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CR 96-170 PH - Cable Television Franchise Ordiancef. October 30, 1996 Proposed Action „...7 s A. Genellie ssistant City Manager PUBLIC HEARING REGARDING CABLE TELEVISION FRANCHISE ORDINANCE Council Report 96 -170 Staff recommends that the Council approve the following motion: Move that the Hopkins City Council a rove Ordinance #96 -790 Cable Television Franchise A• reement Ordinance and Ordinance #96 -792 Cable II Television Regulatory Ordinance for first reading, Adoption of this motion will continue the process of adopting a new cable franchise with Paragon Cable. Overview The Southwest Suburban Cable Commission (SWSCC), which consists of the cities of Hopkins, Eden Prairie, Edina, Minnetonka, and Richfield, have been negotiating with Paragon Cable on a new franchise. The negotiations are have resulted in a new franchise ordinance and a new regulatory ordinance. The regulatory ordinance establishes the minimum requirements regarding the granting of cable television franchises. The franchise agreement ordinance contains the specific conditions for granting a franchise to Paragon Cable. The Commission has recommended that its member cities adopt the new ordinances. Each City has a separate franchise with Paragon Cable. It is up to each City to approve the franchise. Primary Issues to Consider • What are the provisions of the new cable ordinances? • What are some of the effects of the new ordinances? Supporting Information • Ordinance #96 -790, Cable Television Franchise Agreement Ordinance • Ordinance #96 -792, Cable Television Regulatory Ordinance Council Report 96 -170 • Page 2 Analysis of the Issues: • What are the provisions of the new cable ordinances? 1) Design Provisions: • 15 year franchise • increased number of channels to 79 by 12/31/99 • provide cable to all municipal buildings and schools which are currently served • will serve any new municipal and school buildings within 200 feet of the grantee's existing system • provide installation to private schools within 200 feet • service to private schools will be free until the year 2000 • periodic reviews between the sixth and twelfth year of the franchise to determine whether the system remains "state of the art." 2) Public, Educational, and Governmental Access • continue four access channels: 1 public, 1 governmental, 2 educational • one access studio in Eden Prairie which means the elimination of the Hopkins studio • increased hours of operation • provides $200,000 for PEG access during the first year of the franchise. After the first year, the cable company shall provide sufficient financial and in kind support to maintain an equivalent level of services, facilities and equipment. • the company will no longer fund Southwest Community News • increased flexibility for the use of the government access channel. Cites will be able to: insert live City Council meetings, replay access programming from City Hall, transmit electronic bulletin board, have the company replay video tapes, or switch to C -Span 2 or comparable programming when the channel is not carrying any other programming. 3) Financial Provisions • 5% franchise fees continue subject to "level playing field" language. • "Level playing field" - should a wired competitor begin operation in one or more of the franchise cities who is not obligated to pay a similar franchise fee, the cable company will only have to pay the same franchise fee required of the wired competitor down to a minimum of 2 %. The level playing field language also affects the provision of access channels and support for access. • Council Report 96 -170 Page 3 • What are some of the effects of the new ordinances? Subscribers: More channels - currently there are 54 channels, by the year 2000 there will be 79. Initial rate adjustment - Paragon has said that the money that they are saving by reducing public access support will be passed on to the customers. Access users: There will no longer be a local studio in Hopkins. The Eden Prairie studio is several miles away. More hours - the Eden Prairie studio should be open more hours than the current studios. Uncertain future - the entrance of a wired competitor into the Southwest could result in the cutback or elimination of public access support. City of Hopkins The 5% franchise fee remains but it also has an uncertain future. As with access, the entrance of a wired competitor into the Southwest could result in the reduction of franchise fees, although the cable company is required to pay at least 2 %. More flexibility with the programming of the government access channel, Channel 34. Alternatives 1, Approve Ordinance #96 -790, Cable Television Franchise Agreement Ordinance and Ordinance #96 -792, Cable Television Regulatory Ordinance for first reading. This will continue the process of establishing a new cable franchise in the City. 2. Do not approve Ordinance #96 -790, Cable Television Franchise Agreement Ordinance and Ordinance #96 -792, Cable Television Regulatory Ordinance for first reading. This would delay the process of establishing a new cable franchise in the City Failure to approve the ordinances as currently written, however, would make it difficult for the five city Southwest Suburban Cable Commission to continue. Staff recommends Alternative 1.