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HomeMy WebLinkAboutR2002-020A RESOLUTION ESTABLISHING THE MAXIMUM RATES THAT CHARTER COMMLrlqlCATIONS MAY CHARGE ITS DENTON CABLE TELEVISION SUBSCRIBERS FOR THE BASIC SERVICE TIER, CHANGING TIERS, AND ASSOCIATED EQUIPMENT; ESTABLISHING A MAXIMUM HOURLY SERVICE CHARGE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") is the Grantor of a cable television franchise by a franchise ordinance, Ordinance No. 88-189 passed and executed on or about November 15, 1988, by and between the City and Sammons Communications, Inc. ("Sammons"), and the City, by Ordinance No. 95-191, passed by the City Council on September 19, 1995, approved the transfer of the Franchise Ordinance along with attached amendments to Marcus Cable Associates, L.L.C. ("Marcus"); and WHEREAS, on March 23, 1999, the City Council adopted Ordinance No. 99-094 Ordinance Nos. 88-189, 95-191, and 99-094, and the Acceptance Agreements of September 12, 1995 and March 23, 1999, are hereinafter referred to as the "Franchise"), transferring the Franchise from Marcus to Paul G. Allen dba Vulcan Cable, Inc., Vulcan Cable II, Inc., Charter Communications, Inc., and Charter Communications Holdings, Inc. ("Charter"); and WHEREAS, on May 17, 1994, the City Council passed Resolution No. R94-019 authorizing the regulation of basic service tier rates and related equipment, installation, and service charges for any cable television system operating within the City in accordance with.the applicable Federal Communications Commission ("FCC") regulations; and WHEREAS, on May 15, 2001, the City Council passed Resolution No. R2001-025 authorizing changes in the rates that Charter may charge its Denton cable television subscribers for the basic service tier, associated equipment, and installation charges; and WHEREAS, the City, pursuant to the Cable Consumer Protection and Competition Act of 1992 ("Cable Act") and the rules and regulations adopted thereunder by the FCC and other applicable laws, is certified as a franchising authority to regulate the rates for the basic cable service, equipment, and installation rates; and WHEREAS, in accordance with Section 8-136 "Rates", of the Code of Ordinances of the City of Denton, Texas and in accordance with Section XXI "Rates" of the Franchise, Charter filed a petition with the City on or about March 1, 2002, along with FCC Forms 1205 and 1240, in conformance with this section and all applicable laws, requesting a change in its basic cable service, changing tiers, equipment, and installation rates as above described, which the City is certified to regulate; and WHEREAS, the City held a public hearing in conformance with Section 8-136 of the Code of Ordinances of the City of Denton on April 16, 2002, after all interested citizens had been properly notified in accordance with the law, and all interested members of the public had an opportunity to be heard; and WHEREAS, to assure the rates requested by Charter are fair and reasonable, the City employed C2 Consult'mg Services, Inc.. to review the rates, and C2 Consulting has filed its recommendations and report; and WHEREAS, as the local regulator of rates for the basic service tier, the City desires to make a rate ruling on the proposed rates submitted by Charter to be charged to subscribers of the basic service tier; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY RESOLVES: SECTION 1. Findings: A) The City is the Grantor of a Franchise executed on or about November 15, 1988, by and between the City and Sammons. B) The Franchise, as amended, was transferred to Marcus, in accordance with the terms and conditions of that ordinance on or about September 19, 1995. C) In accordance with the applicable provisions of the Cable Act, the rules adopted by the FCC, Chapter 8 of the Code of Ordinances of the City of Denton, Resolution No. R94-019, and other applicable laws, the City has undertaken all appropriate procedural steps to regulate the basic cable service tier, changing tiers, related equipment, and installation charges. D) In accordance with the applicable FCC regulations, on or about January 7, 1994, the City filed FCC Form 328 - Certification of Franchising Authority to Regulate Basic Cable Service Rates and Initial Finding of Lack of Effective Competition - with the FCC. E) In accordance with applicable FCC regulations, on or about May 17, 1994, the City passed and adopted a resolution providing for the regulation of rates charged by cable television operators within the City for the basic service tier and related equipment and installation charges. F) On or about March 23, 1999, the City Council transferred the Franchise from Marcus to Charter. G) On or about March 1, 2002, Charter submitted FCC Form 1205 and Form 1240 to the City. H) Pursuant to FCC regulations and applicable law, on or about April 16, 2002, the City held a public hearing and gave the public adequate opportunity to comment on the proposed rate request. The City regularly conducted a meeting which was open to the public, in accordance with the Texas Open Meetings Act, Tex. Gov't Code ch. 551, and provided an opportunity for interested parties to present information to the City during the meeting of April 16, 2002. Page 2 I) The City must act upon the pending rate request consistent with current FCC roles and regulations and other applicable laws. SECTION 2. Conclusions: A) That for the period beginning June 1, 2002, until May 31, 2003, the maximum permitted rate for basic cable service (these numbers