginning to schedule work for the regulations and policies component of the master planning process. Work session discussion topics will be defined in the next month. LCDA Application The Metropolitan Council has recommended that the City not proceed with a full LCDA application until a private developer/user has been identified. City staff anticipates that a full application may be possible in the 2015 LCDA funding cycle. Future Meeting Schedule Special and regular City Council work session meetings have been scheduled to discuss issues related to the Master Plan and City infrastructure. Discussion topics are tentatively planned as follows: June 16, 2014, Regular Work Session at 5:00 pm, Council Chambers Review Revised Master Plan June 30, 2014, Special Work Session at 5:30 pm, Community Room Review Final AUAR and Mitigation Plan Review Aesthetics for I-35W Bridges Kick-off Discussion with Infrastructure Development/Design Consultant Team June 30, 2014, Regular Meeting at 7:00 pm, Council Chambers Consider approval of Master Plan Municipal Consent for I-35W/Highway 96 July 14, 2014, Regular Work Session at 5:00 pm, Council Chambers Discussion topics to be determined (infrastructure, regulations and policies, etc.) July 21, 2014, Special Work Session at 5:30 pm, Community Room Discussion topics to be determined (infrastructure, regulations and policies, etc.) July 28, 2014, Regular Meeting at 7:00 pm, Council Chambers Approve Final AUAR and Mitigation Plan It is anticipated that additional regular and special work session meetings will be scheduled to discuss TCAAP issues. Future meeting topics will be defined as those dates draw nearer. May 2014 1 Summary of Comments Received on the Draft AUAR At the end of the comment period on the Draft AUAR (May 28, 2014), six comments had been received from five state, regional, and local agencies and one member of the general public. Commenters included: x Minnesota Department of Health x Minnesota Department of Transportation x Minnesota Pollution Control Agency x Metropolitan Council x Rice Creek Watershed District x City of Shoreview x Lyle Salmela Minnesota Department of Health x Affordable Housing – The City should consider incorporating a mix of housing types including single- family detached homes, single-attached homes, condominiums, townhomes, apartments, and senior housing options, as well as providing affordable housing options. x Energy/Climate Change – The project should consider ways to conserve energy, reduce energy use, eliminate or reduce greenhouse gas emissions, and promote the use of renewable energy. x Flooding – With the project’s vicinity to Rice Creek and the associated 100 year flood zone, the project should consider whether the proposed stormwater infrastructure would have capacity for extreme rainfall events. x Health Impact Assessment – An HIA could provide recommendations to policy makers to support positive health outcomes and to mitigate or prevent possible negative health outcomes to improve the public’s health and to inform zoning, permitting, and monitoring policies. x Physical Activity – The project should consider bicycle and pedestrian connections, accessibility, and wayfinding to parks, recreational facilities, and trails and between proposed uses (i.e., connections between proposed commercial and residential areas). x Demolition – Prior to demolition of remaining structures and utilities on site an inspection must be conducted according to 40 CFR 61 National Emissions Standards for Hazardous Air Pollutants (NESHAP). Any required asbestos inspection activities must be completed in compliance with the Minnesota Asbestos Abatement Act, and a pre-demolition survey must be conducted according to Minnesota Rules 7035.0805 to identify all hazardous waste in the facility. x Hazardous Materials – The AUAR should provide clear guidelines for establishing the presence of hazardous materials in soils prior to their disturbance during construction. x Stormwater Runoff/Impervious Surfaces – The project should consider whether stormwater infrastructure and retention facilities designed for larder storm events would be appropriate to accommodate anticipated future climatic events. x Well Construction – New wells that are constructed must be constructed according to the requirements of Minnesota Statutes Chapter 103I and Minnesota Rules chapter 4725. Abandoned wells must be properly sealed. May 2014 2 Minnesota Department of Transportation x I-35W/County Road H Interchange o Stages 3 and 4 of the proposed interchange improvements will require approval from the Joint Interchange Planning Review Committee o Stages 2, 3, and 4 of the proposed interchange improvements are not shown in enough detail. MnDOT is not requesting additional information at this time but sharing information. MnDOT lists specific concerns for each stage. o MnDOT will not support plans which will add capacity or traffic volume to the I-35W/CR H interchange if it retains the existing weaving from the CR H loop to southbound I-35W. The loop should be closed until the barrier separation is in place. o The CR H bridge will need to accommodate the planned MnPASS lane, the two-lane ramps connecting US 10 with I-35W to and from the north, and the loop to eastbound US 10 and in stage 3, southbound I-35W. Minnesota Pollution Control Agency x No comments at this time Metropolitan Council x Item 6 Project Description o Clarify that the comprehensive plan amendment will reflect the land use plan selection and align with the final organization of those land uses on the property, including any adjustments to land use densities or intensities, if needed. o If Ramsey County pursues the land exchange, an amendment to the Rice Creek North Regional Trail Master Plan must be approved by the Metropolitan Council. The land exchange will also need to comply with the System Protection requirements delineated in the Regional Parks Policy Plan. x Item 8 Permits and Approvals Required o When the City makes application to the MPCA for a permit to construct each segment of the sanitary sewer, a copy of the plans, design data, and a location map will also need to be submitted to the Metropolitan Council for review by Environmental Service Municipal Services staff. x Item 9 Land Use o Revise reference to Rice Creek Regional Park to Rice Creek North Regional Trail x Item 11 Water Resources o Future analysis may be needed to evaluate potential water supply impacts resulting from severe contamination on the TCAAP property and neighboring areas o The Council encourages implementation of new water conservation and stormwater management strategies as part of construction and site landscaping. o New data from the National Weather Service should be used in the calculation of runoff from the site to ensure that proposed stormwater conveyance, treatment, and infiltration facilities will be properly sized to accommodate future runoff events. May 2014 3 x Item 13 Fish, Plant Communities, and Sensitive Ecological Resources o The Council encourages the City to incorporate an evaluation of the woodlands identified in Figure 7-1 in the Final AUAR and give consideration to preserving and incorporating as many as possible as an amenity into the stormwater treatment and infiltration system planned for the northwest portion of the study area. o The Council recommends, consistent with DNR impact minimization guidance for the Blanding’s turtle, that the proposed new roadways through the site specify the utilization of sloping, surmountable curbing through the project site. o Update reference to Rice Creek North Regional Trail Master Plan Amendment x Item 18 Transportation o Review Appendix D of the TPP to determine the most appropriate classification for the spine road o Stages 3 and 4 of the I-35W/CR H interchange improvements will need to be reviewed by the Joint Interchange Planning Review committee. x Figures – Update maps to reflect the entire Rice Creek North Regional Trail and Wildlife Corridor x Draft Mitigation Plan o Item 13a – This section should discuss how the proposed green corridor will interact with Ramsey County’s wildlife corridor x Figure T2 – Future planning for the potential roadway crossing Rice Creek North Regional Trail should be coordinated with Ramsey County Parks x Appendix C. TCAAP Traffic Study o Using ITE trip generation rates is generally not recommended for large developments, and local data has shown that many ITE trip generation rates are likely higher than observed in this area. o Delays shown in unmitigated traffic analysis are unrealistic and do not take in account likely diversion of trips to other roadways. Forecasts using a regional scale model would show this. o Any new freeway access at CR H will need to be reviewed by MnDOT/Metropolitan Council interchange committee as discussed earlier in the comment letter Rice Creek Watershed District x No comments on the AUAR or Mitigation Plan x Provided additional details in regards to stormwater and permitting requirements City of Shoreview x Study Area Delineation – Future development of the TCAAP property will have an impact on Rice Creek, the Ramsey County Regional Trail and Wildlife Corridor, and County Road I. The study area should be expanded or additional information provided in order to determine the full impact on these natural features and the adjacent transportation network that includes Shoreview. x Section 9 Land Use – Future development efforts should preserve the integrity of the Rice Creek Regional Trail (and planned future improvements as outlined in the 2013 amendment to the Rice Creek Regional Trail Master Plan) and provide local connections. May 2014 4 x Section 18 Transportation o Aligning a future road connection with Rice Creek Parkway has the potential to change the character of roadway given that it will become an attractive alternative for the congestion at I- 35W/Highway 10 in the peak rush hour. Such a connection could result in potential impacts to residential land uses in the area because of the traffic volumes and vehicle distribution (i.e., more trucks and heavy commercial). o It is unclear how a potential six-legged intersection of Rice Creek Parkway/CR I/TCAAP/I-35W Freeway Ramp would function and preserve existing access to I-35W. The City strongly desires to maintain existing access to and from I-35W at CR I for their residents. o The AUAR does not provide sufficient details about the potential future connection CR I. More detailed analysis including traffic projections and alignment options need to be identified so the impacts to the road system and adjoining land uses in Shoreview can be determined. A collaborative approach involving MnDOT, Ramsey County, and adjoining cities should be initiated to assess and review the transportation impacts from future improvements that support the TCAAP development. Lyle Salmela x VOC/Radon Abatement o Per state and city building codes, all new residential structures at TCAAP should be protected and abated for radon and VOCs; the public should have this knowledge and it should be discussed with the MDH radon/VOC regulatory personnel. o The AUAR states that VOCs will be remediated to comply with MPCA Tier 1 residential standards. This may be misleading because VOCs/radon are not remediated but abated but building codes and construction standards. o Where can the public review the RAP/DRAP? o Commercial and industrial construction requires vapor barriers under concrete slabs. Whether to provide further code regulation would be up to the City to amend the applicable codes. To prevent past 3M and General Mills issues it should be discussed. x Transportation – CR H/I-35W o Will phases 1-4 (Figure 18-1) come in succession until the total project is done or on separate start and completion dates? If not in succession then phase 4 should be included with phase 1 because major construction would be on the same side of 35W. Also a traffic lane should connect Hwy 10 north with the CR H roundabout. o It appears that the traffic analysis is based on the full build out of TCAAP and 2030 I-35W traffic. The analysis does not mention anything about what the Metropolitan Council, Ramsey County, MnDOT, Metro Transit, Chamber of Commerce, and I-35W corridor cities including Arden Hill s have for further plans for I-35W north and I-694. The AUAR should address what these governmental bodies are planning and how they view this rebuild. Page 1 of 1 DATE: June 9, 2014 TO: Honorable Mayor and City Councilmembers Patrick Klaers, City Administrator FROM: Terry Maurer, Public Works Director SUBJECT: Transportation Update Background A brief oral update will be provided at the meeting on the US Highway 10 and County Road 96 project. STAFF COMMENTS – 3B MEMORANDUM Approved: CITY OF ARDEN HILLS, MINNESOTA SPECIAL CITY COUNCIL WORK SESSION APRIL 28, 2014 ARDEN HILLS CITY HALL CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the special City Council work session at 8:35 p.m. Present: Mayor David Grant; Councilmembers Brenda Holden, Fran Holmes, Dave McClung, and Ed Werner Absent: None Also present: City Administrator Patrick Klaers; Assistant City Engineer John Anderson; Associate Planner Matthew Bachler; City Planner Ryan Streff; and City Clerk Amy Dietl APPROVAL OF AGENDA The Council accepted the agenda as presented. 1. AGENDA ITEMS A. County Road 96/Interstate 35W Interchange Design Discussion Assistant City Engineer Anderson reported that Ramsey County is taking the lead on the County Road 96/Interstate 35W interchange design. The County has assembled a project management team (PMT) and is moving ahead with preliminary design of the interchange. A part of the preliminary design is to look at traffic control options and compare the alternatives. Assistant City Engineer Anderson indicated that the alternative that seems to be the preferred choice related to intersection control and bridge layout is referred to as a diverging diamond interchange (DDI). Staff has asked that Ramsey County provide the City Council with information on this style of interchange. On April 22nd, Ramsey County attended a City Council work session in New Brighton to share this information with their Council. In the coming months after the design progresses, Ramsey County will return with a fully developed plan to discuss municipal consent. He noted that Beth Engum with Ramsey County was in attendance to give a short presentation and to answer questions that the City Council may have. ARDEN HILLS SPECIAL WORK SESSION – APRIL 28, 2014 2 Beth Engum, Ramsey County, discussed the proposed interchange design for the intersection of County Road 96 and I-35W with the Council. She noted that this was the last segment of Highway 96 that required reconstruction. The diverging diamond design and proposed goals for the intersection were reviewed. She played a short video that displayed the DDI configuration and requested comment from the Council. She reported that St. Cloud and Bloomington had a DDI intersection. She described how the project would be cost shared between the City, County and State. Mayor Grant questioned if this would be a MnDOT project or a Ramsey County project. Ms. Engum reported that this would be a County led project. She discussed the memorandum of understanding that the County had drafted with MnDOT. Mayor Grant believed that the DDI configuration would be strange and would take some time for the public to become familiar with. Councilmember McClung requested further information on how pedestrians could pass through this intersection. Ms. Engum reviewed how traffic and pedestrians would flow through the intersection. She noted that the County has considered posting “no right on red” signs for pedestrian safety reasons. Councilmember Holden questioned if the proposed DDI was safer than the typical interchange. Ms. Engum indicated that the County did have statistics that showed that the DDI design was the safer option. She further reviewed the benefits of the proposed intersection, noting that there were fewer contact points. Mayor Grant asked if the DDI would take longer to build. Ms. Engum described how the construction would be completed. She noted that the bridge would not be closed throughout most of the construction, but there will be a need for some short term closures. Councilmember Holden expressed concern with how long this road construction project would take; stating it would greatly impact Arden Hills’ residents. She questioned when this work would be completed. Ms. Engum noted that this project was scheduled for 2015 along with the County Road F (Lake Valentine Road and County Road E projects). She reported that she could investigate the timing of the projects further, but explained that the County wanted to have these projects done before development began on TCAAP. Councilmember Holden feared that by having both of these projects worked on at the same year the residents of Arden Hills would be extremely impacted by traffic delays. Discussion took place regarding a City detour route map. ARDEN HILLS SPECIAL WORK SESSION – APRIL 28, 2014 3 Councilmember McClung understood that there would be an inconvenience for a short period of time, but he wanted to see the project completed. Councilmember Holden agreed that the projects needed to be completed; however, Arden Hills’ residents were faced with burden after burden and these projects should be better coordinated. She asked if half of the bridge belonged to the City of New Brighton. Ms. Engum reported that the project local share would be a 50/50 split between New Brighton and Arden Hills. She explained that the City would not be responsible for any legs of the signals. Mayor Grant asked what feedback the City of New Brighton had provided the County. Ms. Engum discussed the feedback received from the New Brighton City Council. 2. COUNCIL COMMENTS AND STAFF UPDATES None. ADJOURN Mayor Grant adjourned the special City Council work session at 9:26 p.m. __________________________ __________________________ Amy Dietl David Grant City Clerk Mayor Page 1 of 1 DATE: June 9, 2014 TO: Honorable Mayor and City Council Members Patrick Klaers, City Administrator FROM: Sue Iverson, Director of Finance and Administrative Services, Ashley Bertrand, Accounting Analyst SUBJECT: Claims & Payroll Requested Action: 1. Motion to Approve Consent Agenda Item – Claims and Payroll Supporting Documents: Payroll 2014 Payroll #12 ............................................................................... $ 105,600.50 Total Payroll $ 105,600.50 Accounts Payable Claims Through 06/06/2014 Paid Claims (Check No 43497-Check No 43544) ................................. $ 46,413.51 Total Accounts Payable $ 46,413.51 Total Claims $ 307,809.75 CONSENT ITEM - 5A MEMORANDUM CITY OF ARDEN HILLS PAYROLL # 12 CHECKS DATED: 06/06/14 Biweekly: 05/17/14 - 05/30/14 EMPLOYEE DEDUCTIONS AMT.Payment Method FIT 7,716.35 EFT SIT 3,137.06 EFT FICA Oasdi 4,481.10 EFT FICA Medicare 1,048.01 EFT TOTAL TAXES 16,382.52 Health Premium 2,099.39 A/P Check* Dental Premium A/P Check* FSA Health Care Reimb. 238.33 A/P Check* FSA Dependent Care Reimb. 442.66 A/P Check* TOTAL FLEXIBLE SPENDING 2,780.38 HSA Health Saving 616.94 Health Care Savings Plan EFT Health Care Savings Plan-2% 294.79 EFT Health Care Savings Plan-4% 203.01 EFT TOTAL HEALTH SAVINGS 1,114.74 PERA 4,092.08 EFT ICMA 3,685.95 EFT Central Pension Fund-Union 614.40 A/P Check* MN State Retirement System 328.13 EFT TOTAL RETIREMENT 8,720.56 IUOE 49 Dues (Union) 131.04 A/P Check* LTD/STD Insurance 1,285.23 A/P Check* PERA Life Insurance 32.00 A/P Check* Life/Addl/Dep Life 124.45 A/P Check* MN Child Support 145.82 EFT Public Employee Long Term Care 93.72 A/P Check* UNUM 83.86 A/P Check* AFLAC 163.96 EFT Avesis-Vision Care 5.22 A/P Check* TOTAL VOLUNTARY 2,065.30 Total Employee Deductions 31,063.50 Net Payroll 0.00 PR Check # Direct Deposit 44,930.66 EFT Gross Payroll Tie-Out 75,994.16 STD/LTD Gross - Up 0.00 Plus City Paid Benefit 29,606.34 ICMA Benefit Held 0.00 TOTAL PAYROLL COST 105,600.50 FICA TIE-OUT Gross Payroll 75,994.16 Less Total FSA 2,780.38 Plus Employer Match ICMA 0.00 Plus ICMA Benefit Held 0.00 Net P/R Subject to FICA 73,213.78 FICA Oasdi @ 6.20% 4,481.10 FICA Medicare @ 1.45% 1,048.01 Note: Federal and State Payroll Tax obligations are satisfied by means of utilizing the "Taxtel" Electronic Tax Deposit Service. Trans- fers are typically made two business days after the payroll date. * A/P Checks can be found on the ACCOUNTS PAYABLE Check Approval report. Checks may be paid this week or the following week. 5,529.11 CITY BENEFIT 4,481.10 1,048.01 341.04 14,192.06 1,211.80 15,403.86 3,467.81 17.80 3,485.61 4,746.82 5,087.86 99.90 99.90 Accounts Payable User: Printed: ashley.bertrand 6/5/2014 1:21 PM Checks by Date - Detail by Check Date Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription 0600 315800-NCPERS Minnesota 05/30/201443497 052014-NCP June PR Deductions June PR Deductions 64.00 64.00 0.00Total for Check Number 43497: ACCT Accountemps 05/30/201443498 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 433.20 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 51.30 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 530.10 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 530.10 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 51.30 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 530.10 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 51.30 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 51.30 40186156 April 11 Contract Fee May 9, May 16 and April 11 Contract Fees 51.30 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 530.10 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 51.30 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 51.30 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 530.10 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 530.10 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 51.30 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 51.30 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 433.20 40332145 May 2 Contract Fee May 2, May 9, May 16 and April 11 Contract Fees 51.30 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 69.11 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 69.09 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 69.09 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 583.47 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 713.98 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 713.98 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 69.09 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 69.09 40396605 May 9 Contract Fee May 9, May 16 and April 11 Contract Fees 713.98 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 44.57 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 460.52 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 460.52 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 44.57 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 460.52 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 44.57 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 44.57 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 44.57 40430244 April 16 Contract Fee May 9, May 16 and April 11 Contract Fees 376.34 9,611.63 0.00Total for Check Number 43498: 1223 Adam's Pest Control, Inc.05/30/201443499 884558 May Pest Control May Pest Control 62.54 62.54 0.00Total for Check Number 43499: Page 1AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription 6047 Avesis Third Party Administrators, Inc 05/30/201443500 060114-VIS June Vision June Vision 10.44 10.44 0.00Total for Check Number 43500: 0131 Beisswenger's How-To Store 05/30/201443501 437053 PW Parts PW Parts 67.00 67.00 0.00Total for Check Number 43501: CPF1 Central Pension Fund 05/30/201443502 053114-IUOE May Contributions May Contributions 1,228.80 1,228.80 0.00Total for Check Number 43502: 6987 Cities Digital 05/30/201443503 33643 Cable Fund Expenses Cable Fund Expenses 582.00 582.00 0.00Total for Check Number 43503: 0719 City of St. Paul 05/30/201443504 1573 April Asphalt Mix April Asphalt Mix 534.24 534.24 0.00Total for Check Number 43504: 1033 Comcast 05/30/201443505 051114-COM May TV Services May TV Services 8.42 8.42 0.00Total for Check Number 43505: 0453 Continental Research Corp.05/30/201443506 404040-CRC-1 PW Supplies PW Supplies 912.00 912.00 0.00Total for Check Number 43506: 0337 D-Rock Center Landscape Supply 05/30/201443507 1456 Park Supplies-Hazelnut Park Supplies-Hazelnut 22.00 22.00 0.00Total for Check Number 43507: 5678 E&M Consulting, Inc.05/30/201443508 27885 Directory Ad-TCN COC Directory Ad-TCN COC 378.00 378.00 0.00Total for Check Number 43508: 1785 EcoEnvelopes 05/30/201443509 1347 April UB Fee April UB Fee 156.60 1347 April UB Fee April UB Fee 156.60 1347 April UB Fee April UB Fee 53.30 1347 April UB Fee April UB Fee 156.60 523.10 0.00Total for Check Number 43509: 0339 Ferguson Waterworks 2516 05/30/201443510 77039 Water Hydrant Repair Kits Water Hydrant Repair Kits 5,302.93 5,302.93 0.00Total for Check Number 43510: 0376 FirstLab 05/30/201443511 779129 April Testing Fee April Testing Fee 47.00 47.00 0.00Total for Check Number 43511: Page 2AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription 1024 Fluid Interiors 05/30/201443512 32671 Storage Cabinets Storage Cabinets 3,010.89 32672 Storage Cabinets Storage Cabinets 920.32 3,931.21 0.00Total for Check Number 43512: 5679 Fobbe Contracting, Inc.05/30/201443513 1671 Water Repair Water Repair 1,000.00 1,000.00 0.00Total for Check Number 43513: 4470 GLTC Premium Payments 05/30/201443514 1396479 June LT Care June LT Care 187.44 187.44 0.00Total for Check Number 43514: 0192 Grainger, Inc 05/30/201443515 9433768042 PW Parts PW Parts 25.71 25.71 0.00Total for Check Number 43515: 5589 Independent Officials Association, LLC. 05/30/201443516 1281 Rec Supplies Rec Supplies 546.00 546.00 0.00Total for Check Number 43516: 0390 INT'L Union Operating Engineers-Union Dues05/30/201443517 050614-IUOE May Union Dues May Union Dues 262.00 262.00 0.00Total for Check Number 43517: 8080 Sonja Klingberg 05/30/201443518 052314-SK May Mileage Reimbursement May Mileage Reimbursement 27.44 27.44 0.00Total for Check Number 43518: 4460 Minnesota Battery LLC 05/30/201443519 11947 Vehicle #402 Parts Vehicle #402 Parts 178.00 178.00 0.00Total for Check Number 43519: 0155 Office of MN IT Services 05/30/201443520 W14040673 April Phone Bill April Phone