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Mounds View City Council June 9, 2014 <br />Regular Meeting Page 6 <br /> <br /> <br />Mayor Flaherty questioned why Comcast was proposing 44 cents in PEG fees when Minneapolis <br />and Woodbury received over one dollar in PEG fees. Mr. Logan stated this was the offer being <br />made within the formal cable franchise. He noted the PEG fees continue to be discussed <br />informally. <br /> <br />Council Member Mueller saw the benefits of the monthly PEG fees from the local channels. She <br />questioned what benefit the residents would gain through the proposed connection fees <br />($3,350/month). Mr. Logan stated all libraries and schools would continue to receive a free draw <br />from Comcast. He indicated Comcast owns this network and has invested $1.6 billion in the <br />metro area. He reported that Federal law does not require Comcast to maintain the network and <br />therefore Comcast was proposing to charge the member cities a fee for connectivity to assist with <br />the future maintenance of the network. <br /> <br />Council Member Mueller explained she was not a part of the negotiations 10 years ago with <br />Comcast. She questioned why the member cities would be charged connectivity fees when they <br />had provided Comcast with right-of-way for the installation of the network. Mr. Logan stated the <br />5% franchise fee compensated the member cities for use of the right-of-way. <br /> <br />Council Member Mueller commented that Comcast was requesting $1,675.80 per capita to <br />operate its services in the City of Mounds View. She reported she had a very difficult time <br />comprehending why the City would be charged a connectivity fee, when right-of-ways were <br />offered to Comcast, and for this reason she could not support the proposed cable franchise. <br /> <br />Council Member Meehlhause understood that Comcast customers assisted in paying for the <br />network. He indicated the Cities also contributed to the upgrades of the I-Net. He questioned <br />why Comcast was proposing to charge back connectivity fees to member cities. Mr. Logan <br />stated ultimately, the network belonged to Comcast and while customers assisted indirectly with <br />paying for the investments, the system was wholly owned and operated by Comcast. <br /> <br />Council Member Meehlhause reported franchise and PEG fees were not paid out by Comcast, but <br />rather, were pass through fees that did not impact Comcast’s bottom line. Mr. Logan explained <br />that franchise fees were impacting Comcast as it was making the company less competitive with <br />satellite vendors. <br /> <br />Council Member Meehlhause reviewed how funds had been used by CTV in the previous year <br />and questioned Comcast’s income in 2013. Mr. Logan stated he could not speak to this. <br /> <br />Council Member Meehlhause indicated Comcast generated $64.7 billion in revenue in 2013 and <br />had a cash flow of $8.5 billion. For this reason, he believed that Comcast could afford to be <br />publicly service conscience in the proposed cable franchise with Mounds View and its member <br />cities. <br /> <br />Council Member Hull questioned why the PEG fees were agreed to 10 years ago. Mr. Logan <br />commented that the PEG fees have increased over the past 10 years. Ms. Wilson stated in 2001