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HomeMy WebLinkAbout9.a. Application for a Cable Communication FranchiseCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: FEBRUARY 20, 2001 AGENDA ITEM: APPLICATION FOR CABLE AGENDA SECTION: COMMUNICATION FRANCHISE NEW BUSINESS PREPARED BY: Thomas D. Burt, City Administrator AGE 'Ap A A t 9 ATTACILIIENTS: Application for Cable Communication APPROVED BY: Franchise J At the February- 12, 2001 Utilities Commission meeting, Craig Rapp representing Contractor Property Developers Company submitted a letter of intent to obtain a limited area cable franchise. It is the desire of Contractor Property Developers Company to provide integrated telecommunications services to the Evermoor area of Rosemount. The Utilities Commission, by motion, recommended the City Council open the application process for a competitive overbuild. I have included a letter from legal council on the process that needs to be followed for accepting applications for a competitive franchise. If the Council opens the process the notice must be published each week for two weeks, and applicants must be given 20 days from the initial publication for submission of an application. The developer would be required to submit $20,000 to process an application and a public hearing must be held one week from the application deadline. Recommendation: Publish notice of intent to accept applications for a cable communications system franchise. RECOMMENDED ACTION: MOTION to publish the notice of intent to accept applications for a cable communications system franchise. COUNCIL ACTION: ' A R T E R E D 470 Pillsbury Center 200 South Sixth Street Minneapolis MN 55402 (612) 337 -9300 telephone (612) 337 -9310 fax http: / /www.kennedy- graven.com Robert J. N'. Vose Attomey at Law Di.-ect Dial (612) 337 -9275 Email: noxake .edy -gaven.00m February 12, 2001 By Facsimile — To Follow by U.S. Mail ti1r. Tom Burt Attorney -Client Privileged City Adminiszator City of Rosemount 2875 145 St. W. Rosemount, INL t 55068 RE: Evermoor Development; Installation of Cable Communications Netivork Dear Tom: This is to update you concerning discussions. -with Contractor Property Developers Company ("Developer"). As you know, the Developer is working on the, Evermoor development in the City and Apple Valley. The Developer would like permission_ to provide certain telecommunications and cable services solely to residences within the development. The Developer has indicated that it will seek a cable television franchise. The Minnesota cable franchising law, Minnesota Statutes Chapter 238, contemplates that initial cable franchises will be granted in a process similar to a request for proposals or bid process. In addition, I have advised the Developer that any franchise application must comply with the City's "Policies and Procedures Governing Application, Review and Recommendations Regarding Grant of Competitive Cable Franchises," dated May 1, 2000 ( "Franchising Policies "). The City's Franchising Policies provide that the City will publish notice of intent to franchise " a reasonable time" after being notified that a provider is "interested in applying for a [competitive] Franchise." In this case, it is not clear whether the Council "intends to franchise" because the Developer will seek only a limited area franchise. The Council has not previously considered or addressed grant of a limited area franchise and this presents a new policy issue. As you know, the Developer asked that the City consider and decide the "limited area" issue before a franchise application is even submitted. I refused that request but did advise the Developer that the City Council, rather than staff, may determine whether and when to issue the statutory notice and that there may be an opportunity for the Developer to make a presentation to the City as part of that process. I also advised the Developer that the Mayor should be involved in determining %whether such presentation(s) would be helpful and desired. Mr. Tom Burt Page Two February 12, 2001 Enclosed is an appropriate franchising notice. The City previously received a proposed notice from the Cable Commission. The enclosed notice has been modified in several respects. This notice confirms that while the City will accept and consider applications by the Developer and any other interested party, the City Council has not determined that it intends to issue a franchise. In addition, although the Franchising Policies indicate that the application fee is 520,000, the enclosed notice requires submission of a $10,000 fee along «ith a statement that the applicant will pay all of the City's costs related to the application. We believe S10,000 will be adequate. Finally, the enclosed notice does not specify the system that the City expects to be constructed since the Developer will propose a unique design. You will need to add appropriate dates to the notice. Please note that the notice must be published each week for two successive weeks, and that applicants must be given-at least 20 days from initial. publication for submission of applications. Thereafter, the City must hold a public hearing at least seven days before formally considering the franchise application(s). Normally the deadline for submitting applications is 20 days from initial publication, and the public hearing is held approximately one week after the application deadline. Please feel free to contact me with questions. Very truly yours, Robert J. V. Vose RJV/brg Enclosures cc: Charlie LeFevere RJV- 183613v2 RS220 -94 NOTICE BY THE CITY OF ROSEMOUNT, MINNESOTA OF ITS INTENT TO ACCEPT APPLICATIONS FOR A CABLE COhLNUJNICATIONS SYSTEM FRANCHISE The City of Rosemount, Minnesota, has been informed that a party is interested in applying for a cable franchise. Notice is hereby given that the City will accept applications for a franchise for the purpose of constructing a cable communications system. This notice is given in accordance with the requirements of Minnesota Statutes § 238.081. Applications in response to this Notice must be submitted in accordance with the City's Policies and Procedures Governing Application, Review and Recommendations Regarding Grant of Competitive Cable Franchises, dated May 1, 2000. 