Bill 716.48 716.48 0.00Total for Check Number 43520: 7064 Rotary Club of Arden Hills/Shoreview 05/30/201443521 1218 Q2 Dues Q2 Dues 178.10 178.10 0.00Total for Check Number 43521: 1193 SelectAccount 05/30/201443522 050914-SA May Participant Fees May Participant Fees 42.20 42.20 0.00Total for Check Number 43522: 1387 Standard Insurance Company 05/30/201443523 051914-STAN June STD/LTD/Life Insurance June STD/LTD/Life Insurance 1,635.53 1,635.53 0.00Total for Check Number 43523: 0336 T.A. Schifksy & Sons, Inc.05/30/201443524 56361 Asphalt Asphalt 113.43 Page 3AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription 113.43 0.00Total for Check Number 43524: 1175 TNT Cleaning and Consulting, INC 05/30/201443525 268109 May Cleaning May Cleaning 845.00 845.00 0.00Total for Check Number 43525: 1300 UniFirst Corporation 05/30/201443526 090 0203338 May Mat Services May Mat Services 66.60 66.60 0.00Total for Check Number 43526: 0285 Xcel Energy 05/30/201443527 412369836 May Gateway Sign May Gateway Sign 12.43 413359196 May Utility Bill May Utility Bill 1,475.09 1,487.52 0.00Total for Check Number 43527: 30,596.76 0.00Total for 5/30/2014: 0382 ICMA Retirement Trust - 106944 06/05/2014ACH PR Batch 00100.06.2014 ICMA Employee Percent 401PR Batch 00100.06.2014 ICMA Employee Percent 401 294.00 PR Batch 00100.06.2014 ICMA Employer Percent 401PR Batch 00100.06.2014 ICMA Employer Percent 401 341.04 635.04 0.00Total for this ACH Check for Vendor 0382: 0387 ICMA Retirement Trust- #302482 06/05/2014ACH PR Batch 00100.06.2014 ICMA Employee PercentPR Batch 00100.06.2014 ICMA Employee Percent 539.25 PR Batch 00100.06.2014 ICMA Employee DeductionPR Batch 00100.06.2014 ICMA Employee Deduction 2,852.70 3,391.95 0.00Total for this ACH Check for Vendor 0387: 5648 Matthew Bachler 06/05/2014ACH 05302014-MB April/May 2014 Mileage Reimbursement April/May 2014 Mileage Reimbursement 10.64 10.64 0.00Total for this ACH Check for Vendor 5648: 0602 US BANK 06/05/2014ACH Arvidson-040514 April-May 2014 CC Charges-PW Supplies April-May 2014 CC Charges 206.76 Grant-040514 April-May 2014 CC Charges-Egg Hunt April-May 2014 CC Charges 56.04 Grant-040514 April-May 2014 CC Charges-Park Supplies April-May 2014 CC Charges 22.88 Grant-040514 April-May 2014 CC Charges-Egg Hunt April-May 2014 CC Charges 56.35 Grant-040514 April-May 2014 CC Charges-Clay Play April-May 2014 CC Charges 59.90 Grant-040514 April-May 2014 CC Charges-Clay Play April-May 2014 CC Charges 189.19 Hutmacher-40514 April-May 2014 CC Charges-P&Z Training April-May 2014 CC Charges 52.81 Iverson-040514 April-May 2014 CC Charges-Supplies April-May 2014 CC Charges 159.95 Iverson-040514 April-May 2014 CC Charges-You Send It April-May 2014 CC Charges 14.99 Iverson-040514 April-May 2014 CC Charges-Supplies April-May 2014 CC Charges 174.36 Iverson-040514 April-May 2014 CC Charges-Supplies April-May 2014 CC Charges 119.36 Iverson-040514 April-May 2014 CC Charges-Finance Dues April-May 2014 CC Charges 300.00 Mooney-040514 April-May 2014 CC Charges-PW Supplies April-May 2014 CC Charges 212.11 Mooney-040514 April-May 2014 CC Charges-PW Supplies April-May 2014 CC Charges 246.32 Olson-040514 April-May 2014 CC Charges-Softball Supplies April-May 2014 CC Charges 1,185.52 Olson-040514 April-May 2014 CC Charges-Perry #3 April-May 2014 CC Charges 511.90 Olson-040514 April-May 2014 CC Charges-Egg Hunt April-May 2014 CC Charges 24.79 Schifsky-040514 April-May 2014 CC Charges-PW Supplies April-May 2014 CC Charges 195.04 3,788.27 0.00Total for this ACH Check for Vendor 0602: Page 4AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription 2597 AARP 06/05/201443528 06032014-AARP June 2014 AARP Class June 2014 AARP Class 200.00 200.00 0.00Total for Check Number 43528: 0654 Brake & Equipment Warehouse, Inc. 06/05/201443529 1-316138 PW Parts PW Parts 178.00 1-316224 PW Parts PW Parts -70.00 108.00 0.00Total for Check Number 43529: 1032 Commercial Asphalt Co.06/05/201443530 140515 May 2014 Asphalt Expenses May 2014 Asphalt Expenses 301.15 301.15 0.00Total for Check Number 43530: 4889 Community Footworks 06/05/201443531 06042014 June 2014 Foot Care Clinic June 2014 Foot Care Clinic 353.60 353.60 0.00Total for Check Number 43531: 9635 Dahlke Trailer Sales & Leasing, Inc 06/05/201443532 135864 PW Supplies PW Supplies 3,628.27 3,628.27 0.00Total for Check Number 43532: 0192 Grainger, Inc 06/05/201443533 9441291607 PW Supplies PW Supplies 170.43 170.43 0.00Total for Check Number 43533: 4999 Hirshfield's Paint Mfg., Inc.06/05/201443534 101785 Athletic Field Paint Athletic Field Paint 1,312.50 1,312.50 0.00Total for Check Number 43534: 5673 Marge Johnson 06/05/201443535 06032014-MJ Computer Class Reimbursement Computer Class Reimbursement 45.00 45.00 0.00Total for Check Number 43535: 5680 Loren Lemke 06/05/201443536 06032014-LL Computer Class Refund Computer Class Refund 45.00 45.00 0.00Total for Check Number 43536: 0731 MIDWAY FORD 06/05/201443537 196308 PW Parts PW Parts 292.64 292.64 0.00Total for Check Number 43537: 0147 Moundsview Public Schools 06/05/201443538 5368 April 2014 Facility Rental April 2014 Facility Rental 67.51 5428 April/May 2014 Facility Rental April/May 2014 Facility Rental 340.65 408.16 0.00Total for Check Number 43538: 7025 On Site Sanitation 06/05/201443539 A-538699 June 2014 Rental-Floral Park June 2014 Rental-Floral Park 52.00 A-538700 June 2014 Rental-Hazelnut Park June 2014 Rental-Hazelnut Park 52.00 A-538701 June 2014 Rental-Perry Park June 2014 Rental-Perry Park 100.00 A-538702 June 2014 Rental-Royal Hills Park June 2014 Rental-Royal Hills Park 52.00 A-538703 June 2014 Rental-Valentine Park June 2014 Rental-Valentine Park 52.00 Page 5AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Check No Check DateVendor NameVendor No Void Checks Check Amount Invoice No ReferenceDescription A-538875 June 2014 Rental-Cummings Park June 2014 Rental-Cummings Park 52.00 A-539213 June 2014 Rental-Ingerson Park June 2014 Rental-Cummings Park 52.00 412.00 0.00Total for Check Number 43539: 3100 Provident Life and Accident Ins Co 06/05/201443540 9672443-0414 April 2014 UNUM Payment April 2014 UNUM Payment 167.72 9672443-0514 May 2014 UNUM Payment May 2014 UNUM Payment 167.72 335.44 0.00Total for Check Number 43540: 0435 SAM's Club 06/05/201443541 05302014-Sams 2014 Membership Renewal 2014 Membership Renewal 45.00 45.00 0.00Total for Check Number 43541: 5606 Darien Schifsky 06/05/201443542 06022014-DS Unifrom Expense Allowance Reimbursement Unifrom Expense Allowance Reimbursement 11.96 11.96 0.00Total for Check Number 43542: 0327 Staples Business Advantage 06/05/201443543 3231316449 Office Supplies Office Supplies 156.39 3231316450 Office Supplies Office Supplies 70.31 226.70 0.00Total for Check Number 43543: 5180 Tessman Seed Co.06/05/201443544 S194320-IN PW Supplies PW Supplies 95.00 95.00 0.00Total for Check Number 43544: 15,816.75 0.00Total for 6/5/2014: Report Total (52 checks): 46,413.51 0.00 Page 6AP Checks by Date - Detail by Check Date (6/5/2014 1:21 PM) Page 1 of 1 DATE: June 9, 2014 TO: Honorable Mayor and City Councilmembers Patrick Klaers, City Administrator FROM: Terry Maurer, Public Works Director SUBJECT: Temporary Permit to Construct for Work in Freeway Park Requested Action Adopt Resolution 2014-030 Approving the Temporary Permit to Construct for work on the County Road E trail adjacent to Freeway Park. Background/Discussion As part of the MnDOT plans for the replacement of the County Road E Bridge ov er TH 51 there will be a pedestrian facility on the south side of the bridge. MnDOT’s plan will include a bituminous trail on both sides of the bridge from approximately Connelly Avenue to the Freeway Park driveway. In order to get this new trail installed adjacent to Freeway Park some minor grading will be necessary to the slope from County Road E on to the property. MnDOT has requested that the City as the owner of the park property enter into a Temporary Permit to Construct allowing work on City property for the purpose of installing the new trail. The permit expires at the completion of the project. Staff would recommend that the Council approve the Temporary Permit to Construct and authorize the Mayor and City Administrator execute it on behalf of the City by adopting Resolution 2014-030. Attachments Attachment A: Temporary Permit to Construct Attachment B: Resolution 2014-030 CONSENT ITEM – 5B MEMORANDUM CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION NO. 2014-030 RESOLUTION APPROVING THE TEMPORARY PERMIT TO CONSTRUCT FOR THE COUNTY ROAD E BRIDGE OVER TH51. WHEREAS, MnDOT is planning to replace the County Road E bridge over TH51 in 2015; and WHEREAS, as part of that project MnDOT will be constructing a bituminous trail adjacent to Freeway Park; and WHEREAS, in order to construct the trail some grading will be necessary on the slope on park property; WHEREAS, in order to allow this grading work a temporary permit is necessary. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF ARDEN HILLS, MINNESOTA: 1. The Temporary Permit to Construct is hereby approved. 2. The Mayor and City Administrator are authorized to execute the Temporary Permit to Construct. ADOPTED BY THE CITY COUNCIL OF THE CITY OF ARDEN HILLS THIS 9th DAY OF JUNE, 2014. ________________________________ David Grant, Mayor ATTEST: __________________________________ Amy Dietl, City Clerk PUBLIC HEARING – 7A MEMORANDUM DATE:June 9, 2014 TO:City Councilmembers Patrick Klaers, City Administrator FROM:Mayor Grant SUBJECT:TCAAP Development Discussion Opportunity for Residents Discussion Under this Public Hearing, citizens have an opportunity to discuss ideas regarding TCAAP development. NEW BUSINESS – 8A MEMORANDUM DATE: June 9, 2014 TO: Honorable Mayor and City Council Members FROM: Patrick Klaers, City Administrator SUBJECT: Renewal Proposal for Cable Television Franchise Background The North Suburban Cable Commission (NSCC) is a Joint Powers Commission for the ten member cities. One of the responsibilities of the NSCC is to enforce the terms of the franchise. Currently, NSCC has been working on the renewal of the cable franchise with Comcast. The renewal process has been going on for a number of years and the City Council has received periodic updates on the renewal status from Coralie Wilson, NSCC/NSAC Executive Director. The NSCC held public hearings on the formal Comcast franchise proposal on April 17, 2014, and on May 1, 2014. On May 15, 2015, the NSCC approved a resolution (on a 9-1 vote) to recommend preliminary denial of the renewal based on the formal proposal. On May 23, 2014, Comcast sent to the City the formal proposal for franchise renewal and this material is available at City Hall for City Council and public review. Discussion The City Council is being asked to consider the formal Comcast franchise. Attached is some background information on the Comcast proposal. Also attached are two resolutions for the City Council to consider: one resolution approves the Comcast proposal; and the second resolution makes a preliminary assessment that the franchise should not be renewed. Please note that the resolution for preliminary denial includes the NSCC resolution that recommends this preliminary denial; and that all of the material from Attachment I, Exhibit A of the NSCC resolution is the background information that immediately follows this cover memo. Cor Wilson will be at this City Council meeting to provide an update on the NSCC recommendation and to answer questions from the City Council. Recommendation It is recommended that the City Council support the NSCC recommendation to adopt the attached resolution that makes a preliminary assessment that the Comcast franchise should not be renewed. Attachments Attachment A: NSCC staff report Attachment B: Resolution for renewal of the Comcast franchise proposal Attachment C: Resolution for preliminary assessment that the Comcast franchise proposal should not be renewed. 1 SUPPLEMENTAL STAFF REPORT ON THE COMCAST FORMAL PROPOSAL FOR RENEWED FRANCHISES WITH THE NSCC MEMBER CITIES Introduction and Overview The purpose of this supplemental staff report is to provide the staff’s analysis of the formal franchise renewal proposal and exhibits submitted by Comcast on December 20, 2013, and the extent to which the proposal meets the needs identified in the Staff Report and Request for Renewal Proposal (RFRP), which was issued by the North Suburban Communications Commission (NSCC) on July 29, 2013. Specifically, the supplemental staff report will address the top four issues for renewed franchises with the ten member cities: 1) the continued offering of the fiber‐based Institutional Network (I‐Net) which connects local government institutions within the ten member cities, including municipal facilities, Ramsey County facilities, and several schools (both K‐12 and post‐secondary) at no charge to the users; 2) funding for Public, Educational and Government (PEG) communications in the ten member cities, and channel capacity for transmission of the eight PEG channels in both SD and HD; 3) Comcast’s past customer service performance and 4) two of the issues from the report prepared by Mr. Andrew Elson of E‐Consulting Group (Exhibit 2 of the Comcast proposal). This Supplemental Staff Report should be considered with the other consultant’s reports (CGB Communications, Front Range Consulting and The Buske Group). Attached as Exhibit 1 to this report is an initial comparison of the franchise agreement terms included in the RFRP to Comcast’s Proposal. EXECUTIVE SUMMARY I‐Net Issues Since Comcast notified the NSCC member cities in October and November 2010 of its desire to renew the cable television franchises, the NSCC and its staff have been engaging in the renewal processes set out in federal law. The NSCC undertook an extensive assessment of our community’s cable‐related communications needs and interests (both from a subscriber and community user standpoint) and evaluated the company’s performance under the current franchise. The Staff Report summarized these needs and identified key issues to be addressed in the renewed franchises. Those key issues – retention of the fiber and HFC based Institutional Network (I‐Net) linking local government facilities and the community media center, CTV North Suburbs; retention of both operational and capital funding for community media; and retention 2 of the eight PEG access channels currently programmed and simulcast of several of those channels in HD – were identified as community needs and are included in the RFRP. The NSCC RFRP on the I‐Net recognized that Comcast has already been compensated for the six strands of fiber provided in the 1998 franchise for local government and community media use. Comcast passed through to subscribers in the PEG fee itemized on their bills the cost attributed by the company (approximately $567,000) primarily for those six fibers which are embedded in the company’s network. The users of the I‐Net (the cities, schools, libraries and NSCC/NSAC) have provided their own equipment to connect to and manage the network, and city and NSCC/CTV staff oversees and maintains the network. As a result, the cost to Comcast to maintain the I‐Net is very small. However, the benefits to the NSCC/CTV and the member cities, such as substantial cost savings, are significant. Comcast’s proposal to impose new charges for these already paid for networks do not meet the NSCC’s needs or the RFRP. Staff also believes that Comcast is incorrect that the Cable Act only allows the I‐Net to be used for PEG transport services. The current I‐Net is used for both the PEG transport services and a dedicated private communications network for the governmental facilities, and the RFRP requested a continuation of that practice at essentially no cost to the NSCC or its member cities. These I‐Net benefits include, of course, the upstream and downstream transmission of video programming for the seven public and educational channels and the 10 discrete city channels. In addition to programming the four public channels, the I‐Net enables CTV North Suburbs to provide programming and channel management, as well as webstreaming, services for nine of the ten cities and two of the three school districts, saving the cities and the school districts money that would otherwise need to be spent on staff time and the purchase of playback and webstreaming equipment and software. In addition, the cities, schools and Ramsey County use the I‐Net non‐video data applications and services, including a telephone system and Internet access shared among eight of the ten cities and CTV North Suburbs and administrative services, such as financial systems and GIS applications. The Ramsey County Library uses the I‐Net to connect its four branch libraries in Shoreview, Roseville, Mounds View and New Brighton, allowing for the technology consolidation to support their daily operations, as well as high speed and reliable access to collections, applications, programming and the Internet. The collaboration among all of these public institutions not only saves taxpayer dollars, but provides for more efficient and effective local government and community institution operations. The Cable Act has recognized the value to the local community of these private communications networks and has allowed these I‐Nets to be part of the franchise agreement for a cable operator to use the public rights‐of‐ way. It should be pointed out again that the local government users of the I‐Net, including NSCC/NSAC, have paid for nearly all of the equipment and software to “light up” the fibers that they use and for the staff that manage and maintain that equipment and software. Comcast’s 3 proposal would significantly increase the non‐PEG I‐Net costs which will significantly burden the non‐PEG users unfairly and would serve to enrich Comcast’s profits on a fully paid for network. However, despite the fact that Comcast has already been compensated for the I‐Net and the fact that its maintenance costs are minimal, Comcast now wants to charge for its use. For the use of the I‐Net to transmit video programming, Comcast proposes to charge subscribers another $645,000 over the 10‐year franchise by passing through $0.18 per month per subscriber. For the non‐video uses, Comcast would charge $1,675.80 per month per location for network interconnectivity and $750 per month per rack/cabinet for collocation. For this charge, “…Comcast will agree to continue to provide institutional‐network services comparable to that provided today” to recover what the company believes is the “fair‐market value” of that portion of the I‐Net. Based on the language in the proposal, it is frankly unclear whether Comcast is proposing to provide managed services for the I‐Net or whether the company is intending for the local governmental users and NSCC/NSAC to pay more while they continue to buy and maintain their own equipment as they do now. Comcast’s proposal on the I‐Net does not meet the needs and interests identified in the Staff Report and RFRP. PEG Funding The current level of operational and capital funding for the community media facility operated by the North Suburban Access Corporation, dba CTV North Suburbs, in 2014 amounts to a little over $1.5 million. In addition, the NSCC receives a Scholarship Grant that provides educational scholarships to post‐secondary students pursuing degrees in communications and paid internships at CTV North Suburbs. These student interns work with the cities, as well as with public and educational access producers and volunteers. In order to assess our future needs and interests, the NSCC commissioned The Buske Group to determine the future needs and interests. As summarized in the Staff Report and RFRP, the capital needs were approximately $14,000,000 over the ten‐year proposed franchise term. Additionally, the NSCC proposed that Comcast essentially continue to voluntarily support the operational needs of the NSCC/NSAC. Incorrectly asserting that federal law prohibits the payment of operational funding, Comcast’s formal proposal would provide only $0.44 per subscriber per month for PEG capital needs only. Depending on the number of subscribers, that would range from approximately $153,000 per year to approximately $158,000 per year, compared to the nearly $100,000 in annual capital grants in years 1 through 15 of the current franchise. This proposed level of capital funding is drastically below the identified needs and interest from the Buske Report and should serve as a basis for a preliminary denial of the Comcast proposal. Comcast has provided limited explanation in its proposal as to how the dramatically reduced capital funding could meet the capital needs of the NSCC/NSAC over the next ten years. Although this is an increase 4 in capital funding for CTV North Suburbs, Comcast has agreed historically that the NSCC/NSAC could use the currently operational and capital funding at its own discretion and the proposed lack of voluntary operational funding threatens the organization’s continued existence. In fact, failure to provide sufficient voluntary operational funding throughout the duration of the 10‐year franchise would likely mean that CTV North Suburbs would have to shut its doors unless funding is provided by the member cities whereby essentially all of the franchise fees are used for PEG operational funding. That would mean that Comcast essentially pays no rent to the member cities for using the public rights‐of‐way, which seems unfair at best. Not only would that affect public and community access video production and programming, both for individual producers as well as community organizations, but it would affect local government and educational access video production and programming services as well. Those include covering city parades and festivals; school sports, concerts and graduations; local election coverage; programs about city services and activities; and coverage of special events, such as multiple hearings over the years on the TCAAP property and a series of hearings held by the Mounds View School District to discuss school closings. Further, it is because of the program playback infrastructure available at CTV North Suburbs community media center that the organization can offer low cost channel programming and webstreaming services to the cities and schools. That is all at risk with Comcast’s proposal and would suggest that the local community needs and interest will not be met. Comcast asserts in part that its refusal to continue voluntarily paying operational support, which the franchisee has been paying since 1991, is because the amount of the PEG fee collected in the NSCC cities makes it uncompetitive with other multi‐channel video programming providers, such as DirecTV and Dish Network. However, the amount of the PEG fee has increased much more slowly than that of Comcast’s own fees for its cable services. In addition, despite the company’s claim that subscribers are unwilling to pay the PEG fee, no subscribers came forward at the April 17 public hearing on Comcast’s formal proposal to complain about the PEG fee, nor has the NSCC received any written comments in conjunction with the public hearing complaining about the PEG fee or its amount. The bottom line is that the PEG grants – capital, operational and scholarship – cost Comcast nothing. They are a pass‐ through on subscriber’s bills, and since 1991 staff has received no complaints about the PEG fee, nor did staff receive any comments in conjunction with the public hearing. Channel Capacity The member cities’ current franchise agreements specify that 12 channels of 6 MHz each will be reserved for public, educational and government access use. Four of those channels were “loaned” back to the company, although without any expectation that they would be returned to community programming. Of the remaining eight channels, three are used for public/community; three are used for educational programming by the three public 5 school districts serving the member cities; one is used for government access, with each of the cities’ programming distributed discretely within the their own municipal boundaries; and one is used for programming distributed by NASA via satellite. Because a number of cable subscribers were interested in the service, NSAC/CTV North Suburbs agreed to put the NASA programming on one of the community channels when a previous franchisee no longer wanted to carry it. Comcast’s formal proposal would cut the number of Standard Definition (SD) channels from eight to three and add one High Definition channel, with the possibility of adding one additional SD channel in the future. (Comcast proposal p. 74) The criteria for getting the HD channel is “not less than 5 hours per day, 5 days per week of locally produced, non‐character generated, first‐run programming (emphasis added),” a standard that does not appear to apply to any commercial channel on Comcast’s system. In fact, some cable programming services do not cablecast ANY first‐run programming. Further, Comcast’s emphasis on first‐run programming devalues the PEG channels role as a video archive of the community. There is no requirement in federal law the puts a “first‐run” restriction on PEG programming and would infringe on the NSAC’s freedom of speech protections. Whether it is a live broadcast, i.e., first‐ run, or a replay of a previous broadcast does not increase or decrease its value to the community. As such, the NSCC cannot recommend adoption of the Comcast proposal on either the number of SD and HD channels offered by Comcast nor the hurdles imposed in gaining new HD programming. In addition, failure to transition PEG programming to HD will marginalize this programming and ensure that it will NOT be watched. The reality is that cable subscribers with HD television sets tend to watch only HD channels/programming services, and the trend is that most, if not all, programming services will be provided in HD or its successor technology (likely 4K). CTV North Suburbs has already invested in HD and HD‐capable equipment, and a substantial amount of the programming produced at CTV North Suburbs, as well as that turned in for cablecast, is already in the HD format. At some point in the future, it will difficult to purchase SD production equipment. But it is the content of these channels and what they represent that is most important. The community channels provide a variety of programming for local audiences that are not