HomeMy WebLinkAboutItem 11 - Comcast CableITEM 0
MEMO TO: HONORABLE MAYOR AND MEMBERS
'OF THE CITY COUNCIL
FROM: ROGER NELSON, CITY MANAGER r'
MEETING DATE: JANUARY 18, 2004
SUBJECT: ORDINANCE ESTABLISHING THE MAXIMUM PERMITTED
BASIC SERVICE TIER RATES CHARGED BY COMCAST
CABLE COMMUNICATIONS, INC.
RECOMMENDATION:
City Council to consider adoption of an ordinance establishing the maximum permitted
basic service tier rates charged by Comcast Cable Communications, Inc., and take any
necessary action.
FUNDING SOURCE:
No funding required.
BACKGROUND:
In March 2004, the City of Grapevine received Comcast's FCC Form 1240 filing. The
1240 filing relates to the maximum permitted rate for basic cable service. The basic tier
includes 29 channels and is the only service rate regulated by the City Council.
The filing requests an increase to $11.69, which does not include the FCC user fee of
$0.06. This results in an effective filing of $11.75. This is an increase of $0.61 over the
current maximum permitted rate of $11.14.
Upon receipt of this request, the City asked Connie Cannady of C2 Consulting to review
the filing. Attached Exhibit A is Ms. Cannady's recommendation to allow the increase to
$11.75. The analysis is based upon the following factors:
■ Form 1240 "true -up" rate was $0.27 higher than the average rate charged to
subscribers during the true -up period.
■ The federally -issued inflation rate increases the rate by $0.20.
■ Comcast is requesting an increase of $.14 because of external costs.
The Utility Committee has reviewed this request along with Staff, and recommends that
the basic rate increase from $11.14 to $11.75.
JCH
January 13, 2005 (10:10AM)
i 2`70
[01 jo 91111,01
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS ESTABLISHING THE MAXIMUM
PERMITTED BASIC RATES SERVICE TIER RATES
CHARGED BY COMCAST CABLE; PROVIDING A
SEVERABILITY CLAUSE; DECLARING AN EMERGENCY
AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City of Grapevine, Texas franchises cable television service for
the benefit of its citizens; and
WHEREAS, the City is the grantor of a franchise ordinance by and between the
City of Grapevine and Comcast Cable ("Comcast"); and
WHEREAS, in accordance with the applicable provisions of the
Telecommunications Act of 1996 (herein the "Telecom Act") and rules adopted by the
Federal Communications Commission ("FCC") and all other applicable federal and state
law and regulations, the city has undertaken all appropriate procedural steps to regulate
the basic service rates; and
WHEREAS, in accordance with applicable FCC regulations the City adopted an
ordinance providing for the regulation of rates charged by cable television operators
within the City and providing for reasonable opportunity for interested parties to express
their views concerning basic cable regulations.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS:
Section 1. That all matters stated above are found to be true and correct and are
incorporated herein by reference as if copied in their entirety.
Section 2. Findings:
1. On or about March 1, 2004, the City of Grapevine received Comcast's
FCC Form 1240 filing.
2. The City engaged the services of C2 Consulting Services, Inc. to provide
assistance in the review of Comcast Form 1240 to determine the
reasonableness of the proposed basic service tier rates.
3. On or about May 14, 2004, C2 Consulting Services, Inc. submitted a
preliminary report regarding the Form 1240.
4. On or about June 14, 2004, Comcast provided an Operator Selected Rate
for Basic Service of $10.89.
5. C2 Consulting Services, Inc. conducted additional analysis based on
Comcast's provision of certain contractual information not previously
provided by Comcast.
6. On or about July 31, 2004, C2 Consulting Services, Inc. submitted a final
report concerning Form 1240. C2 Consulting's report is attached hereto as
Exhibit "A", and is incorporated in its entirety.
7. On or about October 29, 2004, Comcast provided a response to the
consultant's report.
8. Based upon the information received from Comcast and the consultant's
report, the City concludes that the Form 1240 rate of $11.69 as filed by
Comcast is reasonable.
9. The FCC user fee should not be greater than $.06 per month.
Section 3. Conclusions:
The City has an obligation to timely act upon the pending rate application
consistent with the current FCC rules and regulations. Comcast's submittal of the FCC
Form 1240 is reasonable.
Section 4. Orders for Action:
Based on the foregoing Findings and Conclusions, the City hereby enters the
following orders:
1. The Maximum permitted basic service Form 1240 rate of $11.69, with a
maximum FCC User Fee of $.06, as adopted by the City in Ordinance
No. is hereby ordered.
2. This effective date for this rate is for a period of one year beginning in
June 1, 2004.
Section 5. If any section, article, paragraph, sentence, clause, phrase, or word
in this ordinance, or application thereto any person or circumstance is held invalid or
unconstitutional by a court of competent jurisdiction, such holding shall not affect the
validity of the remaining portions of this ordinance; and the City Council hereby declares
it would have passed such remaining portions of the ordinance in spite of such
invalidity, which remaining portions shall remain in full force and effect.
ORD. NO. 2
Section 6. The fact that the present ordinances and regulations of the city of
Grapevine, Texas, are inadequate to properly safeguard the health, safety, morals,
peace, and general welfare of the public may creates an emergency which requires that
this ordinance become effective immediately upon passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF THE
CITY OF GRAPEVINE, TEXAS on this 18th day of January, 2005.
IMUANM�
ATTEST:
ORD. NO. 3