HomeMy WebLinkAbout6.f. Revision of Policy on Cable Franchise Applications
EXECUTIVE SUMMARY
City Council Regular Meeting: April 5, 2016
AGENDA ITEM: Revision of policy on cable franchise
applications
AGENDA SECTION:
Consent
PREPARED BY: Alan Cox, Communications Coordinator
Dwight Johnson, City Administrator AGENDA NO. 6.f.
ATTACHMENTS: Proposed revised policy and application
instructions APPROVED BY: ddj
RECOMMENDED ACTION: Motion to approve the attached revisions to City’s Competitive
Cable Franchise policy
ISSUE
The City has been notified that a company would like to apply for a franchise to operate what would be
the third cable television system to operate in Rosemount. Existing City policies for a franchise process do
not reflect changes in technology and in federal and state law.
BACKGROUND
In early 2000, the City and its partners in the Cable Commission, Apple Valley and Farmington, were
notified that two companies might apply to build a cable system in the communities to compete with the
original system, owned by Charter. The Commission’s then attorney drafted a policy for each city to
implement as a way to meet requirements in federal and state law for applications for new (rather than
renewed) cable franchises. The Rosemount City Council approved the policy on June 6, 2000.
One of the potential franchise applicants dropped out because of financial issues. The other became what
was known as the FTTH system, now operated as Gigabit Minnesota, intended to serve only Rosemount.
That franchise was approved by the Rosemount City Council in 2002.
In February 2016, Frontier Communications had informal discussions with each city’s staff indicating the
company is interested in offering cable service. The Cable Commission’s current attorney has drafted
revisions to the 2000 policy to reflect changes in the technology of video services and to comply with
federal and state law. The attorney has also supplied templates for the instructions to be provided to
applicants and for the public notice that must be published twice in the City’s legal newspaper.
The policy is referred to as “competitive” because it covers systems that would add competition to the
market. It does not set up a process in which applicants are competing with each other for a single
franchise opportunity. Additional applicants would be free to come forward to the City at any time in the
future.
Among the revisions is a reduction in the application fee. Because Frontier proposes to serve all three
cities in the Cable Commission, City staff proposes that negotiations with the applicant or applicants will
be handled by Commission staff. The Commission attorney estimates that the work involved could be
covered by the updated fee of $5,000.
2
If the Council approves these revisions tonight, public notices would likely be published later in April, and
a preliminary public hearing would be held by the Council in May to introduce the applicants. Negotiations
would then move forward with the applicant(s) before a proposed franchise ordinance is brought back for
Council consideration. Although the three cities may act as a single group for negotiating purposes, the
proposed policy revisions must be approved by each City Council, the public hearing must be held in each
city, and any franchise proposals must be presented to and acted on separately by the Councils.
RECOMMENDATION
Staff recommends approval of the revised Competitive Cable Policy.
Competitive Cable Policy Page 1 of 6
CITY OF ROSEMOUNT
POLICY TITLE: POLICIES AND PROCEDURES GOVERNING
APPLICATION, REVIEW AND RECOMMENDATIONS
REGARDING GRANT OF COMPETITIVE CABLE
FRANCHISES
EFFECTIVE DATE:
POLICY NUMBER:
PROPOSED BY: Thomas D. Burt, City Administrator
DATE APPROVED
BY CITY COUNCIL: June 6, 2000
Amended: April 5, 2016
PREAMBLE
The City of Rosemount (“City”) administers the cable television Franchise between the City and the
current cable franchisees. The City requested, reviewed and considered the applications of the initial
prospective cable franchisees and issued a cable Franchise. Modern telecommunications policy, law
and regulations encourage the emergence of competition in all telecommunications markets. Increased
competition in the provision of all telecommunications services is expected, including in the provision
of cable television service. The emergence of such competition could increase the quality and
availability of enhanced telecommunications services via Cable Systems, encourage lower rates,
encourage better customer service, and generally benefit consumers. Policies and procedures
regarding application for and review of Applications for competitive cable Franchises will streamline
the processing of requests to provide such competitive telecommunications services.