available elsewhere on the cable system, and they give a voice to people and groups who are often not heard or seen. In 2013, community producers and volunteers contributed almost 17,000 hours to produce 558 programs for the PEG channels, and CTV staff produced another 206 programs. These include city parades and festivals, school sports and concerts (both from K‐12 and post‐secondary schools); election coverage; high school robotics competitions; talk shows about community people, organizations and activities, such as “Tale of Ten Cities;” community band and orchestra concerts (The Shoreview Northern Lights Variety Band, the Roseville Community Band, the Roseville Strings); and a program by and about people with 6 disabilities, “Disability Viewpoints,” that has been produced at CTV North Suburbs for 15 years. Losing five SD channels will severely impact how many of these locally produced programs will be cablecast in prime time. Difficult choices will have to be made as to whether, for example, “Disability Viewpoints” will be shown over the “Tale of Ten Cities.” It will also impact the availability of discrete educational channels for the three school districts as they are forced to all share one channel. With all of the PEG channels being moved into a digitally compressed technology, there is no question that Comcast cannot claim bandwidth scarcity. Rather, it is the company’s desire to reduce the availability of PEG programming in order to allow it to add more commercial programming services for which it can charge subscribers. But community media and CTV North Suburbs is more than programming. The Youth Media Program at CTV North Suburbs had 161 participants in 2013. These high school students produced 64 programs and contributed 350 volunteer hours to cover the “Night to Light MN” at the Guidant John Rose Oval tree lighting ceremony in Roseville, the Mounds View Community Theatre production of “Les Miserables,” the North Oaks Vintage Baseball Association baseball game, and the Roseville Area High School dance recital. The goal of the Youth Media Program is not to create professional videographers, although some may pursue that career, but to give them opportunities to use their academic studies in real life situations and to develop life skills such as team work. In a similar effort, two years ago CTV North Suburbs partnered with the Roseville Adult Learners Program at the Fairview Community Center to provide video production training for their students, all of whom are immigrants learning English as a second language. There were 12 students the first year, and this past year we had 34. As with the Youth Media Program, the goal is not to train professional videographers, but to support their English language training and to give them the tools to tell their own stories. The Youth Media Program and the classes for the Roseville Adult Learners Program are also important for helping those who sometimes perceive themselves as outsiders, whether in the high school culture or in the American culture at large, to find a way to fit in and learn to express themselves. The Staff Report and RFRP laid out a well‐reasoned needs assessment for the number and type of PEG channels. The only additional requirement in the RFRP regarding PEG was a move to simulcasting the current SD channels in HD. Considering digital compression technology, the NSCC believed that the Staff Report and RFRP would have essentially not required additional bandwidth but rather used less than the analog bandwidth used by the NSCC/NSAC a year or so ago. Comcast’s proposal would use less than 6 MHz of capacity, far less than the 48 MHz of capacity in the current franchise agreement, according to CBG Communications, Inc. 7 Past Peformance ‐ Customer Service Issues The performance review conducted by The Buske Group was done in the Fall of 2011. Had it been done in 2013, it would have told a very different story about Comcast’s customer service. Historically, the NSCC office would receive two or three customer complaints per month, but in January 2013 the complaint calls spiked. The staff quickly discerned two primary causes. First, beginning with the January bills and with ineffective notice to subscribers, Comcast began charging $1.99 for the digital transport adaptors (DTA’s) that the company had been providing at no charge since it began its transition to a digital cable system in 2010. Second, Comcast’s Western Division had implemented a restructuring of its call centers, going from regional call centers that handled the full range of customer issues to call centers that specialized in specific issues, such as billing, installation, retention, Internet service, etc., and the transition did not go well. The result was long wait times to talk to a customer representative, with many calls routed to off‐shore contract call centers unprepared for the influx of customer referrals and many of whose staff did not have adequate English language skills. Although the call center transition should have been resolved by now, the NSCC office still hears from customers, in addition to their primary complaint, about long wait times and the English language skills of the customer service representatives. Generally, by the time customers call the NSCC office, they are extremely angry and frustrated with a customer service system that provides different information everytime they call, that seems more intent on blaming the problem on the customer than accepting responsibility and fixing it, and whose pricing is less than transparent, from DTA fees that include both equipment and “service” to annual service rates that seem to go in $3 to $5 increments. In contrast, the PEG fee about which Comcast complains has gone from $3.75 in the early 2000’s to $4.15 in 2014, an increase of only $0.40. In determining the needs and interests outlined in the Staff Report and the RFRP, the NSCC strongly considered the lack of any subscriber complaints about the PEG fee and the constant rate increases for cable services to substantiate the inclusion of a request for Comcast to voluntarily continue operational support payments that would allow the NSCC to continue to meet the historical and future needs and interests of the communities. The NSCC cannot recommend the adoption of Comcast’s proposal regarding its PEG commitments. NSCC/NSAC Financial Operations Comcast consultant Andrew Elson of E‐Consulting Group has questioned the allocation of the Executive Director’s time as reported on the NSAC’s IRS Form 990 in 2011 and 2012. The report is prepared by the NSCC/NSAC contract accountants and auditors, Harrington Langer & Associates, and reviewed by staff, who simply missed this error. While an error, it has no place 8 as part of the formal renewal process. The financial statements sent to the IRS reflecting the NSAC as a non‐profit organization is not relevant to the financial qualifications of Comcast to hold a franchise in the member cities. Comcast’s proposal also relies on an assertion by Mr. Elson on page 22 of his report that the NSCC and NSAC held $2.1 million in cash and cash equivalents in reserves and demands that half of this “reserve fund” be distributed to the member cities and counted toward the capital grants to the cities proposed by Comcast. Mr. Elson and Comcast apparently fail to recognize that the various NSCC and NSAC checking and money market accounts are not static. While there may have been $2.1 million collectively at one point in time in these accounts, that is not the case at this point in time. Two of the accounts, one for NSCC and one for NSAC, were checking accounts used for daily operations. They will ebb and flow as funds go in and funds are expended. One of the money market accounts is a $250,000 letter of credit required by our lease because of the uncertainties of the franchise renewal process. Another account included in the “reserves” is a deferred revenue account that holds the PEG funds to be used in the next calendar quarter. In addition, Comcast and Mr. Elson fail to consider the value of having reserves available to cover large capital expenses that are not annual, such as the over $500,000 in capital improvements required when CTV North Suburbs had to move out of its former location and lease space in a new office building, or when it has to replace 10 cameras in two mobile production trucks and five cameras in the studio, or purchase new servers for video and office storage. In short, having financial reserves to cover extraordinary or unexpected expenses is, in fact, a good thing, and it is inappropriate for Comcast to suggest how much those reserves should be and how the funds should be distributed. Those are NSCC and NSAC board decisions. The proposal is for future cable related needs and interests. The use of the current PEG obligations is under the current franchise agreement, and they are not required to be used to offset any future cable related needs and interests. This is a practice that is entirely reasonable and under the control of the Board of Directors. Recommendation The NSCC/NSAC recommends that the NSCC Renewal Committee and the NSCC Board recommend to the Member Cities that the Member Cities make a preliminary assessment that the Comcast Franchises should not be renewed based on this supplemental staff report including the additional consultant’s reports, because the Comcast proposal does not meet the future cable‐related community needs and interests, taking into account the cost of meeting such needs and interests. Further, staff is very concerned that, by adopting the Comcast Proposal, the NSCC and the member cities will be under franchise terms that will unfairly benefit Comcast. Many of the Comcast proposed franchise terms will limit enforcement by the NSCC and the member cities or will reduce the financial penalties for Comcast’s failure to 9 comply with the franchise agreements. It is clear to the staff that the proposed I‐Net and PEG funding and channels will cause the current operations and the anticipated future cable related needs and interests to be severely hampered by the Comcast proposal. Furthermore, the NSCC currently has issued two Notices of Violation to Comcast on: 1) Rate Order Compliance and the 2) 6 MHz PEG channel capacity. The NSCC will potentially consider additional notices of violation regarding Comcast’s compliance with the March 2012 Memorandum of Understanding with regards to the bundled package allocations and adherence to the current franchise provision regarding the cost basis for Comcast’s late fees. These compliance issues also serve as a basis for a preliminary assessment that the Comcast Franchises should not be renewed. 1 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 CO M P A R I S O N O F P R O P O S E D F R A N C H I S E A G R E E M E N T S 1 NS C C CO M C A S T Us e o f R O W ( R i g h t s o f W a y ) Se c t i o n 2 ( A ) ( B ) — D o e s n o t p r o v i de o p e n a u t h o r i t y t o e r e c t , in s t a l l , c o n s t r u c t , e t c . : e x p r e ss e s G r a n t e e s h a l l m a k e u s e o f ex i s t i n g p o l e s , u n d e r g r o u n d a n d a e r i a l fa c i l i t i e s . D o e s n o t e x em p t Gr a n t e e f r o m o b l i g a t i o n t o p a y c om p e n s a t i o n f o r r e a l o r p e r s o n a l pr o p e r t y o t h e r t h a n R O W . (C ) L e a s e o r a s s i g n m e n t o f G r a n t e e ’ s s y s t e m p r o h i b i t e d . 2. 1 , 2 . 4 — G r a n t o f A u t h o r i t y t o t h e u se o f R O W l i s t s e q u i p m e n t th a t c a n b e e r e c t e d , i n s t a l l e d, c o n s t r u c t e d , e t c . , t o i n c l u d e p oles, wi r e s , c a b l e s , c o n d u c t o r s , d u c t s , c o n d u i t s , v a u l t s , m a n h o l e s , pe d e s t a l s , a m p l i f i e r s , a p p l i a n c es , a t t a c h m e n t s , a n d o t h e r r e l a t ed pr o p e r t y o r e q u i p m e n t a s m a y b e n e c e s s a r y o r a p p u r t e n a n t t o t h e Ca b l e S y s t e m . Pr o h i b i t i o n o n L e a s e o r a s s i g n m e n t o f G r a n t e e ’ s s y s t e m n o t in c l u d e d Fr a n c h i s e T e r m Se c t i o n 2 ( D ) — P e r i o d o f 1 0 y e a r s . 2. 2 — P e r i o d o f 1 0 y e a r s Pr e v i o u s F r a n c h i s e U n f u l f i l l e d Ob l i g a t i o n s a n d C o m m i t m e n t s 1 T h i s i n i t i a l c o m p a r i s o n e x c l u d e s a r e v i e w o f t h e “ g r o s s r e v e n u es ” d e f i n i t i o n , P E G p r o v i s i o n s a n d I - N e t p r o v i s i o n s . T h e l a s t tw o p r o v i s i o n s a r e c o v e r e d i n o t h e r re p o r t s a n d t h e “ g r o s s r e v e n u e s ” d e f i n i t i o n h a s a l r e a d y b e e n a g re e d t o . 2 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 2 ( E ) — R e t a i n s C i t y ’ s a u t ho r i t y t o e n f o r c e t h e t e r m s o f se v e r a l t r a n s f e r s , M e m o r a n d u m o f U n d e r s t a n d i n g , S e t t l e m e n t s , et c . , f r o m t h e p r e v i o u s f r a n c h i s e No s u c h p r o v i s i o n . No W a i v e r Se c t i o n 2 ( F ) ( 1 ) ( 2 ) — Re t a i n s r i g h t o f t h e C i t y o r C o m m i s s i o n t o en f o r c e c o m p l i a n c e o r p e r f o r m a n c e e v e n w h e n t h e y h a v e n o t ex e r c i s e d t h a t r i g h t . P r e v e n t s n u l l i f i c a t i o n o f o t h e r p r o v i s i o ns i f th e r e i s a w a i v e r o f a n y o t h e r b r e a c h . No s u c h p r o v i s i o n . No R e c o u r s e , C o n s t r u c t i o n o f F r a n ch i s e A g r e e m e n t , A m e n d m e n t o f Fr a n c h i s e A g r e e m e n t Se c t i o n 2 — ( G ) ( H ) ( I ) — E x e m p t s t h e C i t y o r t h e C o m m i s s i o n fr o m c l a i m s , a c t i o n s , l i a b i l i t y , e t c . , a r i s i n g f r o m a c t i o n s o r in a c t i o n s b y t h e G r a n t e e . Pr o v i d e s t h e F r a n c h i s e b e l i b e r al l y c o n s t r u e d i n f a v o r o f t h e C it y or t h e C o m m i s s i o n . Al l o w s t h e C i t y t o l i b e r a l l y a m e n d t h e f r a n c h i s e t o a c c o m m o d a t e ne w t e c h n o l o g y i n o r d e r f o r G r a n t ee t o b e t t e r s e r v e i t s c u s t o m e rs ; ho w e v e r , r e t a i n s p o l i c e p o w e r s . No s u c h p r o v i s i o n s . 3 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Co m p l i a n c e W i t h A p p l i c a b l e L a w s , R e s o l u t i o n s a n d O r d i n a n c e s Se c t i o n 2 ( J ) ( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) — R e qu i r e s G r a n t e e t o c o m p l y w i t h al l l a w s , r e s o l u t i o n s a n d o r d i n a nc e s ( e v e n i f n o t i n t h e F r a n c h is e ) ; re t a i n s p o l i c e p o w e r s o f t h e G r a n t or . P r o v i d e s e v e n t r e a t m e n t of al l R O W u s e r s . E s t a b l i s h e s p r o c e d u r e f o r n o t i f i c a t i o n s . No s u c h p r o v i s i o n . Ru l e s o f G r a n t e e Se c t i o n 2 ( K ) — A l l o w s G r a n t e e t o e s t a b l i s h h o w i t g o v e r n s t h e co n d u c t o f i t s b u s i n e s s a s l o n g a s i t i s n o t i n c o n f l i c t w i t h l aw s . No s u c h p r o v i s i o n . Te r r i t o r i a l A r e a I n v o l v e d Se c t i o n 2 ( L ) — R e q u i r e s G r a n t ee t o e x t e n d s e r v i c e t o n e w l y de f i n e d c o r p o r a t e b o u n d a r i e s o f t h e c i t y , g i v i n g a 1 2 m o n t h de a d l i n e f o r e x t e n s i o n . Li n e e x t e n s i o n r e q u i r e m e nt s t o b e i n c l u d e d . 2. 5 — D e f i n e s G r a n t e e w i l l n o t e x t e n d t o n e w l y i n c o r p o r a t e d a r e a s un l e s s t h e r e i s a m i n i m u m o f 5 0 h o m e s p e r c a b l e m i l e (u n d e r g r o u n d ) a n d 3 5 h o m e s p e r c a b l e m i l e ( o v e r h e a d ) , w i t h i n 50 0 f t . o f t h e c a b l e s y s t e m , g i v i n g a 2 4 m o n t h l i m i t o n co m p l e t i o n . Al l o w s c h a r g e s t o c u s t o m e r s f or d r o p s g r e a t e r t h a n 1 5 0 f e e t . 4 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Wr i t t e n N o t i c e Se c t i o n 2 ( M ) — P r o v i d e s r e q u i r e m e nt f o r w r i t t e n n o t i c e s , t i m e l i n e an d p e r s o n t o r e c e i v e n o t i c e s . No s u c h p r o v i s i o n . Ne t w o r k D r o p s , E q u i p m e n t a n d C a b l e S e r v i c e t o D e s i g n a t e d B u i l d i ng s Se c t i o n 2 ( N ) — R e f e r s t o t h e R F R P In c l u d e s l i s t a s a t t a c h m e n t Re g i s t r a t i o n , P e r m i t s , C o n s t r u c t i o n C o d e s Se c t i o n 3 ( A ) ( 1 ) ( 2 ) — R e q u i r e s c o m p l i a n c e w it h a l l l a w s ; co n s i d e r a t i o n o f a e s t h e t i c s a nd p r i v a t e p r o p e r t y ; s u p e r v i s i o n b y Ci t y . Pr o v i d e s r e m e d y f o r n o n - c o m p l i a n c e . No s u c h p r o v i s i o n . Re p a i r o f R i g h t s o f W a y a n d P r o p e r t y Se c t i o n 3 ( B ) — L i s t s w h a t r i g h t s o f w a y a n d f a c i l i t i e s m u s t b e re p a i r e d , r e s t o r e d , r e p l a c e d , r e c on s t r u c t e d i n e v e n t o f d a m a g e ; ti m e l i n e f o r c o m m e n c e m e n t o f r e p a i r s o f d a m a g e n o m o r e t h a n th r e e ( 3 ) d a y s ( p r o v i d e s f o r e x te n s i o n b y C i t y ) ; r e i m b u r s e m e n t to Ci t y . Se c t i o n 3 . 1 — P r o v i d e s f o r r e p a ir o f d a m a g e ; d o e s n o t d e f i n e ti m e l i n e f o r c o m m e n c e m e n t o f r e p a i r ; p r o v i d e s f o r re i m b u r s e m e n t t o t h e C i t y . 5 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Co n d i t i o n s o n R i g h t o f W a y U s e Se c t i o n 3 ( C ) ( 1 ) ( 2 ) — E s t a b l i s he s r i g h t o f C i t y t o c o n t r o l , co n s t r u c t , r e l o c a t e , m a i n t a i n, e t c . , a l l o f t h e R i g h t o f W a y . Re q u i r e s t h a t G r a n t e e n o t o b s t r u c t o r i n t e r f e r e w i t h u s e o f R i g ht of W a y , c a u s e m i n i m u m i n t e r f e re n c e w i t h r i g h t s o f p r o p e r t y ow n e r s a n d n o i n t e r f e r e n c e wi t h p u b l i c u ti l i t i e s . No s u c h p r o v i s i o n . No s u c h p r o v i s i o n . Gr a n t e e t o M o v e L i n e s a t R e q u e s t o f C i t y Se c t i o n 3 ( C ) ( 3 ) — G r a n t e e , a t it s e x p e n s e , t o m o v e , d i s c o n n e c t , re l o c a t e , e t c . , w h e n r e q u e s t e d b y th e C i t y i n o r d e r f o r t h e C i t y t o co n d u c t n e c e s s a r y w o r k . I f G r a n te e f a i l s , t h e C i t y s e c u r e s t h e ri g h t t o m o v e , d i s c o n n e c t , r e l o c a t e, e t c . , a t t h e G r a n t e e ’ s e x p en s e . Th e C i t y w i l l n o t b e l i a b l e if i t c o n d u c t s t h e w o r k . Se c t i o n 3 . 2 — G r a n t e e w i l l p r o t e c t , a l t e r , r e l o c a t e , e t c . l i n e s o n th i r t y ( 3 0 ) d a y s w r i t t e n n o ti c e f r o m C i t y . I f p u b l i c f u n d s a r e av a i l a b l e t o a n y o t h e r u s e r o f t he R O W , C i t y w i l l n o t i f y G r a n t e e of f u n d s a n d m a k e t h e m a v a il a b l e t o t h e G r a n t e e . In t e r f e r e n c e w i t h E x i s t i n g U t i l i t i e s Se c t i o n 3 ( C ) ( 4 ) — G r a n t e e s h a l l n o t p l a c e a n y t h i n g a b o v e o r be l o w g r o u n d t h a t w i l l i n t e r f e r e w i t h e x i s t i n g u t i l i t i e s i n t h e R O W an d w i l l c o m p l y w i t h a l l l a w f u l r e q u i r e m e n t s o f t h e C i t y . No s u c h p r o v i s i o n . 6 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Re l o c a t i o n D u e t o T h i r d P a r t y Se c t i o n 3 ( C ) ( 5 ) ( 8 ) — O n t e n ( 1 0 ) d a y s n o t i c e , G r a n t e e s h a l l mo v e i t s w i r e s o r f i x t u r e s t o p e r m i t t h e m o v i n g o f a b u i l d i n g . Pe r s o n r e q u e s t i n g m u s t b e p e r m i t t e d a n d s u b j e c t t o r e i m b u r s e Gr a n t e e f o r t h e e x p e n s e . Gr a n t e e w i l l b e g i v e n t h i r t y ( 3 0 ) d a y s w r i t t e n n o t i c e o f P e r s o n au t h o r i z e d t o u s e R O W a n d m o v e me n t o f i t s f a c i l i t i e s t o ac c o m m o d a t e . G r a n t e e w i l l b e p a i d i n a d v a n c e b y s u c h P e r s o n . Di s p u t e s b e t w e e n p a r t i e s w i l l b e r e s o l v e d b y t h e C i t y , i f n o t co v e r e d b y c o n t r a c t b e t w e e n t h e p a r t i e s . Se c t i o n 3 . 3 — G r a n t e e w i l l r e l o c a t e f a c i l i t i e s o n r e a s o n a b l e p r i o r wr i t t e n r e q u e s t , n o t l e s s t h a n t h i r t y ( 3 0 ) d a y s . G r a n t e e w i l l be pa i d i n a d v a n c e b y s u c h P e r s o n . Tr e e a n d V e g e t a t i o n T r i m m i n g Se c t i o n 3 ( C ) ( 6 ) — G r a n t e e s h al l f o l l o w C i t y C o d e w h e n re m o v i n g , c u t t i n g , t r i m m i n g , e t c . , o f t r e e s a n d v e g e t a t i o n . Gr a n t e e a g r e e s n o t t o i n j u r e t r e e s, a n d a l l c o s t s a s s o c i a t e d w i ll b e pa i d b y G r a n t e e , n o t t h e C i t y o r p r i v a t e p r o p e r t y o w n e r . No s u c h p r o v i s i o n . No t i f i c a t i o n o f P r o p e r t y O w n e r s Se c t i o n 3 ( C ) ( 7 ) — G r a n t e e m u s t u s e b e s t e f f o r t s t o n o t i f y p r i v a te pr o p e r t y o w n e r s o f w o r k i n R O W . No s u c h p r o v i s i o n . 7 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Un d e r g r o u n d i n g Se c t i o n 3 ( D ) ( 1 ) ( 2 ) — C i t y m a y r eq u i r e G r a n t e e t o u s e e x i s t i n g po l e s , c o n d u i t s , e t c . Ci t y m a y r e q u i r e G r a n t e e t o p l ac e i t s f a c i l i t i e s u n d e r g r o u n d . Gr a n t e e m a y n o t p l a c e f a c i l i t i e s w he r e t h e y w i l l i n t e r f e r e w i t h ex i s t i n g u t i l i t y f a c i l it i e s . C o n s i s t e n t w i t h C i t y C o d e , G r a n t e e m a y us e o v e r h e a d f a c i l i t i e s , b u t i n n o w a y u s e o v e r h e a d f a c i l i t i e s wh e r e o t h e r u t i l i t i e s a r e u n d e rg r o u n d . C i t y m a y r e q u i r e o v e r h e ad fa c i l i t i e s t o b e p l a c e d u n d e r g r o u n d . Se c t i o n 3 . 4 — G r a n t e e s h a l l p a r t i c ip a t e i n p l a n n i n g p r o j e c t s o f un d e r g r o u n d i n g a l l u t i l i t i e s . G r a n t ee ’ s r e l o c a t i o n c o s t s w i l l be in c l u d e d i n p r o j e c t f u n d i n g , a n d G ra n t e e w i l l b e e n t i t l e d t o re i m b u r s e m e n t f r o m p u b l i c o r p r i v a t e f u n d s . In s t a l l a t i o n o f F a c i l i t i e s Se c t i o n 3 ( E ) ( 1 ) ( 2 ) — G r a n t e e mu s t o b t a i n r e q u i r e d p e r m i t s o r au t h o r i z a t i o n f r o m t h e C i t y b e fo r e p l a c i n g a n y f a c i l i t i e s o r eq u i p m e n t , e t c . Pl a c e m e n t o f f a c i l i t i e s d o e s n o t c o n s t i t u t e a v e s t e d f e e i n t e r e st i n RO W o r C i t y p r o p e r t y . F a c i l i t i e s m u s t b e l o c a t e d a n d i n s t a l l e d t o ca u s e m i n i m a l i n t e r f e r e n c e f o r p r i v a t e p r o p e r t y o w n e r s . No s u c h p r o v i s i o n . 8 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Sa f e t y R e q u i r e m e n t s Se c t i o n 3 ( F ) ( 1 ) — G r a n t e e m u s t f o l l o w s a f e t y p r a c t i c e s o f c o d e , la w a n d r e g u l a t i o n . G r a n t e e m u s t m a i n t a i n s a f e t y i n p r e v e n t i n g fa i l u r e o r a c c i d e n t s t o t h e p u b l i c o r p r o p e r t y . No s u c h p r o v i s i o n . No n - I n t e r f e r e n c e Se c t i o n 3 ( F ) ( 2 ) — G r a n t e e m u st n o t i n t e r f e r e w i t h C i t y ’ s co m m u n i c a t i o n s t e c h n o l o g y r e l a t e d t o h e a l t h , s a f e t y a n d w e l f a r e of r e s i d e n t s . No s u c h p r o v i s i o n . Wa r n i n g D e v i c e s Se c t i o n 3 ( F ) ( 3 ) — G r a n t e e m u s t i n s t a l l a n d m a i n t a i n d e v i c e s t h a t wa r n P e r s o n s o r g o v e r n m e n t e n t i t i e s o f w o r k i n t h e R O W . No s u c h p r o v i s i o n . Gr a n t e e M u s t b e M e m b e r o f O n e C a l l N o t i f i c a t i o n Se c t i o n 3 ( F ) ( 4 ) — G r a n t e e m u st b e m e m b e r o f O n e C a l l No t i f i c a t i o n S y s t e m a n d m a r k l oc a t i o n s o f u n d e r g r o u n d f a c i l i t i e s an d i d e n t i f y s a m e f o r C it y f r e e o f c h a r g e . No s u c h p r o v i s i o n . 9 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Ci t y U s e o f F a c i l i t i e s Se c t i o n 3 ( G ) — C i t y h a s t h e r i gh t t o u s e G r a n t e e ’ s p o l e s , co n d u i t s , d u c t s , e t c . , f r e e o f c h a rg e p r o v i d e d i t d o e s n o t i n t e rf e r e wi t h n e e d s o r o p e r a t i o n s o f G r a n t ee . A n y c o s t s a s s o c i a t e d w i l l no t b e o f f s e t a g a i n s t f r a n c h i s e f ee s o r o t h e r p a y m e n t s t o C i t y , NS A C o r t h e C o m m i s s i o n . No s u c h p r o v i s i o n . Re m o v a l o f F a c i l i t i e s a t E x p i r a t i o n Se c t i o n 3 ( H ) — T h e C i t y s h a l l h a v e t h e r i g h t a t e x p i r a t i o n o f t h e Fr a n c h i s e t o r e q u i r e t h e G r a n t ee , a t i t s e x p e n s e , t o r e m o v e a l l fa c i l i t i e s a n d r e s t o r e a f f e c t e d s i t e s t o o r i g i n a l c o n d i t i o n . F ai l u r e to d o s o r e s u l t s i n f a c i l i t i e s b e c o m i n g p r o p e r t y o f t h e C i t y . Th e Ci t y w i l l n o t b e l i a b l e t o t h e G ra n t e e f o r d a m a g e , l o s s o r c o s t s as s o c i a t e d . No s u c h p r o v i s i o n . 10 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Sy s t e m C a p a c i t y a n d T e c h n i c a l D e s i g n Se c t i o n 4 ( A ) ( 1 ) ( a ) — R e q u i r e m e n t s f o r c h a r a c t e r i s t i c s , T B D p e r RF R P . Se c t i o n 3 . 5 — C o m p l i a n c e w i t h F C C st a n d a r d s . U p o n r e c e i p t o f cu s t o m e r c o m p l a i n t s , C i t y m ay i n q u i r e a s t o G r a n t e e ’ s co m p l i a n c e . A l s o s e e S e c t i o n 5 . 