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HomeMy WebLinkAbout022007 Cable FranchiseVerizon Cable Franchise Verizon Cable Franchise Presentation to City Council Presentation to City Council February 20, 2007 February 20, 2007 Major Milestones Major Milestones July 2006 -Verizon (VZ) requests a cable franchise July 2006 -Verizon (VZ) requests a cable franchise ? ? for its FiOS(fiber to the home) TV cable television for its FiOS(fiber to the home) TV cable television service service July 2006 to February 2007 -Franchise Negotiations July 2006 to February 2007 -Franchise Negotiations ? ? November 2006 -VZ notifies City of its election of November 2006 -VZ notifies City of its election of ? ? an Ordinance Cable Franchise an Ordinance Cable Franchise January 8, 2007 -VZ begins offering FiOSTV under January 8, 2007 -VZ begins offering FiOSTV under ? ? ordinance franchise process ordinance franchise process February 2007 -Negotiated Franchise finalized February 2007 -Negotiated Franchise finalized ? ? Key Considerations Key Considerations New state legislation governing cable New state legislation governing cable ? ? franchises went into effect July 1, franchises went into effect July 1, 2006 2006 Significant changes are discussed in Significant changes are discussed in ? ? Legal Considerations portion of this Legal Considerations portion of this briefing briefing Initial Service Area Ocean View City of Virginia Beach Showing Verizon Virginia Inc. Initial service area and telephone facility area ROBBINS CORNER GREAT BRICKELL RD NECK RD CHINESE CORNER PLAZA TRAIL VA BCH 32ND ST Initial service area INDIAN RIVER RD Telephone facility area INDIAN LAKES SALEM ROAD Virginia Beach CENTERVILLE TPKE 0124 Miles Market Analysis & Modeling November 2006 Provision of Service Provision of Service Shall offer cable service to: Shall offer cable service to: ? ? •all occupied residential dwelling units* in initial •all occupied residential dwelling units* in initial service area within 3 years service area within 3 years •no less than 65% of occupied residential •no less than 65% of occupied residential dwelling units in Franchise Area (entire City) dwelling units in Franchise Area (entire City) within 7 years within 7 years •if requested by City, up to 80% of occupied •if requested by City, up to 80% of occupied residential dwelling units in Franchise Area residential dwelling units in Franchise Area (entire City) within 10 years (entire City) within 10 years *Where average density >= 30 per mile Franchise Highlights Franchise Highlights 10 year term 10 year term ? ? Franchise fee of 5% of gross Franchise fee of 5% of gross ? ? revenues (as defined by state revenues (as defined by state legislation) legislation) One cable drop and highest level of One cable drop and highest level of ? ? non-pay Cable Service free of charge non-pay Cable Service free of charge to City and Public School facilities to City and Public School facilities Franchise Highlights Franchise Highlights Educational and Governmental Educational and Governmental ? ? Channels Channels •3 access channels on Basic Service Tier •3 access channels on Basic Service Tier •Upon request, 4 additional access channels on •Upon request, 4 additional access channels on digital service tier digital service tier •Direct interconnection between VZ and VBTV •Direct interconnection between VZ and VBTV from Advanced Technology Center from Advanced Technology Center •$0.20 per month/per subscriber access •$0.20 per month/per subscriber access channel capital fee channel capital fee •$0.02 per month/per subscriber capital •$0.02 per month/per subscriber capital surcharge fee surcharge fee Customer Service Standards Customer Service Standards Consistent with federally required customer service and Consistent with federally required customer service and ? ? consumer protection standards consumer protection standards Toll free telephone number for reporting Service Toll free telephone number for reporting Service ? ? Interruptions 24/7 and for other inquiries at least 45 hours Interruptions 24/7 and for other inquiries at least 45 hours per week per week Calls to be answered within 30 seconds for 90% or more of Calls to be answered within 30 seconds for 90% or more of ? ? calls calls Service problem calls responded to within 24 hrs Service problem calls responded to within 24 hrs ? ? Automatic bill credits for Significant Outages > 24 hours in Automatic bill credits for Significant Outages > 24 hours in ? ? duration duration Local office within Virginia Beach once VZ has attained Local office within Virginia Beach once VZ has attained ? ? minimum of 13,000 subscribers minimum of 13,000 subscribers Quarterly reports of customer service standards Quarterly reports of customer service standards ? ? performance performance Legal Considerations Legal Considerations Until 7/1/06, cable law and cable Until 7/1/06, cable law and cable ? ? franchise process was almost franchise process was almost exclusively under the federal exclusively under the federal Communications Act. Communications Act. Since 7/1/06, cable franchising is Since 7/1/06, cable