2. The deadline for submitting applications is 4:00 p.m., February , 2001. 3. Applications shall be in writing, notarized, and in a substance and format consistent with Section 5 of the Policies and Procedures, and Minnesota Statutes § 238.081, subd. 4. Ten (10) copies of each application shall be submitted along with an application fee of $10,000.00 in the form of a certified check made payable to the City of Rosemount, Minnesota, and a statement acknowledging that the applicant shall be responsible for all of the City's costs incurred in reviewing and processing the application. Any portion of the application fee which remains after payment of the City's costs will be reimbursed to the applicant. 4. Applications must be delivered to the attention of Robert J.V. Vose, Kennedy & Graven Chartered, 470 Pillsbury Center, 200 S. 6th Street, Minneapolis, MN 55402, (612)337- 9275. Any questions concerning applications shall be directed to Mr. Vose. 5. Applicants are requested to be present at a public hearing, before the City Council, to be held at City Hall beginning at p.m. on , 2001. Each applicant will be given fifteen (15) minutes to summarize its application. The City Council may then continue the public hearing to permit further review of the application. 6. The City desires a high quality system that permits residents to receive a variety of services. 7. The criteria for evaluating the applications and priorities for selection are as set -forth in the Policies and Procedures and include: a. The completeness and conformance of applications; b. The system design; C. The programs and services offered initially and criteria for adding programs and services; d. The initial service area and the line extension policy; e. The time for construction; f. Customer service policies; RN- 1920030 RS220 -94 g. The legal, technical, and financial qualifications of the applicant; h. The proposal for community services, including public, educational, and governmental access and/or institutional network services; and i. Other factors deemed relevant by the City which may distinguish an applicant's proposal from other proposals. 8. In no event will submission of a conforming application entitle any applicant to grant of a franchise. The City expressly reserves the right to reject both conforming and non- conforming applications. 9. Any applicant(s) accepted by the City Council will be required to accept a franchise within thirty (30) days after adoption and will be required to reimburse the City for the expenses -not covered, by the application fee, as provided for by Minnesota Statutes § 238.081, subd. 8. Date: , 2001 Published in: , on 2001 and , 2001. Affidavit of Publication required for each publication RN- 192003v1 RS220 -94 Creating Neighborhoods of Merit February 1, 2001 Chair and Members Rosemount Utilities Commission City of Rosemount Dear Chair and Members: On behalf of Contractor Property Developers Company (CPDC) and Gate House Networks, this letter officially expresses our interest in providing integrated telecommunications services to the Evermoor area of Rosemount as a test -bed project. Our intention is to provide these services over a fiber optic network known as FTTH (fiber -to- the - home). We are excited about the opportunity to work with the City on this effort, and we are confident it will demonstrate how an advanced information infrastructure can benefit both Evermoor and the entire city. We understand that the City of Rosemount's authority related to telecommunications services applies specifically to video. Further, we know that we must apply to the City for a limited area franchise. It is our intention to submit an application and fully comply with the content of City policy in regard to video services in Evermoor. Our full application will follow closely upon this letter of intent. Because our approach to telecommunications services "bundles" video service with data (Internet) and phone service, we have broadened the attached documentation to include details of those additional services. The original vision for Evermoor included the desire to provide our residents with access to the most advanced telecommunications system available. For the past year, we have been engaged in the research and development of a system that will be the first and best of its kind. We began by engaging the services of top consultants in the field. Milda Hedblom, has been our lead legal and technical consultant. Ms Hedblom has an international reputation CPDC Corporate Offices: The Quadrant Building - 7100 Northland Circle - Suite 108 - Minneapolis, MN 55428 phone: (612)971 -0477 - fax: (612)971 -0576 - email: cpdc@schererbros.com in the telecommunications field, and represents clients in the cable, telephone, and data (Internet) industries, as well as the public sector. She has been assisted