3 , re s t r i c t i o n s o n r e p o r t i n g re q u i r e m e n t s . Se c t i o n 4 ( 1 ) ( b ) — R e q u i r e s T D D / TY Y e q u i p m e n t a t G r a n t e e ’ s of f i c e a n d p u b l i s h e d p h o n e n u m b e r s f o r s a m e . No s u c h p r o v i s i o n Se c t i o n 4 ( A ) ( 2 ) — R e q u i r e d f e a t u r es t o b e i n s e r t e d a s p e r R F R P . No s u c h p r o v i s i o n . Se c t i o n 4 ( A ) ( 3 ) — N o c h a n n e l ma p p i n g o f P E G c h a n n e l s w i t h o u t pr i o r a p p r o v a l o f t h e C i t y . R e q u i re s G r a n t e e t o a g r e e t o c h a n n el ma p a s f e w n o n - P E G c h a n n e l s a s p o s s i b l e i n t h e a t t e m p t t o de l i v e r h i g h q u a l i t y s i g n a ls o r c o m p l y w i t h l a w . No s u c h p r o v i s i o n Se c t i o n 4 ( A ) ( 4 ) — C o n d u i t i s t o b e s i z e d t o a c c o m m o d a t e f u t u r e up g r a d e s i n a t t e m p t t o o b v i a t e ne e d f o r r e o p e ni n g o f R O W . No s u c h p r o v i s i o n . Se c t i o n 4 ( A ) ( 5 ) — G r a n t e e w i l l n o t r a i s e a c l a i m t h a t t h e s y s t e m de s i g n a n d p e r f o r m a n c e s t a n d a rd s a r e u n e n f o r c e a b l e . No s u c h p r o v i s i o n . 11 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 In t e g r a t i o n o f A d v a n c e d T e c h n o l o g y Se c t i o n 4 ( B ) ( 1 ) — G r a n t e e i s r es p o n s i b l e f o r p e r i o d i c u p g r a d e s to me e t t h e n e e d s a n d i n t e r e s t s o f t h e c o m m u n i t y . No s u c h p r o v i s i o n Se c t i o n 4 ( B ) ( 2 ) — R e q u i r e s G r a n t ee t o r e p o r t n o m o r e t h a n e v e r y tw o ( 2 ) y e a r s t o C o m m i s s i o n a n d M e m b e r C i t i e s o n de v e l o p m e n t s i n t e c h n o l o g y a n d i n t en t t o i n c o r p o r a t e t h o s e te c h n o l o g i e s . Re p o r t m u s t i n c l u d e e f f e c t o n u s e o f P E G , I - N e t , c o n s u m e r eq u i p m e n t . R e p o r t m u s t r e p o r t h o w o t h e r c a b l e c o m p a n i e s h a v e in c o r p o r a t e d s u c h t e c h n o l o g y a n d t im e t a b l e f o r G r a n t e e t o d o s o . No s u c h p r o v i s i o n . Sy s t e m C o n s t r u c t i o n a n d L i n e E x t e n s i o n Se c t i o n 4 ( C ) ( 1 ) — T o b e i ns e r t e d p e r t h e R F R P Se c t i o n 4 ( C ) ( 2 ) — S y s t e m c o n s tr u c t i o n a n d m a i n t e n a n c e i n ac c o r d a n c e w i t h l a w s , c o d e s , s t a n d a r d s , e t c . No s u c h p r o v i s i o n . Se c t i o n 4 ( C ) ( 3 ) — G r a n t e e m u s t n o t i f y C i t y o f a n y m a i n t e n a n c e or c o n s t r u c t i o n t h a t c a u s e s s e r vi c e d i s r u p t i o n o r p h y s i c a l co n s t r u c t i o n . ( e x a m p l e l i s t i n c l u d e d ) . No s u c h p r o v i s i o n . 12 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 4 ( C ) ( 4 ) — G r a n t e e s h a l l p r o v i d e , o n r e q u e s t , d e t a i l e d de s c r i p t i o n o f c o n s t r u c t i o n a nd d e s i g n m a p s o f f a c i l i t i e s . No s u c h p r o v i s i o n . Se c t i o n 4 ( C ) ( 5 ) — G r a n te e s h a l l m a i n t a i n c o m p r e h e n s i v e a s - b u i l t dr a w i n g s ( a s t h e y a r e u p d a t e d ) a nd p r o v i d e c o p i e s t o t h e C i t y a nd Co m m i s s i o n o n r e q u e s t . D r a w i n g s m u s t i n c l u d e b o t h R O W a n d pr i v a t e p r o p e r t y f o r i n v e s t i g a ti o n o f c o m p l a i n t s . G r a n t e e w i l l ma i n t a i n r o u t i n g d i a g r a m s a nd p r o v i d e t h e s e t o t h e C i t y . No s u c h p r o v i s i o n . Se c t i o n 4 ( C ) ( 6 ) — G r a n t e e , o n r e qu e s t , s h a l l m e e t w i t h t h e C i t y or C o m m i s s i o n t o p r o v i d e u p d a t e s on p r o g r e s s o f c o n s t r u c t i o n . Th r o u g h o u t p r o c e s s G r a n t e e s h a l l in f o r m t h e p u b l i c / S u b s c r i b e r s on p r o g r e s s , l o c a t i o n o f c r e w s a nd e x p e c t e d i n t e r r u p t i o n s o f se r v i c e . No s u c h p r o v i s i o n . Se c t i o n 4 ( D ) ( E ) ( F ) — S y s t e m M ai n t e n a n c e , T e c h n i c a l S t a n d a r d s , Te s t s a n d I n s p e c t i o n s t o b e i n s e r t e d p e r th e R F R P FC C R e p o r t s Se c t i o n 4 ( G ) — G r a n t e e w i l l f i l e t h e F C C r e p o r t s o f r e s u l t s o f te s t i n g w i t h C i t y o r C o m m i s s i o n w i t h in t e n ( 1 0 ) d a y s o f r e q u e s t . No s u c h p r o v i s i o n . 13 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 No n - v o i c e R e t u r n C a p a b i l i t y Se c t i o n 4 ( H ) — G r a n t e e i s r e q u i r e d t o h a v e t e c h n i c a l c a p a b i l i t y fo r n o n - v o i c e r e t u r n c o m m u n i c a t i o n . No s u c h p r o v i s i o n . Lo c k o u t D e v i c e Se c t i o n 4 ( I ) — G r a n t e e i s r e q u i r e d , a t r e q u e s t o f s u b s c r i b e r , t o pr o v i d e a l o c k o u t d e v i c e a t n o c h a r g e . No s u c h p r o v i s i o n . Ty p e s o f S e r v i c e Se c t i o n 4 ( J ) — G r a n t e e r e q u i r e d i n c h a n g e s i n s e l e c t i o n o f pr o g r a m s o r s e r v i c e t o p r o v i de 3 0 d a y s w r i t t e n n o t i c e t o su b s c r i b e r s , C o m m i s s i o n a n d C i t y a nd c o m p l y w i t h a l l a p p l i c a b l e la w s a n d f r a n c h i s e a g r e e m e n t . No s u c h p r o v i s i o n . Us e s o f S y s t e m Se c t i o n 4 ( K ) — G r a n t e e , o n r e q u e st , s h a l l a d v i s e C o m m i s s i o n a n d Ci t y o f u s e s o f S y s t e m . C i t y / C om m i s s i o n s h a l l h a v e r i g h t t o co n d u c t u n a n n o u n c e d a u d i t s o f u s e . No s u c h p r o v i s i o n . 14 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Ad d i t i o n a l C a p a c i t y Se c t i o n 4 ( L ) — G r a n t e e s h a l l n o ti f y C i t y / C o m m i s s i o n i n w r i t i n g in a d v a n c e o f a d d i t i o n a l f i b e r ca p a c i t y , s o c a p a c i t y c a n b e a d d ed fo r g o v e r n m e n t a n d i n s t i t u t i o n a l u s e . C i t y / C o m m i s s i o n w i l l no t i f y G r a n t e e w i t h i n f i f t e e n ( 1 5 ) d a y s . C o s t s i n c u r r e d b y Gr a n t e e w i l l n o t b e d e d u c t e d o r o ff s e t a g a i n s t f r a n c h i s e f e e s o r PE G s u p p o r t . No s u c h p r o v i s i o n . Ho m e W i r i n g Se c t i o n 4 ( M ) ( 1 ) — G r a n t e e w i l l n o t r e s t r i c t S u b s c r i b e r ’ s a b i l i t y to c h a n g e w i r i n g l o c a t e d i n S u b s cr i b e r ’ s d w e l l i ng a s l o n g a s t h os e ch a n g e s d o n o t i n t e r f e r e w i t h F C C st a n d a r d s o r a b i l i t y o f G r a n t ee to p r o v i d e s e r v i c e s a n d c o l l e c t p a ym e n t f r o m t h a t S u b s c r i b e r o r ot h e r s . No s u c h p r o v i s i o n . Se c t i o n 4 ( M ) ( 2 ) — G r a n t e e m u s t p r o v i d e S u b s c r i b e r s n o t i c e o f th e i r r i g h t s r e g a r d i ng h o m e w i r i n g . N o t i c e m u s t i n c l u d e c h a n g i ng ho m e w i r i n g , t h e r i g h t t o s e l e ct a t h i r d p a r t y c o n t r a c t o r , r e q u es t th a t G r a n t e e c a n p r o v i d e s e r v i c e a t h o u r l y r a t e p l u s m a t e r i a l s . No s u c h p r o v i s i o n . Se c t i o n 4 ( M ) ( 3 ) — N o t i c e m u s t i nf o r m S u b s c r i b e r s o f i t s re s p o n s i b i l i t y i n c h a n g i n g w i r i ng . G r a n t e e m a y o f f e r m a t e r i a l s t o Su b s c r i b e r s a t c o s t p l u s r ea s o n a b l e r a t e o f r e t u r n . No s u c h p r o v i s i o n . 15 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 4 ( M ) ( 4 ) — G r a n t e e w i l l c o o p e r a t e w i t h c o m p e t i t i v e pr o v i d e r s a n d p r o v i d e a c c e s s t o h o m e r u n w i r i n g i n m u l t i p l e dw e l l i n g u n i t s a t p r o r a t a c o s t . E x c l u s i v e c o n t r a c t s f o r p r o v i si o n of s e r v i c e w i l l b e n u l l a n d v o i d . No s u c h p r o v i s i o n . Cu s t o m e r S e r v i c e M o n i t o r i n g Se c t i o n 4 ( N ) — G r a n t e e s h a l l re t a i n r e c o r d s t o e n a b l e Ci t y / C o m m i s s i o n t o d e t e r m i n e c o mp l i a n c e w i t h p h o n e a n s w e r i n g st a n d a r d s . Se c t i o n 5 . 3 — O t h e r I n f o r m a t i o n R eq u e s t s ( s e e p a g e 3 2 b e l o w ) Cu s t o m e r S e r v i c e S t a n d a r d s Se c t i o n 5 ( A ) — G r a n t e e sh a l l c o m p l y w i t h F C C c u s t o m e r s e r v i c e st a n d a r d s a n d a d d i t i o n a l o r s t r ic t e r s t a n d a r d s c o n t a i n e d i n fr a n c h i s e o r b y o r d i n a n c e o r l a w a d o p t e d b y s t a t e , Ci t y / C o m m i s s i o n . Se c t i o n 4 . 1 — R e q u i r e s C i t y t o a do p t F C C c u s t o m e r s e r v i c e st a n d a r d s . 16 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 L o c a l O f f i c e a n d O f f i c e H o u r s Se c t i o n 5 ( B ) ( 1 ) — G r a n t e e w i l l p r ov i d e c u s t o m e r s e r v i c e c e n t e r in f r a n c h i s e a r e a w i t h d e t e r m i n ed h o u r s s o t h a t c u s t o m e r s m a y : pa y b i l l s , r e t u r n e q u i p m e n t , c a n c e l s e r v i c e , e t c . G r a n t e e w i l l pr o v i d e a d r o p b o x a t d e t e r m i n e d h o u r s . P a y m e n t s w i l l b e p o s t e d wi t h i n 4 8 h o u r s . S i x t y ( 6 0 ) d a y s n o t i c e o n c h a n g e o f s e r v i c e ce n t e r l o c a t i o n t o S u b s c r i b e r s . G r a n t e e w i l l , a t r e q u e s t , p i c k u p o r re t r i e v e e q u i p m e n t . No s u c h p r o v i s i o n . Cl o s u r e o f S e r v i c e C e n t e r s Se c t i o n 5 ( B ) ( 2 ) ( a ) (b ) ( c ) — I n t h e e v e n t o f c l o s u r e o f s e r v i c e ce n t e r o f f i c e i n f r a n c h i s e a r e a , G r a n t e e w i l l p i c k u p a n d d r o p of f eq u i p m e n t , e t c . , f r e e o f c h a r g e . P r o v i d e S u b s c r i b e r s w i t h a p r e- pa i d m a i l e r . E n a b l e p a y m e n t o v e r t h e p h o n e f r e e o f c h a r g e . No s u c h p r o v i s i o n . Vi d e o P r o g r a m m i n g Se c t i o n 5 ( C ) — P r o g r a m m i n g i s t h e d i s c r e t i o n o f G r a n t e e , pr o v i d e d G r a n t e e p r o v i d e s t h i r t y ( 3 0 ) d a y n o t i c e o f c h a n g e t o Ci t y / C o m m i s s i o n / S u b s c r i b e r s . No s u c h p r o v i s i o n . 17 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Re g u l a t i o n o f S e r v i c e R a t e s Se c t i o n 5 ( D ) ( 1 ) — P r o v i d e s C o m m i s s i o n a u t h o r i t y o v e r eq u i p m e n t / s e r v i c e r a t e s a s a l l o w e d b y l a w . No s u c h p r o v i s i o n . Se c t i o n 5 ( D ) ( 2 ) — G r a n t e e t o p r o v id e o n e b i l l i n g c y c l e n o t i c e t o Su b s c r i b e r s , C i t y a n d C o m m i s s i o n o f c h a n g e s i n r a t e s . B i l l s m u st be c l e a r a n d u n d e r s t a n d a b l e . O n l i n e b i l l p a y e r s m u s t r e c e i v e em a i l o f c h a n g e s . No s u c h p r o v i s i o n . Se c t i o n 5 ( D ) ( 3 ) — G r a n t e e w i l l r e s p o n d t o w r i t t e n r e q u e s t s f o r da t a b y t h e C i t y / C o m m i s s i o n d u r i n g p e t i t i o n f o r r e l i e f u n d e r ef f e c t i v e c o m p e t i t i o n . No s u c h p r o v i s i o n . Sa l e s P r o c e d u r e s Se c t i o n 5 ( E ) — G r a n t e e w i l l n o t e n g a g e i n d e c e p t i v e s a l e s pr a c t i c e s a n d i n f o r m n o n - S u b s c r ib e r o f a l l s e r v ic e s . C o m m i s s i o n mu s t b e n o t i f i e d o f p a c k a g e c h a n g e s . No s u c h p r o v i s i o n . 18 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Su b s c r i b e r I n q u i r y a n d C o m p l a i n t s Se c t i o n 5 ( F ) ( 1 ) — G r a n t e e t o h a ve p u b l i c a l l y li s t e d t o l l f r e e nu m b e r , t w e n t y f o u r ( 2 4 ) h o u r s p e r d a y , s e v e n ( 7 ) d a y s p e r w e e k . No s u c h p r o v i s i o n . Se c t i o n 5 ( F ) ( 2 ) — E s t a b l i s h e s g u i d e l i n e s f o r a n s w e r i n g t h e ph o n e , t e l e p h o n e l i n e s , p e r s o n n e l , a n d b u s y s i g n a l g u i d e l i n e s . Re q u i r e s r e p o r t i n g o f c o m p l i a n c e . No s u c h p r o v i s i o n . Se c t i o n 5 ( F ) ( 2 ) — G r a n t e e w i l l r e s p o n d t o w r i t t e n r e q u e s t s w i t h in th i r t y ( 3 0 ) d a y s a n d p r o v i d e C o mm i s s i o n w i t h c o p y o f r e s p o n s e . No s u c h p r o v i s i o n . Se c t i o n 5 ( F ) ( 4 ) — G r a n t e e w i l l p r ep a r e , m a i n t a i n w r i t t e n r e c o r d s of c o m p l a i n t s a n d p r o v i d e t he m t o C o m m i s s i o n o n r e q u e s t . Se c t i o n 5 . 3 ( i i ) - - N o i nf o r m a t i o n p r o v i d e d u n l e s s t h e r e i s re a s o n a b l e b a s i s f o r i n q u i r y . Se c t i o n 5 . 3 ( i i i ) — C i t y s h a l l c o n t a c t G r a n t e e p r i o r t o i n f o r m a t i on re q u e s t t o a l l o w c u r e . Se c t i o n 5 . 3 ( i v ) — G r a n t e e w i l l b e g iv e n d r a f t o f r e s u l t s t o r e v i ew be f o r e p u b l i c a t i o n . Se c t i o n 5 . 3 ( v ) — G r a n t e e s h a l l b e g i v e n a d v a n c e n o t i c e o f me e t i n g s t h a t d i s c u s s r e v i e w . 19 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 5 ( F ) ( 5 ) — G r a n t e e w i l l c o m m e n c e w o r k i n g o n s e r v i c e pr o b l e m s t w e n t y f o u r ( 2 4 ) h o u r s o n s e r v i c e i n t e r r u p t i o n s . No s u c h p r o v i s i o n . Se c t i o n 5 ( F ) ( 6 ) — E s t a b l i s h e s p a r a m e t e r s a n d t i m e w i n d o w s f o r ap p o i n t m e n t s f o r s e r v i c e c a l l s . No s u c h p r o v i s i o n . Se c t i o n 5 ( F ) ( 7 ) — G r a n t e e w il l r e s p o n d t o C i t y / C o m m i s s i o n co m p l a i n t s i n a t i m e l y m a n n e r . No s u c h p r o v i s i o n . 20 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Su b s c r i b e r C o n t r a c t s Se c t i o n 5 ( G ) — G r a n t e e m u s t f i l e w i t h t h e C o m m i s s i o n a n y st a n d a r d c o n t r a c t w i t h s u b s c r i be r s , t o i n c l u d e l e n g t h a n d t e r m s an d m u s t m a k e s a m e a v a i l a b l e at t h e i r o f f i c e s a n d N S C C . No s u c h p r o v i s i o n . Se c t i o n 5 ( H ) ( 1 ) — G r a n t e e w i l l p r o r a t e t h e m o n t h l y r a t e t o su b s c r i b e r s o n e s t a b l i s h m e n t o r t e r m i n a t i o n o f s e r v i c e . No s u c h p r o v i s i o n . Se c t i o n 5 ( I ) — G r a n t e e s h a l l e n s u r e t h a t p e r s o n s or e n t i t i e s n o t re c e i v i n g C a b l e s e r v i c e n o t b e a s s e s s e d f r a n c h i s e f e e s , u n l e s s pe r m i t t e d b y l a w . No s u c h p r o v i s i o n . Se c t i o n 5 ( J ) ( 1 ) ( 2 ) — R e f u n d s w i l l b e i s s u e d p r o m p t l y n o t l a t e r th a n : a . n e x t b i l l i n g c y c l e ; b . r et u r n o f e q u i p m e n t . C r e d i t s i ss u e d on S u b s c r i b e r ’ s n e x t b i l l . No s u c h p r o v i s i o n . Se c t i o n 5 ( K ) — G r a n t e e n o t t o i s s u e l a t e f e e s u n l e ss s e r v i c e h a s be e n p r o v i d e d a n d n o t i f i c a t i o n o f S u b sc r i b e r . L a t e f e e s w i l l n ot ex c e e d a c t u a l c o s t a n d a m o u n t s m u s t b e f i l e d w i t h t h e Co m m i s s i o n . No s u c h p r o v i s i o n . Se c t i o n 5 ( L ) ( 1 ) ( a ) — G r a n t e e w il l p r o v i d e a t i n s t a l l a t i o n a n d ev e r y t w e l v e m o n t h s : i n s t r u c ti o n s o n u s e ; b i l l i n g a n d c o m p l a i n t pr o c e d u r e s ; s c h e d u l e an d r a t e s ; c h a n n e l p o s it i o n s ; p r i c e s a n d op t i o n s ; p o l i c i e s a n d r i gh t s o f S u b s c r i b e r s . No s u c h p r o v i s i o n . 21 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 5 ( L ) ( 2 ) — C o p i e s o f p r e v io u s s u b s e c t i o n p r o v i s i o n s t o b e fi l e d w i t h C i t y a n d C o m m i s s i o n . No s u c h p r o v i s i o n . Se c t i o n 5 ( L ) ( 3 ) — A l l G r a n t e e p r om o t i o n a l m a t e r i a l s m u s t b e cl e a r a n d a c c u r a t e l y r e f l e c t r a t es a f t e r t h e e n d o f p r o m o t i o n s . No s u c h p r o v i s i o n . Ex c l u s i v e C o n t r a c t s a n d A n t i c o mp e t i t i v e A c t s P r o h i b i t e d Se c t i o n 5 ( M ) ( 1 ) — G r a n t e e m a y n o t r e q u i r e a n e x c l u s i v e c o n t r a c t of S u b s c r i b e r s . No s u c h p r o v i s i o n . Se c t i o n 5 ( M ) ( 2 ) — G r a n t e e s h a l l n o t e n g a g e i n a n t i - c o m p e t i t i v e ac t s a g a i n s t s u b s c r i b e r s a n d m u l t i p l e d w e l l i n g u n i t s . No s u c h p r o v i s i o n . Op e r a t i o n s a n d A d m i n i s t r a t i o n P r o v i s i o n s Se c t i o n 8 ( A ) — T h e C i t y M a n a g er o r d e s i g n e e w i l l h a v e ju r i s d i c t i o n o v e r t h e S y s t e m a n d G r a n t e e ’ s o p e r a t i o n s . No s u c h p r o v i s i o n . Se c t i o n 8 ( B ) — T h e C o m m i s s i o n w i l l h a v e t h e a u t h o r i t y t o ad m i n i s t e r a n d s u p p o r t t h e f r a n c h i s e . T h e G r a n t e e s h a l l c o o p e r at e wi t h t h e C o m m i s s i o n . No s u c h p r o v i s i o n . 22 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Pe r i o d i c E v a l u a t i o n s Se c t i o n 8 ( F ) ( 1 ) — C i t y o r C o m m i ss i o n c a n r e q u i r e e v a l u a t i o n s o n fi f t e e n ( 1 5 ) d a y s n o t i c e . Se c t i o n 5 . 3 — R e p o r t s a n d m e e ti n g s . S e e p a g e 3 2 b e l o w . Se c t i o n 8 ( F ) ( 2 ) — E v a l u a t i o n s e s s i o n s m a y a d d r e s s v a r i o u s as p e c t s o f t h e f r a n c h i s e , c o u r t a n d F C C r u l i n g s , c h a n g e s i n l a w , et c . , o r a n y t o p i c t h e C i t y o r C o m m i s s i o n d e e m s r e l e v a n t . Se c t i o n 5 . 3 ( i i ) - - N o i nf o r m a t i o n p r o v i d e d u n l e s s t h e r e i s re a s o n a b l e b a s i s f o r i n q u i r y . Se c t i o n 5 . 3 ( i i i ) — C i t y s h a l l c o n t a c t G r a n t e e p r i o r t o i n f o r m a t i on re q u e s t t o a l l o w c u r e . Se c t i o n 5 . 3 ( i v ) — G r a n t e e w i l l b e g iv e n d r a f t o f r e s u l t s t o r e v i ew be f o r e p u b l i c a t i o n . Se c t i o n 5 . 3 ( v ) — G r a n t e e s h a l l b e g i v e n a d v a n c e n o t i c e o f me e t i n g s t h a t d i s c u s s r e v i e w . Se c t i o n 8 ( F ) ( 3 ) - - - A f t e r e v a l u a ti o n , G r a n t e e w i l l m e e t w i t h C i ty or C o m m i s s i o n t o d i s c u s s c h a n g e s to t h e f r a n c h i s e t h a t a r e fe a s i b l e . No s u c h p r o v i s i o n . 23 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Fi n a n c e a n d I n s u r a n c e Se c t i o n 9 ( A ) ( 1 ) - - P e r f o r m a n c e B o n d o f $ 3 , 0 0 0 , 0 0 0 . Se c t i o n 9 ( A ) ( 2 ) — P r o v i d e s a b i l i t y t o e x t e n d t i m e b y t h e Co m m i s s i o n . Se c t i o n 9 ( A ) ( 3 ) — I f f ra n c h i s e i s r e v o k e d , C i t y o r C o m m i s s i o n ma y c o l l e c t f o r d a m a g e s f r o m t h e P e r f o r m a n c e B o n d . Se c t i o n 9 ( A ) ( 4 ) — P r o v i d e s f o r t he r e t u r n o f t h e P e r f o r m a n c e Bo n d t o t h e G r a n t e e . Se c t i o n 9 ( A ) ( 5 ) — T h e P e r f o r m a n ce B o n d w i l l n o t i n t e r f e r e w i t h ot h e r r i g h t s r e s e r v e d b y t h e Ci t y a n d t h e C o m m i s s i o n . Se c t i o n 8 . 5 — P e r f o r m a n c e Bo n d o f $ 5 0 0 , 0 0 0 . C i t y n o t a l l o w e d to d r a w o n i t i f i n d i s p u t e p r o c e s s . Le t t e r o f C r e d i t a n d L i q u i d a t e d D a m a g e s Se c t i o n 9 ( B ) ( 1 ( 2 ) ) — L e tt e r o f C r e d i t f o r $ 2 5 , 0 0 0 . No s u c h p r o v i s i o n . Se c t i o n 9 ( B ) ( 3 ) — C o l l e c t i o n f ro m L e t t e r o f C r e d i t f o r ac t s / o m i s s i o n s b y G r a n t e e t o C it y , C o m m i s s i o n o r a n y P e r s o n . Se c t i o n 8 . 4 — L i q u i d a t e d D a m a g es t o t h e C i t y ( s o l e l y ) . 24 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 9 ( B ) ( 3 ) ( a ) — F a i l u r e t o t i m e l y c o n s t r u c t s y s t e m o r I - N et in t i m e l y m a n n e r $ 1 , 0 0 0 p e r d a y . Se c t i o n 8 . 4 ( v ) ( 1 ) — F a i l u r e t o c on s t r u c t a s p r o v i d e d i n f r a n c h i se, $5 0 p e r d a y . Se c t i o n 9 ( B ) ( 3 ) ( b )— F a i l u r e t o p r o v i d e d a t a , r e p o r t s , e t c . , $ 50 0 pe r d a y . Se c t i o n 8 . 4 ( v ) ( 3 ) — F a i l u r e t o p r ov i d e d a t a , r e p o r t s , e t c . , $ 5 0 per da y . Se c t i o n 9 ( B ) ( 3 ) ( c ) — a f t e r f i ft e e n d a y n o t i c e , f a i l u r e t o c o m p ly wi t h s y s t e m r e q u i r e m e n t s , $ 1 , 0 0 0 p e r d a y . No s u c h p r o v i s i o n . Se c t i o n 9 ( B ) ( 3 ) ( d )— F a i l u r e i n P E G p r o v i s i o n s , $ 1 , 0 0 0 p e r d a y . Se c t i o n 8 . 4 ( v ) ( 5 ) — F a i l u r e i n P E G p r o v i s i o n s $ 5 0 p e r d a y . Se c t i o n 9 ( B ) ( 3 ) ( e ) — B r e a c h o f c o n t r a c t o r a g r e e m e n t $ 1 , 0 0 0 p e r da y . Se c t i o n 8 . 4 ( v ) ( 4 ) — V i o l a t i o n o f t r a n s f e r p r o v i s i o n $ 2 5 0 p e r d a y. Se c t i o n 9 ( B ) ( 3 ) ( f ) — F a i l u r e t o c o m p l y w i t h a n y p r o v i s i o n f o r wh i c h a p e n a l t y i s n o t i nc l u d e d , $ 5 0 0 p e r d a y . No s u c h p r o v i s i o n . Se c t i o n 9 ( B ) ( 4 ) — E a c h v i o l a t i o n s ha l l b e c o n s i d e r e d s e p a r a t e l y . No s u c h p r o v i s i o n . Se c t i o n 9 ( B ) ( 5 ) ( 6 ) — C o n d i t i o n s f o r d r a w i n g o n L e t t e r o f C r e d i t. No s u c h p r o v i s i o n . 25 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 9 ( B ) ( 7 ) ( 8 ) ( 9 ) — P e r i o d i c r e p l a c e m e n t a n d re p l e n i s h m e n t o f t h e L e t t e r o f C r e d i t . No s u c h p r o v i s i o n . Se c t i o n 9 ( B ) ( 1 0 ) — D r a w o n t h e L et t e r o f C r e d i t w i l l n o t a f f e c t an y o t h e r r i g h t o r r e m e d y o f t he f r a n c h i s e a g r e e m e n t . No s u c h p r o v i s i o n . In d e m n i f i c a t i o n o f t h e C i t y a n d C o m m i s s i o n Se c t i o n 9 ( C ) ( 1 ) ( 2 ) ( 3 ) — B r o a d d e s c r i p t i o n o f t h o s e i n d e m n i f i e d an d a c t i v i t i e s d e f i n e d . Se c t i o n 8 . 6 — N a r r o w d e f i n i t i o n o f t h o s e i n d e m n i f i e d a n d ac t i v i t i e s d e f i n e d . In s u r a n c e Se c t i o n 9 ( D ) ( 1 ) — B r o a d d e f i n i t i o n o f r e q u i r e m e n t s f o r l i a b i l i t y in s u r a n c e . Se c t i o n 8 . 6 — N a r r o w d e f i n i t i o n o f r eq u i r e m e n t s f o r l i a b i l i t y in s u r e d . Se c t i o n 9 ( D ) ( 2 ) ( a t o g ) — $2 , 0 0 0 , 0 0 0 — p r o p e r t y d a m a g e t o a p e r s o n . $2 , 0 0 0 , 0 0 0 — p r o p e r t y d a m a g e t o p r o p e r t y $2 , 0 0 0 , 0 0 0 - - - p e r s o n a l i n j u r y . $2 , 0 0 0 , 0 0 0 - - - p e r s o n a l i n j u r y d u r i n g a n y o n e i n c i d e n t . $2 , 0 0 0 , 0 0 0 - - - f o r a l l o t h e r l i a b i l i t y . $2 , 0 0 0 , 0 0 0 - - - a u t o l i a b i l i t y : s e p a r a t e f o r b o d i l y i n j u r y a n d d e a th pe r o c c u r r e n c e ; b o d i l y i n j u r y a n d d e a t h t o a n y o n e p e r s o n ; pr o p e r t y d a m a g e p e r o c c u r r e n c e . Se c t i o n 8 . 7 — $1 , 0 0 0 , 0 0 0 - - - p e r s o n a l i n j u r y o r d e a t h t o o n e p e r s o n . $2 , 0 0 0 , 0 0 0 - - - p e r s o n a l i n j u r y o r d e a t h o f t w o o r m o r e p e r s o n s . $5 0 0 , 0 0 0 - - - f o r p r o p e r t y d a m a g e t o a n y o n e p e r s o n . $2 , 0 0 0 , 0 0 0 - - - p r o p e r t y d a m a g e f o r o n e a c t o r o c c u r r e n c e . 26 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 9 ( D ) ( 3 t o 6 ) — I n s u r a n c e p o l i c i e s a r e t o b e m a i n t a i n e d ; in s u r e r s q u a l i f i e d t o d o bu s i n e s s i n t h e S t a t e ; i n s u r a n c e p o l i c ie s mu s t b e a v a i l a b l e f o r r e v i e w b y t h e C i t y a n d C o m m i s s i o n ; f a i l u r e to c o m p l y w i t h i n s u r a n c e r e q u i re m e n t s a s m a t e r i a l b r e a c h . No s u c h p r o v i s i o n s . 2 W r o n g l y d e s i g n a t e d a s S e c t i o n 1 0 ( 1 3 ) . Re v o c a t i o n Se c t i o n 1 0 ( A ) ( 1 ) — C i t y r e s e r v e s th e r i g h t t o r ev o k e i n c a s e o f : a . Gr a n t e e v i o l a t e s m a t e r i a l p r o v i si o n s ; b . G r a n t e e h a s a t t e m p t e d to ev a d e t e r m s o f f r a n c h i s e ; c . G ra n t e e h a s p r a c t i c e d f r a u d o r d e c ei t . Ci t y m a y r e v o k e w i t h o u t h e a r i ng i f G r a n t e e i s a d j u d g e d b a n k r u p t . 8. 1 — I f G r a n t e e h a s n o t c o m p l i e d w it h m a t e r i a l p r o v i s i o n s , C i t y wi l l n o t i f y G r a n t e e . Se c t i o n 1 0 ( B ) 2 (1 ) — C i t y w i l l p r o v i d e w r it t e n n o t i c e t o c u r e . Gr a n t e e w i l l h a v e t h i r t y ( 3 0 ) d a y s t o c o r r e c t . 8. 2 — G r a n t e e w i l l h a v e t h i r t y ( 3 0 ) d a y s t o : r e s p o n d b y co n t e s t i n g ; c u r e t h e d e f a u l t ; o r i n i t i a t e r e a s o n a b l e s t e p s t o b egin to cu r e . Se c t i o n 1 0 ( B ) ( 2 ) — G r a n t e e w i l l b e p r o v i d e d p u b l i c h e a r i n g b y th e C i t y C o u n c i l ; t h e C i t y w i l l p r o v i d e G r a n t e e w r i t t e n n o t i c e of it s d e c i s i o n . 8. 