THE CITY OF
SAN JOSE,
CALIFORNIA
REQUEST FOR RENEWAL PROPOSAL
FOR
CABLE TELEVISION FRANCHISE
August 21, 2001
City of San José
TOM MANHEIM
801 N. FIRST STREET, SAN JOSE, CA 95110
APPLICANT'S RESPONSE TO THIS REQUEST FOR RENEWAL
PROPOSAL MUST BE RECEIVED AT THE ABOVE ADDRESS
BY 4:00 P.M.
ON OCTOBER 19TH , 2001
TABLE
OF CONTENTS
I. INTRODUCTION............................................................................................................... 1
A. Invitation to Submit Proposals.................................................................................... 1
B. Principles Embodied in the Request For Renewal Proposal......................................... 2
C. Format of the RFRP; Evaluation of Responses........................................................... 3
D. Submission of Proposal and Additional Information.................................................... 5
E. Further Information.................................................................................................... 6
F. Relationship of Cable Ordinance and Franchise.......................................................... 6
II. REQUIREMENTS AND MODEL FOR FACILITIES AND EQUIPMENT........................ 8
A. Requirements for Satisfying Needs and Interests for
Equipment, Facilities and Channels for PEG and I-Net Use; and for Management of
PEG................................................................................................................................. 8
1. General
System Design.................................................................................. 8
2. Channels,
Facilities and Equipment for PEG Use.......................................... 12
B. Model: System Characteristics................................................................................ 15
1. General
System Design. Applicant must rebuild
its Cable system as described below; except that, nothing in this section is
intended to require an Applicant to use a particular transmission technology,
so long as the Cable System is designed and rebuilt so that it will have
characteristics that in all relevant respects meet or exceed the
characteristics of the Cable System model.
If the applicant does not propose to rebuild its Cable System as
described in the model, it must prove that the design it proposes in fact will
have functional characteristics that in all relevant respects meet or exceed
the characteristics of the Cable System model.
Without limitation, this means that the proposed system must: be as
reliable or more reliable; be able to deliver upstream and downstream signals
with greater or equal speed, and as effectively for the user; have adequate,
initial activated capacity and additional capacity that can be activated
without the addition of active components to or construction of additional
cable in the plant to deliver Cable Services, including the most advanced Cable
Services, to and from each Subscriber location in a format responsive to
Subscriber needs and interests; be
designed so that it can be configured to deliver additional bandwidth to and
from each Subscriber, without substantial delay or construction; be able to
respond to changing consumer needs and interests with the minimum delay or
disruption; be designed so that power outages affect, to the extent possible,
only those consumers who are not receiving power at their home; be designed so
that the amount of required maintenance, and the mean time to repair, is
minimized; and be designed so that there will be no negative impact or additional
cost of any kind on PEG Uses (including I-NET Uses) of the Cable System under
the proposal, as compared to the model.................................................................................................................... 17
2. Downstream
PEG Capacity on Subscriber Network.................................... 23
3. Upstream
Capacity for PEG use.................................................................. 26
4. Institutional
network.................................................................................... 27
5. Access
Facilities and Equipment.................................................................. 30
6. Miscellaneous
PEG Requirements................................................................ 32
7. Cable
Modems, Cable Drops and Outlets for Government Facilities............. 34
III. CONSTRUCTION TIMETABLE AND CONSTRUCTION CONDITIONS................... 34
A. Needs and Interests................................................................................................. 34
IV. OTHER FRANCHISE TERMS AND REGULATORY CONDITIONS............................ 36
V. APPLICATION FORMS................................................................................................... 37
A. Instructions.............................................................................................................. 37
B. Identification of Applicant........................................................................................ 38
C. Applicant’s Affidavit................................................................................................ 39
D. Executive Summary of Proposal............................................................................... 40
1. The City Council concludes that
the cable related needs and interests of the City are accurately identified in
the Report. 108
With this
request for a renewal proposal (“RFRP”), the City of San José, California (the
“City”), invites Heritage
Cablevision of California, Inc., (“Heritage”), providing services under the
name AT&T Broadband, to submit a cable
franchise renewal proposal describing the cable-related facilities, equipment,
and services that it proposes to provide in the City during a franchise renewal
term. While this RFRP is specifically
designed for a cable franchise renewal proposal, the City also invites any
other interested party to submit a proposal for a cable franchise using the
attached forms by the deadline established herein. Applicants other than Heritage responding to the RFRP may read
RFRP language such as “upgrades,” “rebuilds” and “renewal term” as applying
equally to proposals for a new system with a new initial term.
If an Applicant submits a complete proposal by the deadline
that the City has established, the proposal will be evaluated in accordance
with applicable provisions of federal and local law. In determining whether a cable franchise renewal should be
granted, the City will consider, for example, whether the Applicant’s past
performance justifies renewal; whether an Applicant has the financial,
technical and legal qualifications to perform as promised during a renewal
term; and whether the Applicant has submitted a proposal that is reasonable to
meet future, cable-related needs and interests of this community, considering
the cost of meeting those needs and interests.
The City
is seeking a proposal that:
(1) describes,
in detail, what services, facilities and equipment the Applicant proposes to
provide during a renewal franchise term;
(2) demonstrates
that Applicant's proposal will satisfy community cable‑related needs and
interests capably, creatively, economically, responsibly and in a manner that
will provide the benefits of cable communications technology to the residents,
institutions, organizations, and businesses in the City now and for any
franchise term;
(3) shows that
Applicant is financially, technically, and legally qualified to hold a renewal
cable franchise; and
(4) explains
why the Applicant believes that renewal is warranted in light of its past
performance.
The
following principles are embodied in the RFRP:
1.
The City has conducted a
detailed review to identify future, cable-related needs and interests. Among other things, the City commissioned
special studies and surveys; reviewed its own records, and collected information
that bears upon cable-related needs and interests. Developments in the industry, generally, were reviewed, as were
the results of renewals in others communities.
Consumer satisfaction with cable service was considered. A series of “focus groups” were held to identify cable-related needs and
interests. Information from the cable
operator was reviewed, and Heritage was provided an opportunity to comment on
cable-related needs and interests and submit whatever information it had
bearing upon cable-related needs and interests. The City Council conducted hearings where comments were received
from the public and from cable operators.
In addition, we took advantage of staff’s own familiarity with the City.
2.
A critical concern was that
all parts of the cable system be upgraded to and remain a state-of-the art
cable system. In any renewal term,
advanced cable infrastructure needs to be available in all parts of the City,
and the cable system needs to serve any entity that desires cable services. A cable system should employ state-of-the-art
technology so that optimal use is made of the City’ rights‑of‑way
and private property, and so that subscribers are in a position to benefit from
advances in cable technology. The
Heritage cable system currently serving the City is antiquated. Although the City issued a long-term
franchise to Heritage’s predecessors, neither Heritage or its predecessors saw
fit to fully upgrade its system. The
RFRP therefore looks not only to (a) whether immediate problems will be
redressed; but also (b) whether the proposal is structured in such a way that
the City can be assured that the system will be upgraded to keep pace with
developments in the industry over any renewal term.
3.