In view of the foregoing, the City has formulated policies and procedures for application and review
of Applications for competitive Franchises with the City. Pursuant to these policies and procedures
the City has delineated the information which must be provided in an Application for a competitive
Franchise, detailed a process for review of such Application and negotiation of the terms of the
Franchise agreement, and provided for the presentation of a formal recommendation regarding the
grant of such Franchise by the City.
POLICY
Section 1. Definitions
“Applicant” shall mean a Cable Company that files an Application with the City.
“Application” shall mean the information, documentation, and data, of the form and substance
required herein, filed by a Cable Company with the City requesting the City’s consideration regarding
any recommendation to grant a competitive Franchise.
“Application Fee” shall mean a fee which is intended to cover all costs incurred by the City related
Competitive Cable Policy Page 2 of 6
to processing Applications up to and including the grant of a Franchise (if any) including, but not
limited to, staff and attorney’s time in reviewing and considering an Application and related
information, negotiating the terms and conditions of Franchises, and preparing recommendations,
Franchises and other documentation related to such Application.
“Cable Company” shall mean any person or entity owning a significant interest in, controlling,
operating, managing or leasing a Cable System (or any components thereof in the Public Rights-of
Way) within the state or any person seeking a Franchise to do so.
“Cable Service” shall mean (1) the one-way transmission to Subscribers of video programming or
other programming services; and (2) Subscriber interaction, if any, which is required for the selection
or use of such video programming or other programming services. For purposes of these Policies and
Procedures, “Cable Service” includes, but is not limited to, the provision of Internet service over a
Cable System.
“Cable System” shall mean the facility of a Cable Company consisting of a set of closed transmission
paths and associated signal generation, reception and control equipment that is designed to provide
Cable Service, which includes video programming and which is provided to multiple Subscribers
within the City, but such term does not include: (1) a facility that only serves to retransmit the
television signals of one or more television broadcast stations; (2) a facility that serves Subscribers
without using any Public Rights-of-Way; (3) a facility of a common carrier which is subject, in whole
or in part, to the provisions of Title II of the Communications Act, except that such facility shall be ·
considered a System if such facility is used in the transmission of video programming directly to
Subscribers, unless the extent of such use is solely to provide interactive on-demand services; (4) an
open video system that complies with 47 U.S.C. § 573; (5) any facilities of any electric utility used
solely for operating its electric utility system; or (6) a translator system which receives and
rebroadcasts over-the-air signals. A reference to a Cable System in these Policies and Procedures
refers to any part of such System including, without limitation, converters. The foregoing definition of
“System” shall not be deemed to circumscribe or limit the valid authority of the City to regulate or
franchise the activities of any other communications system or provider of communications service to
the full extent permitted by law.
“Franchise” shall mean any nonexclusive authorization granted by the City in the form of a Franchise,
privilege, permit, license or other municipal authorization to construct, own, control, operate,
maintain, or manage a Cable System within the Public Rights-of-Way to provide Cable Service within
the City.
“Institutional Network” shall mean a discrete communications network provided by a Cable
Company to institutions designated by the City, as provided in a Franchise ordinance.
“Policies and Procedures” shall mean these policies and procedures governing the City's processing
of Applications for Franchises.
“Public Rights-of-Way” shall mean the surface, the air space above the surface, and the area below ·
the surface of any public street, highway, lane, path, alley, sidewalk, avenue, boulevard, drive,
concourse, bridge, tunnel, park, parkway, waterway, dock, bulkhead, wharf, pier, easement or similar
property or waters within the City in which the City now or hereafter holds any property interest,
Competitive Cable Policy Page 3 of 6
including, but not limited to, any riparian right, which, consistent with the purposes for which it was
created, obtained or dedicated, may be used for the purpose of installing, operating and maintaining a
Cable System. No reference in these Policies and Procedures to a “Public Right-of-Way” shall be
deemed to be a representation or guarantee by the City that its interest in or other right to control the
use of such property is sufficient to permit use of the property for the purpose of installing, operating
and maintaining a Cable System.
“Subscriber” shall mean any person or entity who receives service via a Cable System. In the case of
multiple office buildings or multiple dwelling units, the term “Subscriber” means the lessee, tenant or
occupant.