3 — I f G r a n t e e f a i l s t o r e s p o n d o r d e f a u l t i s n o t r e m e d i e d i n th i r t y ( 3 0 ) d a y s , t h e C i t y w il l p r o v i d e a p u b l i c h e a r i n g n o t l e ss th a n t e n ( 1 0 ) d a y s a f t e r in i t i a l t h i r t y ( 3 0 ) d a y p e r i o d . Se c t i o n 1 0 ( B ) ( 3 ) — A f t e r p u b l i c h e a r i n g a n d o n w r i t t e n n o t i c e o f re v o c a t i o n , t e r m i n a t i o n o r s h o r t e ni n g l e n g t h o f f r a n c h i s e , G r a n te e ma y a p p e a l i n s t a t e , f e d e r a l c o u r t . No s u c h p r o v i s i o n . 27 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 1 0 ( C ) - - - G r a n t e e s h a l l n o t a b a n d o n t h e s y s t e m w i t h o u t th r e e ( 3 ) m o n t h s n o t i c e , m u s t c o mp e n s a t e C i t y f o r a b a n d o n m e n t . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( D ) ( 1 ) ( 2 ) - - - C i t y h a s ri g h t t o r e q u i r e G r a n t e e t o re m o v e i t s s y s t e m o n t e r m i n a t i o n , f o r f e i t u r e o r a b a n d o n m e n t o f fr a n c h i s e . I f G r a n t e e f a i l s , C it y c a n c o l l e c t o n L e t t e r o f C r e di t o r Pe r f o r m a n c e B o n d a n d t h e C i t y o w n s t h e s y s t e m . No s u c h p r o v i s i o n . Sa l e o r T r a n s f e r o f F r a n c h i s e Se c t i o n 1 0 ( E ) ( 1 ) — N o s a l e o r t r a ns f e r o f f r a n c h i s e o r t r a n s f e r o f st o c k w i t h o u t a p p r o v a l o f t h e C o m m i s s i o n . I n c l u d i n g i n t r a - co m p a n y t r a n s f e r s o r s a l e s , e x c e p t f o r i n d e b t e d n e s s . Se c t i o n 6 . 1 - - - G r a n t e e n e e d s c o n s e n t o f C i t y f o r t r a n s f e r , d e f i n ed as 5 1 % o w n e r i n t e r e s t . N o c o n s e n t n e e d e d f o r i n t r a - c o m p a n y tr a n s f e r s , i n c l u d i n g t o s e c u r e i n d e b t e d n e s s . Se c t i o n 1 0 ( E ) ( 2 ) - - - D e f i n e s c o n tr o l l i n g i n t e r e s t a s w o r k i n g co n t r o l , t o i n c l u d e f i f t e e n p e rc e n t ( 1 5 % ) o r m o r e b y o n e p e r s o n an d a c q u i s i t i o n b y o n e p e r s o n o f f i v e p e r c e n t ( 5 % ) o r m o r e . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 3 ( a ) ( b ) ( c ) - - - G ra n t e e s h a l l f i l e a l l d o c u m e n t s (d e f i n e d i n t h i s s e c t i o n ) a n d o t h e r d o c u m e n t s a s C o m m i s s i o n m a y re q u i r e . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 4 ) - - - C o m m i s s i o n w i l l h a v e t i m e d e f i n e d b y fe d e r a l l a w t o r e v i e w t h e t r a n s f e r r e q u e s t . No s u c h p r o v i s i o n . 28 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 1 0 ( E ) ( 5 ) - - - C i t y a n d C o m mi s s i o n c o s t a s s o c i a t e d w i t h th e t r a n s f e r r e q u e s t w i l l b e r ei m b u r s e d b y t h e G r a n t e e . G r a n t e e ma y r e c o v e r t h o s e e x p e n s e s b u t n o t i t e m i z e t h e m . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 6 ) - - - T r a n s f e r ee b e c o m e s s i g n a t o r y t o t h e Fr a n c h i s e . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 7 ) - - - C i t y a n d / o r C o m m i s s i o n w i l l h a v e t h e r i g h t to p u r c h a s e t h e s y s t e m . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 8 ) ( a ) ( b ) - - - C i t y a n d C o m m i s s i o n m u s t i n d i c a t e in wr i t i n g w i t h i n s i x t y ( 6 0 ) d a y s i t s i n t e n t t o p u r c h a s e . C i t y a n d Co m m i s s i o n c a n n o t e x e r c i s e t h i s r i g h t i f i t h a s a p p r o v e d a n as s i g n m e n t o r s a l e . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 9 ) - - - N o s a l e o r t ra n s f e r i n e v e n t o f G r a n t e e no n c o m p l i a n c e , C i t y a n d C o m m i ss i o n r e t a i n r i g h t t o e n f o r c e co m p l i a n c e e v e n i f n o n c o m p l i a n c e is s u e s a r i s e a f t e r a p p r o v a l . No s u c h p r o v i s i o n . Se c t i o n 1 0 ( E ) ( 1 0 ) - - - T r a n s f e r o r s a l e w i t h o u t C i t y o r Co m m i s s i o n c o n s e n t i s c o n s i d e r e d i m p a i r m e n t o f p e r f o r m a n c e . No s u c h p r o v i s i o n . 29 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Pr o t e c t i o n o f I n d i v i d u a l R i g h t s Se c t i o n 1 1 ( A ) - - - D i s c r i m i n a t o r y p r a c t i c e s p r o h i b i t e d . No s u c h p r o v i s i o n . Se c t i o n 1 1 ( B ) ( 1 ) ( 2 ) ( 3 ) - - - G r a n t e e w i l l p r o v i d e t h e C i t y a n d Co m m i s s i o n w i t h a l l d o c u m e n t s , b u t n o t v i o l a t e s u b s c r i b e r pr i v a c y . C i t y a n d C o m m i s s i o n r e s er v e t h e r i g h t t o q u e s t i o n re d a c t i o n s . N o m o n i t o r i n g o f i n d i vi d u a l v i e w i n g p a t t e r n s w i t h o ut th e S u b s c r i b e r ’ s p e r m i s s i on . N o d a t a o n v i e w i n g p a t t e r n s c a n b e so l d o r m a d e a v a i l a b l e t o t h i rd p a r t y , w i t h o u t S u b s c r i b e r ’ s pe r m i s s i o n . N o p e r m i s s i o n n e e d e d f o r s y s t e m w i d e o r i n d i v i d u a l el e c t r o n i c s w e e p s t o v e r i f y s y s te m i n t e g r i t y a n d f o r b i l l i n g pu r p o s e s . No s u c h p r o v i s i o n . Un a u t h o r i z e d C o n n e c t i o n s o r M o d i f i c a t i o n s Se c t i o n 1 2 ( A ) ( B ) ( C ) - - - N o u n a u t h o r i z e d c o n n e c t i o n s o r mo d i f i c a t i o n s a r e a l l o w e d b y a n y p e r s o n , g r o u p , g o v e r n m e n t bo d y , e t c . , w i t h o u t G r a n t e e a u t h o r iz a t i o n . I t i s u n l a w f u l t o re m o v e o r d e s t r o y a n y p a r t o f t h e s ys t e m . P r o v i d e s p e n a l t i e s f or vi o l a t i o n o f t h i s s e c t i o n . No s u c h p r o v i s i o n . 30 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Mi s c e l l a n e o u s P r o v i s i o n s Se c t i o n 1 3 ( A ) - - - R e n e w a l w i l l b e p e r f o r m e d i n a c c o r d a n c e w i t h al l l a w s f o r a t e r m l i m i t e d t o f i f t e e n ( 1 5 ) y e a r s . Se c t i o n 2 . 2 a n d 2 . 3 - - - F r a n c h i s e t e r m o f t e n ( 1 0 ) y e a r s , a l l ap p l i c a b l e l a w s a p p l y . Se c t i o n 1 3 ( B ) - - - W o r k p e r f o r m e d b y t h i r d p a r t i e s m u s t c o m p l y wi t h f r a n c h i s e , G r a n t e e m u s t p r ov i d e n o t i c e o f s u c h t h i r d p a r t i es to C i t y a n d C o m m i s s i o n . No s u c h p r o v i s i o n . Se c t i o n 1 3 ( C ) - - - A m e n d m e n t o f f ra n c h i s e b y w r i t t e n a g r e e m e n t be t w e e n G r a n t e e a n d C i t y . R e t e n ti o n o f r i g h t s o f C i t y t o a m e n d as p r o v i d e d b y l a w . Se c t i o n 1 0 . 5 - - - M o d i f i c a t i o n b y w r i t t en a g r e e m e n t b e t w e e n C i t y an d G r a n t e e . Se c t i o n 1 3 ( D ) ( 1 ) ( 2 ) (3 ) - - - C o m p l i a n c e w it h a l l l a w s , a n y s u c h la w s a f f e c t i n g a c e r t a i n s e c t io n w i l l n o t i n v a l i d a t e e n t i r e fr a n c h i s e , p a r t i e s w i l l n e g o t i a t e t o r e c o n s t i t u t e a n y p a r t s o f th e fr a n c h i s e t o c o m p l y w i t h a l l l a w s . Se c t i o n 1 0 . 4 - - - P r o v i d e s f o r s e v e r a b i l i t y o f p a r t s o f t h e f r a n c h ise in a t t e m p t t o c o m p l y w i t h l a w . Se c t i o n 1 3 ( E ) ( F ) - - - G r a n t e e s h al l n o t b e r e l i e v e d d u e t o n o n - en f o r c e m e n t o f a n y p a r t o f t h e f r a n c h i s e . C i t y a n d C o m m i s s i o n re t a i n a l l r i g h t s a v a i l a b l e an d d o n o t w a i v e r i g h t s f o r f a i l u r e t o ex e r c i s e a n y r i g h t s . Se c t i o n 1 0 . 7 - - - G r a n t e e d o e s n o t w a i v e r i g h t s u n d e r t h e f r a n c h i s e. 31 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Se c t i o n 1 3 ( G ) - - - G r a n t e e a c k n o w l e d g e s i t h a s r e v i e w e d t e r m s a n d co n d i t i o n s a n d t h e i r v a l i d i t y a n d th e p o w e r o f t h e C i t y t o s e t te r m s a n d c o n d i t i o n s . No s u c h p r o v i s i o n . Se c t i o n 1 3 ( H ) - - - F r a n c h i s e i s g o v e rn e d b y t h e l a w s o f M i n n e s o t a , di s p u t e s w i l l b e v e n u e d i n R a m se y C o u n t y D i s t r i c t C o u r t . No s u c h p r o v i s i o n . Se c t i o n 1 3 ( I ) - - - F o r c e M a j e u r e . Se c t i o n 1 0 . 1 - - - F o r c e M a j e u r e ( i n c lu d e s w o r k d e l a y s d u e t o o t h e r ut i l i t i e s ) . Se c t i o n 1 3 ( J ) - - - T h e C o m m i s s i o n a n d N S A C a r e d e e m e d t h i r d pa r t y b e n e f i c i a r i e s to t h e f r a n c h i s e . Se c t i o n 1 0 . 6 - - - N o r i g h t s t o t h i r d p a r t i e s . Se c t i o n 1 3 ( K ) ( L ) - - - C a p t i o n s d o n o t a f f e c t t h e m e a n i n g o f t h e fr a n c h i s e . T h i s f r a n c h i s e c o n s t i tu t e s t h e e n t i r e a g r e e m e n t e x c ep t fo r t h o s e e n u m e r a t e d i n S e c t i o n 2 ( E ) . Se c t i o n 1 0 . 3 - - - T h e f r a n c h i s e s u p e r s e d e s a l l p r e v i o u s d o c u m e n t s . Se c t i o n 1 4 - - - T e r m s f o r a c c e p t a n c e o f t h e f r a n c h i s e a n d de l i v e r a b l e s , s u c h a s P e r f o r m a n c e B o n d , L e t t e r o f C r e d i t , P E G Ac c e s s S u p p o r t A g r e e m e n t w i t h N S A C . No s u c h p r o v i s i o n . 32 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 In t h e C o m c a s t F r a n c h i s e O n l y Se c t i o n 3 . 2 — G r a n t e e w i l l p r o t e c t , a l t e r , r e l o c a t e , e t c . , l i n e s on t h i r t y ( 3 0 ) d a y s w r i t t e n n o t i c e fr o m C i t y . I f p u b l i c f u n d s a r e a va i l a b l e t o a n y o t h e r u s e r o f th e R O W , C i t y w i l l n o t i f y G r a n t e e of f u n d s a n d m a k e t h e m a v a il a b l e t o t h e G r a n t e e . Se c t i o n 5 . 3 ( i i ) - - N o s u c h i n f o r m a t i on r e q u e s t s h a l l b e i n i t i a t e d u n l es s t h e r e i s a r e a s o n a b l e ba s i s f o r i n q u i r i n g a s t o c o m p l i a n c e , s u c h a s c u s t o m e r c o m p l a i n ts a b o u t t h e s u b j e c t m a t t e r of t h e i n q u i r y , t h e f a i l u r e t o p r o v i d e r e p o r t s o n t h e s u b j e c t m at t e r a s r e q u i r e d b y o t h e r se c t i o n s o f t h i s F r a n c h i s e A g r e e m e n t , o r m a r k e t i n g o r o t h e r c o m mu n i c a t i o n s f r o m t h e Gr a n t e e i n d i c a t i n g n o n c o m p l i a n c e . Se c t i o n 5 . 3 ( i i i ) — I n t h e i n t e r e s t s o f c o s t s a v i n g s a n d e f f i c i e nc y , p r i o r t o s e r v i n g a n in f o r m a t i o n r e q u e s t u p o n t h e G r a n t ee , t h e C i t y s h a l l c o n t a c t G r an t e e ’s l o c a l r e p r e s e n t a t i v e t o di s c u s s t h e s u b j e c t m a t t e r o f c o n ce r n t o d e t e r m i n e w h e t h e r a p r om p t a n d i n f o r m a l s o l u t i o n i s av a i l a b l e ( i . e . , G r a n t e e i s a b l e t o s a t i s f a c t o r i l y e x p l a i n w h y th e r e i s n o v i o l a t i o n o r i s w i l l i n g to c u r e t h e a l l e g e d n o n c o m p l i a n c e ) . Se c t i o n 5 . 3 ( i v ) — T o e x p e d i t e t h e r ev i e w p r o c e s s a n d t o a v o i d p ro l o n g e d d i s p u t e s , p r i o r t o di s t r i b u t i n g o r p u b l i s h i n g t h e r e s ul t s o f a n t h e r e v i e w , t h e C i ty s h a l l a f f o r d G r a n t e e a m i n i m u m of 1 5 b u s i n e s s d a y s t o r e v i e w t h e d r a f t r e s u l t s a n d t o r e s p o n d to t h e f i n d i n g s t h e r e i n s o t h a t t h e re v i e w e r m a y t a k e i n t o c o n s i d e r at i o n a n y a d d i t i o n a l i n f o r m a t i o n G r a n t e e p r o v i d e s . Se c t i o n 5 . 3 ( v ) — G r a n t e e s h a l l b e p r o v i d e d w i t h a d v a n c e w r i t t e n n o t i c e o f a n y m e e t i n g a t wh i c h t h e r e s u l t s o f t h e a u d i t o r r e v i e w w i l l b e p r e s e n t e d a n d sh a l l b e a f f o r d e d a n o p p o r t u n i t y to r e s p o n d t o t h e r e s u l t s i n w ri t i n g a n d i n p e r s o n a t a n y s u c h me e t i n g . Se c t i o n 5 . 4 - - P r o c e d u r e s R e q u i r e d t o I n i t i a t e A u d i t / R e v i e w o r I nf o r m a t i o n R e q u e s t . Be c a u s e a u d i t s / r e v i e w s a n d i n f o r m a t i o n r e q u e s t s c a n b e t i m e c o n su m i n g a n d e x p e n s i v e f o r t h e Ci t y a n d G r a n t e e , p r i o r t o c o m m e n c in g a f r a n c h i s e f e e o r P E G f e e a u d i t o r r e v i e w o r a n in f o r m a t i o n r e q u e s t a s s e t f o rt h i n t h e s u b s e c t i o n s a b o v e : (i ) Th e C i t y s t a f f o r d e s i g n e e w a n t i n g t o i n i t i a t e t h e a u d i t / r e v i e w o r i n f o r m a t i o n 33 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 re q u e s t s h a l l p r e s e n t t h e p r o p o s ed a u d i t / r e v i e w o r i n f o r m a t i o n re q u e s t t o t h e C i t y f o r ap p r o v a l . T h e p r o p o s a l s h a l l i n cl u d e t h e p r o p o s e d i n q u i r y d o c u m en t , t h e e s t i m a t e d c o s t s of p e r f o r m i n g t h e a u d i t o r r e v i e w , a n e x p l a n a t i o n o f t h e b a s i s fo r t h e i n q u i r y , a n d a re p r e s e n t a t i o n t h a t a n a t t e m p t t o r e s o l v e t h e i n q u i r y i n f o r m a l l y w i t h G r a n t e e w a s m a d e . (i i ) Gr a n t e e s h a l l h a v e a d v a n c e w r i t te n n o t i c e o f t h e m e e t i n g a t w h i ch t h e a b o v e pr o p o s a l w i l l b e p r e s e n t e d a n d s h al l h a v e t h e o p p o r t u n i t y t o a d dr e s s t h e p r o p o s a l w i t h th e C i t y p r i o r t o a p p r o va l o f t h e a u d i t / r e v i ew o r i n f o r m a t i o n r eq u e s t . Se c t i o n 5 . 5 - - R e s o l u t i o n o f D i s p ut e s i n A u d i t s o r I n f o r m a t i o n R eq u e s t s . I n t h e e v e n t o f a di s p u t e b e t w e e n t h e C i t y a n d G r an t e e r e g a r d i n g t h e G r a n t e e 's p r o d u c t i o n o f r e s p o n s i v e in f o r m a t i o n o r r e g a r d i n g t h e r e s u l t o f a n a u d i t \ r e v i e w o r i n f o r ma t i o n r e q u e s t , t h e p a r t i e s ag r e e t o f i r s t a t t e m p t t o r e s o l v e t h e d i s p u t e i n a d i r e c t d i s c u ss i o n . U p o n t h e f a i l u r e o f d i r e c t di s c u s s i o n s , t h e p a r t i e s s h a l l m e d i a t e t h e d i s p u t e i n n o n b i n d i n g m e d i a t i o n b e f o r e a j o i n t l y - se l e c t e d m e d i a t o r w h o s e f e e s h a l l b e s p l i t b e t w e e n t h e p a r t i e s . I f m e d i a t i o n i s u n s u c c e s s f u l , th e p a r t i e s m a y t h e r e a f te r p u r s u e s u c h o t h e r r e m e d i e s a n d p r o c e ss e s a s m a y b e a v a i l a b l e . Se c t i o n 6 . 1 - - - G r a n t e e n e e d s c o n s e n t o f C i t y f o r t r a n s f e r , d e f i n ed a s 5 1 % o w n e r i n t e r e s t . N o co n s e n t n e e d e d f o r i n t r a - c o m pa n y t r a n s f e r s , i n c l u d i n g t o s e c u r e i n d e b t e d n e s s . Se c t i o n 9 - - - “ C o m p e t i t i v e E q u i t y p r o v is i o n ” w h i c h r e q u i r e s t h e s am e t e r m s o f t h e f r a n c h i s e b e ap p l i e d t o t h e n e w e n t r a n t . Se c t i o n 1 0 . 7 - - - G r a n t e e d o e s n o t w a i v e r i g h t s u n d e r t h e f r a n c h i s e. Se c t i o n 1 0 . 3 - - - T h e f r a n c h i s e s u p e r s e d e s a l l p r e v i o u s d o c u m e n t s . Se c t i o n 1 0 . 6 - - - N o r i g h t s t o t h i r d p a r t i e s . 34 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 No t e : T h e C o m c a s t a g r e e m e n t a l s o i n c l u d e s a “ C o m p e t i t i v e E q u i t y p r o v i s i o n ” w h i c h r e q u i r e s t h e s a me t e r m s o f t h e f r a n c h i s e b e ap p l i e d t o t h e n e w e n t r a n t . De f i n i t i o n s (i n c l u d e d i n e a c h d o c u m e n t ) Se c t i o n 1 Ac t u a l c o s t . Af f i l i a t e . Ba s i c C a b l e S e r v i c e . Br o a d c a s t C h a n n e l s . Ca b l e S e r v i c e . Ca b l e S y s t e m . Ch a n n e l . Ci t y . Ci t y C o d e . Ci t y C o u n c i l . Cl a s s I V C a b l e C h a n n e l . Co m m i s s i o n . Co n v e r t e r . Dr o p . Ed u c a t i o n a l A c c e s s C h a n n e l . FC C . Fr a n c h i s e . Go v e r n m e n t a l A c c e s s C h a n n e l . Se c t i o n 1 Af f i l i a t e t o n o t i n c l u d e c e r t a i n e n t i t i e s . Co m m i s s i o n . Ef f e c t i v e D a t e . 35 In i t i a l A s s e s s m e n t 5 - 8 - 1 4 Gr a n t e e . Gr o s s R e v e n u e . In f o r m a t i o n S e r v i c e . In s t a l l a t i o n . In s t i t u t i o n a l N e t w o r k . Lo c k o u t D e v i c e . Me m b e r C i t i e s . No d e . No r m a l B u s i n e s s H o u r s . No r m a l O p e r a t i n g C o n d i t i o n s . No r t h S u b u r b a n A c c e s s C o r p o r a t i o n . No r t h S u b u r b a n F r a n c h i s e A r e a . PE G . Pe r s o n . Pu b l i c A c c e s s C h a n n e l . Ri g h t o f W a y . Ri g h t o f W a y O r d i n a n c e . St a n d a r d I n s t a l l a t i o n . St a t e . Su b s c r i b e r . Gr o s s R e v e n u e . Fr a n c h i s e A r e a . CBG Communications, Inc. Executive Summary of CBG Communications, Inc.’s Report on the Technical Aspects of Comcast’s Formal Renewal Proposal to the North Suburban Communications Commission CBG Communications, Inc. Thomas Robinson, President Dick Nielsen, Senior Engineer May 7, 2014 CBG Communications, Inc. 1 EXECUTIVE SUMMARY CBG Communications, Inc. (“CBG”), conducted a system technical review, consulting, and engineering services project evaluating Comcast’s residential network, the Institutional Network (“I-Net”) and Public, Educational, and Governmental (“PEG”) Access signal origination, transport and signal distribution over the cable system and dedicated transmission links serving Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, Saint Anthony and Shoreview, MN (“Member Cities”) comprising the North Suburban Communications Commission’s (“NSCC”) service area. CBG’s findings and recommendations are fully described in our Final Report, “Evaluation of Comcast’s Subscriber System, Evaluation of the Existing Institutional Network, Evaluation of PEG Access Signal Transport and Distribution” (“Technical Report”), dated July, 2013. CBG also assisted the NSCC with its preparation of the Staff Report and Request for Renewal Proposal (“RFRP”). In addition to components that CBG was not specifically involved with, these documents included technical elements and functionality specifications required to meet the needs enabled by the subscriber network, the I-Net and PEG Access origination and transport network. This Report was prepared by CBG at the request of the NSCC. In preparing this Report, CBG has reviewed the technical aspects of the formal Cable Television Franchise Renewal Proposal (“Renewal Proposal”) of Comcast of Minnesota (“Comcast”) in response to the NSCC’s RFRP dated July 29, 2013 . Our focus was on Comcast’s responses to the RFRP related to system functionality and capacity as it pertains to Cable TV services (including the subscriber network, I-Net and PEG Access transport), system maintenance and overall system performance and the potential need for system upgrades over the course of a 10 year franchise agreement. Our findings from our review and analysis of Comcast’s Renewal Proposal are described in detail in the main body of this Report. Overall, CBG finds: Comcast’s Renewal Proposal does not comply with a number of the system technical, PEG Access transport and I-Net provisions of the model franchise. In many cases, Comcast does not specifically respond to requirements of the RFRP in its Proposal. Because the requirements of the RFRP were not addressed, no conclusion can be made regarding the adequacy of Comcast’s proposal in these areas. Comcast did not respond to many of the recommendations made in CBG’s Technical Report, and therefore did not sufficiently respond to the needs CBG Communications, Inc. 2 determined by the Commission as described in both the Staff Report and the Community Needs Assessment prepared by the Buske Group. Some of Comcast’s responses echo a unilateral sentiment of “we will decide” without proposing to the Commission what it specifically believes will meet the NSCC’s needs. As such, Comcast’s proposal is nonresponsive in these areas and is inadequate. In summary, Comcast’s Renewal Proposal, in many respects, is not so much a proposal of what it will do from a technical perspective to meet the needs determined by the Commission, but rather a dictate of what it will not do. Further, where Comcast indicates it will meet some or a portion of the needs, it often will not describe how it proposes to do so. As such, Comcast’s Renewal Proposal regarding many technical, I- Net and PEG Access signal transport matters is deficient and not reasonable. Provision and Use of the Institutional Networks Comcast has made it clear that it is not proposing to continue the existing fiber optic and HFC I-Net as built and maintained today. Comcast has proposed to continue the HFC I - Net for PEG Access video origination purposes only. Comcast also proposes to keep the existing fiber optic I-Net in place for PEG Access video origination purposes. However, Comcast has proposed that any utilization of the I -Net, outside of video origination, can only occur as a managed service whereby Comcast would charge a monthly recurring charge for use of the network and therefore Comcast would profit from non-video origination use of the I-Net. During the current franchise, Comcast has enabled the NSCC and the Member Cities to use the I-Net for data transportation, in addition to using the I -Net for PEG Access video origination. Indeed, Comcast has installed equipment owned by Member Cities on the I-Net in order for this data transportation to occur. This arrangement dates back to when cable modem technology was in its infancy in the late 1990s and early 2000s and has continued through the more recent installation of Ethernet based equipment on the fiber optic I-Net. CBG strongly believes that Comcast should continue to provide the I-Net for uses beyond PEG Access video origination, as well as for such video origination, as detailed in the Buske Report and in CBG’s Technical Report. The I-Net has been in place for more than 14 years and has fulfilled data communication needs for the NSCC and its Member Cities for more than 14 years and needs to continue to do so. CBG Communications, Inc. 3 CBG’s Technical Report clearly states the need for the functionality of the HFC I -Net to continue, and for the HFC I-Net to be able to provide HD PEG Access signal transportation. However, the Report goes on to say that “the current HFC I -Net was upgraded over 12 years ago. However, the amplifiers in use date back to the 1980’s. Some of these have been in operation for nearly 30 years. Replacement components are no longer made and it is likely that used replacement parts are difficult - to obtain. Therefore, we recommend that if this HFC I-Net is to be utilized going forward, these amplifiers be replaced, rather than hoping that over the course of a renewed franchise term of 10-15 years, they will continue to operate successfully and replacement parts will be available. CBG recommended that the current HFC I -Net be upgraded or that other forms of signal transportation, that would fulfill the need, be implemented. Comcast in its Proposal, however, merely states that: “Comcast will provide transport of HD PEG programming over fiber where Comcast owned fiber facilities and capacity exist. Comcast will provide transport for SD PEG programming over any platform or facility of Comcast’s choosing”1. Comcast also indicates that it has no plans to upgrade either the fiber I-Net or the HFC I-Net. These statements then do not address the technical needs identified and should be seen as an insufficient response. Use of The Institutional Networks is Non-Commercial Comcast indicated in its Proposal that the I-Net is currently used for commercial purposes. Comcast asserts that the City of Roseville sells I-Net services to other entities in a commercial agreement with those entities. This is simply not true. The City of Roseville works with other cities throughout the Twin Cities area in a cost sharing scenario. The agreement between these cities is for shared equipment and applications and does not include selling access to the I-Net or I-Net services. The Comcast I-Net is used at the discretion of each of the cities to interconnect the city with the shared applications provided by the Metro I-Net. This allows sharing of manpower, applications and equipment such as centralized servers. This also allows access to applications by larger cities at reduced costs and it allows for smaller cities to have access to applications that would not otherwise be cost effective for them. 1 Comcast Renewal Proposal, page 59 CBG Communications, Inc. 4 Interconnection – PRISMA Another technology based need that is supported in the Buske Report and CBG’s Technical Report is that of interconnection with entities outside of the NSCC service area. Such interconnectivity exists today via a network labeled as the PRISMA network. This network provides interconnection of video services for entities outside of the NSCC service area to receive video programs from CTV and it allows CTV to use video from outside the NSCC service area. It also provides interconnection with other I-Nets for voice and data communications purposes and sharing between government and educational entities. Comcast, in its Proposal, has agreed with CBG that the current PRISMA Interconnect is in need of an upgrade. Comcast proposes to use its Converged Regional Area Network (“CRAN”) to replace the PRISMA equipment. However, Comcast only says it will replace the existing equipment at its headend and hubs and does not specify that CTV, the NSCC or member Cities can use it at no cost for all purposes. The Proposal states that “But additional add/drop locations in the future will be billed (or credited) at $1,675.80/month/location”2. There is no mention of an initial connection to the Interconnect and it is unclear as to whether the Interconnect can be used for data or only PEG Access video sharing with other entities. QSI Report – I-Net Valuation Comcast, in an effort to value the I-Net and to create a basis for charging the NSCC and its Member Cities for I-Net utilization, obtained a report from QSI Consulting, Inc. (“QSI”) that places a value on the I-Net as it exists today. The QSI Report makes several incorrect assumptions as its basis for valuing the I-Net. First, QSI’s Report uses examples from the Twin Cities and other locations throughout the Country to compare this I-Net to other largely commercial networks. Comparisons to commercial networks are inapplicable to the NSCC I-Net. The use of the NSCC I-Net is noncommercial and was built and maintained as a public benefit. The second flaw in the QSI Report is that they include the cost to build other networks as a basis for what this network is worth. They assume that a monthly recurring cost to the users of the I-Net would need to include the recovery of construction costs. 