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HomeMy WebLinkAboutFranchise with the Town  To: Board of Directors From: Peter Holzmeister Date: April 11, 2003 Subject: Franchise with the Town of Truckee for the provision of video services ______________________________________________________________________            1. Why the matter is before the board   Attached is a draft Cable System Franchise to be entered into by the district and the Town of Truckee.  This document will need to be finalized and approved by you and the Town Council before being submitted to Nevada County LAFCo as one to the last conditions placed on the District to be met prior to the provision of Broadband Services.  2. History Truckee Donner Public Utility District received Conditional Approval from Nevada County LAFCo to provide Broadband Services on January 18, 2001.  At that time the Commission approved it’s Resolution 01-01 specifying those conditions the District must meet prior to receiving a Certificate of Compliance to provide Broadband Services within the District’s service area.  One of these conditions was that the District enter into a Franchise Agreement with the Town of Truckee for the provision of video (cable television) services. In the past the board has asked whether we are required to secure a franchise agreement from the Town. We have been advised by counsel that we are required. Our overall approach to the franchise has been influenced by the idea that there should be a level playing field between USA Media and us. We do not expect to have a regulatory advantage over USA Media, nor should they have an advantage over us, since we will be in direct competition with them and the rules of engagement should be fair. 3. New Information District and Town staff have worked together to prepared the attached Cable System Franchise Agreement. This Franchise Agreement provides the District the opportunity to provide video, cable television services to residential and commercial customers within the Town’s limits.  This Agreement includes specific requirements that must be met by the District.  In the following paragraphs I have summarized these requirements for Board review. 1.      Duration of Franchise:  The term of the Franchise has been agreed to be ten (10) years from the effective date of the Agreement. 2.      Franchise Fees:  Per Federal Communications Commission rules, the District has agreed to pay the Town five percent (5%) of gross annual Cable Service Revenue.  Cable Service Revenues are currently defined as revenues collected for the provision of all video services. 3.      Insurance:  Insurance requirements found within the Franchise Agreement for General Liability, Automobile Liability, Worker’s Compensation, and Errors and Omissions coverage has been reviewed by District management and General Counsel, and has been found to be in line with current District coverage, thus acceptable. 4.      Service Area:  District staff has agreed that once operational its Broadband system will provide services to all residential and commercial opportunities within the District and Town’s limits. 5.      Construction of the District’s Broadband System:  Under the Agreement the District would guarantee that the construction of its Broadband system would be complete within five (5) years, or April 31, 2008. 6.      Most Favored Nations:  In approving the Agreement the District agrees that it’s system will be compared to systems in specific communities, and that if the average services provided by these predetermined communities is greater than that provided by the District, that the District will increase its offerings to meet them. 7.      EAS:  The District shall provide an Emergency Alert System in compliance with applicable Federal Communications Commission requirements. 8.      Standby Power:  In order to ensure that the District’s video services are available on an ongoing basis the Agreement includes language that requires the District to include in its system infrastructure devices that will provide standby power generating capacity capable of providing twelve (12) hours of emergency power. 9.      Parental Control Lock:  The District has agreed to provide, for sale or lease, to subscribers, upon request, a parental locking devise or digital code that permits inhibiting the video and audio portions of premium channels. 10. Public Educational and Governmental (PEG) Access:  As the Board is aware, the Truckee Community does not currently have a broadcast television station in place.  As such local news and sports is generally found in a local weekly newspaper.  For over eight years Channel 6, a Public, Educational and Governmental (PEG) cable channel, owned by the Town of Truckee and operated by the Tahoe Truckee Unified School District, has provided up to date community information to those subscribing to the local cable television service.  It is the District’s intent to provide support to this channel in order to ensure it’s continued growth and success. As part of the Franchise Agreement with the Town of Truckee the District would provide the following PEG support: (a)               Carriage of Truckee Channel Six in its entirety with no restrictions on the amount of revenue generated by the Channel or its programming; (b)               Carriage of two additional PEG channels; (c)               A one time PEG Capital Equipment Grant of $60,000 (d)               Ongoing PEG financial support in the amount of $.40 per subscriber per month. 4. Recommendation It is staff’s recommendation that the Board approve the Cable System Franchise Agreement between the District and the Town of Truckee, and direct Telecommunications Director Alan Harry to submit the Agreement to the Town of Truckee for Town Council review and approval, and Nevada County LAFCo.