It is also critical that all
members of the public (including individuals, civic groups, non-profit
organizations, and government and educational institutions) have the
opportunity to exercise their First Amendment rights using Applicant’s cable
system. The City therefore requires the
Applicant to describe its proposals for public, educational and governmental
(“PEG”) use in detail, and to explain how it would ensure that the PEG channels
and resources promised will be managed in a way that ensures that the needs and
interests of the community will be met.
Moreover, it is fair to say that the management of PEG by Heritage has
not worked well. Because existing structures and arrangements for management
and operation of access have not worked in the past, Heritage must explain in
detail how its proposal would ensure that PEG is managed and operated properly.
4.
High-quality cable service
should be available throughout the City to anyone requesting service, on non‑discriminatory
terms.
5.
With the issuance of a cable
franchise, Applicant is granted a special right to use the public rights-of-way
that is not available to all. The City
believes that any grant of a cable franchise can have a substantial effect on
the quality of life in the community and upon other potential users of the
rights-of-way. Therefore, the City has
invoked its right to manage the uses of its public rights-of-way in order to
establish a firm and enforceable franchise that adequately protects the public
interest.
6.
The promises made in any
proposal should be enforceable from both a legal and a practical
standpoint. Therefore, in evaluating
the adequacy of a proposal, the City will, for example, give little weight to
promises that are phrased in a way that allows an Applicant to escape or avoid
obligations, that are so vague as to be unenforceable, or that are so vague as
to allow the operator to avoid obligations while disputing terms. The City does not generally engage in
binding arbitration, and will not accept a proposal that makes the operator’s
obligations contingent upon an arbitrator’s decision. Similarly, Applicant should not seek to add to a superficially
conforming proposal conditions that would render the proposal unworkable or
cause it to fail to meet the City’s needs and interests. Provisions in this RFRP which require the
City’s approval or direction will be exercised by City in a reasonable manner
consistent with all applicable laws.
This RFRP
is being issued pursuant to applicable law.
It is intended to satisfy all requirements of the Cable Communications
Policy Act of 1984, as amended by the Cable Television Consumer Protection and
Competition Act of 1992 and the Telecommunications Act of 1996, 47 U.S.C.
§ 521 et seq. The City reserves the right to modify this
RFRP, including the extension of due dates or deadlines established as part of
this RFRP and/or request additional information or clarifications from
Applicants.
Sections I
– IV summarize critical needs and interests identified by the City for which
requirements may be established consistent with the Cable Act. Those sections also identify the
requirements that the City has established with respect to those needs and
interests. The Cable Act allows the City to
establish requirements in an RFRP:
(1) “that
channel capacity be designated for public, educational or government use, and
channel capacity on institutional networks be designated for educational or
governmental use, and may require rules and procedures for the use of channel
capacity designated....” 47 U.S.C.
§531(b).
(2) “for facilities and equipment.” The legislative history explains that this includes requirements
for institutional networks, studios, equipment for public, educational and
government use, two-way networks, and so on.
47 U.S.C. §544.
The Cable Act also states that “A franchising authority may
establish and enforce (1) customer service requirements of the cable operator;
and (2) construction schedules and other construction-related requirements,
including construction-related performance requirements, of the cable
operator.” The City believes that this
language permits the City to establish these requirements unilaterally, and the
City does propose to unilaterally establish customer service requirements and
conditions related to the use of streets and roads. However, the City has included as part of the RFRP certain
construction requirements related to the timing of system construction and the
area to be served by the Applicant. To
the extent that the franchising authority has the right to require that any
franchise be subject to certain conditions (such as customer service
conditions), it is the City’s view that an unwillingness to accept these
conditions also justifies non-renewal
To aid the Applicant, and so that
there is no misunderstanding as to the intent of particular requirements, we
have set out a model for satisfying the minimum requirements. Applicant is not required to follow the model in every
respect. If Applicant proposes a cable
system that differs from the model, however, then Applicant must explain in
detail why it has departed from the model suggested by the City, and
demonstrate how the Applicant’s proposal will meet the needs and interests
embodied in the model. If the change
would result in some needs and interests not being satisfied, or not being
satisfied as well, then the Applicant must explain in detail why it believes
that the change is justified, and provide supporting documentation. Applicant must include with its proposal all
information on which it intends to rely in making that demonstration. Applicant will note that the model for
system design and construction are generally consistent with the settlement
agreement between the City and Heritage dated December 18, 2000. The reasons why this is so is described in
Part II.B.
In addition, Applicant is cautioned that meeting the
minimum requirements may be necessary, but not enough to obtain renewal. The Cable Act’s
legislative history explains that, in evaluating the adequacy of a renewal
proposal submitted in response to an RFRP, the issue is whether “the equipment,
facilities, and services proposed . . . are reasonable in light of the future
cable-related community needs and interests, taking into account the cost of
meeting such needs and interests.” H.
Rep. 934, 98th Cong. 2d. Sess. at 74, reprinted
at 1984 U.S.C.C.A.N. 4655 (1984).
In
evaluating a proposal, the City will also consider whether Applicant’s
proposals will, in practice, satisfy the future cable-related needs and
interests of the community. For example,
an Applicant cannot satisfy the facilities and equipment requirements by
“providing” them under conditions that may impede their use. An Applicant thus would not be deemed to
have “provided” the required facilities and equipment for PEG use if under its
proposal, for example: (1) PEG use of
facilities or equipment would be subordinate to other uses; (2) there would be
a charge for the use of the equipment and facilities or channels; (3) the
equipment or facilities generally would not be available for PEG use at all
times; or (4) there are conditions on use of such facilities or equipment
beyond the conditions that are imposed by operation of federal law.
It is up
to the Applicant to submit a proposal consistent with the foregoing. Applicant
is encouraged not only to meet but to exceed the requirements of the RFRP in
order to ensure that the cable-related needs and interests of the City are
satisfied. [1]
Section V includes application forms which Applicant is to use in submitting
its proposal, and identifies materials and information the City require an
Applicant to provide in its response.
There are
some needs and interests – the needs and interests related to PEG use
(including PEG use of the institutional network) that will present particular
issues if and when a second provider enters the community. The franchise must
therefore include provisions that require the incumbent to cooperate with new
entrants to ensure that PEG and I-Net obligations are satisfied
cost-effectively, and that, under appropriate circumstances, permit the City to
modify obligations as appropriate so that it can comply with the requirements
of state law for competitive franchises, as applicable.
An
application must be responsive to, and be submitted in the format required by,
this RFRP and must include all required information. The City reserves the right to reject a nonconforming application
or to require Applicant to provide supplemental information or an amended
proposal if the Applicant’s filing does not conform to the requirements of this
RFRP. No proposal shall be considered
submitted to the City until all information required by this RFRP has been
furnished to the City.
Applicant
shall submit an original and twelve copies of its proposal to the City on the
date and at the place indicated on the cover page of this RFRP, in accordance
with the instructions set forth in this Introduction and in Section V. In addition, Applicant shall provide an
Executive Summary of its proposal, which shall not exceed fifteen pages
(double-spaced). Applicant should
provide 25 copies of the Executive Summary to the City. Applicant should also provide a copy of its
proposal and Executive Summary on a computer diskette, with documents in Microsoft
Word, Excel, and FileMaker Pro as appropriate for word processing, spreadsheet,
and database components.