2 Comcast Renewal Proposal, page 83 CBG Communications, Inc. 5 Because the I-Net has been in place for at least 14 years and because Comcast and its predecessors recovered the cost to build the I-Net from its subscribers over the years, this cost should not be included in a costing model of the I -Net. Therefore, the only cost, if anything, to the NSCC And Member Cities for utilization of the I-Net should be the cost of maintaining the I-Net over and above costs that would be incurred by Comcast to maintain their subscriber system. System Inspection / Documentation and Repairs CBG’s technical Report documented a number of issues of non -compliance with the National Electrical Code (NEC) and the National Electrical Safety Code (NESC) on Comcast’s cable TV system up to and including on buildings and homes in the NSCC area. CBG then recommended that the NSCC require Comcast to regularly inspect and document issues found on its cable TV system. In addition, the Report recommended that requirements for such inspections and documentation be included in any renewed franchise. This was embodied in the Staff Report that Comcast “provide a detailed inspection and repair plan that addresses these and all issues and code violations in the NSCC service area”. Comcast provided a significant amount of discussion on its repair procedures in place today but it never specifically described an inspection and documentation plan. System Upgrade Review CBG’s Technical Report stated that there may be a need to upgrade the system in the future to meet the cable related needs of the communities served by the NSCC. The report recommended that there be a mid-term review of the system in part to evaluate the ability of the system to meet the cable related needs of the community. In Comcast’s Proposal, Comcast only states: “Comcast does not propose any rebuilds or upgrades to the current system at this time, and does not propose new upgrades to the current institutional network.3” This makes it impossible to evaluate Comcast’s system’s ability to meet the needs of the community going into the future and the likelihood that Comcast will upgrade the system as needed. This becomes important as Com cast may continue to use more of its system’s capacity for non-cable TV services diminishing the ability of the cable TV 3 Comcast Renewal Proposal, page 57 CBG Communications, Inc. 6 system from delivering the cable TV needs of the subscribers including the PEG programming. EXECUTIVE SUMMARY REVIEW OF PUBLIC, EDUCATIONAL, AND GOVERNMENT (PEG) ACCESS ASPECTS OF FRANCHISE RENEWAL PROPOSAL SUBMITTED BY COMCAST OF MINNESOTA Prepared for The North Suburban Communication Commission May 7, 2014 Prepared by THE BUSKE GROUP 4808 T Street SACRAMENTO, CA 95819 (916) 441-6277 1 EXECUTIVE SUMMARY REVIEW OF PUBLIC, EDUCATIONAL, AND GOVERNMENT (PEG) ACCESS ASPECTS OF FRANCHISE RENEWAL PROPOSAL SUBMITTED BY COMCAST OF MINNESOTA I. INTRODUCTION/OVERVIEW The North Suburban Communication Commission (“NSCC”), on behalf of its member cities of Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony, and Shoreview, Minnesota (hereinafter, collectively the “Member Cities” or individually a “Member City”) in July, 2013, issued a Request for Renewal Proposal (“RFRP”) to Comcast of Minnesota (“Comcast”). This report is a review of the public, educational, and government (“PEG”) aspects of the proposal submitted by Comcast in response to the RFRP. Prior to issuing its RFRP, the NSCC, acting through its staff and retained experts on institutional networks and PEG access, undertook extensive research to identify the current and future community cable-related needs and interests of the NSCC member cities, their residents, business and community organizations, and educational institutions that serve the residents of the cities. The Buske Group (“TBG”) was retained to prepare a Community Needs Ascertainment by the NSCC, which review was included in the Staff Report and became part of the RFRP. The NSCC, through its RFRP, sought a proposal that: (1) describes, in detail, what Comcast proposed to provide during a franchise term with respect to services, facilities and equipment; (2) demonstrates that Comcast satisfies community cable-related needs and interests and in a manner that will provide the benefits of cable communications technology to the residents, institutions, organizations, and businesses in the community, now and for any franchise term; (3) shows that Comcast is financially and otherwise qualified to hold a renewal cable franchise and to provide the services, equipment and facilities set forth in its proposal; (4) explains why Comcast believes that renewal is warranted in light of its past performance; and (5) complies with the requirements of Chapter 238 of Minnesota Statutes. The format of this Executive Summary mirrors the format of the full report. Part II of this document is a review of key PEG elements of the proposal submitted by Comcast. This analysis does not attempt to analyze each and every PEG requirement in the RFRP, and whether Comcast has or has not complied with that requirement of the RFRP. This summary analysis concentrates on the key categories of PEG requirements and outlines Comcast’s level of compliance. Part III of this Executive Summary summarizes the flaws in Comcast’s critique of the Community Needs Ascertainment activities undertaken by NSCC and points out serious flaws in Comcast’s own needs ascertainment methodology. 2 II. KEY PEG ACCESS ELEMENTS OF COMCAST’S PROPOSAL This section summarizes the degree to which Comcast has complied with the primary categories of PEG access requirements contained in the RFRP. Comcast has failed to comply with many of the PEG access and public service obligations contained in the RFRP. If implemented in accordance with Comcast’s proposal, there will be a dramatic reduction of services and channels to the public, since many of the requirements, needs and interests identified in the Community Needs Ascertainment and RFRP are continuations of current funding and services being provided by Comcast, pursuant to the current franchise agreement and related settlements and other agreements with NSCC. Obviously, there are changes and upgrades identified in the RFRP requirements that would be logical, given the dramatic changes in technology and the public’s use of video and media services since the current franchises were granted in 1999. The Proposal submitted by Comcast is inadequate to meet the identified current and future community cable-related needs and interests of NSCC, its ten Member Cities, NSAC, the three public school districts that serve the residents of the Member Cities, community groups and organizations that provide community-related services, area businesses, and the residents of the Member Cities. The series of tables on the following pages of this Executive Summary list key RFRP requirements and the degree to which the proposal submitted by Comcast complies with those requirements. 3 KE Y P E G A C C E S S TE R M S NS C C / C I T I E S R F R P R E Q U I R E M E N T CO M C A S T F O R M A L P R O P O S A L Pu b l i c , Ed u c a t i o n a l , a n d Go v e r n m e n t ( P E G ) Ch a n n e l s Ma i n t a i n 8 e x i s t i n g S D C h a n n e l s (p . 3 1 , 3 9 , e t c . ) Ad d 4 H D C h a n n e l s ( p . 3 1 , 3 9 , e t c . ) Av a i l a b i l i t y o f a d d i t i o n a l H D a n d / o r S D P E G ch a n n e l s ( p . 3 1 , 3 9 , e t c . ) No n c o m p l i a n t : 3 S D c h a n n e l s a v a i l a b l e i m m e d i a t e l y ( p . 7 1 ) ; t r i g g e r f o r a 4 th S D c h a n n e l ; “ In n o e v e n t w i l l t h e t o t a l n u m b e r o f P E G c h a n n e l s ex c e e d f i v e r e g a r d l e s s o f t h e f o rm a t i n w h i c h t h e y a r e d e l i v e r e d .” (p . 7 4 ) No n c o m p l i a n t : O n l y 1 H D c h a n n e l w i t h 3 m o n t h s n o t i c e w i t h t r i g g e r o f 5 h o u r s / 5 d a y s p e r w e e k H D o r i g i n a l p r o g r a m m i n g i s a v a i l a b l e . ( p . 7 1 ) On l y 1 a d d i t i o n a l S D P E G c h a n n e l i f N S C C d o c u m e n t s t h a t i t m e e t s MN S t a t u t e r e q u i r e m e n t s ; A p p l i c a n t w i l l h a v e 3 - 6 m o n t h s t o p r o v i d e th i s c h a n n e l . ( p . 7 4 ) PE G S i g n a l Qu a l i t y a n d Fu n c t i o n a l i t y Qu a l i t a t i v e e q u i v a l e n c e f o r P E G c h a n n e l s t o hi g h e s t q u a l i t y l o c a l b r o a d c a s t c h a n n e l ( s ) , in c l u d i n g ( b u t n o t l i m i t e d t o ) H D . ( p . 3 2 , 3 7 , e t c . ) Si m u l c a s t S D a n d H D P E G c h a n n e l s a s l o n g as S D c h a n n e l s a r e a v a i l a b l e ( p . 3 2 , 3 7 , e t c . ) Pe r m i t o n d e m a n d v i e w i n g o f S D a n d H D P E G ac c e s s p r o g r a m m i n g a n d P E G d a t a v i a t h e Ap p l i c a n t ’ s o n - d e m a n d p l a t f o r m . ( p . 3 4 ) Su f f i c i e n t c a p a c i t y f o r P E G c h a n n e l s t o u t i l i z e ne w t e c h n o l o g i e s s u c h a s 4 K o r 3 D ( p . 3 1 , 3 7 , et c . ) PE G c a p a c i t y t o e n a b l e t h e t r a n s m i s s i o n o f cl o s e d c a p t i o n s , v i d e o d e s c r i p t i o n s , S A P co n t e n t a n d m u l t i p l e a u d i o c h a n n e l s / s t r e a m s . (p . 3 2 , 3 3 , e t c . ) In t e r a c t i v e c a p a b i l i t y a n d V O D f o r P E G ; s e r v e r st o r a g e f o r f r e e o n - d e m a n d v i e w i n g o f P E G (p . 3 3 , 3 4 , e t c . ) Ab i l i t y t o n a r r o w c a s t g o v e r n m e n t c o n t e n t t o di f f e r e n t c i t i e s o n s i n g l e c h a n n e l ( c u r r e n t l y oc c u r s o n C h a n n e l 1 6 ) ( p . 3 9 ) No n c o m p l i a n t : P E G c h a n n e l s w i l l b e p r o v i d e d a n a c c e p t a b l e s i g n a l co n s i s t e n t w i t h F C C s t a n d a r d s . N o sp e c i f i c c o m m i t m e n t t o q u a l i t a t i v e eq u i v a l e n c e . ( p . 7 1 - 7 2 , e t c . ) No n c o m p l i a n t : N o t a d d r e s s e d a n d n o t o f f e r e d . No n c o m p l i a n t : N o P E G V O D . No n c o m p l i a n t : N o o f f e r o f 4 K o r 3 D o r a c c e s s t o n e w t e c h n o l o g i e s . No n c o m p l i a n t : N o o f f e r o f t h e s e s e r v i c es o r c a p a b i l i t i e s o n P E G ch a n n e l s . No n c o m p l i a n t : C o m c a s t d o e s n o t p r o p o s e i n t e r a c t i v e o r v i d e o - o n - de m a n d c a p a b i l i t y f o r P E G c h a n n e l s . No n c o m p l i a n t : N o t a d d r e s s e d i n p r o p o s a l . KE Y P E G A C C E S S TE R M S NS C C / C I T I E S R F R P R E Q U I R E M E N T CO M C A S T F O R M A L P R O P O S A L PE G C h a n n e l Lo c a t i o n s PE G S D c h a n n e l s o n b a s i c t i e r . ( p . 3 2 ) PE G H D c h a n n e l s o n l o w e s t c o s t H D t i e r . (p . 3 2 ) Gr o u p e d P E G c h a n n e l s – S D c h a n n e l s o n lo w e s t c o s t S D t i e r a n d H D c h a n n e l s g r o u p e d on l o w e s t c o s t H D t i e r ( p . 3 2 ) Ch a n g e s i n c h a n n e l n u m b e r s m a y o n l y o c c u r to c o m p l y w i t h f e d e r a l l a w , a n d m u s t h a v e p r i o r ap p r o v a l o f N S C C . I n t h e e v e n t o f c h a n g e s , a l l co s t s m u s t b e b o r n e b y A p p l i c a n t . ( p . 3 2 - 3 3 ) Al l P E G c h a n n e l s o n b a s i c - t i e r o f s e r v i c e . ( p . 7 1 - 7 2 ) No n c o m p l i a n t : N o i n d i c a t i o n a s t o w h e t h e r P E G H D c h a n n e l s w i l l b e on t h e l o w e s t c o s t H D t i e r . No n c o m p l i a n t . P E G c h a n n e l s w i l l r e m a i n i n r e a s o n a b l e p r o x i m i t y t o on e a n o t h e r ( p . 7 2 ; a l s o a d d r e s s e d o n p . 7 3 - 4 ) . N o d i f f e r e n t i a t i o n o f SD o r H D c h a n n e l s . No n c o m p l i a n t : C h a n n e l n u m b e r s g e n e r a l l y a n t i c i p a t e d t o b e c o n s i s t e n t wi t h c u r r e n t P E G c h a n n e l n u m b e r s ( p . 7 1 ) . N o g u a r a n t e e o f p e r m a n e n t as s i g n m e n t o f P E G c h a n n e l s . W i l l r e i m b u r s e u p t o $ 1 , 5 0 0 f o r c o s t s an d p r o v i d e a s s i s t a n c e w i t h n o t i f i c at i o n s t o c u s t o m e r s f o r c h a n n e l nu m b e r c h a n g e s . ( P . 7 2 ) PE G C h a n n e l Pr o g r a m L i s t i n g s & I n f o r m a t i o n i n Gu i d e s Fu l l P E G C h a n n e l l i s t i n g s o n I n t e r a c t i v e Pr o g r a m G u i d e . ( p . 3 8 , 4 2 , e t c . ) No c h a r g e t o e n t i t i e s m a n a g i n g P E G c h a n n e l s . (p . 3 8 , 4 2 , e t c . ) Co m p l i a n t : P E G C h a n n e l s o n I n t e r a c t i v e P r o g r a m G u i d e . Na r r o w c a s t i n g t o a m u l t i p l e c o m m u n i t i e s o n t h e s a m e c h a n n e l i s n o t po s s i b l e . No n c o m p l i a n t : N S A C m u s t p a y f o r c h a r g e s t o g e t p r o g r a m o n I P G . PE G S i g n a l Tr a n s p o r t a n d Li n k a g e o f P E G Ac c e s s Or i g i n a t i o n Lo c a t i o n s , P E G Ac c e s s F a c i l i t i e s an d t h e H e a d e n d Pr o v i d e c a p a c i t y o n I - N e t ( & a s s o c i a t e d eq u i p m e n t ) f o r v i d e o s i g n a l t r a n s p o r t f r o m va r i o u s l o c a t i o n s i n N S C C m e m b e r c i t i e s , Ra m s e y C o u n t y , N S A C a t n o c o s t . (p . 3 5 , 4 2 , e t c . ) Bi - d i r e c t i o n a l H D / S D f e e d ( & a s s o c i a t e d eq u i p m e n t ) b e t w e e n C o m c a s t h e a d e n d N S A C ma s t e r c o n t r o l . ( p . 3 5 , 3 6 , e t c . ) No n c o m p l i a n t . C o m c a s t a g r e e s t o p r o v i d e p o r t i o n o f I - N e t c u r r e n t l y us e d f o r P E G p u r p o s e ( e s t i m a t e d a t 8 % ) . C o m c a s t t o c h a r g e i t s es t i m a t e d v a l u e o f t h a t a g a i n s t i t s p r o p o s e d c a p i t a l c o n t r i b u t i o n . N o of f e r o f a n y f u n d i n g f o r e q u i p m e n t f o r v i d e o s i g n a l t r a n s p o r t o t h e r t h a n fu n d s i n c l u d e d i n i t s p r o p o s e d c a p i t a l c o n t r i b u t i o n . C o m c a s t p r o p o s e s no u p g r a d e s t o t h e I - N e t c a p a b il i t i e s f o r P E G p u r p o s e s . Co m c a s t p r o p o s e s t o “ pr o v i d e t r a n s p o r t o f H D P E G p r o g r a m m i n g o v e r fi b e r w h e r e C o m c a s t o w n e d f i b e r f a c i l i t i e s a n d c a p a c i t y e x i s t . C o m c a s t wi l l p r o v i d e t r a n s p o r t f o r S D P E G p r og r a m m i n g o v e r a n y p l a t f o r m o r fa c i l i t y o f C o m c a s t ’ s c h o o s i n g .” … ” To t h e e x t e n t t h e N S C C r e q u i r e s PE G - r e l a t e d c a p i t a l e q u i p m e n t u p g r a d e s t o e n a b l e H D P E G - s i g n a l tr a n s p o r t , o r a d d i t i o n a l n e t w o r k c a p a c i t y , t h e N S C C c a n s e e k f u n d i n g fo r s u c h u p g r a d e s a n d n e t w o r k c a p a c i t y f r o m t h e m e m b e r c i t i e s ut i l i z i n g t h e P E G c a p i t a l f u n d i n g t h a t C o m c a s t i s c o m m i t t i n g t o p r o v i d e di r e c t l y t o t h e m e m b e r c i t i e s .” ( P . 5 9 ) ( S e e C B G R e p o r t f o r d e t a i l s . ) 4 KE Y P E G A C C E S S TE R M S NS C C / C I T I E S R F R P R E Q U I R E M E N T CO M C A S T F O R M A L P R O P O S A L PE G A c c e s s Ch a n n e l a n d Co m m u n i t y M e d i a Ce n t e r D e s i g n a t e d Ac c e s s P r o v i d e r s NS C C r e s e r v e s r i g h t t o d e s i g n a t e e n t i t y ( s ) t o ma n a g e P E G a c c e s s c h a n n e l s a n d f a c i l i t i e s . (p . 3 4 , e t c . ) Co m p l i a n t : C o m c a s t a g r e e s t o c o o p e r a t e w i t h P E G c h a n n e l ma n a g e r ( s ) d e s i g n a t e d b y N S C C . PE G C a p i t a l Fu n d i n g To t a l P E G c a p i t a l f u n d i n g f o r 1 0 m u n i c i p a l i t i e s an d N S C C / N S A C o v e r f r a n c h i s e t e r m : $1 4 , 1 6 0 , 7 4 0 . T h i s a m o u n t i s t o b e a l l o c a t e d ov e r t h e l i f e o f f r a n c h i s e p e r t h e R F R P . (p . 6 5 , 6 7 , e t c . ) PE G s u p p o r t t o b e p r o v i d e d t o N S C C a n d NS C C d i s t r i b u t e s e q u i p m e n t a n d / o r f u n d i n g t o ea c h m e m b e r c i t y . ( p . 6 5 , 6 7 , e t c . ) No n c o m p l i a n t : T o t a l a m o u n t i n p r o p o s a l $ 3 , 2 4 7 , 8 3 0 . C o m c a s t o n l y pr o p o s e s t o p r o v i d e a p o r t i o n o f c o s t s f o r e q u i p m e n t n e e d e d i n Co u n c i l C h a m b e r s / c o n t r o l r o o m s f o r m un i c i p a l i t i e s o v e r t h e l i f e o f t h e fr a n c h i s e , a n d N O s u p p o r t f o r p u b l i c a n d e d u c a t i o n a l a c c e s s eq u i p m e n t n e e d s a s t h o s e n e e d s a r e m e t b y N S C C / N S A C . ( p . 7 1 - 7 2 , et c . ) No n c o m p l i a n t : C o m c a s t p r o p o s e s t o p r o v i d e f u n d i n g t o e a c h C i t y a n d no f u n d i n g d i r e c t l y t o N S C C . ( p . 7 9 ) PE G S e r v i c e s Gr a n t s An n u a l o p e r a t i n g g r a n t s re q u e s t e d f o r 1 0 mu n i c i p a l i t i e s a n d N S C C / N S A C o v e r f r a n c h i s e te r m e s t i m a t e d t o b e $ 1 3 , 5 5 8 , 1 3 0 . C o m c a s t ’ s cu r r e n t f r a n c h i s e a g r e em e n t / o r d i n a n c e s ( a s am e n d e d ) a n d v a r i o u s M O U s a n d a g r e e m e n t s in c l u d e P E G s u p p o r t o t h e r t h a n c a p i t a l g r a n t s an d f u n d i n g . ( p . 3 8 ) No n c o m p l i a n t : C o m c a s t o f f e r e d n o f u n d i n g o r s u p p o r t f o r t h e u s e o f th e P E G f a c i l i t i e s a b o v e f r a n c h i s e f e e s . ( p . 7 6 ) Co m c a s t ’ s p o s i t i o n i s t h a t a n y t h i ng t h e y w o u l d p r o p o s e o t h e r t h a n ca p i t a l f u n d i n g m u s t b e a p a r t o f t h e 5 % f r a n c h i s e f e e s Co m p l i m e n t a r y Ca b l e D r o p s & Se r v i c e s Fr e e c a b l e d r o p , o u t l e t , c a b l e s e r v i c e , a n d a l l te r m i n a l e q u i p m e n t n e c e s s a r y t o r e c e i v e al l su b s c r i b e r s e r v i c e t i e r s f o r N S C C / N S A C of f i c e s , s t u d i o f a c i l i t y , e a c h M e m b e r C i t y a n d Ra m s e y C o u n t y g o v e r n m e n t b l d g . ( i n c l u d i n g bu t n o t l i m i t e d t o p o l i c e , s h e r i f f & f i r e s t a t i o n s ) , pu b l i c s c h o o l s , p u b l i c l i b r a r y ( i n c l u d i n g m u l t i p l e co n n e c t i o n s f o r m u l t i p l e l o c a t i o n s b e l o n g i n g t o a g i v e n d e p a r t m e n t o r a g e n c y ) . ( p . 7 0 - 7 1 , e t c . ) No n c o m p l i a n t : “ Co m c a s t w i l l p r o v i d e c o m p l i m e n t a r y b a s i c c a b l e se r v i c e v i a o n e d r o p t o o n e o u t l e t a t e a c h o f t h e e d u c a t i o n a l a n d mu n i c i p a l l o c a t i o n s l i s t e d i n A t t a c h me n t A . C o m c a s t w i l l p r o v i d e t h r e e co m p l i m e n t a r y d i g i t a l d e v i c e s a t e a c h s u c h l o c a t i o n i f n e c e s s a r y t o vi e w t h e b a s i c c a b l e s e r v i c e . S e r v i c e t o a d d i t i o n a l o u t l e t s a t e a c h lo c a t i o n m a y b e p u r c h a s e d b y t h e C i t y .” ( C P F A p . 1 0 - 1 1 , S e c t i o n 7 . 8 ) Co m c a s t i n d i c a t e s i t w i l l n o t p r o v i d e f r e e H D e q u i p m e n t t o c u s t o m e r s , in c l u d i n g c o m p l i m e n t a r y m u n i c i p a l a n d e d u c a t i o n a l a c c o u n t s (S e c t i o n 7 . 4 [ i v ] ) . 5 6 III. RESPONSE TO COMCAST’S CRITIQUE OF COMMUNITY NEEDS ASCERTAINMENT Comcast’s critique of the Community Needs Ascertainment report criticizes the methods undertaken by TBG to gather public input. TBG conducted a telephone survey, five focus groups, a survey of the focus group participants, an on-line survey of area residents, and small group interviews with I-Net and PEG access stakeholders. These activities provided opportunities for all residents of the NSCC franchise area, people who work but do not reside in the area, and individuals with first-hand knowledge of and experience with the I-Net and PEG access resources to offer their input regarding a number of cable-related matters. This expansive approach to public input is essential in that the Cable Act points out that the franchise renewal process should “afford the public in the franchise area notice and participation.” Comcast also criticizes the conclusions regarding existing PEG Access and Institutional Network resources that were based upon the consultant’s: (1) on-site inspections of the PEG access facilities; (2) examination of detailed inventory and operations documents; (3) discussions with and input from PEG access and I-Net staff and/or stakeholders; and (4) decades of experience in this field. Comcast’s consultant, Talmey-Drake Research and Strategy, Inc., prepared a critique of TBG’s research and conducted a telephone survey that it argues is superior to the telephone survey conducted by Group W Communications on behalf of NSCC. It is important to note that Talmey-Drake’s telephone survey of cable subscribers was the only reported activity undertaken by Comcast to ascertain the cable-related needs and interests of the public in the NSCC franchise area. Unlike Comcast’s limited effort to obtain public input, the TBG community needs ascertainment activities sought and obtained input from elected officials and other representatives of the Member Cities’ local governments; teachers and other individuals associated with educational institutions in the franchise area; representatives of nonprofit, civic and community organizations; leaders of health and human service organizations and agencies; members of area arts, cultural, and heritage organizations; local business leaders; PEG access and I-Net staff and/or stakeholders; current Comcast subscribers; and residents who are currently not (or have never been) Comcast cable subscribers. Talmey-Drake’s critique relies heavily on advocacy-oriented value judgments, unsubstantiated assumptions, double standards, and frequent hyperbole. In addition, some elements of the Group W telephone survey that were severely criticized by Talmey- Drake appear in very similar form in the telephone survey conducted by Talmey-Drake. 1. Talmey Drake claims that the Group W survey is “fatally flawed” because “the sample did not include cell-phone-only respondents”. Group W complied with the federal law that prohibits use of automatic dialing systems to contact a cell phone number without prior consent. Survey research professionals have also raised many other concerns about the use of cell numbers in their work. Given budget, legal and other real world considerations, it was appropriate for Group W to conduct the survey as it did. 2. Talmey-Drake implies that the Group W survey report did not include what it believes is sufficient methodological detail, and states that this negates “the trustworthiness of the survey and the professionalism of the expert who is presenting the results of the survey.” This criticism is not supported by standard industry practice. 3. Talmey-Drake added in respondents who were not asked a particular question to minimize survey results that show support for community access services and programming. It is inappropriate and misleading to calculate a result that includes people who were not asked a question and call it the “total sample response.” 4. One example of the double standards employed by Talmey-Drake: A Group W survey finding that 72.5% of respondents said it was “Very Important” or “Important” to have local cable programming is belittled by Talmey-Drake as “not particularly high.” But it states that its survey finding that 69% of customers say they are very or somewhat satisfied with cable service shows that customer satisfaction is “solid.” 5. Talmey-Drake’s critique contains several statements that involve unfounded assumptions, including: a. Talmey-Drake states that if CTV programs were rated using the same methods as commercial channels, “their ratings would barely be infinitesimal.” It is impossible to know what the ratings of the CTV programs would be under that scenario, since national ratings firms like The Nielsen Company have never included community access channels in their ratings. b. Talmey-Drake states that if a respondent says he is very interested in watching local sports, “he may well be imagining a production level on par with NFL games, but when he actually sees a televised local game it is anything but NFL quality play or production and he loses interest." Talmey- Drake simply assumes that CTV’s award-winning local sports productions are poorly produced, an inappropriate assumption that is easily refuted. 6. Talmey-Drake says the Group W survey is “flawed” because, unlike Talmey- Drake’s survey, quotas were not enforced to select respondents based upon their gender, level of cable service, and geographic location. One could ask, why not also enforce requirements for age, income and ethnic distribution? At what point of “enforcing” requirements does a random sample cease to be random? 