by Elert & Associates, a Stillwater -based company specializing in the design and implementation of telecommunications systems. Because this will be the first Twin Cities community with a residential fiber -to -the -home network, Rosemount «ill become known throughout the state and the Midwest for leadership in this area. The City and this project have already attracted the attention of the Minnesota Department of Transportation, due to MNDOT's efforts to encourage advanced telecommunications networks throughout the state. MNDOT is currently making plans to study the impact of the fiber optic project in Rosemount beginning in Llay of this year. To help understand what we intend to offer, we have attached a Question and Answer document that describes the services and the fiber optic technology. This is accompanied additional information on key items related to the City's competitive cable franchise application. While full application documents will be submitted shortly, we hope it will be useful to elaborate on selected items. N'e look forward to presenting this information to you in person and answering any questions you have. Sincerely, Crai R app Vice- President [ruins Neighborhoods of Meril EVERMOOR: COMMUNITY PARTNER FOR A BETTER FUTURE The Evermoor Residential Development in Rosemount will bring with it exciting benefits for the whole Rosemount community. Evermoor will include a new way of delivering telecommunications services over fiber optics directly to the home. This type of network is the best available today and will be equal to any foreseeable need tomorrow. The whole community will benefit significantly through the fiber optics investment at Evermoor: School and Learning Partner Children and parents will benefit substantially from the fiber optic services being installed at Evermoor. Why is this so? Because the Evermoor developer and the schools are working together to connect Shannon Park Elementary, Rosemount High School and Rosemount Middle School to the high- powered fiber network at Evermoor at no cost to the district for the fiber link. Business Partner High Speed Services: The network at Evermoor can support state -of -the -art services to business parks in Rosemount as well as to other businesses in the area. Access to fiber connection is a major reason for business location and development today. This will give Rosemount major advantages for securing a stronger tag base and attracting businesses whose employees will want to live in Rosemount as well as work there. Local Business Access: Evermoor's web site and neighborhood Intranet will include information on local business and provide local business access to residents. The Evermoor Community Development Director mill actively solicit retail businesses located in Rosemount to take part in the Evermoor Intranet. This will benefit both residents and businesses. Community Partner Local Service: The Evermoor web site would link to the City of Rosemount web site, as well as to local service and charitable organizations, non -profit organizations, and other community groups. Local organizations would be able to reach Evermoor residents directly by posting notices about volunteer, school and charitable activities. Community of Choice: High tech businesses are drawn to areas with a population that includes technology- oriented individuals. The fiber optics at Evermoor will help draw a pool of residents and local talent to support existing technology businesses and to draw new ones to the community, which will add to the vitality of the entire area. Gee rn, %;hbo&A of Mel Evermoor Fiber Optics - Q & A What is fiber to the home (FTTH) and how does it work? Fiber to the Home is a new technology linking each residence by fiber optic cabling in Evermoor to a network center located in a small building on the property (the "Headend ") There will be two or three pairs of fiber to each residence. Right now only one of those pairs is necessary but the spare fibers will cover future needs without digging. Voice (telephone dial - tone), video (TV channels) and data (email, Internet and web) services will all come to the home over those fibers. The system delivers all three services to a box attached to the outside wall of the house (the User Demarcation Point or UDP). Within the UDP, the voice, data and video traffic is converted to the types of cabling used for home equipment. For example, ethernet cabling for computers, coaxial cabling for video equipment, and "normal" phone cabling for phones and fax machines. The Technology This technology is generically known as Passive Optical Networking (PON). Optical Solutions, Inc. makes the patented equipment for our system. Video programs, telephone service and Internet/Web access come to the Headend for distribution over fiber via a small outside cabinet (PON cabinet) and underground enclosures (called handholes). The fiber is spliced in those locations to provide interconnection to each residence. What are the benefits of fiber to the home? Fiber optic technology has the largest bandwidth capacity of any cable type. It is future proofed. This means that fiber optic connections will not limit future uses. This cannot be said for current copper cabling systems (twisted pair and coaxial.) The fiber optic network which will be demonstrated at Evermoor is also ready for the next step in Internet delivery. 