Mediacom Franchise Extension
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MEMORANDUM
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June 2, 2004
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TO:
The Honorable Mayor and City Council Members
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Michael C. Van Milligen, City Manager
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FROM:
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SUBJECT: Mediacom Franchise Extension
The actions the City Council has taken recently to spur Mediacom into taking the
negotiations process seriously appear to be working.
The Formal Renewal Process is proceeding and Mediacom understands that could end
up in denial offranchise renewal.
The Franchise Fee Payment Analysis to analyze franchise fee payments made by
Mediacom to the City in calendar years 2002 and 2003 is progressing.
The Technical System Audit, which is a technical design and performance review of the
Mediacom system, will include on-site inspections in July.
Informal discussions have been held and Mediacom has announced new services.
Hopefully, Mediacom will continue to make attempts to resolve issues the City has
identified.
Cable Franchise Administrator Merrill Crawford is recommending a six month extension
of the Franchise Agreement to give these processes time to be completed. It is
anticipated that this will be the last requested extension.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
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Michael C. Van Milligen
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Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Merrill Crawford, Cable Franchise Administrator
CITY OF DUBUQUE, IOWA
MEMORANDUM
June 2, 2004
MEMO TO: Michael C. Van Milligen, City Manager
FROM: Merrill Crawford, Cable Franchise Administrator~
SUBJECT: Mediacom Franchise Extension
INTRODUCTION: The purpose of this memorandum is to recommend that the City
Council grant an additional six-month extension of the existing Mediacom cable
franchise and side agreements under the terms currently in effect.
BACKGROUND: At their December 15,2003 meeting, the City Council adopted
Ordinance No.1 00-03 extending the current cable franchise with MCClowa, LLC
(Mediacom) to June 30, 2004.
On February 16, 2004, the Council authorized the advancement of the Formal
Renewal Process as provided in the 1984 Cable Act, in tandem with the continuation
of informal negotiations. On March 15, the Council approved a contract with Lewis &
Associates of Hollywood, FL to conduct a franchise fee payment analysis and also
authorized the expanded scope of services of the Miller & Van Eaton law firm and
CBG Communications, Inc. to include the component tasks of the Formal Franchise
Renewal Process.
The tasks of the Formal Renewal Process are proceeding as planned:
1. Franchise Fee Payment Analysis - On March 15, 2004, the City Council approved
a contract with Lewis & Associates, of Hollywood, FL to analyze franchise fee
payments made by Mediacom to the City of Dubuque in calendar years 2002 and
2003. The firm has reconciled Mediacom's address database with the City's GIS
address database. A few discrepancies were found and resolved. On May 21, Lewis
received from Mediacom a package of requested supporting data re: the computation
and payment of franchise fees to the City over the two-year studied period. Analysis
is underway, and I expect a further report from Lewis & Associates soon.
2. Technical System Audit - (Note: this is not a financial audit as reported in the
Telegraph Herald in February. It is a technical design and performance review of
Mediacom's Dubuque cable system, measuring compliance with franchise standards,
FCC rules, and other relevant codes.) Mediacom has promised delivery by June 14
of the requested system technical reports, test data and answers to specific
questions posed by CBG Communications. In July, Dick Nielsen of CBG will perform
on-site inspections and tests in Dubuque.
3. RFRP - Attorney Rick Ellrod of the Miller and Van Eaton law firm has begun
preparation of the detailed Request For Renewal Proposal that lies at the core of the
Cable Act's Formal Renewal Process. In the Formal Process, when the very specific
RFRP is presented to the cable operator, the operator has a single opportunity to
respond with a proposal that reasonably meets the community needs as detailed in
the RFRP, taking into account the cost of meeting those needs. That essential
question becomes the focus of a formal administrative hearing and likely court
proceedings which eventually determine whether, and under what terms, the cable
franchise is renewed, per federal law.
4. Related Ordinances - Mr. Ellrod will also be working with the City's Legal Services
Department and the franchise renewal negotiating team on the framework of
ordinances needed to enact the provisions of the renewed franchise and otherwise
protect the City's interest in the use of public rights of way for cable and
telecommunications services.