7. Rather than asking about the importance of the CTV channels directly (as the Group W survey did), Talmey-Drake simply assumes that weekly viewing amounts are a valid “indication of the importance of community access channels.” Weekly viewing amounts have no substantiated relationship to the perceived “importance” of community access channels. These reported weekly viewing amounts could be related (for example) to the fact that unlike the other 7 channels on the Comcast line-up, Comcast’s on-screen program guide includes no information about upcoming programs on the CTV channels. 8. Drawing upon Talmey-Drake’s misleading interpretation of its survey results, Comcast proposes to significantly reduce the number of PEG access channels in the NSCC franchise area (saying that this “strengthens” them). Actually, a 44% plurality of Talmey-Drake survey respondents said that Comcast should keep the current number of community access channels (another 3% said to add more) -- as compared to only 26% who said to cut them back at all. Only 12.9% of the Talmey-Drake survey respondents supported a reduction in the number of community access channels as proposed by Comcast.1 9. Talmey-Drake repeatedly asserts that responses to its survey questions show that cable subscribers are not inclined to support local programming financially. However, Talmey-Drake’s questions imply (or state outright) that customers must pay all of Comcast’s PEG access-related costs, since that is allowed by federal law. It should be noted that just because the federal law allows one to do something, this does not mean that it must be done. 10. Talmey-Drake carefully words its description of various types of programming services, as it attempts to “measure” the importance of receiving these services in high-definition (HD). A purposely-vague and boring definition of community access programming is included, stating only one example: “meetings.” The responses lead Talmey-Drake to conclude that having the community access channels offered in HD is the “least important.” A follow-up question regarding the acceptable amount to pay for these channels in HD is also very misleading, since it implies that HD channels are purchased on a per-channel basis. 11. Finally, Talmey-Drake includes similarly biased questions about having community access programming available On Demand, weighing down this option with this loaded wording: “your local government may require the cable company to set aside additional capacity so that you can also watch past meetings of your local city government.…” The bias is compounded with a statement that “Making past city council meetings available On Demand will mean fewer channels will be available for watching other types of regular, non- access cable programming or movies On Demand….” This is simply not true. The Talmey-Drake critique also dismisses the legitimacy of the contributions from those who participated in the other community needs ascertainment activities that TBG conducted (five focus groups, an on-line survey of area residents, and small group interviews with PEG access and I-Net stakeholders). A variety of methods were used to invite the public to participate in these activities, including notices on websites, emails to residents and stakeholders, press releases to area media outlets, flyers posted at locations throughout the franchise area, and newspaper advertisements. Talmey-Drake complained 1 Talmey-Drake only asked a question about the desired number of community access channels, willfully deciding not to ask a question about the desired number of channels dedicated to any other type of programming (e.g., sports programming, which currently occupies 44 channels on Comcast’s line-up). 8 9 that some participants were not cable subscribers, a small number of participants worked in but do not reside in the NSCC franchise area, random sampling was not used to restrict participation, and the views of the I-Net and PEG access stakeholders were tainted by the fact that they “appear to have a vested interest in I-Net and PEG access.” In response, we note that: (1) non-subscribers in the area have a right to participate in a process that considers the community obligations of a private commercial firm to use public rights of way; (2) people who do not reside in the area but work there may have work-related reasons to use the I-Net and PEG Access resources, and therefore can provide meaningful feedback; and (3) the direct experience of I-Net and PEG access stakeholders can result in valuable comments and suggestions, based upon their actual use of these resources. Using the logic associated with Talmey-Drake’s criticism of these participants, one could conclude that opinions and proposals of Comcast representatives regarding franchise renewal elements should also not be considered as legitimate, due to the “vested interest” of Comcast in negotiating an agreement that is compatible with Comcast’s desired outcomes. Again, it is important to point out that the Cable Act invites franchising authorities to establish a franchise renewal process “which affords the public in the franchise area appropriate notice and participation for the purpose of (A) identifying the future cable- related community needs and interests, and (B) reviewing the performance of the cable operator under the franchise during the then current franchise term” (emphasis added). It should also be noted that the language of the Cable Act does not: (1) dictate the nature and suitability of the public input activities to be undertaken; (2) restrict participation in the public input process to cable subscribers (note that the Cable Act states “…affords the public in the franchise area…”); or (3) require every aspect of the public input process to be conducted in accordance with strict adherence to survey research methodology. May 2014 Front Range Consulting, Inc. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal By Richard D. Treich Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 1 Executive Summary Front Range Consulting, Inc. (“FRC”) was retained by Bradley & Guzzetta, LLC (“B&G”)1 to review the Comcast of Minnesota, Inc.’s (“Comcast”) response to the Request for Renewal Proposal (“RFRP”) issued by the North Suburban Communications Commission and for FRC to identify any issues and concerns it has with the Comcast proposal. The North Suburban Communications Commission (the “NSCC” or the “Commission”) is a municipal joint powers consortium organized by Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony and Shoreview, Minnesota (individually, a “Member City” and, collectively, the “Member Cities”) pursuant to Minn. Stat. § 471.59, as amended, to administer and enforce cable franchises awarded by the Member Cities. Comcast responded to the RFRP on December 20, 2013 (“Proposal”) with a lengthy submission and numerous exhibits. Review Methodology FRC has reviewed the Proposal by determining the extent to which Comcast as met the needs and interests contained in the RPRF and associated exhibits primarily from a financial viewpoint. The relevant provisions of the Communications Act (47 U.S.C. 546) states: (c)(1) Upon submittal by a cable operator of a proposal to the franchising authority for the renewal of a franchise pursuant to subsection (b), the franchising authority shall provide prompt public notice of such proposal and, during the 4- month period which begins on the date of the submission of the cable operator's proposal pursuant to subsection (b), renew the franchise or, issue a preliminary assessment that the franchise should not be renewed and, at the request of the operator or on its own initiative, commence an administrative proceeding, after providing prompt public notice of such proceeding, in accordance with paragraph (2) to consider whether-- (A)the cable operator has substantially complied with the material terms of the existing franchise and with applicable law; (B)the quality of the operator's service, including signal quality,response to consumer complaints, and billing practices, but without regard to the mix or quality of cable services or other services provided over the system, has been reasonable in light of community needs; (C)the operator has the financial, legal, and technical ability 1 Bradley & Guzzetta, LLC has recently changed its name to Bradley Hagen & Gullikson, LLC. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 2 to provide the services, facilities, and equipment as set forth in the operator's proposal; and (D)the operator's proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests. FRC primarily focused on subsection (D) above where the proposal needs to be evaluated “taking into account the cost of meeting such needs and interests.” The legislative history provides further insights to this “cost” standard where it states “[i]n assessing the costs, the cable operator’s ability to earn a fair rate of return on its investment and the impact of such costs on subscriber rates are important considerations.”2 The RFRP contained numerous requirements to address the costs of the identified needs and interest with respect to the financial impact on Comcast and the impact on subscriber rates.3 Issues Identification FRC has identified five issues with the Proposal. Those issues are: Complete lack of any financial projections to compare the RFRP requirements to the potential earnings by Comcast and the impact on subscriber rates in the NSCC franchise area. Lack of any recognition and financial credit that the current I-Net construction costs have been fully and completely paid for by NSCC subscribers. Lack of any recognition that Comcast has improperly recaptured valuable analog spectrum from the NSCC and will be able to use that recaptured spectrum for its own money-making purposes without compensation to the NSCC and the subscribers. Comcast has proposed that the NSAC be required to use its reasonable reserves accumulated by the NSAC to cover future NSAC operating and capital requirements that will place the NSAC in an exposed financial position which could potentially lead to a financial collapse of the NSAC. Comcast repeatedly complains that operating support cannot be required by the NSCC/NSAC but fails to acknowledge that the Cable Act allows the cable operator to voluntarily offer operating support. Given the public support for the NSAC’s programming, Comcast should have volunteered to pay operating support to the NSAC as part of its proposal. In a recent development, Comcast has agreed to extend a 2 See H.R.REP.NO. 98-934, at 74 (1984),as reprinted in 1984 U.S.C.C.A.N. 4655, 4656. 3 See e.g.,RFRP Form III.F. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 3 current franchise agreement for a minimum of two years while informal negotiations are taking place. The extension continues a capital and operating support PEG commitment that is greater than the current NSCC PEG agreement and drastically larger than Comcast’s proposal. FRC will summarize each of these five issues below. Financial Projections Form III attached to the RFRP contained a listing of the financial information and projections that were required as part of Comcast’s Proposal. Form III.F contained requirements for pro forma financial projections by Comcast. The specific requirements4 are: The Applicant shall furnish tables following the format below and provide the requested pro forma projections for the Applicant’s operations in the Member Cities for the proposed franchise term (see Form XI), assuming a franchise for the City is awarded on January 1, 2014.5 If the system’s assumed revenues or expenses will reflect an allocation of assumed expenses or revenues for some other entity (including, but not limited to, overhead allocations and management fees),pro forma projections for such other entity should be provided as well. The pro forma projections should include approximately the same line-item level of detail indicated on the attached forms, but particular details of presentation may differ if the Applicant believes that alternatives are more appropriate given its internal accounting practices. Key assumptions supporting the projections should be documented and submitted as notes to the pro formas. In particular, assumptions regarding system modifications, PEG and institutional network requirements, franchise fee expenses, and any other franchise requirements should be clearly identified and treatment of associated costs or revenues in the financial projections should be highlighted or explained. Financial pro formas must be based upon RFRP requirements. If the application deviates from those requirements, submit separate and additional pro formas showing the financial impact of each difference. Comcast response6 was: As shown by the NSCC staff’s own report and the public filings of Comcast’s corporate parent, Comcast’s financial capability to perform is not in question. Comcast objects to the demands in this section for that reason, and also because the questions below are 4 RFRP Form III, page 101. 5 The NSCC recognizes that all franchises for the Member Cities will not be awarded on January 1, 2014. This date has been selected for purposes of convenient analysis. 6 Proposal, page 47. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 4 burdensome, and unnecessary to evaluate Comcast’s overall financial capabilities. Moreover, due to rapid and ongoing changes in technology and the cable industry, Comcast would be otherwise unable to make reliable pro forma financial projections for the life of a 10-year franchise. Nevertheless, to try to accommodate this request, Comcast has supplied a 3–year history as Exhibit 13 and subscriber information as Exhibit 16. Further, with regards to the financial projections of each year of the proposed term of the franchise, they simply referred to this response above. As such there is no data provided by Comcast that will allow any measurement of impact of meeting the future cable related needs and interests. Also Form III.D asked Comcast for information about its financial goals including historical rate of return on investment. Comcast’s response7 was: Overall financial goals for the member cities’ systems are to provide a reasonable return on existing and newly invested capital, commensurate with the anticipated risks of the business and the required returns of the capital markets. Since business and market risks change over time with the economy and as competition and technology rapidly increase, Comcast has not established a stated rate of return for the system. Actual financial returns will always be dependent upon satisfying customers with an array of service offerings delivered in an economically efficient manner. Financial returns do and will vary across cable systems as a result of competition, market characteristics, regulation, and system efficiencies. Without the required historical and pro forma financial data include data on subscriber rates and Comcast’s financial goals like return on investment, Comcast has not presented any evidence that would suggest that the RFRP requirement would be overly burdensome on subscribers and would not meet Comcast’s financial goals. Quite to contrary, Comcast avoids addressing the fact that PEG obligations are subscriber pass-throughs and will have no impact on the financial results of Comcast. Based on FRC’s analysis of subscriber rates in the NSCC franchise areas, PEG fees historically assessed to subscribers have risen at a much smaller rate of increase than has the cable rates under Comcast’s control. FRC has noted that the Proposal has improperly attempted to use the FRC Financial Analysis of Comcast Corporation8 as some sort of endorsement of Comcast financial capability to operate the cable system. The financial report was not meant to assess the financial capability of Comcast but was, as shown in the report, an attempt to ascertain the level of profitability that Comcast generates in the franchise area. With the level of profitability estimated, Comcast 7 Proposal at 45. 8 See Attachment D to the RFRP. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 5 could easily invest these profits in the NSCC franchise area by providing the level of capital and operating support contained in the RFRP and/or reducing the pass-through burden on the subscribers and still return significant profits to the corporation. I-Net Facilities Comcast has rejected the RFRP requirement to basically maintain the current HFC and fiber I- Net and has instead suggested that the I-Net would only be maintained for only PEG transport and that the balance of the use of the I-Net will be based on “fair-market value.”9 As an initial matter, Comcast is incorrect that the Cable Act limits the use of an I-Net to only PEG transport. Again referring to the legislative history of the 1984 Cable Act, it is clear the Congress intended PEG requirements to be separate and distinct from I-Net requirements. The legislative history concludes: A franchising authority, under 611(b), may require as part of its request for proposals the number of channels that an operator must set aside for public, education or governmental use. Subsection 611(b) also permits franchising authorities to require that channel capacity on institutional networks be designated for educational or governmental use. The term “institutional network” means a communication network which is constructed or operated by the cable operator and which is generally available only to non-residential subscribers.10 FRC believes it is clear that PEG needs are separate from I-Net needs based on this legislative history and therefore should reject Comcast unsupported position. Comcast I-Net proposal unfairly restricts the needs of the franchising authority. Comcast also fails to consider that the full construction costs (as determined by the cable operator) of these I-Net facilities have been fully recovered from subscribers as part of the PEG fee included in Comcast’s regulated service rate. For Comcast to now re-take these paid for I-Net facilities and subsequently charge the NSCC/NSAC for these services at market based rates will allow Comcast to earn a profit on these fully paid for I-Net facilities. Such a self-serving proposal does not meet the needs and interests of the subscribers in the NSCC franchise area. 9 Proposal at 10. 10 See H.R.REP.NO. 98-934, at 46 (1984),as reprinted in 1984 U.S.C.C.A.N. 4655, 4656. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 6 Analog Spectrum The current franchise agreement with Comcast allows the NSCC to use/program eight (8) analog channels on the basic tier.11 When Comcast converted all of the analog channels to a digital format last year, Comcast was able to re-capture a significant amount of bandwidth on the system. According to the 2014 FCC Form 1240 filed with the NSCC, the Basic service tier contains thirty-two (32) channels. If you assume conservatively that six (6) digital channels can be place in the space of one analog channel, Comcast was able to recapture approximately twenty-six (26) analog channels with this digital conversion. This allows Comcast to reprogram these re-captured twenty-six channels and with an assumed six digital channels for each analog channel re-captured, Comcast would be able to add one hundred and fifty-six (156) new digital services. The programming value of those new channels is quite significant. Additionally, Comcast might be able to use this re-captured analog spectrum to provide faster internet speeds by bonding channels together and/or offer new services like home security services. Additionally and more importantly, the re-captured analog spectrum assigned to the eight (8) PEG channels has potentially violated the current franchise agreements in the franchise area. Assuming a reasonable valuation technique, FRC has estimated that the value of these lost analog PEG channels has a value to Comcast of approximately $1,250,000 annually. Comcast in its proposal has not considered the lost value of these re-captured analog PEG channels. Without this consideration, Comcast will be unfairly able to enrich its profits from the current system by not compensating the NSCC for this franchise violation. Operating Reserves Comcast has proposed that the NSCC/NSAC use some of its current reserves to offset capital and operating costs on a going forward basis. The E-Consulting Group Report (ECG)12 completely mischaracterizes the reserves held by the NSCC and NSAC. ECG improperly lumps the NSCC and NSAC’s reserves together. The NSCC’s reserves are generated solely by operating reserves funded by the franchise fees provided by the member cities, not any reserves generated from PEG funding and therefore should not be used to fund NSAC needs. From the $2.1 million discussed in the ECG Report, over $400,000 pertains to the NSCC, leaving a balance of over $1.7 million for the NSAC.13 Again improperly suggesting, ECG would have the NSAC use these reserves to fund future capital purchases without recognizing that approximately $100,000 of that so called NSAC reserve in the NSAC’s checking account used to pay it monthly bills which should not be depleted under any reasonable theory. Also included in the so called reserves is a required deposit that the NSAC must maintain in the bank as part of its lease letter 11 The current franchise agreements actually call for 12 channels but the NSCC has returned 4 of those channels back to Comcast already. 12 Exhibit 2 to the Proposal. 13 Included in this $1.7 million reserve amount is over $400,000 of deferred revenues which cannot be considered a “reserve.” Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 7 of credit requirement. Finally, it would be financially imprudent for the NSAC to not maintain approximately a six month reserve of it annual budget as set forth in non-profit guidelines. The ECG “recommendation” completely misunderstands the financial reserves that the NSAC has prudently incurred during this franchise term and using any of these funds would be detrimental to the NSAC on a going forward basis to purchase future expenditures. The result of this ill-advised recommendation by ECG to use these reserves for future expenditures would place the NSAC in an exposed financial position that could lead to the collapse if the NSAC unless that is the end result the Proposal is attempting to suggest. These reserves have been prudently incurred under the expiring franchise and memoranda of understanding and should not be used to offset future capital and operating support obligation. Most importantly, these funds are not Comcast funds but rather funds provided by subscribers and to be prudently used by the NSAC. Operating Support Payments From the very onset of the Proposal, it suggests that operational support contributions are unlawful.14 The FCC has made it very clear in 1999 that a cable operator is free to make voluntary operating payments as part of a franchise agreement. In the letter ruling issued on June 25, 1999, the FCC added the following modification and clarification: The legislative history explains that "Subsection 622(g)(2)(C) establishes a specific provision for PEG access in new franchises. In general, this section defines as a franchise fee only monetary payments made by the cable operator, and does not include as a "fee" any franchise requirements for the provision of services, facilities or equipment. As regards PEG access in new franchises, payment for capital costs required by the franchise to be made by the cable operator are not defined as fees under the provision. These requirements may be established by the franchising authority under Section 611(b) or Section 624(b)(1). In addition, any payments which a cable operator makes voluntarily relating to support of public, educational and governmental access and which are not required by the franchise would not be subject to the 5 percent franchise fee cap."See H.R. Rep. No. 98-934 at 65 (1984) reprinted in 1984 U.S.C.C.A.N. 4702;see also 1984 U.S.C.C.A.N. at 4753 (Colloquy between Rep. Wirth and Rep. Bliley). (Emphasis added). Based on the well documented needs and interests in the franchise area, the Proposal should have agreed to provide, at a minimum a voluntary payment, for the operational needs and interests identified in order to allow the NSCC to continue to provide the services that were confirmed by the Ascertainment Report. 14 See e.g., Proposal at 1. Executive Summary FRC’s Review of Comcast’s Formal Renewal Proposal © Front Range Consulting, Inc.Page 8 Recently Comcast has agreed to resolve the same 6 MHz issue discussed above with the Ramsey Washington cable commission by agreeing to provide an HD PEG channel now and has agreed to continue the same capital and operating support payments for approximately two years while the commission negotiates an informal renewal with Comcast and potentially longer as negotiations continue. The current PEG capital and operating support payments in the Ramsey Washington area are similar if not greater than the current NSCC capital and operating support payments. It would seem logical that the suggestion that the current PEG capital and operating support payments are impacting subscriber retention and acquisition has been dismissed by Comcast as part of that settlement agreement with the Ramsey Washington cable commission. Conclusion FRC has concluded that the Proposal falls woefully short on the required financial information contained in the RFRP that is necessary to assess the impact on Comcast earned rate of return and any impact on subscriber rates. FRC believes that many of the modifications contained in the Proposal from the RFRP would likely allow Comcast to increase its profitability in the franchise area and the reduction of services provided by the NSCC/NSAC. The Proposal has not considered the already paid for I-Net and the impact of the recapture of analog PEG spectrum which will both allow Comcast to earn additional profits. The Proposal has suggested a use of the reserves that will place the NSAC in a venerable financial position and should have considered the operating payments to be, at a minimum, a voluntary payment. 