PASCO COUNTY, FLORIDA
INTEROFFICE MEMORANDUM

______________________________________________________________________________________________________

TO: Honorable Chairman and                                       DATE: 02/11/02                                        FILE: CAO02-0457
      Members of the Board of
      County Commissioners

                                                                                SUBJECT: Award of Cable Television Franchise
                                                                                                to Heritage Technologies, Ltd., d/b/a
                                                                                                Pasco Broadband.
                                                                                                Public Hearing 2/19/02 - 9:30 a.m. – Dade City

FROM: Barbara L. Wilhite                                           REFERENCES:
           Chief Assistant County Attorney

_______________________________________________________________________________________________________

It is recommended that the data herein presented be given formal consideration by the Board of County Commissioners and that the Board conduct a public hearing to seek comments regarding the award of the cable television franchise as described.

DESCRIPTION AND CONDITIONS:

Please find before you for your consideration a proposed Resolution to grant a cable television franchise to Heritage Technologies, Ltd., d/b/a Pasco Broadband ("Heritage").

Heritage has applied for a cable television franchise to be able to construct a cable system in Pasco County and provide service to residents. Heritage’s cable system would overbuild a portion of Shaw Communications’ and Time Warner’s existing cable systems. While the area that Heritage intends initially to serve is a new development that does not have cable service, Heritage will be able to offer service in competition with Shaw and Time Warner in other areas.

Public Hearing Requirements:

State Law requires that prior to granting a new cable franchise, the Board conduct a public hearing to consider certain factors. These factors include:

• The economic impact upon private property within the Franchise area;

• The public need for such Franchise;

• The capacity of the public rights-of-way to accommodate the cable system;

• The present and future use of the public rights-of-way to be used by the cable system;

• The potential disruption to existing users of the public rights-of-way to be used by the cable system and the resultant inconvenience that may occur to the public,

• The financial ability of Heritage to perform; and

• Other matters that the County considers to be relevant to the public interest.

The proposed Franchise contains sufficient requirements to protect the rights-of-way, residents and property owners, and the County. If Heritage does not perform as required in the Franchise, the County may assess liquidated damages and ultimately terminate the Franchise. Further, the proposed Franchise expires in two years, and the County may refuse to extend the Franchise if Heritage has not satisfied the terms of the Franchise.

Significant Terms of the Proposed Franchise:

• Area to be served: The Franchise would allow Heritage to serve primarily the south central area of the County. It would include north of the Hillsborough County line, east from Suncoast Parkway (Rt. 579), west from State Road 301, and south from State Road 52. Heritage anticipates providing service primarily in the New River development on State Road 54, which is anticipated to have approximately 3,500-4,000 homes, but the Franchise would allow Heritage to serve other areas in competition with other cable providers.

• Cable System Construction: Heritage has agreed to build a state-of-the-art 750 MHz cable system, to begin construction within 120 days, and to begin providing service to residents within 9 months. The system will have the capability of offering hundreds of cable channels, high speed Internet access, and other advanced services. If Heritage does not meet this time frame, the County may assess liquidated damages in the amount of $500.00 per day. Heritage’s cable system must be underground unless technically not feasible and may only be aerial with express County permission. The Franchise contains detailed requirements for construction, obtaining permits, and use of the rights-of-way, including a $200,000 construction bond to guarantee restoration of any damage.

• Compensation: Heritage has agreed to pay a $15,000.00 application fee to cover the County’s costs incurred in connection with this Franchise. Once Heritage begins providing service, it will pay the same communications services tax on gross revenue that all cable companies pay, pursuant to state law. Heritage will also be responsible for all other taxes and fees assessed by the County.

• Public, Educational, and Government (PEG) Access Channels and Support: Heritage has agreed to make 3 channels available for PEG access, including carriage of County Board meetings. Heritage has agreed to pay an initial amount of $5,000 to support the County’s programming, and not to pass this through to customers. Heritage has also agreed to pay annually $1.00 per subscriber to support PEG programming.

• Interconnection: Heritage has agreed to interconnect its system at its own expense with other franchised cable operators. This will allow Heritage to carry PEG access programming, including County Board meetings, carried by the other cable providers.

• Free Services: Heritage will provide free cable service to all floors of government buildings within its service area, and free cable service to all schools and nonprofit organizations providing services to children or senior citizens within 200 feet of its cable system. Heritage will also provide high speed Internet access to one computer in each school and library within its service area for free.

• Customer Service Standards: Heritage will maintain a customer office and system manager within the County, and must satisfy the customer service standards adopted by the County.

• Enforcement Mechanisms: Heritage must submit a $100,000.00 security bond to guarantee its performance with the Franchise. The County may enforce the Franchise by assessing liquidated damages in the amount of $250.00/day for a violation or revoke the Franchise for non-compliance.

• Term: The Franchise is for a short term. It will expire on February 1, 2004. If the County determines that Heritage has complied with the Franchise, the County may extend the Franchise an additional three years.

• Transfers: Heritage may not transfer its Franchise or any assets of its cable system without the County’s approval.

ALTERNATIVES AND ANALYSIS:

1. Approve the resolution granting the Franchise to Heritage.

2. Require additional or alternative terms for the Franchise.
   
3. Do not approve the resolution granting the Franchise to Heritage.

RECOMMENDATIONS AND FUNDING:

The County Attorney’s Office, with the concurrence of outside counsel Gary Resnick, Esq. and the County Administrator, recommends that the Board approve alternative number one and approve the Franchise. We recommend that the Board authorize the Chairman’s signature on the resolution and on the Cable Franchise Agreement and direct Board Records to distribute the resolution and Cable Franchise Agreement as follows: one (1) original to Board Records, one (1) original to the County Attorney’s Office, New Port Richey, one (1) original to Ms. Helen Morgan, Vice President, Regulatory Affairs, Heritage Technologies, Ltd., 2500A Central Parkway, Houston, Texas 77092; one (1) copy to Gary Resnick, Esq., Weiss, Serota, Helfman, Pastoriza & Guedes, P.A., 3107 Stirling Road, Suite 300, Fort Lauderdale, Florida 33312; one (1) copy to Michael Nurrenbrock, Director, Office of Management and Budget, New Port Richey; and one (1) copy to Debra M. Zampetti, Administrator, Zoning/Code Compliance, New Port Richey.

Heritage has agreed to pay the County $15,000.00 to cover costs incurred for outside attorneys’ fees and staff time. Heritage has also agreed to pay the County the initial amount of $5,000.00 and then to make annual payments of $1.00 per subscriber to support public, educational and government access programming. Heritage will also pay the communications services tax of 1.94% of gross revenue through September 30, 2001, and 1.84% of gross revenue thereafter, pursuant to Florida law.

Attachments:

(1) Resolution by the Board of County Commissioners of Pasco County, Florida, Approving the Cable Franchise Agreement between Pasco County and Heritage Technologies, Ltd. d/b/a Pasco Broadband; Providing for Severability; Providing for Conflicts; and Providing for an Effective Date.

(2) Four (4) originals and two (2) copies of the Cable Franchise Agreement.

cc: Michael Nurrenbrock, Director, OMB (w/attachment)
     Debra M. Zampetti, Director, Adm., Zoning/Code Compliance (w/attachment)