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Ibe fiber to the home system allows for up to six phone lines (numbers) per house as needed by that family. For residents with home office, teen, senior or other needs adding lines will be easy. Basic telephone service to each home will consist of one line with fourteen (14) service features such as caller ID, call forwarding and three -way calling, plus a second line (without features) for a fax machine or other purpose. Options can be added to either line. But no will be used for a modem since the (much faster) Internet connection is already in place. What cabling should be installed in homes to use these services fully? Builders have a list of certified cabling contractors as well as specifications for the basic installation requirements. For example, an "average" four- bedroom house would have 16 outlets throughout the house with various types of "plug -ins" for phones, computers and TVs. All the cables from these outlets would go back to a main location in an enclosed box somewhere in the home. Depending on needs, that box may contain a computer network hub or switch, a video signal amplifier, and other equipment. What about interior systems such as home theater, home automation and security systems? These systems can be part of any new home according to the decision of the resident. The builders and the Evermoor Sales Office are able to help residents make such choices. Who will provide service and support? Evermoor's service provider is Gatehouse Networks (GHN). GHN will provide a single point of contact for all three services in Evermoor. Residents will call one service center to turn -up service before arrival, to turn -off service while away, to add or reduce services and to report any problems that may be encountered with the voice, data and video services. The service center will be available 24 hours a day, seven days a week. The optical fiber network provides one of the most complete monitoring and reporting services available in a residential setting. GateHouse Networks provides phone, video and data services to residential developments throughout the country. Through a contract with GHM, Evermoor residents benefit from combined billing (just one monthly bill for phone, Internet and video services). c Excerpted Answers - Rosemount Limited Franchise Application 3) At current configurations we are offering up to 80 channels of analog product. The digital channel capacity is purely a function of compression technology, with today's scheme we can offer over two hundred digital channels (if they existed) and this number will only increase with time. The basic analog tier will consist of 72 channels to be energized immediately. The digital tier includes 117 channels to be energized immediately. 4) We are planning to offer the following local broadcast signals, free of charge, to all homeowners within the Evermoor development. Since we will not be charging for this service, no retransmission consent is required: Ch 2 KTCA PBS Ch 4 WCCO CBS Ch 5 KSTP ABC Ch 9 KMSP UPN Ch l l KARE NBC Ch 23 KLGT WB Ch 29 WFTC FOX Channel Line -ups are as follows: Analog Service A &E American Movie Classics Animal Planet BBC America Black Entertainment (BET) Boomerang Cartoon Network CNBC CNN CNN Sports Illustrated CNNfn /Intemational Country Music Television Court TV C -S PAN C -SPAN2 Discovery Channel Discovery Health Discovery Kids Disney Disney Toon DIY E! Entertainment ESPN ESPN Classic ESPN 2 ESPN News Food Network FOX News Channel (FCN) FX Galavision Golf Channel Headline News History Channel Home & Garden Television (HGTV) Home Shopping Network Lifetime MSNBC MTV MTV2 MTVS MTVX Nick Games and Sports Nickelodeon /N ickrd,nite Noggin Odyssey Outdoor Channel Oxygen Romance Channel SCI -Fl Channel TBS Superstation Turner Classic Movies (TCM) The Learning Channel The National Network TNT Travel Channel TV Land USA Network VH1 VH 1 Classic Rock VH1 Country VH 1 Soul The Weather Channel Web MD Techtv 2 KTCA PBS 4 WCCO CBS 5 KSTP ABC 9 KMSP UPN 11 KARE NBC 23 KLGT WB 29 WFTC FOX Evermoor 1 Evermoor 2 Evermoor 3 Regional Sports Network, if available Digital Tier BET ON JAZZ BIOGRAPHY BLOOMBERG TELEVISION BRAVO DISCOVERY CIVILIZATION DISCOVERY HOME AND LEISURE DISCOVERY SCIENCE DISCOVERY WINGS DMX (1 -37) MUSIC CHANNELS FOX SPORTS WORLD GOODLIFE (NOSTALGIA) HISTORY CHANNEL INTERNATIONAL INDEPENDENT FILM CHANNEL INSPIRATIONAL LIFE INTERNATIONAL CHANNEL LIFETIME MOVIE NETWORK MUCH MUSIC OVATION STYLE TRINITY BROADCAST NETWORK SHOWTIME MULTIPLEX (8 CHANNELS OF SHOWTIME) THE MOVIE CHANNEL MULTIPLEX (4 CHANNELS OF TMC) ENCORE MULTIPLEX (5 STARZ, 12 ENCORE CHANNELS) CINEMAX MULTIPLEX (4 CHANNELS OF CINEMAX) HBO MULTIPLEX (8 CHANNELS OF HBO) PAY PER VIEW (19 CHANNELS OF PPV) 5) The headend location will be located at the corner of Evermoor Pkwy and Shannon Pkwy within the Evermoor Development. The off -air antenna will be located on top of the Shannon Park Elementary School. We are proposing to replace the existing off -air antenna on the Shannon Park Elementary School. There will be three satellite dishes located at the headend location. ii. The system will be built and activated as a fully bi- directional network. As such, the build and activation will be the same for the bi- directional network as the entire fiber -optic network system with no lag time. iii. Automated services will include but are not limited to pay - per -view, electronic programming guides, and bulletin board messaging for community events and program tier selection and upgrades for those individuals that have set -top boxes. iv. The minimum number of channels offered is (10) ten. This includes the local off -air channels and the local origination channels specific to Evermoor. V. Initially, GHN will provide three channels specific to the Evermoor Development. These would provide custom content specific to the community. vi. We have not yet talked with the incumbent Cable Company, but would gladly make best efforts to accept from them all PEG channels that would apply to the city of Rosemount, and would offer them the local channels we provide Evermoor if those are the wishes of CPDC. 6) GateHouse Networks will provide complimentary video and data services to Shannon Elementary School, as well as Rosemount Middle School and Haigh School. This will be done and will meet any and all industry standards. 