Section 2. Applicability of Policies and Procedures
These Policies and Procedures apply to every Cable System and every Cable Company, including a
Cable Company which constructs, operates and/or maintains a Cable System or provides Cable
Service in whole or in part through facilities owned, controlled, managed or operated by another
provider, that seeks to operate within the territorial limits of the City.
Authority: Minn. Stat.§ 238.03
Section 3. Franchise requirement
Subd. 1. In accordance with state and federal law, the City shall require a Franchise of any Cable
Company or Cable System providing Cable Service within the municipality.
Subd.2. Nothing in these Policies and Procedures shall be construed to limit City authority to
construct, purchase, and operate a Cable System or otherwise to provide any telecommunications or
Cable Services either for internal municipal purposes or for sale to the public.
Authority: Minn. Stat. §238.08
Section 4. Application for Franchise
Subd 1. In the event the City receives notice that a Cable Company is interested in applying for a
Franchise, the City shall may publish notice of intent to Franchise within a reasonable time and in
accordance with Minn. Stat. § 238.081, subd. 1, which requires publishing notice of intent to
Franchise each week for two successive weeks, allowance of 20 days from initial publication for
submission of Applications and a public hearing at least seven days before introduction of the
Franchise into proceedings of the City the adoption of a franchise ordinance.
Subd. 2. Review of Applications. Applications for a competitive Franchise shall contain such
information as is required below in these Policies and Procedures and shall be submitted to the City.
Review by the City of any Applications pursuant to these Policies and Procedures and final
determination by the City regarding whether to Franchise such Applicant(s) may be based on any
relevant factors. Such relevant factors may include comparisons of the level and quality and nature of
Cable Services proposed by the Applicant to that provided by the incumbent Cable Company, the
needs and interests of the community and institutions, as identified solely by the City, and information
regarding industry trends, state of the art technologies, services and other related information.
Competitive Cable Policy Page 4 of 6
Subd. 3. Public Hearing on Applications. A public hearing before the City affording reasonable notice
and a reasonable opportunity to be heard with respect to an Application shall be scheduled in
accordance with Minn. Stat.§ 238.081, Subd. 6.
Subd. 4. Negotiation of Franchise Terms. During the period prior to the public hearing on the
Application, the responsible City employee(s) and Applicant may negotiate specific Franchise terms
and conditions for recommendation and presentation to the City. In addition, during this period the
responsible City employee(s) shall review the Application and may request such additional
information necessary to make final recommendations to the City.
Subd. 5. Determinations. Determinations by the responsible City employee(s) regarding the
qualifications of Applicant(s) and recommendations to the City regarding grant of a Franchise shall be
made based on information provided by the Applicant as required herein and such other information
which the responsible City employee(s) deem relevant in their sole discretion. The responsible City
employee(s) may, in their sole discretion, consider information developed during any negotiations
with the Applicant and any information or evidence adduced by the incumbent Cable Company. After
the public hearing referenced in Subd. 3, the responsible City employee(s) shall issue written
recommendations to the City regarding such Application. These recommendations may include a
Franchise document for adoption by the City.
Subd. 6. Award of Franchise. A Franchise may be awarded only by an ordinance adopted by the City.
Subd. 7. Costs of Reviewing Application and Issuing Franchise. The Applicant shall pay the
Application Fee required below. The Application Fee is required for the purpose of reimbursing the
City for all costs associated with processing Applications pursuant to these Policies and Procedures
through and including any granting of a Franchise. Any portion of the Application Fee which remains
after payment of all the City’s costs will be reimbursed to the Applicant. Should the Application Fee
not cover the expenses of the City, those unreimbursed expenses shall be reimbursed prior to any
consideration of the Franchise by the City. A successful Applicant shall be fully responsible to
reimburse the City for all costs of awarding the Franchise.
Subd. 8. Franchising nonprofit or municipally-owned system. Nothing contained in this Section
prohibits the City from franchising a nonprofit or municipally-owned system. The municipality or
nonprofit entity shall be considered an Applicant subject to these Policies and Procedures.
Authority: Minn. Stat.§ 238.081
Section 5. Information Required in Application.