1 CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION No. 2014-031 RENEWAL OF COMCAST OF MINNESOTA, INC., CABLE FRANCHISE WHEREAS, the City of Arden Hills (the “City”), is a Member City of The North Suburban Cable Commission, d/b/a The North Suburban Communications Commission (the “Commission”), a Joint Powers Commission organized pursuant to Minn. Stat. § 471.59, as amended, and includes the municipalities of Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony, and Shoreview, Minnesota (hereinafter, collectively the “Member Cities”); and WHEREAS, a Joint Powers Commission organized pursuant to Minn. Stat. § 471.59 has the statutory authority to “jointly or cooperatively exercise any power common to the contracting parties i.e., the Member Cities;” and WHEREAS, the Commission was established by the Amended North Suburban Cable Commission Joint and Cooperative Agreement for the Administration of a Cable Communications System, dated June 1990 (the “Joint Powers Agreement”), to monitor Comcast’s performance, activities and operations under the Franchises and to coordinate, administer and enforce the Member Cities' Franchises, among other things; and WHEREAS, The North Suburban Communications Commission acts on behalf of its Member Cities, including the City, to monitor the operation and activities of cable communications and to provide coordination of administration and enforcement of the franchises of the Member Cities; and WHEREAS, the City enacted an ordinance and entered into an agreement authorizing MediaOne North Central Communications Corp. to provide cable service (the “Franchise”); and WHEREAS, as a result of several transfers of the Franchise, Comcast of Minnesota, Inc., (“Comcast”) currently holds the Franchise in the city; and WHEREAS, Section 626(a)(l) of the Cable Communications Policy Act of 1984, as amended (the “Cable Act”), 47 U.S.C. § 546(a)(1), provides that if a written renewal request is submitted by a cable operator during the 6-month period which begins with the 36th month before franchise expiration and ends with the 30th month prior to franchise expiration, a franchising authority shall, within six months of the request, commence formal proceedings to 2 identify the future cable-related community needs and interests and to review the performance of the cable operator under its franchise during the then current franchise term; and WHEREAS, by letters dated October 11, 2010, and November 23, 2010, from Comcast to each of the Member Cities, including this City, Comcast invoked the formal renewal procedures set forth in Section 626 of the Cable Act, 47 U.S.C. § 546; and WHEREAS, the City and the other Member Cities informed the Commission, by resolution, that they want the Commission and/or its designee(s) to commence, manage and conduct the formal renewal process specified in Section 626(a)-(g) of the Cable Act, 47 U.S.C. § 546(a)-(g), on their behalf; and WHEREAS, the City has affirmed, by resolution, the Commission’s preexisting authority under the Joint Powers Agreement to take any and all steps required or desired to comply with the Franchise renewal and related requirements of the Cable Act, Minnesota law and the Franchises; and WHEREAS, the Joint Powers Agreement empowers the Commission and/or its designee(s) to conduct the Section 626 formal franchise renewal process on behalf of the city and to take such other steps and actions as are needed or required to carry out the formal franchise renewal process; and WHEREAS, the Commission adopted Resolution No. 2011-02 commencing formal franchise renewal proceedings under Section 626(a) of the Cable Act, 47 U.S.C. § 546(a), and authorizing the Commission or its designee(s) to take certain actions to conduct those S ection 626(a) proceedings; and WHEREAS, the Commission performed a detailed needs assessment of the Member Cities’ and their communities’ present and future cable-related needs and interests and has evaluated and continues to evaluate Comcast’s past performance under the Franchises and applicable laws and regulations, all as required by Section 626(a) of the Cable Act, 47 U.S.C. § 546(a); and WHEREAS, the Commission’s needs ascertainment and past performance review produced the following reports: The Buske Group’s “Community Needs Ascertainment – North Suburban Communications Commission (Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony and Shoreview, Minnesota)” (July 15, 2013) (the “Needs Assessment Report”); Group W Communications, LLC's, telephone survey and report titled “North Suburban Communications Commission Cable Subscriber Survey (September 2011)” (the “Telephone Survey Report”); CBG Communications, Inc.’s, “Final Report - Evaluation of Comcast's Subscriber System, Evaluation of the Existing Institutional Network and Evaluation of PEG Access Signal Transport and Distribution for the North Suburban Communications Commission” (July 2013) (the “Technical Review Report”); Front Range Consulting, Inc.’s, “Financial Analysis of Comcast Corporation 2012 SEC Form 10K” (May 2013) (the “Comcast Financial Report”); and Commission staff’s “Report on Cable- Related Needs and Interests and the Past Performance of Comcast of Minnesota, Inc.,” (July 22, 2013) (the “Staff Report”); and 3 WHEREAS, based on its needs ascertainment, past performance review, best industry practices, national trends in franchising and technology, and its own experience, Commission staff prepared a “Request for Renewal Proposal for Cable Television Franchise” (“RFRP”) that summarizes the Member Cities' and their communities’ present and future cable-related needs and interests, establishes requirements for facilities, equipment and channel capacity on Comcast’s cable system and includes model provisions for satisfying those requirements and cable-related needs and interests; and WHEREAS, pursuant to Resolution No. 2013-04, the Commission authorized its Executive Committee, Franchise Renewal Committee, Commission staff and/or Com mission designee(s) to take all steps and actions necessary to implement, conduct and engage in the entire formal franchise renewal process set forth in Section 626(a)-(g) of the Cable Act, 47 U.S.C. § 546(a)-(g), and to comply with any and all related federal, state and local laws, regulations, ordinances, orders, decisions and agreements; and WHEREAS, the Commission’s delegation of authority to the Franchise Renewal Committee includes, but is not limited to, the issuance of a staff report and RFRP and the establishment of appropriate deadlines for questions and Comcast’s RFRP response; and WHEREAS, in accordance with the authority delegated by the Commission, the Franchise Renewal Committee, by resolution, terminated the Section 626(a) proceedings required by the Cable Act on July 26, 2013, issued the Staff Report and RFRP to Comcast, effective July 29, 2013, and instructed Commission staff to deliver the Staff Report and RFRP to Comcast no later than July 30, 2013; and WHEREAS, the Staff Report and RFRP was delivered to Comcast on July 29, 2013; and WHEREAS, the Commission ratified the issuance of the Staff Report and RFRP by the Franchise Renewal Committee at its August 2013 meeting; and WHEREAS, the Commission and Comcast engaged in informal renewal negotiations pursuant to 47 U.S.C. § 546(h) but are currently unable to arrive at mutually acceptable terms, although informal discussions are ongoing; and WHEREAS, the Commission established November 22, 2013, as a deadline for Comcast’s response to the Staff Report and RFRP; and WHEREAS, the Commission and Comcast agreed to extend certain deadlines including the deadline for Comcast to respond to the Staff Report and RFRP and the deadline set forth in 47 U.S.C. 546(c) for the Commission and the Member Cities to accept or preliminarily deny the Comcast Proposal; and WHEREAS, on or about December 20, 2013, Comcast submitted to the Commission its Formal Proposal in response to the Staff Report and RFRP (“Proposal”); and WHEREAS, the Commission published a notice notifying the public that Comcast’s Proposal has been received and was placed on file for public inspection in the Commission’s office, and that written public comments may be submitted to the Commission; and 4 WHEREAS, the Commission held a public hearing on April 17, 2014, and May 1, 2014, on the Comcast Proposal; and WHEREAS, Comcast’s proposal was analyzed by the Commission’s staff, The Buske Group, CBG Communications, Inc., and Front Range Consulting, Inc., each of whom prepared a separate Executive Summary of Comcast’s Proposal (collectively the “Executive Summary Reports”); and WHEREAS, the Executive Summary Reports identify with particularity whether Comcast’s Proposal is acceptable or unacceptable as it relates to the Commission’s Staff Report and RFRP; and WHEREAS, the Commission carefully considered all public comment including that contained within the Staff Report and RFRP, the Proposal and the Executive Summary Reports; and WHEREAS. the Commission, on May 15, 2014, adopted a resolution recommending to the Member Cities that the Member Cities issue a preliminary assessment that the Comcast Franchises should not be renewed; and WHEREAS, despite the Commission’s recommendation, the City, after carefully reviewing Comcast’s Proposal determines the Proposal meets the future cable-related community needs and interests taking into account the cost of meeting such needs and interests; NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF ARDEN HILLS THAT: 1. Each of the above recitals is hereby incorporated as a finding of fact by the City. 2. The City hereby rejects the Commission’s recommendation and renews the Comcast Franchise pursuant to the terms of the Comcast Proposal. 3. The City finds that its actions and the actions of the North Suburban Communications Commission are appropriate and reasonable in light of the mandates contained in federal law including 47 U.S.C. § 546. PASSED AND ADOPTED this 9th day of June, 2014: By: David Grant, Mayor ATTEST: Amy Dietl, City Clerk CITY OF ARDEN HILLS COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION No. 2014-031 PRELIMINARY ASSESSMENT THAT THE COMCAST OF MINNESOTA, INC. CABLE FRANCHISE SHOULD NOT BE RENEWED WHEREAS, the City of Arden Hills (the “City”), is a Member City of The North Suburban Cable Commission, d/b/a The North Suburban Communications Commission (the “Commission”), a Joint Powers Commission organized pursuant to Minn. Stat. § 471.59, as amended, and includes the municipalities of Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony, and Shoreview, Minnesota (hereinafter, collectively the “Member Cities”); and WHEREAS, a Joint Powers Commission organized pursuant to Minn. Stat. § 471.59 has the statutory authority to “jointly or cooperatively exercise any power common to the contracting parties i.e., the Member Cities;” and WHEREAS, the Commission was established by the Amended North Suburban Cable Commission Joint and Cooperative Agreement for the Administration of a Cable Communications System, dated June 1990 (the “Joint Powers Agreement”), to monitor Comcast’s performance, activities and operations under the Franchises and to coordinate, administer and enforce the Member Cities' Franchises, among other things; and WHEREAS, The North Suburban Communications Commission acts on behalf of its Member Cities, including the City, to monitor the operation and activities of cable communications and to provide coordination of administration and enforcement of the franchises of the Member Cities; and WHEREAS, the City enacted an ordinance and entered into an agreement authorizing MediaOne North Central Communications Corp. to provide cable service (the “Franchise”); and WHEREAS, as a result of several transfers of the Franchise, Comcast of Minnesota, Inc., (“Comcast”) currently holds the Franchise in the City; and WHEREAS, Section 626(a)(l) of the Cable Communications Policy Act of 1984, as amended (the “Cable Act”), 47 U.S.C. § 546(a)(1), provides that if a written renewal request is submitted by a cable operator during the 6 -month period which begins with the 36th month before franchise expiration and ends with the 30th month prior to franchise expiration, a franchising authority shall, within six months of the request, commence formal proceedings to 2 identify the future cable-related community needs and interests and to review the performance of the cable operator under its franchise during the then current franchise term; and WHEREAS, by letters dated October 11, 2010, and November 23, 2010, from Comcast to each of the Member Cities, including the City, Comcast invoked the formal renewal procedures set forth in Section 626 of the Cable Act, 47 U.S.C. § 546; and WHEREAS, the City and the other Member Cities informed the Commission, by resolution, that they want the Commission and/or its designee(s) to commence, manage and conduct the formal renewal process specified in Section 626(a)-(g) of the Cable Act, 47 U.S.C. § 546(a)-(g), on their behalf; and WHEREAS, the City has affirmed, by resolution, the Commission’s preexisting authority under the Joint Powers Agreement to take any and all steps required or desired to comply with the Franchise renewal and related requirements of the Cable Act, Minnesota law and the Franchises; and WHEREAS, the Joint Powers Agreement empowers the Commission and/or its designee(s) to conduct the Section 626 formal franchise renewal process on behalf of the City and to take such other steps and actions as are needed or required to carry out the formal franchise renewal process; and WHEREAS, the Commission adopted Resolution No. 2011-02 commencing formal franchise renewal proceedings under Section 626(a) of the Cable Act, 47 U.S.C. § 546(a), and authorizing the Commission or its designee(s) to take certain actions to conduct those Section 626(a) proceedings; and WHEREAS, the Commission performed a detailed needs assessment of the Member Cities’ and their communities’ present and future cable-related needs and interests and has evaluated and continues to evaluate Comcast’s past performance under the Franchises and applicable laws and regulations, all as required by Section 626(a) of the Cable Act, 47 U.S.C. § 546(a); and WHEREAS, the Commission’s needs ascertainment and past performance review produced the following reports: The Buske Group’s “Community Needs Ascertainment – North Suburban Communications Commission (Arden Hills, Falcon Heights, Lauderdale, Little Canada, Mounds View, New Brighton, North Oaks, Roseville, St. Anthony and Shoreview, Minnesota)” (July 15, 2013) (the “Needs Assessment Report”); Group W Communications, LLC's, telephone survey and report titled “North Suburban Communications Commission Cable Subscriber Survey (September 2011)” (the “Telephone Survey Report”); CBG Communications, Inc.’s, “Final Report - Evaluation of Comcast's Subscriber System, Evaluation of the Existing Institutional Network and Evaluation of PEG Access Signal Transport and Distribution for the North Suburban Communications Commission” (July 2013) (the “Technical Review Report”); Front Range Consulting, Inc.’s, “Financial Analysis of Comcast Corporation 2012 SEC Form 10K” (May 2013) (the “Comcast Financial Report”); and Commission staff’s “Report on Cable- Related Needs and Interests and the Past Performance of Comcast of Minnesota, Inc.,” (July 22, 2013) (the “Staff Report”); and 3 WHEREAS, based on its needs ascertainment, past performance review, best industry practices, national trends in franchising and technology, and its own experience, Commission staff prepared a “Request for Renewal Proposal for Cable Television Franchise” (“RFRP”) that summarizes the Member Cities' and their communities’ present and future cable-related needs and interests, establishes requirements for facilities, equipment and channel capacity on Comcast’s cable system and includes model provisions for satisfying those requirements and cable-related needs and interests; and WHEREAS, pursuant to Resolution No. 2013-04, the Commission authorized its Executive Committee, Franchise Renewal Committee, Commission staff and/or Commission designee(s) to take all steps and actions necessary to implement, conduct and engage in the entire formal franchise renewal process set forth in Section 626(a)-(g) of the Cable Act, 47 U.S.C. § 546(a)-(g), and to comply with any and all related federal, state and local laws, regulations, ordinances, orders, decisions and agreements; and WHEREAS, the Commission’s delegation of authority to the Franchise Renewal Committee includes, but is not limited to, the issuance of a staff report and RFRP and the establishment of appropriate deadlines for questions and Comcast’s RFRP response; and WHEREAS, in accordance with the authority delegated by the Commission, the Franchise Renewal Committee, by resolution, terminated the Section 626(a) proceedings required by the Cable Act on July 26, 2013, issued the Staff Report and RFRP to Comcast, effective July 29, 2013, and instructed Commission staff to deliver the Staff Report and RFRP to Comcast no later than July 30, 2013; and WHEREAS, the Staff Report and RFRP was delivered to Comcast on July 29, 2013; and WHEREAS, the Commission ratified the issuance of the Staff Report and RFRP by the Franchise Renewal Committee at its August 2013 meeting; and WHEREAS, the Commission and Comcast engaged in informal renewal negotiations pursuant to 47 U.S.C. § 546(h) but are currently unable to arrive at mutually acceptable terms, although informal discussions are ongoing; and WHEREAS, the Commission established November 22, 2013, as a deadline for Comcast’s response to the Staff Report and RFRP; and WHEREAS, the Commission and Comcast agreed to extend certain deadlines includin g the deadline for Comcast to respond to the Staff Report and RFRP and the deadline set forth in 47 U.S.C. 546(c) for the Commission and the Member Cities to accept or preliminarily deny the Comcast Proposal; and WHEREAS, on or about December 20, 2013, Comcast submitted to the Commission its Formal Proposal in response to the Staff Report and RFRP (“Proposal”); and WHEREAS, the Commission published a notice notifying the public that Comcast’s Proposal has been received and was placed on file for public inspection in the Commission’s office, and that written public comments may be submitted to the Commission; and 4 WHEREAS, the Commission held a public hearing on April 17, 2014, and May 1, 2014, on the Comcast Proposal; and WHEREAS, Comcast’s proposal was analyzed by the Commission’s staff, The Buske Group, CBG Communications, Inc., and Front Range Consulting, Inc., each of whom prepared a separate Executive Summary of Comcast’s Proposal, which are all attached hereto and incorporated herewith as Exhibit A to Attachment 1 (collectively the “Executive Summary Reports”); and WHEREAS, the Executive Summary Reports identify with particularity whether Comcast’s Proposal is acceptable or unacceptable as it relates to the Commission’s Staff Report and RFRP; and WHEREAS, the Commission carefully reviewed Comcast’s Proposal and determined a number of areas where the Proposal fails to meet the future cable-related community needs and interests taking into account the cost of meeting such needs and interests; and WHEREAS, should Comcast request the commencement of an administrative hearing pursuant to 47 U.S.C. § 546(c), the Commission has prescribed Rules for the Conduct of an Administrative Hearing, attached hereto as Exhibit B to Attachment 1, which rules comply with all procedural obligations set forth in 47 U.S.C. § 546(c); and WHEREAS, the Commission carefully considered all public comment including that contained within the Staff Report and RFRP, the Proposal and the attached analysis; and WHEREAS, the Commission, on May 15, 2014, adopted a resolution, attached hereto as Attachment 1, recommending to the Member Cities that the Member Cities issue a preliminary assessment that the Comcast Franchises should not be renewed. NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF ARDEN HILLS THAT: 1. Each of the above recitals is hereby incorporated as a finding of fact by the City. 2. Attachment 1 and its Exhibits A and B are hereby incorporated by reference as if fully set forth in the body of this Resolution. 3. The City makes a preliminary assessment that the Comcast Franchises should not be renewed. 4. The City preliminarily finds that Comcast’s Proposal fails to meet the Commission and the City’s future cable-related community needs and interests taking into account the cost of meeting such needs and interests. 5. The basis for the City’s preliminary assessment is set forth in Attachment 1, Exhibit A. 5 6. At any administrative hearing requested by Comcast, the Rules for the Conduct of an Administrative Hearing attached hereto as Attachment 1, Exhibit B will ensure that Comcast is afforded a fair opportunity for full participation, including the right to introduce evidence, to require the production of evidence and to question witnesses. 7. The City finds that its actions are appropriate and reasonable in light of the mandates contained in federal law including 47 U.S.C. § 546. PASSED AND ADOPTED this 9th day of June, 2014: By: David Grant, Mayor ATTEST: Amy Dietl, City Clerk ATTACHMENT 1 NSCC May 15, 2014 Resolution ATTACHMENT 1, EXHIBIT A ANALYSIS OF COMCAST’S CABLE PROPOSAL TO THE NORTH SUBURBAN COMMUNICATIONS COMMISSION Commission’s staff, Supplemental Staff Report on The Comcast Formal Proposal for Renewed Franchises with the NSCC Member Cities CBG Communications, Inc. Executive Summary of CBG Communications, Inc.’s Report on the Technical Aspects of Comcast’s Formal Renewal Proposal The Buske Group Executive Summary, Review of Public, Educational, and Government (PEG) Access Aspects of Franchise Renewal Proposal Submitted By Comcast of Minnesota Front Range Consulting, Inc. Executive Summary, FRC’s Review of Comcast’s Formal Renewal Proposal ATTACHMENT 1, EXHIBIT B RULES FOR CONDUCTING ADMINISTRATIVE HEARING FOR COMCAST OF MINNESOTA, INC., FRANCHISE RENEWAL Section 1. The Commission hereby establishes procedural guidelines for purpose of the administrative hearing under the Cable Communications Policy Act of 1984 as follows: A. The Commission shall appoint an administrative law judge (“hearing officer”) to conduct the administrative hearing and issue recommended findings of fact for consideration by the Commission. Comcast and the Commission will jointly determine the process for selecting an administrative law judge, if necessary. The administrative hearing will be conducted, to the extent practicable and consistent with the requirements of the Cable Communications Policy Act of 1984, pursuant to the provisions for administrative hearings in the Minnesota Administrative Procedures Act. The specific requirements for the administrative hearing shall be as follows: B. Pre-hearing Discovery: (1) Each side is permitted limited requests for production of documents and twenty (20) interrogatories. With respect to interrogatories, the following rules apply: (a) Interrogatories are to be answered by any officer or agent of either party, who shall furnish such information as is available to the party; and (b) Each interrogatory is to be answered separately and fully in writing under oath, unless it is objected to, in which event the objecting party shall state the reasons for the objection and answer to the extent that the interrogatory is not objectionable. All objections shall be stated with specificity and any ground for objection which is not stated in a timely manner is waived unless the party’s failure is excused by the Commission for good cause shown; and (c) Interrogatories will be answered within the timeframe established by the hearing officer; (2) No depositions shall be permitted. (3) The hearing officer will rule on all discovery disputes which may arise. (4) Discovery shall close fifteen (15) days before the administrative hearing. C. Pre-hearing Disclosures: (1) Each side shall disclose to the other the identity of any person who may be used at the hearing to present expert testimony prior to the hearing date. The disclosure must be accompanied by a written report prepared and signed by the expert which shall contain a complete statement of all opinions to be expressed and the basis and reasons therefore; the data or other information considered by the expert informing his or her opinions; and any exhibits to be used as a summary or in support of the opinions so rendered; the qualifications of the witness; the compensation to be paid for the study and testimony of the expert; and a listing of other cases in which the expert has testified at trial within the preceding four (4) years. (2) Exhibits and witness lists will be mutually exchanged one (1) week prior to hearing date. Witness lists will briefly state the subject of the expected testimony of each witness. D. Administrative Hearing: (1) The hearing will be conducted on a date established by the hearing officer; (2) Each side may be represented by an attorney and shall be afforded the opportunity to present relevant evidence and to call and examine witnesses and cross-examine witnesses of the other party; (3) Commission members may not be called as witnesses nor may the Commission’s or Comcast’s legal counsel be called as witnesses. (4) Witnesses will be sworn; (5) The hearing shall be transcribed by a court reporter; (6) The hearing officer will determine evidentiary objections. Strict compliance with the federal rules of evidence will not be necessary. (7) Post-hearing briefs will be permitted in lieu of closing argument. Briefs will be mutually exchanged at a date established by the hearing officer; (8) The hearing officer will issue recommended findings of fact based upon the record of the proceeding and stating the reasons therefore, pursuant to the Cable Communications Policy Act of 1984, as amended. E. The Commission will review the recommended findings of fact from the hearing officer and will, upon request of the parties, permit oral argument before the Commission not to exceed thirty (30) minutes per party. Thereafter the Commission will issue a written decision recommending to the Member Cities to grant or deny the proposal for renewal pursuant to the Cable Communications Policy Act of 1984, as amended. Section 2. Neither the Commission’s July 29, 2013, Staff Report and RFRP or Comcast’s December 20, 2013, Proposal have been amended nor modified in any way since the dates submitted. Section 3. The Commission finds that its actions are appropriate and reasonable in light of the mandates contained in federal law including 47 U.S.C. § 546. END OF DOCUMENT