06-11-2014 Council Agenda - Laserfiche WebLink

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May 23, 2014 Page 5 Formal franchise renewal due -process standards or statutory requirements established under state and federal law. 13. Comcast's cable -television franchises in the NSCC member cities The current NSCC cable franchise combined with the 1994 Settlement Agreement has been very lucrative for the NSCC and NSAC. The existing franchise, adopted in 1998, among other benefits for the NSCC/NSAC has provided: • Franchise -fee payments of $1.5 million per year (as of 2013) to the NSCC and member cities; $1.6 million per year in PEG support; • 8 television channels dedicated for PEG programming; • Free cable services to 87 government buildings; and • Free use of a 322 -mile fiber optic institutional network valued at $7.4 million. The franchise -fee payments mentioned above are collected from Comcast's customers as required by the member cities under the current franchises. The franchise fee equals 50/ of Comcast's gross revenue from cable services, which is the statutory maximum for such a fee. Franchise fees have been described by courts as "rent" for use of rights of way (though other rights-of-way users such as telephone companies are only required to pay for a portion of the costs of managing and maintaining rights-of-way). In addition, the PEG funding requirements under the existing franchise and 1994 settlement amount to $4.15 per customer per month, which is one of the highest PEG fees in the country. With respect to the eight PEG channels under the current franchises, Comcast submitted evidence and expert reports documenting how the NSAC struggles to fill these channels with relevant programming, loading them up with reruns and public-service announcements that air dozens, if sometimes not hundreds, of tithes. (The NSAC says the eight channels should replay the same shows over and over again because it serves as a video archive for PEG programs.) All of these franchise terms— the PEG fees and the number of channels devoted to the NSAC—will expire later this year (which includes a one-year, good -faith extension of all the terms by Comcast, allowing the NSCC time to resolve this matter informally).