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El 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 City Council Regular Meeting Minutes May 27, 2014 Page 5 1. The continued offering of the fiber -based Institutional Network (I -Net) which connects local government institutions within the ten member cities, including municipal facilities, Ramsey County facilities, and several schools at no charge to the users; 2. Funding for Public, Educational and Government (PEG) communications in the ten member cities, and channel capacity for transmission of the eight PEG channels in both SD and HD; 3. Comcast's past customer service performance; 4. Two of the issues from the report prepared by Mr. Andrew Elson of E -Consulting Group (Exhibit 2 of the Comcast proposal). Ms. Wilson stated the formal franchise renewal proposal is before the Council for consideration this evening. The public hearing was held and closed on May 1, 2014. When an audit was done, many electrical violations were discovered. There is no upgrade of the cable network proposed at this time. The proposal shows a reduction in SD channels from 8 to 3 and one HD channel. HD is the new standard. The proposal did not address channel 16 as it is only seen in the immediate cities. Ms. Wilson stated there are a number of gaps in the proposal. Councilmember Jenson asked what a typical resident would receive and what the cost would be. Ms. Wilson stated the PEG fee is $4.15 and paid by subscribers. This fee is based on the size and needs of the community. The proposal is for 44 cent PEG fee. They do not have a lot of authority for rate regulation. The cost could be shifted to other fees. If the PEG fee is reduced, CTV would most likely go out of business. Federal law does not require Comcast to pay an operating grant to provide services for CTV. The Commission is requesting that the Council preliminarily deny adoption of Resolution 14-038. Comcast may come back with another informal proposal or they can request a hearing before an administrative law judge. Mayor Pro Tem Roth asked what has been proposed to CTV. Ms. Wilson stated $1.3 million was proposed in year 1. The PEG fee would be $3.00 by year 3. The City supports the North Suburban Communications Commission. Mayor Pro Tem Roth asked if the City's contribution in the future would go up. Ms. Wilson stated the Commission would need to operate on less funding. City costs could increase for web streaming and the video operator at City meetings. The franchise fees are paid by the City and that rate is set by Federal law. Mr. Tony Mendoza, Comcast Outside Counsel, stated Comcast has invested millions within the City of St. Anthony. He reviewed the benefits provided to the North Suburban Communications Commission. The renewal of the franchise is very important to Comcast. The proposal was submitted in December. The NSCC did not vote on it until April. He stated the City does not have the basis to deny the proposal since they have not had the opportunity to review the proposal and information provided. Tonight's denial of that formal proposal will take Comcast to the next step in the process, which would be litigation. The NSCC requested the formal proposal from Comcast in July 2013. Mr. Mendoza reviewed the RFP received from the NSCC and its requirements. Comcast's formal proposal addressed these requirements. There are only four criteria that allow the City to deny a formal proposal. Mr. Mendoza stated there is no basis to deny Comcast formal proposal because none of the four criteria can be answered yes.