An Application for a competitive Franchise must be signed by an authorized officer or principal of
the Cable Company and be notarized and must include at least the following:
1. Plans for channel capacity, including both the total number of channels capable of being
delivered and actually to be delivered upon system activation;
2. A statement that the Applicant seeks to construct a Cable System and to provide Cable
Services within the City;
Competitive Cable Policy Page 5 of 6
3. the name, street address, e-mail address and telephone number of the individuals who are
authorized to provide and certify information on behalf of the Applicant;
4. plans for analog and digital channel capacity, including both the total number of analog and
digital channels capable of being energized in the system and the number of analog and digital
channels to be energized immediately;
2. A statement of the television and radio broadcast signals for which permission to carry has
been obtained or will be requested from the Federal Communications Commission, or any
other required regulatory agency;
3. In the case of a telephone provider, a copy of the MPUC certificate of authority;
4. A description of the proposed system design and planned operation, including at least
the following items:
a) the general area for location of antennae and the headend, or description of
programming delivery plan if otherwise facilities from which programming will be
received;
b) an explanation of the ownership of the facilities comprising the video system;
c) a map identifying the proposed initial service area(s) in the City;
d) a proposed schedule for expansion of service beyond the initial service area or
description of the proposed policy for such expansion;
e) the schedule for activating two-way capacity and any other system capacity to be
activated in conjunction with the Cable System; i.e., capacity to send video signals
“upstream”;
f) the type of automated services to be provided;
g) the minimum number of video channels, other Cable Services, and other kinds of
services to be made available to residents;
f) the number of channels and services to be made available for community/access
community access broadcasting, and a proposal for providing community access
programming; and
g) a plan for funding of facilities and staff for community/access programming and/or a
plan for interconnection and provision of such programming in cooperation with the
incumbent Cable Company.
g) a general description of any non-video services such as telephone service, high speed
internet or data transmission services to be provided in the City.
5. A proposal for funding community access programming facilities and/or staff;
6. plans for the provision of Institutional Network capacity and services or other “in kind”
services and the terms, conditions and technical standards under which particular service is to
be provided to governmental, educational, and other institutional entities;
7. a list of all institutions receiving Institutional Network service;
6. The terms and conditions under which services will be provided to institutions and
identification of any plans for providing free or reduced price video or data transmission
services or capacity or other “in-kind” services to governmental, educational, and other
institutional entities;
7. A schedule of proposed service rates in relation to the services to be provided, and a the
proposed policy regarding charges for unusual or difficult service connections of services;
8. A time schedule for construction of constructing and activating the entire system with
including the time sequence for wiring the in which video service will be activated in various
parts of the area to be served City;
9. information supporting and A statement indicating the applicant’s financial, technical and legal
qualifications and experience in the cable communications video services field, if any;
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10. an Identification of and contact information for the municipalities in which the applicant
either owns or operates a Cable video system, directly or indirectly, or has outstanding holds
video franchises for which no system has been built;
11. detailed Plans for financing of the proposed system, which must indicate every including
significant anticipated source of capital and significant limitations or conditions with respect
to the availability of the indicated sources of capital;
12. A statement of ownership detailing the corporate organization of the applicant, if any,
including the names and addresses of officers and directors and the number of shares held by
each officer or director, and intracompany relationship including a parent, subsidiary or
information identifying all affiliated company companies or businesses;
13. A statement of a form and substance acceptable to the City indemnifying the City fully
against any claims or liabilities alleged as the result of City’s exercise of these Policies and
Procedures including any such claims or liabilities alleged or asserted by the incumbent Cable
Company;
14. an agreement to pay the City a Franchise fee in the same percentage of gross revenues as the
incumbent providers;
14. A notation and explanation of omissions or other variations with respect to the requirements
of the Application; and
15. submission of An Application Fee in the an amount of $20,000 [Footnote: Approximately
$20,000.00 if a City will be reviewing a franchise application, or $50,000 if a Commission will
be receiving and reviewing one or more applications on behalf of its member cities.] identified
in the Notice of Intent to Consider Issuance or Franchise to offset the City’s costs associated
with processing applications. Any portion of the application fee which remains after payment
of all the City’s Costs will be refunded.
Authority: Minn . Stat.§ 238.081, Subd. 2 and 4.
Amended by the Rosemount City Council April 5, 2016 at a regular City Council meeting.
[Underlined material is new. Stricken material is deleted.]