In the meantime, meetings continue between City and Mediacom negotiators,
attorneys, and technical experts under the informal negotiating process, which both
sides hope will produce a sound agreement.
While specific details of individual negotiating sessions cannot be made public at this
time, I can report progress in most key elements of the City's concerns. The tone of
negotiations and level and pace of information exchange have also improved as we
work through very complicated technical and financial issues that surround such
items as the Institutional Network, local community programming, business
infrastructure and services, a lower-priced "broadcast basic" option, and broadcast
signal quality issues. We note that Mediacom's investment and system upgrade
activity in the community continues absent the prospect of a long-term future in
Dubuque that a renewed franchise would assure.
As you know, Mediacom upgraded its Dubuque system from 550 Mhz to 750 Mhz
bandwidth in the Summer and Fall of 2003 to enable the offering of additional video,
voice and data services. This was accomplished, in part, by upgrading electronic
components, re-spacing some amplifiers, and installation of some additional fiber
optic cable in outlying areas.
Mediacom has also been finishing and lighting its long-haul fiber optic network,
connecting the Dubuque headend to other systems in the Tri-states and beyond.
We've begun to see the diverse practical effects of these interconnections, for
example, in Mediacom's preliminary plan to import the KFXA Fox broadcast signal by
fiber to replace the current KFXB signal later this year. We've also noticed that cable
channel override alerts for severe weather or other emergencies now occur
simultaneously in a surrounding cluster of communities as they occur in Dubuque; a
development which carries both advantages and disadvantages, depending upon the
circumstances.
In February, Mediacom doubled the potential download speed of its residential and
cottage business cable modem service, and in mid-May, introduced a mid-speed
(128Kbps) cable modem service priced to compete directly with phone companies'
DSL products and to draw "average" Internet users away from traditional dial-up
Internet Access via phone lines.
On May 12, Mediacom introduced its first package of High Definition TV products in
Dubuque and has since added to the HDTV line-up. They have also introduced
Video-On-Demand services, including digital video recorder devices.
On May 21, Mediacom invited area business representatives to a luncheon meeting
at Dubuque Greyhound Park for a presentation about the variety of voice-data-video
broadband networking options now available in Dubuque and the surrounding area
from their new Enterprise Networks Division. Chris Kohlmann and I attended.
Mediacom announced the inauguration of IP-delivered business services in Dubuque,
including Local Area Networks (LAN), Virtual Private Networks (VPN), dedicated
Internet links, and point-to-point links of custom-configurable capacities and speeds.
They also announced a plan to roll out Voice-Over-IP competitive telephone services
early next year.
If the range of capabilities and pricing of these new broadband services are in
practice as they were described at the presentation, they represent significant
technical and comp"etitive alternatives for Dubuque area businesses needing local
network connections as well as high-capacity fiberoptic links to the outside world.
We do, however, intend to quiz Mediacom further as to certain technical features and
design elements of their new business services, particularly as to reliability,
redundancy, priority attention should a problem occur, and worst case scenario
installation costs if a particular business is not located close to a fiber node.
Meanwhile, as in the past, it is essential to the preservation of current franchise
benefits and the protection of the interests of the City and cable subscribers that the
current franchise extension not be permitted to expire by default on June 30.
RECOMMENDED ACTION: The Recommended Action is that the City Council set a
public hearing for June 21, 2004 and following that hearing adopt the proposed
ordinance extending Mediacom's present franchise and associated leases to
December 31, 2004, under the same terms as previous extensions and authorizing
the City Manager to execute the Agreement.
cc:
Cindy Steinhauser, Assistant City Manager
Barry Lindahl, Corporation Counsel
Tim O'Brien, Assistant City Attorney
Cable TV Regulatory Commission
Cable Community Teleprogramming Commission
RESOLUTION NO. .237-04
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.L.C.
Whereas, MCClowa, 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 June 30, 20O4,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, 1OWA: .
Section 1. That the City of Dubuque intends to extend the term of the cable services
franchise and the term ofthe lease to December 31, 2004 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 7th day of June, 2004.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, CMC
City Clerk