Applicant
must disclose to the City, in writing, the names, addresses and occupations of
all persons authorized to represent or act on behalf of the Applicant in
matters pertaining to its franchise application. This disclosure requirement shall remain in effect until
Applicant's application is accepted or rejected by the City, or until Applicant
withdraws its application. Applicant
must also identify holding a financial interest in Applicant, as required by
the Application forms.
Applicant
will be expected to respond to any requests for additional information
concerning the proposal fully and promptly, in accordance with the deadlines
specified in such requests. Applicant’s proposals may be rejected, consistent
with applicable law, if Applicant fails to provide information required in the
form requested, or submits false, misleading or incomplete information.
If the
City determines that a renewal franchise should be granted, the terms of the
proposal will be incorporated into a franchise agreement, as discussed below.
Questions
concerning this RFRP should be submitted in writing no later than 4:00 p.m.,
September 19, 2001, to Tom Manheim at 801 N. First Street, Room 436, San José,
CA 95110. All responses will be issued in writing. However, an Applicant must submit a response to this RFRP by the
deadline, regardless of whether the questions asked have been answered.
As noted
above, the terms of an acceptable proposal will be incorporated in a final
franchise. The franchise will include
other provisions which the City may establish (consistent with the Cable Act),
including, but not limited to, provisions regarding the following:
1. standards
for operation within the City, including standards for use of public
rights-of-way;
2.
franchise fees;
3.
rates;
4.
franchise transfers; and
5.
enforcement provisions,
including requirements for letters of credit, liquidated damages provisions,
and provisions for revoking a franchise.
For
Applicant’s information, the City is including a proposed Model Franchise as an
attachment to this RFRP. The proposed
franchise is intended to serve as a model for the final franchise that will be
entered into for the City. Applicant
should assume that the terms of its proposal, if found acceptable, will be
incorporated in a franchise using the language and structure of the attached
proposed Model Franchise. An Applicant
who is willing to accept the terms set forth in the Model Franchise need not
address it, although comments on the Model Franchise are welcome. Applicant must address the Model Franchise in its response if Applicant
demands that changes be made to the Model Franchise as a condition of renewal,
or if Applicant believes that a particular provision should have been part of
the RFRP itself. If Applicant objects
to any particular section of the Model Franchise, it should identify the
section and explain the basis for its objection, including proposed substitute
language. The Applicant must clearly state whether it is willing to accept the
section as proposed in the Model Franchise, assuming no amendments are made. If
Applicant requires the City to add provisions to the Model Franchise, Applicant
must submit language for each provision that it wants added, and explain why it
is demanding that the language be added and provide support for the change.
Applicant must clearly state whether it is willing to accept the Franchise
without the added language. For
example, the Model Franchise is for a
term of 10 years. If the Applicant insists upon a longer term, its proposal
must include proof that a longer term is required even considering the
availability of 47 U.S.C. §546(a)-(g).
Additionally,
the City is in the process of adopting a regulatory Cable Ordinance, a draft of
which is also attached to the RFRP for convenient reference. The Applicant is not required to address
the Cable Ordinance in its response, but is invited to submit any comments it
may have. As is the case with the Model
Franchise, an Applicant must address the Cable Ordinance if its proposal is
conditioned upon changes to the Cable Ordinance. If Applicant objects to any
particular section of the Cable Ordinance, it should identify the section and
explain the basis for its objection, including proposed substitute language.
The Applicant must clearly state whether it is willing to comply with the Cable
Ordinance, assuming no amendments are made. If Applicant requires the City to
add provisions to the Ordinance, Applicant must submit language for each
provision that it wants added, and explain why it is demanding that the
language be added, and provide support for the change. Applicant must clearly state whether it is
willing to comply with the Cable Ordinance without the added language.
In
determining whether Applicant is legally qualified, the City intends to
consider whether the Applicant is willing to comply with a Franchise that is
acceptable to the City. If Applicant insists on changes to the Franchise that
the City finds unacceptable, the City may deny the request for renewal. Additionally, any cable television
franchise granted will be subject to the Cable Ordinance. If the Applicant is
unwilling to comply with a lawful provision of the Cable Ordinance, then the
Applicant’s proposal may be denied.
With
respect to any provision of the franchise or of the ordinance to which the
Applicant objects, a conditional response or a failure to state that the
Applicant is willing to accept the condition as is will be assumed to mean that
the Applicant is not willing to accept the condition, and Applicant’s legal
requirements and qualifications will be evaluated accordingly. Similarly, where
Applicant does not object to a provision, Applicant must be willing to abide by
the provision and (in the case of franchise provisions) enter into a franchise
containing the provision.
The City has identified its future cable-related needs and
interests in detail in the Report. The
needs and interests for facilities, equipment and channels for which Cable Act
requirements are being established are summarized below. Applicant must submit a plan for provision
of facilities, equipment and channels that, at a minimum, satisfies these needs
and interests.
There is a need or interest in a system that includes the facilities and equipment required:
·
To provide substantially
greater channel capacity than is provided on the existing cable system. The system should be capable of responding
to subscriber demands for channels delivered in various formats without
substantial additional upgrades, and should be designed so that it will be
capable of responding to technological developments (e.g., high
definition television and digital television) promptly.
·
To provide substantially
better signal quality and system reliability than is provided by the existing
cable systems. The system should have a
minimal number of failure points between signal sources (headend) and each
individual subscriber.
·
To support two-way, advanced
cable services. The system should be
entirely two-way activated, and should be designed so that it can support
services that require broadband transmissions upstream and downstream from
subscriber locations. Further, the
system should be designed so that as subscriber demand increases, the system’s
upstream and downstream capacity to subscribers can be rapidly and efficiently
expanded through techniques such as “node splitting” without the need for major
cable plant construction or modification.
·
To satisfy all applicable
technical standards for system performance over the franchise term.
·
To permit the operator to
respond quickly and effectively to outages, requests for service, and customer
complaints.
·
To allow subscribers to
receive signals in substantially the same form in which they were received by
the cable company from the programming source, e.g., color television
signals should be received by subscribers in color, stereo signals should be
received by subscribers in stereo, secondary audio signals should be
receivable, and closed captioning signals should be receivable on television
sets capable of decoding the closed captioning signal.
·
To allow parents to control
viewing by children, with only minor modification of adult viewing options.
·
So that the services
(including, by way of example, customer service support) provided by the
operator provider are reasonably accessible to the hearing-impaired and other
persons with disabilities.
·
To permit the City to
remotely and securely override audio and video on all channels as part of a
local emergency alert system.
·
So that the cable system is
capable of being easily connected to additional cable systems in the City, to
systems in adjoining cities, and (directly or indirectly) to the Internet, so
that PEG signals (including institutional network signals) can be effectively
transmitted to and from each system seamlessly, without substantial
deterioration or degradation.
·
To allow customers to use the
cable system for two-way communications from the home, and to use PEG resources
interactively.
·
To allow members of the
public, educators and government representatives to produce programming and
transmit that programming, at no charge from the Applicant, from distant
locations throughout the City to central PEG programming control sites, and
from there, through the headend to subscribers, without the assistance of the
applicant.
·
To permit PEG users to take
advantage of the capabilities of an advanced system, as such capabilities are
activated for commercial purposes; and to ensure that changes in the system do
not hamper the use of the system for PEG purposes.