_______________________________
Mayor William H. Droste
ATTEST:
__________________________________
City Clerk Clarissa Hadler
467381v1 RJV MA151-4
CITY OF ROSEMOUNT, MINNESOTA
CABLE FRANCHISE
APPLICATION INSTRUCTIONS
Applicants for a cable franchise must submit the following information to the City on or before
4:00 p.m, , 2016. Submission of this information will constitute application for
a cable franchise.
(1) Plans for channel capacity, including both the total number of channels capable of being
delivered and actually to be delivered upon system activation;
(2) A statement of the television and radio broadcast signals for which permission to carry
has been obtained or will be requested from the Federal Communications Commission;
(3) In the case of a telephone provider, a copy of the MPUC certificate of authority;
(4) A description of the proposed system design and planned operations, including at least
the following items:
a. the location of the headend facilities from which programming will be received;
b. an explanation of the ownership of the facilities comprising the video system;
c. a map identifying the proposed initial service area(s) in the City;
d. a proposed schedule for expansion of service beyond the initial service area or
description of the proposed policy for such expansion;
e. the schedule for activating two-way capacity; i.e. capacity to send video signals “up
stream”;
f. the number of channels and services to be made available for community access
broadcasting, and a proposal for providing community access programming;
g. a general description of any non-video services such as telephone service, high speed
internet or data transmission services to be provided in the City.
(5) A proposal for funding community access programming facilities and/or staff;
(6) The terms and conditions under which services will be provided to institutions and
identification of any plans for providing free or reduced price video or data transmission
services or capacity or other “in-kind” services to governmental, educational, and other
institutional entities;
(7) A schedule of proposed service rates and the proposed policy regarding charges for
unusual or difficult service connections;
467381v1 RJV MA151-4
(8) A schedule for constructing and activating the system including the sequence in which
video service will be activated in various parts of the City;
(9) A statement indicating the applicant’s qualifications and experience in the video services
field, if any;
(10) Identification of and contact information for the municipalities in which the applicant
either owns or operates a video system, directly or indirectly, or holds video franchises;
(11) Plans for financing the proposed system, including significant anticipated source of
capital and significant limitations or conditions with respect to the availability of the
indicated sources of capital;
(12) A statement detailing the corporate organization of the applicant including the names of
officers and directors, and information identifying all affiliated companies or businesses;
(13) a statement of a form and substance acceptable to the City indemnifying the City fully
against any claims or liabilities alleged as the result of City's exercise of these Policies
and Procedures including any such claims or liabilities alleged or asserted by the
incumbent Cable Company;
(14) A notation and explanation of omissions or other variations with respect to the
application; and
(15) An application fee totaling $5,000.00 to offset the City’s costs associated with processing
applications. Any portion of the application fee which remains after payment of all the
City’s costs will be refunded.
All applications must be notarized and must include detailed responses to the above.
Negotiation of Franchise Terms. The City expects to discuss and negotiate franchise terms and
conditions with a successful applicant. The City reserves the right to seek franchise terms and
conditions or other commitments that meet or exceed the plans contemplated in an application.
Additional Information. The City may request such additional information as it deems
necessary. In determining whether to issue a franchise, the City will consider the application and
additional relevant information. Additional factors the City may consider include the
qualifications of applicant(s), the level and quality and nature of services proposed by the
applicant, the needs and interests of the community and institutions as identified by the City, and
information regarding industry trends, state of the art technologies, services and other related
information.
Public Hearing on Applications. A public hearing with respect to application(s) will be
scheduled at least seven days before the City Council considers adoption of a franchise
ordinance. The hearing will afford the public and franchise applicant(s) reasonable notice and a
reasonable opportunity to be heard.
467381v1 RJV MA151-4
Existing Franchises. Applicants are advised that Charter Communications and Velocity
Telephone DBA Gigabit Minnesota currently provide cable television service in the City.
Award of Franchise. A franchise may, in the City’s sole discretion, be awarded by ordinance.
Any questions regarding this application information may be directed to Robert J.V. Vose, Esq.,
Kennedy & Graven, 470 US Bank Plaza, 200 South Sixth Street, Minneapolis, MN 55402;
telephone (612)337-9275; e-mail: rvose@kennedy-graven.com