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Comcast Franchise Agreement PH 1 - MEMORANDUM

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					                                                                                                            b
                                             MEMORANDUM



 TO                                    Mayor      and   City    Council


 FROM                                  Don   Taylor Director            of Finance

 DATE OF MEMO                          December 1 2009


 MEETING DATE                          December          2009
                                                     7

                                       Approval    of Comcast Cable Franchise           Agreement




 REQUEST OF COUNCIL Staff requests Council to review                                       of Cable TV Franchise
                                                           provisions
 Agreement and to approve the franchise agreement on first
                                                                             reading

 PREVIOUS COUNCIL ACTION
                                      City Council adopted the terms of the existing franchise
 agreement in April 2000 The final draft ofthe
                                                 proposed franchise agreement was reviewed                      by
 City Council in July 2009 Since that time it has been
                                                       working its way through Comcast
 corporate review and is now ready for formal              approval

BACKGROUND Over the last                  year the             of Aspen Pitkin
                                                        City                     County   and the Town of
Snowmass Village have been
                               negotiating          with Comcast Cable TV
                                                                       Company over the terms of
their   respective franchises        We jointly
                                        employed the services of River Oaks Communication
company which is a consulting agency specializing in
                                                         utility franchise agreements The
arrangement had benefits to all of the parties as it
                                                     gave us more negotiating power economies of
scale on the consulting services and
                                     gave  a benefit to Comcast of
                                                                      getting three franchises done at
once and had a
               single point of contact

The franchise agreement is
                           essentially a contract between the City and the Cable TV Company
giving the Cable Company the right to use the City Rights of
                                                              Way to install its facilities and
equipment under terms and conditions provided for in the
                                                            Agreement in exchange for certain
considerations given to the
                            City The federal government has imposed numerous preemptions on
what can be included or
                         negotiated in the terms of the agreement so the City is limited as to what
it can  negotiate   for these agreements


DISCUSSION The current agreement
                                       expires in                 May 2010      Comcast has taken it
                                                                                                     through
their corporate review There aze several
                                                   major provisions        of the agreement that are outlined
below with   a   little   background information for       each


         Term The                 ofthe agreement is 7
                          proposed                     yeazs a few yeazs shorter than the last
         agreement which       was ten years These have tended to be shorter
                                                                             and were             originally


                                                        Page   1 of 2
                                                                                                 franchise and this will
      offered at five   by Comcast        There      aze costs to    renegotiating the
                          years to amortize the costs
                                                                 over
      allow two   more


                                                                      the                                           as   the
      Franchise fee The proposed franchise fee is 5 of gross revenues
                                                                                                            same


               franchise agreement This is capped by the FCC
      previous
                                                                                                           service for      City
      Complimentary Service             The   city   continues to receive           complimentary
      governmental buildings
                                                      The City of Aspen Town of Snowmass
      Pubic Education Government PEG Channels
                                                     channels on the system at no additional
      Village and Pitkin County have access to three
      charge

                     fee The PEG                     fee would         50 cents per residential subscriber per
                                                                   assess
      PEG   access                        access


      month to fund       capital expenditures        related to providing PEG service This would be
                                                                        on the residential bills It would
      passed   on to the consumer and      separately displayed
                                      for reimbursement of capital costs actually expended for
                     500
      generate about 15 a yeaz
                                                                          studio in the council
      this purpose and could be utilized by the city for the costs of the

      chambers     upgrades       or   replacement     of equipment       or   it   can   be   granted to    other      providers
       of PEG    access   for their equipment costs such as Grassroots


                                                                      that if the    City             to           a   franchise to
                                                                                               were
                                                                                                           grant
       Competitive Equity The agreement provides
                                                   the competitor                              better than the terms in this
       a
         competing cable TV provider with terms to
                                                                 to include those more            favorable    terms
       agreement we       will   modify this agreement

FINANCIALBUDGET IMPACTS                                  If   the     Council        chooses          to    assess       the    capital
                                                                                                                    costs           make
equipment subscriber fee the City
                                  could               recover     15
                                                                  000          per yeaz of         equipment                   or


                                                                    for their                      costs
that available to other PEG       programming providers                         equipment

                                               Staff recommends           approval        of the franchise         agreement
RECOMMENDED ACTION

                                                                    that are not covered by FCC
ALTERNATIVES Council              propose alternatives to the terms
                                       can
                                                                    the term of the agreement or
            This would relate primarily to the PEG equipment fee
regulation
the competitive equity     clause


PROPOSED MOTION                        Move to approve Ordinance




                                                          Page   2 of 2
                                                   ORDINANCE          NO
                                                      SERIES OF 2009




          AN     ORDINANCE              OF    THE       CITY         COUNCIL         OF   THE         CITY   OF     ASPEN

COLORADO           APPROVING A CABLE SYSTEM FRANCHISE AGREEMENT BETWEEN


                                 FLORIDA
THE CITY OF ASPEN AND COMCAST OF COLORADO AND AUTHORIZING



AND DIRECTING THE MAYOR TO EXECUTE THE SAME ON BEHALF OF THE CITY


OF ASPEN


          WHEREAS          the   City   Council of the        City   of    Aspen   desires to enter into      an
                                                                                                                   agreement

                Florida
with Comcast of Colorado to allow                          use   of City   right   of way for the purpose of providing


cable services to the citizens of the             City of Aspen      and


          WHEREAS          the   parties   have     agreed   to avail themselves of their        respective rights     as set



forth in Section 626 of the Cable Communications                      Policy   Act of     1984   as   amended relating       to



the                for   negotiating    franchise agreements
      procedures




          NOW THEREFORE                 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY


OF    ASPEN      COLORADO


          Section 1


          That the terms and conditions of the Cable Franchise                        Agreement       between the    City    of


Aspen     and Comcast of          Colorado Inc
                                  Florida                            annexed hereto and      incorporated herein            aze




hereby approved and         the   Mayor      is   hereby   authorized and directed to execute the            same on   behalf


of the   City   of Aspen




                                                                 1
         Section 2


         That if any     section subsection sentence clause phrase            or   portion   of this ordinance is for


                held invalid        unconstitutional in       court of   competent jurisdiction such
any   reason                   or                         a
                                                                                                             portion

shall be deemed     a   separate distinct and    independent provision       and shall not affect the     validity   of


the   remaining portions    thereof


         Section 3


         That this ordinance shall not have any effect          on   existing litigation     and shall not operate   as




      abatement of any action             proceeding          pending   under             virtue of the ordinances
an                                   or                now                      or
                                                                                     by

amended    as   herein   provided    and the    same   shall be construed and concluded under such             prior

ordinances




                                                          2

				
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