06-11-2014 Council Agenda - Laserfiche WebLink

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May 23, 2014 Page 2 Pormal franchise renewal NSCC is prohibited from demanding financial support for its PEG operational expenses. Yet demanding PEG operating support is preciro/y what the NSCC's request for renewal proposal (RhRP) to Comcast does: "Current levels of capital and operations funding, and in-kind support, taus/ be maintained and enhanced as described herein and in the Staff Report" (RFRP at p.38) (Elsewhere in the RhRP, the NSCC.; sometimes state its demand with the phrase that Comcast "shall voluntarily pay" the amount demanded." RhRP at p.65) In most cities around the country, the PEG operations of a local franchising authority (LPA) are funded through the franchise fees that federal law allows an LhA to collect from a cable operator's customers. The member cities of the NSCC already collect the full franchise fee allowed by federal law (5%), but they apparently do not use all of that money for cable -related expenses or in support of PEG operations (despite their agreement to do so in their Joint Powers Agreement forming the NSCC). What the NSCC should have done—years ago, as the expiration of the 1994 Agreement approached --was establish a lawful and reliable alternative source for its operational expenses, without expecting Comcast's customers to continue to provide the funding, and then prepare an RhRP for Comcast that was built on that foundation. This would have been the prudent course. But instead, the NSCC wants to put federal law aside and build the foundation of its formal renewal case on an unlawful demand for PEG operating support. Why would the NSCC go to such lengths over the issue of whether Comcast should continue to pay the NSCC for PEG operating support? The answer to that question gets to a fundamental problem with the renewal process of the NSCC, on which we elaborate more below. The essence of the problem is that the NSCC and the NSAC have an inherent conflict of interest between them—a conflict that causes the NSCC to systemically favor the PIG interests of the NS.AC over the interests of those whom the NSCC is supposed to protect: Comcast customers. This inherent conflict of interest has manifested itself in the franchise -renewal process with open -meeting violations, for example, and a pervasive bias in the NSCCs assessment of community needs that favors the NSAC's interests at the expense of Comcast customers. The rest of this memorandum aims to provide more detail and context behind all this before the upcoming vote of the member cities on Comcast's formal renewal proposal—and to give you a picture of some of the serious issues affecting the NSCC's process and decision-making. This memo is not an