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CR 01-01 Cable Franchise . , January 2, 2001 Council Report 2001-01 Cable Franchise for Everest Communications Proposed Action Staff recommends adoption of the following motion: Approve Ordinance 2001-849 for first reading. This action will continue the process of awarding a new cable franchise in the City of Hopkins. Overview The City of Hopkins, along with the other four cities of the Southwest Suburban Cable Commission has been in the process of considering new cable franchises since April of 2000. Two companies, Everest Communications and WideOpen West (WOW), have been pursuing franchises in the Southwest. The individual cities instructed the Commission to negotiate with Everest and WOW to prepare a Cable Television Franchise Ordinance that would be consistent with all applicable local, state and federal laws. In particular, the Commission was guided by level playing field language contained within Time Warner's existing franchise and state law. That language requires that any franchise granted to a competitor of Time Warner must not be any less burdensome or more favorable than the terms and conditions applied to Time Warner. With these issues in mind the Commission negotiated the attached Ordinance for Everest. The Commission has reviewed the franchise ordinance and recomm~nded approval. The franchise ordinance must be approved by the City of Hopkins in order for a cable system to be built in Hopkins. Primary Issues to Consider How does the Everest franchise ordinance differ from that of Time Warner? Are there any issues specific to the City of Hopkins? Supportin2 Information Analysis of the Issues Summary of Ordinance 2001-849 (A copy of the complete ordinance is available from the City Clerk. ) es Genellie Assistant City Manager Financial Impact: $ None Budgeted: Y IN Related Documents (CIP, ERP, etc.): Notes: Source: Council Report 2001-01 Page 2 Analysis of the Issues How does the Everest franchise ordinance differ from that of Time Warner? Generally, the Ordinances contain language substantially the same as that imposed on Time Warner with a few notable exceptions. The Everest Ordinance contains an institutional network requirement where the City will pay the incremental costs associated with the provision of additional fiber and the cost for any extension of the fiber beyond those locations where Everest is installing fiber as part of its subscriber network. Everest has agreed to a 36-month construction schedule and will have a IS-year franchise term. Time Wamer' s existing franchise, which was renewed approximately four years ago, was granted for a term of 15 years and contains system upgrading requirements but no institutional network provisions. The Commission has recommended approval of the Everest Ordinances. The Commission believes that the differences between the documents are consistent with the level playing field requirements contained within the Time Wamer franchise and represent negotiated compromises which are in the best interests of the member municipalities. Are there any issues specific to the City of Hopkins? The City of Hopkins currently does not have a Right-of- W ay ordinance. The City would like to add language to the Franchise Ordinance that would require Everest to abide by any future Right-of-Way ordinance. The proposed Right-of- Way ordinance would be similar to ordinances already adopted by other cities and should not impose any unreasonable requirements on the cable company. Alternatives 1. Approve Ordinance 2001-849 for first reading. This will continue the process of establishing new cable franchises in the City. 2. Do not approve Ordinance 2001-849. 3. Continue for additional information. Staff recommends Alternative #1. CITY OF HOPKINS COUNTY OF HENNEPIN SUMMARY OF ORDINANCE NO. 2001-849 AN ORDINANCE ESTABLISHING A CABLE TELEVISION FRANCHISE FOR EVEREST COMMUNICATIONS The following is a summary of the major provisions of the new ordinance: Grants to Everest Minnesota, LLC (the Grantee) a cable television Franchise that shall expire on December 31,2015. The new cable system shall have a capacity of 860 MHz will the capacity of at least 300 channels. The System shall serve an average of 150 homes per node. System construction shall be completed and in use within thirty-six (36) months from the Effective Date of the Franchise. The franchise requires the Grantee to provide one outlet of Basic Service, the Cable Programming Service Tier and one Converter, if needed, to all public buildings and schools. Grantee shall provide four public, educational and government (PEG) Access Channels (the "Access Channels"). One channel shall be dedicated to public access, one channel shall be dedicated to governmental access, and two channels shall be dedicated to educational access. Prior to the provision of Cable Service within the City, Grantee will provide one large facility containing one studio with square footage of not less than 1440 square feet for use by the cities of Eden Prairie, Edina, Hopkins, Minnetonka and Richfield ("Member Cities") at a location within the Member Cities mutually agreeable to Grantee and the Member Cities for public, educational and governmental access production. Prior to the provision of Cable Service within the City, Grantee shall provide no less than $200,128 annually for PEG access operating expenses collectively for the cities of Edina, Eden Prairie, Hopkins, Minnetonka, and Richfield. The Ordinance contains an institutional network requirement where the City will pay the incremental costs associated with the provision of additional fiber and the cost for any extension of the fiber beyond those locations where Everest is installing fiber as part of its subscriber network. The Ordinance requires periodic subscriber surveys. The Ordinance requires Grantee to pay to the City a Franchise Fee in an amount equal to five percent (5%) of its annual Gross Revenues. The Ordinance requires a bond to ensure that, during the construction of the System, money will be available to pay any costs incurred by the City due to a failure of the cable company in installation of the system. A printed copy of the entire ordinance is available from the City Clerk and at the Hopkins library. First Reading of Ordinance 2001-849 Second Reading of Ordinance 2001-849 Publication of Summary Ordinance 2001-849 Effective Date of Ordinance 2001-849 January 2, 2001 January 16,2001 January 24, 2001 February 14, 2001 2