·
To link City facilities and
other public buildings (including schools, libraries, public safety facilities
and others) via reliable capacity on
the institutional network for a variety of two-way video, voice and high-speed
data communications with each other. We
will use the term "institutional network" to refer to that portion of
the cable system primarily designed to meet the needs and interests of
non-residential customers, and the term "subscriber network" to refer
to the network equipment and facilities primarily designed to serve residential
customers. We do not mean to suggest,
however, that an institutional network is for the benefit of institutions. It is in fact the intent of the City to use
the I-Net in a way that will improve educational services in the community, and
that will allow government to provide information and serve the community, more
effectively. It is also the intent of
the City to use the network to improve public safety by, for example, making it
easier to train police and fire personnel without removing them from service.
The institutional network should also permit the City to cut expenses, without
reducing services. The subscriber "network" and the institutional
"network" are both designed to deliver cable service, and can be
within the same cable, and it is intended that residential subscribers may be
able to send signals to institutional users and vice versa. There is also no requirement that any
"institutional network" serve only City facilities and other public
buildings.
The capacity on the institutional network that is devoted
to educational and government use (and public use, to the extent Applicant
proposes to allow the institutional network to be used for public use
purposes), and the associated interface devices at each PEG location on the
institutional network should have the following characteristics:
·
I-Net capacity should be provided and be available at no charge to
the users. However, assuming an Applicant otherwise proposes adequate PEG/I-Net
support, as we define those terms later in the RFRP, an Applicant may propose
to require payment for the marginal cost of any network element on the
institutional network that would be dedicated solely to PEG use, and the
marginal cost of any maintenance of those network elements. By marginal cost, we mean the materials and
direct labor costs attributable to the provision or maintenance of the PEG use
institutional network elements, above and beyond the cost that would have been
incurred in the construction and maintenance of the cable system in any
case. There should be no charge,
however, for the paths required to transmit PEG signals to the headend and
access centers, even if these pathways are provided as part of the I-Net. The Applicant must also propose a reasonable
method by which the City can review and approve construction of each segment of
the institutional network. This is
important to ensure that the I-NET will actually meet needs and interests, but
(in the event a marginal cost proposal is submitted) is also critical to allow
the City time to evaluate the cost of particular connections, consider
alternatives, and encumber funds appropriately. And, because the City may bear substantial costs associated with
the network, the City’s use of that network must be protected against
bankruptcy. In addition, the network must be available for use of the City so
long as applicant (or a lawful successor or assign) continues to operate in the
City.
·
The institutional network
should be available throughout the City of San José, and should be able to meet
the needs and interests in governmental and educational use (and public use, if
proposed by the Applicant) throughout the community.
·
There should be sufficient
capacity available to support user requirements over the next decade. This requires that the capacity be scalable
and expandable as needed, and that system be designed so that it can be extended
to new locations without deterioration in system capabilities. This also requires the Applicant to provide
initially the devices necessary to provide activated, useable capacity
supporting the functionality required in the CTC I-Net Report.
·
The network needs to support
integrated services which will include applications for voice, data, and video
(one and two-way) transmissions, and must be designed in a way to minimize the
cost of end user equipment and interfaces.
·
The institutional network
should be designed and constructed to support standard interfaces such as
conventional NTSC analog, M-peg, and J-peg digital video, telephone “T” carrier
services ( DS1, DS3), Ethernet interconnection (10 Mbps, 100 Mbps and Gigabit
platforms), and other similar commonly used interfaces.
·
I-Net users must be able to
access the network in a variety of ways –
not just through direct physical connections For example, the City may wish to attach wireless devices to
control traffic signals and receive telemetry data, among other things.
·
There must be sufficient
capacity available for educational and government (and if proposed by the
Applicant, public) use of an institutional network, and all required network
switches and other equipment so that the there is sufficient throughput to
allow institutional network locations simultaneously to use the system, without
meaningful interference with their applications. In addition, capacity must be provided in such a way so that
users operating at different transmission speeds, or using different media can
cost-effectively use the institutional network.
In
addition, the City concludes there is a need or interest in a Cable System that
has facilities and equipment satisfying at least four other requirements:
·
First, all parts of the City
should be served by systems that have similar characteristics and
capabilities. There is a need and
interest in having equivalent facilities available throughout the community.
·
Second, given the age of the
system, there is a significant interest in having all or almost all components
replaced. There is a particular need
and interest in having all drops replaced as part of the rebuild, in all areas
but the PBVS area to the extent that the drops in that area were replaced as
part of the integration of PBVS facilities into the AT&T network.
·
Third, a proposal for a Cable
System should include provisions that ensure that the Cable System will stay
apace of developments in the industry over the franchise term, and so that the
community can take advantage of changes in technology. Among other things, an appropriate provision
should permit the City to require further upgrades of the technical
capabilities of the Cable System (including by construction of additional
two-way links between public buildings); and for additions and improvements to
the facilities, equipment and other support required for PEG use.
·
Fourth, the system should be
designed so that users can (physically or virtually) "co-locate"
facilities or equipment at the Cable System's headend and control centers and
major backbone facilities such as hubsites and optical transfer nodes (OTN).
The applicant is required to submit a proposal that satisfies the needs and interests for PEG use channels, facilities and equipment described below:
·
There is a need and interest
in having a sufficient number of channels provided for PEG use, receivable by
all subscribers, to enable schools at various levels, the public, non-profit
organizations and the City have full opportunities to create and disseminate
information. At a minimum, this
requires that the existing three PEG channels be maintained, that the fourth
channel already requested by the City for educational use under the existing
franchise be added as soon as possible, and that at least one new additional
channel be added as the rebuilt network is activated throughout the City. The existing capacity devoted to PEG use is
inadequate. In addition, there is a
need or interest in having additional channel capacity set aside if and as the
use of the channels grows. Moreover,
PEG channels should be available in analog formats, and digital formats, if
both formats are provided commercially.
PEG programmers should be able to use the capacity provided for
transmission of any information, not just video; moreover, sufficient capacity
should be available on the network to enable PEG users to take full advantage
of advances in cable technology and system capabilities, including two-way
capability that allows PEG providers and users to take advantage of interactive
television services if and as they become available on the cable system.
·
PEG channels should be
managed by an entity or entities committed to promoting the use and development
of the channels, and with adequate experience to ensure such use and
development.
·
There is a need and interest
in having substantially improved access
facilities and equipment. There is a
need in interest in having at least two user-friendly, accessible facilities
(referred to below as Community Media Centers) that provide both public and
educational access users with places of sufficient size (and expandability) so
that (a) there is adequate studio space, designed in such a way that it can
meet user demands efficiently; (b) there is adequate space for equipment to
playback and control programming on PE channels; (c) there is separate and
adequate space available for editing programs; (d) there is separate and
adequate space available for training, planning meetings and administrative
functions (office space, storage space, bathrooms, and so on); (e) PE
facilities and equipment are distributed so that people throughout this large
and diverse community have reasonable access to them, at convenient locations
and times. Each facility should have
adequate parking and be fully accessible to persons with disabilities.
·
High-quality equipment[2]
should be provided for public use that could be used for producing programming
in the field or in the studio; editing it; and for playing back programming
that may be produced utilizing a variety of formats. This equipment should be replaced and upgraded over the term of
the franchise as needed.
