PASCO COUNTY, FLORIDA

                                                       INTEROFFICE MEMORANDUM

____________________________________________________________________________________

TO:            Honorable Chairman and                      DATE:     7/09/02            FILE: CAO02-0515

                 Members of the Board of

County Commissioners

                                                                           SUBJECT: Pasco County Cable Television

        Ordinance: Public Hearing:

07-16-02 at 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.

DESCRIPTION AND CONDITIONS:

Please find before you for the first and final public hearing a proposed Pasco County Cable Television Ordinance.  The proposed ordinance replaces the County’s existing cable television ordinance, Chapter 26 of the Code, to make it consistent with changes in State and Federal law and changes in the industry.  The existing cable ordinance has not been revised since 1980.  The ordinance establishes the guidelines for new and renewed franchises, as well as customer service provisions.

Issue Regarding The Continuance of Proposed Cable Ordinance.

We understand that Shaw Communications requested a continuance of the proposed ordinance.  Shaw received the initial version of the proposed ordinance in February 2002.  Following the Board’s introduction in February and directions to negotiate differences with the cable operators, we notified Shaw that we needed their written comments by April 12, and would schedule a meeting to review the ordinance.  Shaw asked for additional time because of scheduling conflicts and made a public records request to receive comments submitted by other cable operators.  Shaw then notified us that it would rely on Time Warner’s comments rather than submit its own.  After making revisions per the comments of other operators, we sent Shaw the revised ordinance on June 21, 2002, and indicated we needed further comments by June 29.  Shaw did not provide comments, but requested a two-month continuance.  (Other cable operators submitted comments by this June 29, request.)  Normally we would not object to a request for extension to allow further comments.  However, Shaw has had ample opportunity to provide comments to the ordinance. 

Pursuant to the Board’s direction at the February meeting, Mr. Resnick met with Time Warner and had numerous subsequent communications with Time Warner and Heritage Technologies.   Mr. Resnick revised the ordinance based on these comments and provided a revised ordinance to all cable franchisees on June 21.  Time Warner and Strategic Technologies, Inc. submitted further comments.  Mr. Resnick made further revisions based on their comments, as well as comments of staff and members of the public.  Time Warner still has several issues with the ordinance (see attached Memorandum summarizing Time Warner’s major issues with the ordinance).  However, Mr. Resnick made substantial revisions based on Time Warner’s comments.  The proposed ordinance subjects Time Warner to regulations to which it is already subject in the County’s existing cable ordinance or in cable ordinances adopted by surrounding jurisdictions.  Accordingly, Mr. Resnick does not agree with the additional revisions proposed by Time Warner.

Both Shaw Communications and Time Warner are in the process of transferring their cable systems in Pasco County.  Shaw has announced that it will be selling its system, and Time Warner will be transferring its franchise to Advanced/Newhouse, another cable operator. Both Shaw and Time Warner may therefore have an interest in delaying the implementation of new regulations.  In addition, it is important for the County to adopt a new ordinance with appropriate provisions prior to a new cable operator obtaining the Shaw and Time Warner franchises.  The proposed ordinance contains provisions for franchise transfers that would benefit the County if they were in place prior to new cable companies seeking to acquire the franchises.  Accordingly, we do not recommend a further continuance of the cable ordinance.

Summary of Proposed Ordinance.

The primary revisions to the County’s existing ordinance involve (1) increasing the minimum facilities required to offer state of the art systems, (2) the addition of provisions addressing Open Video Systems, and (3) enhancement of the consumer protection provisions including enforcement mechanisms. The ordinance is divided into five separate Articles, discussed in detail below.

ARTICLE I  -- GENERAL PROVISIONS.

· Requirement of a Franchise – Any person who operates a cable system or provides cable service in the County must enter into a Franchise Agreement with the County or be subject to a fine (§26-6).

· Application Procedures – The ordinance sets forth application procedures for initial grant, renewal, revocation, modification and transfers. (§26-9).

· Term – The maximum franchise term is fifteen (15) years. (§26-10).  

· Compensation – The ordinance requires the maximum compensation from providers of cable service allowed under Florida law.  (§26.11)

· Transfer – A Franchise or cable system cannot be sold, assigned or transferred without approval of the County. (§26.13)

ARTICLE II – INSTALLATION AND OPERATIONS.

· Use of Rights-of-Way – The ordinance provides specific rules for use of Public Rights-of-Way, including obtaining permits, restoring property and submitting a construction bond.  (§26-17 through 19). 