franchising is ? ? regulated by the Virginia Code and regulated by the Virginia Code and the Communications Act. the Communications Act. Legal Considerations Legal Considerations Under Va. Code, City may not Under Va. Code, City may not impose terms that: impose terms that: are more onerous than apply to existing are more onerous than apply to existing ? ? cable operators; cable operators; unreasonably prejudice or disadvantage any unreasonably prejudice or disadvantage any ? ? other cable operator; or other cable operator; or are inconsistent with any provision of are inconsistent with any provision of ? ? federal law or Va. Code. federal law or Va. Code. Legal Considerations Legal Considerations No facility construction or rights-of-way No facility construction or rights-of-way ? ? management provisions allowed in either management provisions allowed in either a negotiated or an ordinance cable a negotiated or an ordinance cable franchisefor providers such as Verizon. franchisefor providers such as Verizon. However: However: •Verizon acknowledges in the franchise that the facilities •Verizon acknowledges in the franchise that the facilities used to provide cable service are the same as the ones used to provide cable service are the same as the ones used to provide telecommunications service. used to provide telecommunications service. •As a result, Verizon’s facilities are subject to the •As a result, Verizon’s facilities are subject to the construction & rights-of-way management provisions in construction & rights-of-way management provisions in the telecommunications franchise the telecommunications franchise Legal Considerations Legal Considerations Existing cable operators may elect to Existing cable operators may elect to ? ? take the same franchise terms that a take the same franchise terms that a new provider has (e.g., Cox Cable may new provider has (e.g., Cox Cable may theoretically “opt out”of its franchise theoretically “opt out”of its franchise and take a franchise with the same terms and take a franchise with the same terms as Verizon) as Verizon) •“All or nothing”basis –can’t pick & •“All or nothing”basis –can’t pick & choose terms choose terms Legal Considerations Legal Considerations New franchisees may elect to surrender New franchisees may elect to surrender ? ? franchise within 3 years if not franchise within 3 years if not economically feasible economically feasible •If surrendered, no liability to locality, •If surrendered, no liability to locality, but operator may not apply again until but operator may not apply again until original term has expired original term has expired Legal Considerations Legal Considerations Verizon required to indemnify and Verizon required to indemnify and ? ? defend the City against liability defend the City against liability proximately caused by Verizon’s proximately caused by Verizon’s negligence negligence Standard insurance provisions included Standard insurance provisions included ? ? in franchise in franchise Verizon required to maintain $50,000 Verizon required to maintain $50,000 ? ? letter of credit letter of credit Legal Considerations Legal Considerations Enforcement: Enforcement: ? ? •Liquidated damages up to maximum of •Liquidated damages up to maximum of $75,000 for violations of $75,000 for violations of reporting requirements; reporting requirements; ? ? PEG channel carriage requirements; PEG channel carriage requirements; ? ? customer service standards customer service standards ? ? Public hearing is required before LDs Public hearing is required before LDs may be imposed may be imposed Legal Considerations Legal Considerations Enforcement : Enforcement : ? ? •City may revoke franchise for substantial •City may revoke franchise for substantial material default of a material term. material default of a material term. Following procedure must be followed (per statute) Following procedure must be followed (per statute) ? ? •informal discussions •informal discussions •formal Noncompliance Notice/right to cure w/i15 days •formal Noncompliance Notice/right to cure w/i15 days •Public hearing (before Council or City officer appointed •Public hearing (before Council or City officer appointed by Council) by Council) •If violations continue, notice of intent to revoke •If violations continue, notice of intent to revoke •New public hearing/proposed findings •New public hearing/proposed findings •Verizon has right to appeal •Verizon has right to appeal Legal Considerations (Enforcement) Legal Considerations (Enforcement) City may, at its sole discretion, take City may, at its sole discretion, take ? ? any lawful action which it deems any lawful action which it deems appropriate to enforce the City’s rights appropriate to enforce the City’s rights under the Franchise in lieu of under the Franchise in lieu of revocation of the Franchise (e.g., revocation of the Franchise (e.g., injunction, mandamus, damages) injunction, mandamus, damages) Proposed Schedule Proposed Schedule Public Hearing –March 6 Public Hearing –March 6 ? ? City Council Vote –March 13 City Council Vote –March 13 ? ? Questions / Discussion Questions / Discussion