·
High quality equipment should
be provided for educational use, including playback equipment and equipment
permitting educators to receive and record programming submitted over the
channels set aside for educational use on the subscriber network or the
institutional network. This equipment should be replaced and upgraded over the
term of the franchise as needed.[3]
·
High quality equipment should
be provided for government use, including cameras and sound equipment for City
Council chambers, field and editing equipment and studio equipment for public
service programming. This equipment should be replaced and upgraded over the
term of the franchise as needed.
·
There is a continuing need
and interest in being able to utilize existing PEG facilities and equipment
until those facilities and equipment are no longer needed. Any proposal should contain a provision that
ensures that such facilities and equipment will remain available for up to 24
months, to allow for continuing PEG operations until the transition to new
facilities is complete.
·
Operating, reliable upstream
capacity should be available throughout the community to enable PEG users to
originate and cablecast programming live from remote locations.
·
Dedicated bi-directional
connections should be available from the access production facilities for
public, for educational and for government use, with sufficient capacity
activated in both directions to enable those managing the PEG channels to (a)
receive signals intended for retransmission on the subscriber network from the
institutional network and from remote locations; (b) select signals for
retransmission, and to transmit and route those signals onto appropriate
channels on the subscriber network, or on the institutional network, without
the assistance of the applicant. The
connections should include all routers, modulators, demodulators and other
equipment required to provide this functionality.
·
PEG facilities and equipment
should be available to the user at no charge from the cable operator.
·
PEG channels should be
provided and publicized in a way so that they are easily identifiable to
subscribers, and provided using channels that can deliver PEG signals without
significant degradation.
·
PEG services should be
available to all schools, libraries and government buildings, particularly so
that these entities can receive the important educational and governmental
information carried over the cable system.
Drops and services should be provided that will make cable available
throughout all of these facilities.
Based on
the needs, interests and requirements identified in the Report and above, the
following model is proposed for the cable system generally, including both the
subscriber network and the institutional network (“I-Net”).
In
devising the model below, and the model under the “Construction Timetables” in
Section III, we have taken into account the settlement agreement between
Heritage and the City. In the early 1990’s, Pacific Bell Video Services
(“PBVS”)had begun, but abandoned, construction of a cable system in the City. PBVS sold its cable facilities to
Heritage. In order to permit Heritage
to take advantage of those facilities, the City entered into a settlement
agreement under which it agreed to issue permits so that Heritage could
integrate the PBVS plant into its plant; and under which Heritage agreed to
rebuild its cable system in the areas where PBVS facilities are located. Heritage also agreed to rebuild the
remainder of its cable system as part of the settlement.
By its
terms, the settlement does not prevent the City from requiring a more advanced
design than was agreed to; it does not prevent Heritage from proposing a less
advanced design. By its terms, the
settlement agreement cannot be used as proof of cable-related needs and
interests, one way or the other.
However, after reviewing the settlement agreement in light of the
completed needs assessment, we conclude that with some important exceptions the
system design described in the settlement agreement generally meets the needs
and interests of the community:
·
The PBVS plant was for a 750
MHz system, relatively advanced at the time it was planned, but now not state
of the art. Under the settlement, the
remainder of the City would be served by an 860 MHz system. Our ascertainment convinces us all parts of
the City should be served by an 860 MHz system.
·
Under the proposed build
schedule, subscribers in the old PBVS cable area would have begun receiving
service from the rebuilt system by approximately October, 2003. The remainder of the system would not be
completed until October 2006, and at that point, the system in the PBVS area
would lag behind the system in the rest of the City. We conclude that the entire City should be rebuilt to satisfy the
model by a date no later than 48 months from the granting of the franchise
renewal, or June, 2006, whichever is earlier.
·
The size of the nodes under
the settlement agreement is relatively large and no longer consistent with the
requirements of advanced 2 way cable television technology In this model, we propose a system under
which the City could require Heritage to further segment the cable distribution
plant to allow for additional nodes as needed to meet the needs and interests
of the community. However, the node
size should be reduced from the outset to no greater than the node size for the
PacBell plant.
There are
a number of important issues that the settlement agreement did not address
which are addressed in this RFRP . The settlement agreement was not intended to
address all issues associated with a cable system rebuild. The settlement agreement dealt with the
rebuild of what engineers refer to as the system “plant,” which does not
include the drops that run to each subscriber’s premises, or the equipment at
the operator’s “headend” that is used to control the system and send and
receive signals to and from users.
Thus, for example:
·
The model provides for
replacement of all subscriber drop cables that were not replaced by PBVS. This requirement was not addressed in the
settlement agreement. The drops that
were not replaced by PBVS have been in service for over 25 years, and need to
be replaced.
·
The settlement agreement did
not address upgrades of the system over the franchise term. The RFRP does.
·
Because the settlement
agreement was concerned with the cable system plant, it contained requirements
that were designed to ensure that the plant would be capable of supporting various functions such as interconnection and
emergency alerts. The settlement did
not establish all the facilities and equipment requirements associated with
such functions. The RFRP includes such
requirements.
·
The settlement did not
establish requirements for construction of the cable system to the downtown
area of the City. The RFRP does.
The
models reflect the needs and interests findings, and the requirements, and thus
address a number of issues that were not addressed in the settlement.
The model
assumes that the cable system will be planned and designed in accordance with
the highest standards of the industry. Hence, the model described below assumes
that the Applicant's cable system will include components of high quality and
reliability, and will be designed and constructed in accordance with the
highest standards of the industry and applicable law, including the Cable
Ordinance and Franchise . It is up to
the Applicant to propose a complete cable system design that is consistent with
the requirements of this RFRP.
With respect to the general system design:
With respect to PEG and I-Net
(i) If the City determines a modification is necessary in order to permit PEG and I-Net users to take advantage of the capabilities of the Cable System; and determines, after hearing, that the modification is reasonable in light of the costs, compared to the benefits or potential benefits to the City or the public.
(ii) If the City determines a modification is necessary in order to balance PEG and I-Net obligations of Applicant and any other franchise cable operator who enters the market.
The reviews permitted by this section may be initiated by the City after the first three years of the franchise term.
(k) If the system provides any interactive services, it shall be designed so that subscribers may use interactive PEG services.
ii) “hotline studio”
iii) large “classroom” area
iv) playback/master control room
v) studio set and materials storage
vi) editing bays
vii) conference room
viii) equipment maintenance area
ix) field production equipment check-out/storage area
b) A second facility, approximately 7,250 square feet, similar to the larger facility, but not including the “hot-line” studio, playback/master control room, and equipment maintenance area.
Each facility should be provided at a location satisfactory to the City, which location must be easily accessible to residents of the community, must have adequate parking, and must be expandable. The City will not unreasonably refuse to approve a proposed facility site. The facility must have adequate heating, air conditioning, ventilation and other infrastructure required to support access operations; and must have security systems to prevent theft or vandalism of all equipment, mobile and fixed. The staff of the entity responsible for managing access must be able to have access to the facility 24 hours a day.
The design of the facility is subject to the review and approval of the City, and must be timely provided so that the facilities can be completed and operational no later than 18 months after the effective date of the franchise, unless the City provides for a longer period.
(d) To provide for a smooth transition to a Designated Access Entity, selected by the City, Applicant shall continue to provide the support it was providing for PEG use, and to manage the use of the facilities and equipment in accordance with such rules as the City may prescribe for a period not to exceed 24 months from the effective date of the Franchise.