· Minimum Services – Minimum services to be established in franchise agreements include a minimum channel capacity of 72 channels no later than two (2) years from the effective date of the ordinance and further upgrades to be negotiated as well as offer certain services for free to schools and government buildings.  The County may negotiate in a franchise agreement for an Institutional Network, which would allow communications between government buildings.  (§26-20). 

· Access Channels – The ordinance provides for a minimum of 2 channels for public, government and educational access programming, as well as for financial and other support for access programming.  (§26-22).

· Security Fund – Franchisees must post a security fund of at least $100,000 cash deposit, letter of credit, or bond (26-24). 

ARTICLE III – CONSUMER PROTECTION STANDARDS.

The new ordinance contains detailed customer service standards and enforcement mechanisms.

• Applicability -- The customer service standards will apply to all cable providers, including Time Warner and Shaw. There is a transition period of 90 days before the customer service provisions apply. (§26-27).

• Complaints to the County – The County may refer complaints it receives to a franchisee.  The franchisee must resolve issues within specific times. (§26-27).

• Business Office -- A franchisee must maintain a business office within the County. (§26-28).

• Telephone Standards – A franchisee must maintain a toll free number available 24-hours per day.  A franchisee must answer all service and repair telephone calls made under normal operating conditions within 30 seconds, with another 30 seconds allowed for transfer of calls.  This standard must be met 90% of the time measured on a quarterly basis.  (§26-29).

• Installation and Service Standards -- No less than 95% of the time, a franchisee must meet certain standards for performing installation and responding to requests for service within specific time frames.  If a franchisee misses a scheduled appointment, the customer is entitled to a $20 credit or free installation.  (§26-30).   There are also specific line extension regulations to require cable service to new developments with 5 dwellings per ¼ mile for aerial cable and 10 dwellings per ¼ mile for underground cable.

• Complaints, Communications and Credits – Franchisees must respond to customer complaints, provide information to subscribers, and provide credits for outages.  In addition, customers may pursue claims against a franchisee in a court of competent jurisdiction. (§26-34, 35).

• Exclusive Contracts – A franchisee may not require a property owner or property manager to enter into an exclusive contract as a condition of obtaining or continuing cable service. (§26-42).

• Administration –The County Administrator (or designee) is responsible for administration of the consumer standards, including the authority to issue administrative orders for refunds and fines, and to require service.  The County must provide notice of a violation and an opportunity to cure.  Any person may appeal an administrative order to the Board. (§26-45, 46). 

ARTICLE IV -- SPECIAL RULES REGARDING OPEN VIDEO SYSTEMS.

Providers of video programming may obtain a certificate from the FCC to offer cable services via an Open Video System (“OVS”).  Competitors of traditional cable television providers use this method to provide services.  Federal law allows local governments to require that OVS operators obtain a franchise.  Accordingly, the ordinance contains requirements for an OVS operator to obtain a franchise. (§26-49). 

ARTICLE V – ADMINISTRATION AND ENFORCEMENT.

The County Administrator has the responsibility for administration of the ordinance and authority to take administrative actions on behalf of the County and to recommend that the Board take certain actions. The County may issue fines and take other enforcement action for violation, including revocation of a franchise.  The Board has sole authority to grant a franchise, modify a franchise agreement, renew or deny renewal of a franchise, revoke a franchise, and approve a franchise transfer. (§26-51).

TIME WARNER'S REMAINING OBJECTIONS.

Attached hereto is a summary prepared by the County's consultant attorney, Gary Resnick, that outlines Time Warner's remaining objections to the proposed cable ordinance.

ALTERNATIVES AND ANALYSIS:

1. Adopt the proposed Pasco County Cable Television Ordinance.

2. Require additional or alternative terms for the Ordinance.

3.         Do not adopt the proposed Pasco County Cable Television Ordinance.

RECOMMENDATIONS AND FUNDING:

The County Attorney’s Office, with the concurrence of the County’s consultant, Gary Resnick, Esq. and the County Administrator, recommends that the Board of County Commissioners adopt the attached proposed Pasco County Cable Television Ordinance.

No funding is required for this item.  The proposed ordinance will require that franchised cable companies that use the public rights-of-way pay the appropriate communications tax if they are providing services in the County.

ATTACHMENTS:

Memorandum From Gary Resnick to Barbara Wilhite Re: Summary of Time Warner’s Objections to Proposed Cable Ordinance.

Proposed Pasco County Cable Television Ordinance.

cc:        Michael Nurrenbrock, Director, OMB (w/attachments)

Debra Zampetti, Director, Zoning/Code Compliance Adm. (w/attachments)