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Cable Mediacom Franchise ExtensMEMORANDUM November 25, 2002 TO:The Honorable Mayor and City Council Members FROM:Michael C. Van Milligen, City Manager SUBJECT:Mediacom Franchise Extension Cable Franchise Administrator Merrill Crawford recommends granting an additional three-month extension of the existing Mediacom cable franchise under the same terms as the franchise extension currently in effect, and that a public hearing be set for December 16, 2002. This extension would allow time to hold negotiations, the public hearing, and finalization of a Mediacom franchise renewal, if the decision is made to renew. I concur with the recommendation and respectfully request Mayor and City Council approval. Michael C. Van Milligen MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager Merrill Crawford, Cable Franchise Administrator CITY OF DUBUQUE, IOWA MEMORANDUM November 22, 2002 MEMO TO: Michael C. Van Milligen, City Manager FROM: Merrill Crawford, Cable Franchise Administrator SUBJECT: Mediacem Franchise Extension INTRODUCTION: The purpose of this memorandum is to recommend that the City Council grant an additional three-month extension of the existing Mediacem cable franchise under the same terms currently in effect. BACKGROUND: At their September 16, 2002 meeting, the City Council adopted Ordinance No. 78-02 approving and authorizing the City Manager to execute an agreement extending the current cable franchise with MCCIowa, LLC (Mediacem) to December 31, 2002. This was the third temporary extension granted to permit completion of our consultant's detailed ascertainment of the community's future cable-related needs and negotiation of franchise renewal terms with Mediacom in accordance with the procedure set by the 1984 Cable Act. The City retained the services of CBG Communications, Inc. to conduct the Needs Ascertainment. In January and February, Tom Robinson of CBG Communications, Inc. and Dr. Connie Book of Elon University, assisted by City staff, conducted a series of workshops, focus groups, surveys, interviews and firsthand inspections. They also gathered and refined data by telephone and e- mail, and have now forwarded draft results and narratives for my preliminary review. 1 have advised them of minor errors in the narratives (such as some City facility and department names), and of recent changes in the community (such as City, Mediacom and Qwest upgrades, America's River construction progress and the elimination of KDUB-TV's local news operation). With these corrections and updated information, the final report and recommendations of CBG Communications are expected shortly. While I am pleased with the result, and with the strength of the methodology of information gathering and analysis, the process has obviously taken longer than we had envisioned. With the CBG Needs Ascertainment and recommendations, and aided by the Miller & Van Eaton law firm, we can finally begin face-to-face negotiations with Mediacom. While these negotiations will not always be easy, particularly in light of the re-energized deregulatory agenda of the Congress and the FCC, we do expect to reach tentative agreement on terms of renewal we can recommend to the City Council. At that point, I will recommend that we publish the details and invite further citizen comment, even though a public referendum is no longer part of the cable franchise renewal process set by the Cable Act. It is clear that the negotiation, the public hearing, and the finalization (or the ultimate denial) of a Mediacom franchise renewal can not be completed as hoped by the December 31 expiration of the current temporary franchise extension. I am recommending that an additional extension be granted through March 31, 2003. This would be accomplished, as before, by ordinance following a public hearing. During such a period of detailed Needs Ascertainment, followed by face-to-face negotiations, few substantive details are announced publicly until certain research conclusions or tentative agreements are achieved. Over time, this process understandably generates questions from Dubuque cable subscribers wondering what, if anything, is happening. Unlike 1981, when the current cable franchise was adopted, the City can not build its negotiating stance upon a strong regulatory authority. The 1984 Cable Act tilted the renewal playing field to favor the incumbent franchisee. The strength of the City's position at the table will arise this time from the care and expertise invested in the Needs Ascertainment over these past months and from up-to-the minute legal guidance we receive from Miller & Van Eaton. These same resources should help avoid an unnecessary trip to the courtroom should negotiations become difficult, but should also buttress our case in the unlikely event legal action is unavoidable. Multiple short-term franchise extensions are not unusual in a cable franchise renewal process, particularly where the franchise authority takes its Needs Ascertainment responsibility seriously and works to reach the best possible result within a changing and sometimes unfavorable legislative landscape. Mediacom has indicated it would agree to the temporary extension of the franchise and side agreements on the same terms as before. In practice, both parties have honored their obligations under these extension agreements and we have averted unnecessary turmoil that would arise from automatic expiration via the calendar before the question of renewal is determined. It is in the interest of neither party nor of the larger community to permit the current franchise to expire by default. RECOMMENDED ACTION: The Recommended Action is that the City Council set a public hearing for December 16, 2002 to consider a proposed Ordinance extending the current cable franchise agreement with Mediacom to March 31, 2003. Cc: Pauline Joyce, Administrative Services Manager Barry Lindahl, Corporation Counsel Tim O'Brien, Assistant City Attorney Cable TV Regulatory Commission Cable Community Teleprogramming Commission Prepared by: Merrill Crawford, Cable Franchise Administrator, Cit,¥ Hall Annex. 1200 Main St. Dubuque, IA 52001-4722 RESOLUTION NO. 635-02 A RESOLUTION OF THE CITY'S INTENT TO GRANT A SHORT-TERM EXTENSION OF AN EXISTING CABLE SERVICES FRANCHISE AND AN EXISTING HUB SITE LEASE TO MCCIOWA L.LC. Whereas, MCCIowa, L.L.C. (Mediacom) is the current holder of a cable services franchise, embodied in Ordinance No. 42-81, as modified by a series of waivers and side agreements, and acquired from TCI of Iowa, Inc. via a transfer approved by the Dubuque City Council on June 18, 2001; and Whereas, one of the side agreements is a lease to Mediacom to build and maintain a network hub on City-owned property located at 1585 West Third Street in Dubuque; and Whereas, the terms of the franchise and of the lease will expire December 31,2002; and Whereas, representatives of the City of Dubuque and of Mediacom have entered into good faith negotiation of terms and conditions for the renewal of the franchise and the lease. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. That the City of Dubuque intends to extend the term of the cable services franchise and the term of the lease to March 31, 2003 under the same terms and conditions as currently in effect; and Section 2. That the City Clerk is hereby authorized and directed to cause notices to be published of the proposed extension in the manner prescribed by law. Passed, approved and adopted this 2nd day of December., Terrance M Duggan, Mayor Attest: Jeanne Schneider, City Clerk