7) The timing for the construction of the entire system is dependent upon the construction schedule that is in place by the developer. Right now, it is anticipated that the build -out of the Evermoor community will take about eight (8) years. Activation of the headend and the first property will take place two weeks prior to certificate of occupancy for. All remaining homes will be activated two weeks prior to occupancy. 8) In addition to over 150 colleges and universities nationwide, GateHouse Networks has designed, engineered, installed and activated two residential communities in Florida, one residential community in Virginia and is currently engaged in the construction of three additional properties throughout the country. Two of the six systems mentioned are fiber to the home platforms like those proposed for Evermoor, and the other four systems are Hybrid Fiber Coaxial systems. The Hybrid Fiber Coax systems have fiber optic cabling that runs to nodes that support 60 -80 homes, as opposed to the traditional platform employed by local cable operators who support up to 500 homes off of one node. The GateHouse Networks approach provides for higher bandwidth, higher reliability, and improved service over that provided by a local cable operator. 9) Currently, GateHouse Networks has a limited franchise in League City, Texas. The franchise is in place to support the Magnolia Creek subdivision. The system has not been built yet. Construction of this system is scheduled to begin this month. 15) Evermoor, LLC agrees to pay a franchise fee in the same percentage of gross revenues as the incumbent providers. This is believed to currently be 5% of gross revenues. February 20, 2001 Dear Mayor of Rosemount and the Rosemount City Council: My family is moving into the Evermoor development in your city. We are very excited about moving into Evermoor for many reasons. One reason is that the schools in the area are excellent. Another is that the area is beautiful and convenient to where we work and play. And the last reason that we're so excited to be moving into Evermoor is because of the cutting -edge technology. To give you some background on where I'm coming from, let me tell you a little bit about my family. My husband and I have two boys with autism spectrum disorders. My oldest son is very high functioning and is really into computers and drawing. My youngest son is more severe than his brother, but he's still doing very well. The only things my youngest son is interested in is the television and the computer. He doesn't play with toys on his own or with other children. He would much rather watch a video or play on the computer than do anything else. My husband is a sales representative for a pharmaceutical company, so he works out of our home. I work in the networking industry for Cisco Systems and enjoy keeping up with new technology. It is very important for us to keep our children engaged with other people and playing. One of the ways we do this is by using rewards. They get to pick something that they want to "work" for and when they finish the work they get their reward. The biggest motivators in our house are the computer and the television. Our children's education and our home's location are very important, but I'm writing you today because of the technology. The technology available to the residents in Evermoor is the beginning of the future. I believe that having fiber optics to your home carrying voice, video and data will be commonplace in the near future. With fiber we can have high -speed Internet access, cable services and phone services over the same media. High -speed access to the Internet is beneficial to my work and to my children. It will benefit my work because I can access the network and not be hindered by slow connections. It will benefit my children, because they can access the Internet without becoming frustrated at the slow -to -load pages. With cable services over fiber, depending on the provider, more channels and options may be available to us. With television being one of the few things my youngest son enjoys, it would be great to have additional children's and educational channels. With fiber, we could videoconference instead of telephone, which would be beneficial for work meetings or training. With Category 5 cable throughout the house, I can network our computers, printers, fax machine and even the appliances. If we're away for a few days, we can control our lights and security system over the Internet. The possibilities are endless. In closing, I want to stress how excited we are to be moving into Evermoor and Rosemount. Here, we get exactly what we're looking for: great education for our children, excellent location and cutting -edge technology. Sincerely, Maureen Studeny Future Evermoor Homeowner 8631 Bernard Path Inver Grove Heights, MN 55076 Phone: (651)457-4565 moe @pconline.com