HomeMy WebLinkAboutItem 09 - Paragon Cable Rate ReviewITEM a
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: ROGER NELSON, CITY MANAGER O41��
MEETING DATE: APRIL 18, 2000
SUBJECT: PARAGON CABLE RATE REVIEW — FCC FORM 1205
RECOMMENDATION:
City Council consider the approval of rate order ordinance to reject the Paragon Cable
rates established by FCC Form 1205 and to order new maximum permitted rates.
FUNDING SOURCE:
The rate order does not have a financial impact. The city will continue to collect revenue
according to our franchise agreement of 5% of gross receipts.
BACKGROUND:
The Staff presented information regarding the Paragon Cable proposed rate filing at the
March 28, 2000 City Council meeting. The City Council approved two rate order
ordinances which, in effect, reduced the basic service tier rate by $1.55 from the
proposed $10.91 Paragon Cable had established. This ordinance addresses FCC Form
1205, proposed rates for monthly equipment rental.
The City of Grapevine received notice of Paragon Cable's FCC filing in September 1999.
Connie Canady, C2 Consulting, Inc., was hired to provide an analysis of FCC Form 1205
related to Paragon's rates for the year 2000. The findings from Ms. Canady's analysis
are attached for your review. The staff recommends the following course of action.
a) The City Council reject Paragon Cable's rate increase filed in the FCC Form
1205 regarding equipment leases.
Addressable Converters Rate at $3.44
Non Addressable Converter Rate at $.64
b) The City Council establish maximum permitted rates of addressable
converters at $3.39 (05 cent reduction) and non -addressable converters at
.62 cents (.02 cent reduction).
The City of Grapevine retains regulatory authority only on the basic service tier and
monthly lease and installation fees. Paragon Cable, upon City Council approval of the
rate order, must comply with the new rate structure effective immediately.
April 10, 2000 (10:05AM)
.' As mentioned at the previous City Council meeting, the Staff has communicated with
neighboring cities with regard to Paragon Cable rate increases. The FCC Forms filed in
those communities reflected the same financial justification for the increases in
Grapevine. C2 Consulting Services reviewed the FCC forms filed in Irving and Coppell.
Representatives from the neighboring communities have forwarded recommendations to
their respective City Councils based on Ms. Canady's analyses.
Staff recommends approval of the rate order ordinance. The Utilities Committee and the
City Attorney have been briefed on the rate order and support the approval of the
ordinance.
April 10, 2000 (10:05AM)
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AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS ESTABLISHING THE MAXIMUM
PERMITTED MONTHLY LEASE RATES CHARGED BY
PARAGON CABLE, 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 Paragon Cable ("Paragon"); and
WHEREAS, in accordance with 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 laws
and regulations, the City has undertaken all appropriate procedural steps to regulate the
equipment and installation 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 for the equipment and installation rates and related equipment and
installation charges and providing for a 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. Findings:
That on or about October 1, 1999, the City of Grapevine received
Paragon's FCC form 1205 filing.
2. That the City engaged the services of C2 Consulting Services, Inc.
to provide assistance in the review of Paragon's FCC form 1205 to
determine the reasonableness of the proposed monthly equipment
lease, installation and maintenance rates attached hereto as Exhibit
"A" and included herein by reference.
3. That based upon the information received from Paragon and
recommendations from C2 Consulting Services, Inc., the City
concludes that the rates proposed by Paragon for maximum
permitted monthly lease rates are not reasonable.
Section 2. Conclusions:
The City has an obligation to timely act upon the pending rate application
consistent with current FCC rules and regulations. Paragon's submittal of the FCC form
1205 received on or about October 1, 1999, is hereby rejected, for the reason that the
proposed rate is not reasonable.
Section 3. Orders for Action:
Based on the foregoing Findings and Conclusions, the City hereby enters the
following orders:
1 Paragon's request for maximum permitted monthly lease rates of $3.44 for
addressable converters and $.64 for non -addressable converters included
in its Form 1205 filing is hereby denied.
2. Based on the information received from Paragon and recommendations
from C2 Consulting Services, Inc. which is attached hereto as Exhibit "A"
(see above), the maximum permitted rate for the monthly lease rate for
addressable and non addressable converters is established at $3.39 and
$.62 respectively effective March 7, 2000.
3. Paragon Cable is hereby required to refund to its current customers any
amounts charged to them based on the Form 1205 rate adjustment, which
were in excess of the rates approved herein.
Section 4. 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 creates an emergency which required that this
ordinance become effective from and after the date of its passage, and it is accordingly
so ordained.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
GRAPEVINE, TEXAS on this the 18th day of April, 2000.
ORD. NO. 2
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