Applicant shall, at no cost to the City, or any entity
entitled to a drop and service outlet, provide and install all inside wiring
necessary for the service connections required under this Section.
The Cable Act permits a franchising authority to “establish
and enforce” “construction schedules and other construction-related requirements,
including construction-related performance requirements of the cable
operator.” 47 U.S.C. §552(a)(2). It is the City’s view that most or all such
requirements can be established unilaterally. However, as a matter of caution,
we list below certain of the needs and interests for construction that seem
closely related to facilities and equipment requirements. Applicant is required to satisfy these needs
and interests.[5]
·
There is a need and interest
in having cable service available throughout the community (including for
businesses and non-profit organizations).
Service should be provided to any residential location requesting
service on a timely basis, without the potential subscriber being forced to pay
to extend the system to provide service.
To that end, Applicant should be required to extend its system upon
request for service to any potential subscriber in the City, without requiring
the potential subscriber to pay for that extension. In areas that are zone commercial, and not mixed use, however,
the applicant may charge for extension where an extension of (a) more than 400
feet is required to reach the property line of the commercial establishment;
and (b) less than 10 commercial outlets are requested per lineal mile. In that instance, unless the Applicant is
already providing service, the potential non-residential subscriber may be
required to help share in the cost of the extension; but the subscriber share
should be just that: a reasonable share. There also is a need and interest in having
free drops and services to schools, libraries and public buildings. No extension charge can be levied for
schools, libraries and government buildings.
·
There is a need and interest
in assuring that any upgrade performed should be performed pursuant to a
construction plan that is reviewed by the City for compliance with the
requirements of the franchise. There
is a need and interest in having the plans for upgrade of the system ensure
that the rebuild is completed with minimum disruption of the rights-of-way or
service.
·
There is a need and interest
in ensuring that Applicant has plans in place that are designed to ensure that
it complies with local standards for construction, and that ensure that
construction errors are promptly corrected.
·
There is a need and interest
in providing for testing of the system to determine whether the rebuild has
been successfully completed and to identify problems and resource performance
on an ongoing basis.
·
There is a need and interest
in ensuring that the franchise includes the right for the City to require that
Applicant adopt a maintenance plan; that it follows that plan (subject to
regulations and applicable law), and periodically reviews and updates the
plan. The plan should ensure that all
parts of the system are properly maintained in a way that is designed to
prevent failures. There is a need and
interest in ensuring Applicant has procedures in place for complying with local
requirements (including permitting requirements) for use of the rights of
way.
·
There is a need and interest
in ensuring that the Applicant cooperates and coordinates in joint trenching,
and complies with the requirements of the City with respect to joint trenching
and undergrounding.
·
There is a need and interest
in ensuring that Applicant’s employees, contractors and subcontractors are
competent and well-trained, and will abide by the requirements of the franchise
and applicable law, as if the work were being directly performed by the
Applicant
As
pointed out in the Introduction to this RFRP, any renewal franchise will be
embodied in a Franchise Agreement based on the attached Model Franchise. A renewal franchise will also be subject to
the City’s municipal code, which is to be amended as indicated in the draft
Cable Ordinance, and which may otherwise be amended pursuant to applicable
law. A renewal franchise will thus be
subject to terms and conditions in addition to than those specifically set
forth in this RFRP. Please refer to the
instructions for directions for commenting on the draft Cable Ordinance and the
Model Franchise. We note that the Model
Franchise reflects a policy determination that there is no reason to
include any type of “level playing field” clause in the Franchise, because such
clauses are anticompetitive; because the clauses should not be a matter of
contract between the City and a cable provider; and because the state
legislature has already addressed the issue of competing systems.[6]
INSTRUCTIONS AND VERIFICATION
All
questions must be answered, and all requested information supplied in the order
set forth in the application.
Consistent with the Cable Act, there is no requirement under this RFRP
that Applicant submit a proposal for specific, or broad categories of video
programming or other information services.
A form is included in this section regarding such services in the event
any are proposed. If Applicant makes
no such service proposals, it may return blank pages. The application must be verified by signing and returning the
Application Form and Affidavit included in Section V. C.,
Applicant’s
Affidavit .
Applicant
may use the forms provided. Where that
is impractical, forms of Applicant's design may be substituted if all requested
information is clearly displayed.
Applicant
should begin a new page wherever indicated.
Applications shall be as concise as possible without sacrificing clarity
and completeness.
The
financial pro forma information submitted must be based upon the requirements
specified in this document. If
Applicant deviates from those requirements, an additional separate pro forma
(which is based on the deviations and explains their impact, in detail) must be
submitted.
Applicant
must clearly differentiate between those elements in a proposal that it is
willing to include in any final franchise; those needs and interests which it
intends to satisfy through contractual agreements with others; and those which
it expects to provide, but which it is not willing to commit to provide.
Name of Applicant:
Address of Applicant:
(Street)
(City, State, Zip Code)
Telephone:
(Area Code and Number)
Date:
Please provide the name and telephone number of a principal
to whom inquiries should be made:
Name:
Telephone:
(Area Code and Number)
Authorized Signature:
(Name and Title)
Date:
1. This application is submitted in
response to the Request for Renewal Proposal issued by the City of San José,
California. Applicant has read and
reviewed the RFRP in preparing its response.
2. The Applicant attests that it has
reviewed and checked the information presented, as necessary to determine its
accuracy, and represents that it is true, accurate and complete, as required to
ensure that the representations explicitly or implicitly made are not
misleading.
3. The Applicant recognizes that all
representations are binding on it and that failure to adhere to any such
representations may, at the City’ option, result in revocation of any franchise
that may be granted as a consequence of and in reliance upon this application.
4. The Applicant hereby gives the City
permission to inquire into the legal, technical, financial and other
qualifications of the Applicant by contacting any persons or organizations
named herein as references, or by any other appropriate and lawful means.
5. The undersigned has been duly
authorized to make these representations on behalf of the Applicant.
Firm Name:
Affiant's Signature:
Official Position:
Date:
Attest:
Applicant should present a clear and concise narrative description of the cable television system it
proposes to provide. Please limit
responses to a maximum of fifteen pages (double-spaced).
The following subject areas must be covered in the
Executive Summary:
·
Overview of proposal;
·
Ownership and management of
system;
·
Financial commitments;
·
System design and
construction;
·
Program services and other
service(s) (if proposed);
·
Public, educational and
governmental access;
·
Institutional network
(including network characteristics and capabilities);
·
The rates Applicant will be
able to charge in light of its proposal, as an indication of the costs
involved; and
·
Other.
The purpose of this section is to provide the reader with
an understandable overview of the proposal, not to discuss details that will be
covered elsewhere in the application forms.
FORM I. BACKGROUND AND LEGAL QUALIFICATIONS
FORM I.A. LEGAL
QUALIFICATIONS.
1. Applicant shall answer the following
questions "yes" or "no."
The term "Applicant" as used in the questions below refers
to: the Applicant; its principals; any
entity which owns or controls, is owned or controlled by, or is under common
ownership with the Applicant; and any entity which is expected to control or be
responsible for, through any arrangement, the management and operation of the
cable system serving the City. The term
franchise refers to a cable franchise, however nominated, or an open video
system franchise, however nominated. The Applicant need not report any case or
proceeding where final judgment was rendered ten years or more prior to the
date this RFRP was issued.