do not include the 5% franchise fee) of 9.80 per month, is approved. But as noted in C2 Consulting Services, Inc.'s (C2) May 9, 2002 reports, Charter used projected subscriber counts that were not supported by actual subscriber counts, and included programming costs for channels that are to be removed from the basic channel tier. C2 reports that this is clearly inappropriate since FCC regulations request that all true-up computations be based on actual data. Accordingly, this resolution and the rates approved hereby are conditioned on Charter using projected subscriber counts that reflect actual experience and exclude removed programming costs in future filings. B) That for the period beginning June 1, 2002, until May 31, 2003, the maximum permitted charge for installation and hourly service (these numbers do not include the 5% franchise fee) of $26.79 per hour, is approved. C) For the period beginning June 1, 2002, until May 31, 2003, the maximum fee (these numbers do not include the 5% franchise fee) for leased customer equipment off remote control 0.20, basic only converter - $.77, non-basic only converter - $6.60 per month and changing tiers - $1.99 is approved. D) In accordance with C2 Consulting Services, Inc.'s report, the City finds that digital converters are used to receive the basic service tier in accordance with FCC regulations, §76.923, that the City has a right to regulate rates charged for the use of this piece of equipment as a part ofthe basic cable service tier. SECTION 3. Incorporation of Findings and Conclusions. That the Findings and Conclusions set forth in Sections I and II of this resolution are found to be true and correct and are made a part of this resolution for all purposes. SECTION 4. Orders for Action. Based on the foregoing Findings and Conclusions, the City Council hereby enters the following orders adopting the rates and requ'n'ing the following actions: A) Pursuant to current FCC regulations and applicable law, for the period commencing June 1, 2002, until May 31, 2003, or until further order of the City, Charter will be permitted to charge a maximum rate for the basic cable service of $9.80 per month (these numbers do not include the 5% t~anchise fee). B) Pursuant to current FCC regulations and applicable law, for the period commencing June 1, 2002, until May 31, 2003, or until further order of the City, Charter will be permitted to Page 3 charge the following maximum equipment and installation rates (these numbers do not include the 5% franchise fee): Equipment & Installation Maximum Permitted Rate Hourly Service Charge Average Charge for Unwired Installation-Aerial Average Charge for Unwired Installation-Underground Average Charge for Install-Prewired/Reconnect Average Charge for AdO at a time of Installation Average Charge for AdO Return Trip Analog Prewired AdO Analog Relocate AdO Average Charge for Service Requiring A Track Roll Average Charge for Digital Installation- Aerial Average Charge for Digital Installation- Underground Average Charge for Digital Upgrade Average Charge for Digital AdO at time of Installation Average Charge for Digital AdO Return Trip Digital Prewired AdO Digital Relocate AdO Digital Truck Roll Changing of Service Tiers 26.79 46.09 50.11 29.47 14.20 29.47 25.46 29.47 24.12 55.47 59.48 38.85 17.42 34.30 29.47 32.96 27.60 1.99 Equipment Charges Remote Control Basic-Only Converters Non-Basic Only Converters 0.20 0.77 6.60 C) This resolution shall not be reconsidered should any further analysis pursuant to future FCC rules and regulations result in or indicate higher rates to subscribers, unless such future FCC Rules and regulations mandate that the City order such an upward adjustment. D) The City Manager and the City Attorney, or their designees, are hereby authorized and directed to take action necessary to enforce the orders contained in this resolution, including, without limitation, to execute and file with the FCC such certification form documents or other Page 4 instruments or take any other actions as are now or hereafter may be required by the FCC rate regulations or applicable laws to enforce the rate ruling set forth herein, to defend this rate ruling in any appeal to the FCC, administrative proceeding or litigation involving this matter. E) That Charter shall fully comply with the Franchise and the recent case of City of Dallas v. FCC, 118 F.3d 393 (5th Cir. 1997), which requires cable television fi:anchise holder to make its franchise payments on all gross receipts, including money collected from and charged to customers that is ultimately allocated to pay the franchise fees. F) That the City Secretary is hereby directed to send a certified copy of this resolution to Charter. SECTION 5. That if any section, subsection, paragraph, sentence, clause, phrase or word in this resolution, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this resolution, and the City Council of the City of Denton, Texas hereby declares it would have enacted such remaining portions despite any such validity. SECTION 6. That the City Council has found and determined that the meeting at which this resolution is considered is open to the public and that notice thereof was given in accordance with the provisions of the Texas Open Meetings Act, Tex. Gov't Code ch. 551, as amended. SECTION 7. and approval. PASSED AND APPROVED this the c~//,9L~dayof ~ EULINE BROCK, MAYOR That this resolution shall become effective immediately upon its passage 2002. ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY Page 5