06-11-2014 Council Agenda - Laserfiche WebLink

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May 23, 2014 Page 14 Formal franchise renewal The NSCC demanded operational funding in the amount of $14 million, or $3.71 per customer per month. "Today, the NSCC seems to acknowledge that it cannot lawfully demand this. Yet the NSCC recommends preliminarily denying the franchise because Comcast won't provide that funding. The NSCC's actions violate the Cable Act, and the member cities are going to potentially be subject to further time-consuming legal proceedings if they follow the NSCC's recommendation. The reasonableness of Comcast's position is further underscored by the fact that the member cities could fund PEG operational expenses with franchise fees. In fact, Article X, 3 of the _JPA requiws the cities to use franchise fees for "cable -related expenses" like PEG operations. But the cities do not appear to be following that requirement of their agreement. I\ gain, combining maximum franchise fees, significant and unjustifiably high PEG capital fees, and unlawfully demanded PEG operational fees, the NSCC wants Comcast's subscribers to pay $7.57 per month—or $90.84 per year in PEG fees alone, on top of the 5% franchise fee that they already pay. Comcast supports PEG programming in these communities—it is offering millions and allocating channels to support it. But there must be balance, Eighty percent of subscribers do not want to pay any amount for PEC programming, and between 78% and 94% seldom or never watch the eight channels. The NSCC's funding demands for PEG are improper, and motivated to satisfy the NSAC's interests above those of subscribers. The number of PEG channels that the NSCC should have available is another issue mentioned in the Supplemental Staff Report. Comcast's proposal of three SD channels and an additional I -Ill channel is more than reasonable to meet the future PEG needs—given the level of demonstrated interest in PEG programming by all subscribers. The NSAC cannot fill the current channels it has—replaying meetings, games, and shows dozens and dozens of times. One city council meeting was apparently played 129 times. One sporting event was apparently played 177 times. Public service announcements are played over and over again to fill time. In addition, the role of PEG as a source of local information has diminished greatly. ,is opposed to 1998, when the franchise began, PEG now competes with a vastly expanded and diversified number of sources for receiving local iinformation-- blogs,'lwitter, internet streaming, Facebook, YouTube, etc.—all of which reduce the need for PEG channels. Review the report of Professor Sanders on this topic, which is attached as Exhibit 6 to Comcast's formal proposal, and see the analysis for yourself. The NSCC has had no response to Professor Sanders's report.