Additionally, the Applicant need not report any franchise revocation
that occurred ten years or more prior to the date this RFRP was issued.
a. Is the Applicant authorized under
California law to operate a business, including a cable television business, in
the State?
b. Does the Applicant hold all federal and
state licenses required for the operation of the system?
c. Does federal law prohibit the Applicant
from holding the franchise?
d. Has the Applicant been found by a court
or other entity of competent jurisdiction to have violated state or federal
laws or regulations regarding, or to have engaged in acts which constitute:
discrimination on the basis of race, sex or religion or any other prohibited
ground; fraud; embezzlement; tax evasion; bribery; extortion; jury tampering;
obstruction of justice (or other misconduct affecting public or judicial
officers' performance of their official duties); false or misleading
advertising; perjury; violations of laws prohibiting anticompetitive conduct or
unfair trade practices (including, but not limited to, violations of the
Sherman Act and state consumer protection laws); or racketeering or conspiracy
to commit any of the foregoing offenses?
e. Has the Applicant ever had a franchise
or FCC license revoked for cause where the revoked franchise or license was not
reinstated?
f. Has the Applicant ever been found by a
court or other entity of competent jurisdiction to have (1) presented
misleading statements, (2) engaged in fraudulent conduct or (3) otherwise
violated applicable law?
2. If the answer to any of questions
1(d)-(f) is "yes," the Applicant must specifically describe the facts
and circumstances concerning the acts or omissions which led to the decisions,
revocation, or findings specified in questions 1(d)-(f). It shall identify with specificity each
case, revocation, or finding which led the Applicant to respond affirmatively
to questions 1(d)-(f). If the Applicant
believes the acts or omissions described in response to 1(d)-(f) should not be
considered in determining whether to grant or deny it a franchise, it shall
explain in detail the basis for this contention. In reviewing the information, the City shall consider: facts and
circumstances which show that the acts or omissions are unrelated to the
consideration of the Applicant's willingness to operate a cable system in
accordance with lawful requirements; whether the Applicant has fully corrected
all harms which flowed from the act or omission; whether the act or omission
did not involve principals of the Applicant; and whether the Applicant has
taken adequate steps to ensure that the act or omission will not recur. Particular weight will be given to any
failure to correct harms flowing from any past misconduct.
FORM I.B. APPLICANT'S
HOLDINGS AND PRESENT SUBSCRIBER RATES
1. Please list
all present holdings (franchises and systems) in which the Applicant or any
principal* owns 5 percent or more of equity interest. (If additional pages are needed, please reproduce this
form). An Applicant that already holds
a franchise need only list (1) systems where the franchise was renewed in the
last three years; (2) systems now being upgraded or rebuilt; and (3) systems
where the franchise is scheduled to expire in the next three years.
|
Location of System |
|
|
|
|
Date of Most Recent Franchise Award |
|
|
|
|
Plant Miles of System |
|
|
|
|
Date First Subscribers Served** |
|
|
|
|
Date Construction Completed*** |
|
|
|
|
Percentage of System Ownership Held |
|
|
|
|
Holder of Controlling Ownership Interest |
|
|
|
|
Current Subscriber Rates |
|
|
|
|
Name and Address of Local Government Officials
Responsible for Cable Operations |
|
|
|
* For purposes of this form,
"principal" means any officer or director of Applicant, and any
person, firm, corporation, subsidiary, joint venture or other entity, that owns
or controls 5 percent or more of the voting stock (or any equivalent voting
interest of a partnership or joint venture) of Applicant.
** In a case of
upgrade or rebuild, date first subscriber served by upgraded or rebuilt system.
*** In case of
upgrade or rebuild, date upgrade or rebuild completed.
2. Please list
other investments or affiliations, direct or indirect, with any media,
entertainment or telecommunications enterprise in which the Applicant or any
principal owns 5 percent or more of equity interest.
FORM I.C. FORMER
FRANCHISES
The Applicant and any principal*
shall list every community where it has received a cable television franchise
or operated a cable system without a franchise, and subsequently disposed of
all or a majority of its interest. (If
additional pages are needed, please reproduce this form).
|
Name of System |
Community |
Franchise Award |
|
Reason and Manner of Disposition |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FORM II. OWNERSHIP DISCLOSURE
FORM II.A. OWNERSHIP
INFORMATION
1. Organizational Structure
Sole Proprietorship Joint Venture
Partnership Unincorporated Association
Corporation Other (explain)
Officers
(if Corporation):
President
Vice
President
Secretary
Treasurer
If Sole
Proprietorship, list:
Owner
If
Partnership, list:
General
Partners
Limited Partners (if applicable)
2. Business Structure
a. If the Applicant is a corporation,
please list all members of the Board of Directors, their principal affiliations
and their addresses:
b. If the Applicant is a partnership,
please list all members of any governing body or management committee, their
principal affiliations and their addresses:
FORM II.B. OWNERSHIP
DISCLOSURES
Please
fully disclose:
(1) the names and positions of all City
officers and employees known to the Applicant to have any interest in the
entity submitting the application, and the extent of such interest;
(2) the names of all officers of the
Applicant (if not fully disclosed on Form II.A.) and the names and last-known
addresses of all persons who have acted as attorney, broker, consultant, or
agent of the Applicant with respect to the franchise application;
(3) the names and last-known addresses of
all persons who own or control any interest in the Applicant; in the case of a
partnership, joint venture or syndicate, the names and last-known addresses of
all partners or participants; in the case of a corporation having fewer than
two hundred stockholders, the names and last-known addresses of all
stockholders; in the case of a corporation having more than two hundred stockholders, the names and last-known
addresses of two hundred stockholders
who own or control the greatest percentage of voting and ownership interest in
the Applicant, except that corporations having more than two thousand
stockholders, and whose stock is traded on a national stock exchange, shall
disclose only those stockholders owning a stock interest of ten (10) percent or
more. For purposes of this disclosure
requirement, a person holding any ownership interest as trustee shall not be
deemed to be an individual, and all persons who may have any interest under the
trust, whether vested or contingent, shall be included in the required
statements;
(4) the names and last known addresses of
all holders of debt of the Applicant, other than stockholders or suppliers of
goods and services paid on a current account, in excess of five thousand
dollars ($5000) or one percent of the total outstanding indebtedness of the
Applicant, whichever is lesser; and
(5) the name and position of each City
officer, employee or immediate family member of any officer or employee to whom
or on behalf of whom the Applicant, officer or board member of Applicant; any
person in a senior management position for Applicant; and the person or persons
who are primarily responsible for the operations of Applicant within the City,
has made any gift, donation or political contribution of one hundred dollars
($100) or more within three years preceding the filing of the franchise
application, the name of the donor, and the amount or value of the gift,
donation or political contribution. As
to elected city officials, this requirement includes disclosure of donations to
their “principal campaign committees” and “authorized committees”, as defined
by 2 U.S.C. § 431.
FORM II.C. STOCK
INFORMATION
Please answer the following if the Applicant is a
corporation.
1. Is the
Applicant a publicly held corporation as defined by the rules and
regulations of the Securities and Exchange Commission?
[ ] Yes [
] No
2. Stock of
Corporation:
|
Class of Stock |
Par Value |
Vote per Share |
No. Shares Authorized |
No. Shares Issued |
No. Shares Subscribed |
Stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Does the
Applicant have any other obligations or securities authorized or outstanding
which bear voting rights either absolutely or upon any contingency?
[ ] Yes
[ ] No
If so,
submit a statement of (a) the nature of such securities, (b) the face or par
value, (c) the number of units authorized, (d) the number of units issued and
outstanding, (e) the number of units, if any, proposed to be issued, and (f)
the conditions of contingency upon which securities may be voted.
4. Is the
Applicant corporation directly or indirectly controlled by another corporation
or legal entity?
[ ] Yes [
] No
If
"yes," please explain.
5. Nationality
and State of Incorporation: __________________________________________________________
FORM II.D. OWNERSHIP
DISCLOSURE
The
Applicant (including all shareholders and parties with any financial interest
in the Applicant) must fully disclose all agreements and understandings with
any person, firm, group, association or corporation with respect to the San
José franchise or Applicant’s cable system in the City. This includes agreements between local
investors and national companies.
Please
append copies of any written agreements made regarding the ownership or control
of the proposed system. In the space
provided, please outline any oral agreements or understandings regarding the
ownership or control of the proposed system.
If
Applicant has sold or leased any part of the system, or capacity on the system
to any person, it should identify what has been sold or leased; to whom; and
for what purposes.
If Applicant
has had any discussions regarding the sale of the system or lease of the
system, or capacity on the system to any person, it should disclose these
discussions, and describe the status of those discussions.
FORM II.E. LIMITED
PARTNERSHIP
If the
Applicant is a limited partnership, please describe the structure of the
partnership and identify the general and limited partners and their principals.
FORM II.F. ADDITIONAL
OWNERSHIP DISCLOSURES
If, in
response to Forms II.B or II.E, the Applicant listed other partnerships or
corporations that are owned, controlled or managed by another corporation or
partnership, then additional forms for II.B and II.E shall be provided for such
corporations and partnerships. The same
shall be done for each partnership or corporation identified in these
additional forms and so on until the ultimate parent of all such entities is
identified. Information previously
provided on Form II.B need not be repeated here.
FORM III. FINANCIAL QUALIFICATIONS AND INFORMATION
An
important element of any response to this RFRP is an adequate demonstration of
financial capability to perform. Clear,
complete and documented financial information is required for the City to
determine the qualifications of the Applicant.
FORM III.A. SYSTEM
FINANCING PLAN
Please
attach a detailed description of the financing plan for any cable system
construction proposed during the period covered by your response to this RFRP.
Indicate the source and amount of financing required to complete the
construction in each of these categories, including internally generated funds,
newly issued equity, newly issued debt, and any other sources. Identify the issuer, and the anticipated
terms of any new debt and equity to be issued.
In describing the terms of financing, include interest rates,
collateral, guarantees, terms and conditions.
Documentation must be submitted which corroborates the commitment of
funds (where applicable) and lists the name, address, title and telephone
number of the appropriate contact person for each organization involved in
funding debt or equity. Copies of
financing agreements are to be submitted or otherwise made available for
inspection at the location indicated in the Instructions. Attach separate pages as necessary.
FORM III.B. APPLICANT'S
FINANCIAL STATEMENTS
(1) Please attach audited financial
statements, including statements of income, balance sheets and cash flow
statements, together with any notes necessary to the understanding of the
financial statements, for the last three fiscal years for the Applicant’s cable
system within the City of San José. If
audited information is not available, unaudited information is to be provided,
and certified as correct by the Applicant's Chief Financial Officer. In
addition, Applicant should provide separate information for any affiliate or
parent company where necessary to understand the statements for Applicant’s
system in the City, or where the debt, interest or other obligations or assets
or revenue or expenses of such affiliate or parent company are in any way
allocated to Applicant’s system in the City.
Any compensation received by Applicant’s owners or related parties from
the Applicant – whether in the form of salary, dividends, in-kind payments,
fringe or personal benefits, stock options, or otherwise – should be disclosed
as to type and amount in each year.
(2) For the last three fiscal years and
for each of the entities indicated above, to the extent not provided in the
statements identified above, identify:
(a) revenue by type (e.g., basic service,
other tier service, pay service, pay-per-view service, equipment rental,
installation, advertising, itemized franchise fees or other fees, etc.) and
expenses by type (e.g., programming costs, plant maintenance and technical
expenses, marketing expenses, customer service expenses, franchise fee
expenses, etc.)
(b) distribution plant miles, homes
passed, subscribers, listed separately, for each service tier, and pay units
(at year end and at previous year end if not already included).
As part of your response to this Form, please provide the
historical financial data requested above in the same format used in your
response to Form III.B.
FORM III.C. PRO
FORMA FINANCIAL PROJECTIONS
The
Applicant shall furnish tables following the format below and shall provide the
requested pro forma projections for the Applicant’s operations within the City
for the proposed franchise term (see Form XI), assuming franchises for the
territories specified in this RFRP are awarded on July 1, 2001.[7] If the system's assumed revenues or expenses
will reflect an allocation of assumed expenses or revenues for some other
entity, including, but not limited to, overhead allocations and management
fees, pro forma projections for such other entity should be provided as
well. The pro forma projections should
include approximately the same line-item level of detail indicated on the
attached forms, but particular details of presentation may differ if the Applicant
believes that alternatives are more appropriate given its internal accounting
practices.
Key
assumptions supporting the projections should be documented and submitted as
notes to the pro formas. In particular,
assumptions regarding upgrades, PEG requirements, franchise fee expenses, and
any other franchise requirements should be clearly identified and treatment of
associated costs or revenues in the financial projections should be highlighted
or explained.
Financial
pro formas must be based upon RFRP requirements. If the application deviates from those requirements, submit
separate and additional pro formas showing the financial impact of each
difference.
FORM III.C. PRO
FORMA FINANCIAL PROJECTIONS (continued)
Please provide the following financial projections for each
year of the proposed franchise term.
1. REVENUES YEAR 1 2 3 [to end of term]
Households
in franchise area:
-
total
-
homes passed
Beginning
subscribers
Net
subscriber growth
Penetration
percentage
New
subscriber connects
Household
reconnects
Subscriber
disconnects
Number of
basic subscribers
Number of
subscribers for other tiers
Number of
premium units
Number of
pay-per-view units sold
Revenue
per subscriber:
Basic
Other
tiers
Premium
Number
of subscribers for each premium service offered
Monthly
rate for each premium service offered
Pay-per-view
Converter/remotes
Extra
outlets
Installation
FM
Advertising
Home
Shopping
Other
(Specify ***)
TOTAL
FORM III.C. PRO
FORMA FINANCIAL PROJECTIONS (continued)
Revenue
(annual $ total):
YEAR 1 2 3
[to end of term]
Basic
Other
tiers
Premium
Pay-per-view
Converter/remotes
Extra
outlets
Installation
FM
Advertising
Home
Shopping
Other
(Specify ***)
TOTAL
Attach information explaining the assumptions upon which
these projections are made.
FORM III.C. PRO
FORMA FINANCIAL PROJECTIONS (continued)
2. STATEMENT
OF INCOME YEAR 1 2 3
[to end of term]
Revenues
Operating
Expenses
Programming
Technical
& Plant
Marketing
Administration
& General
Other
Operating Expenses
TOTAL
OPERATING EXPENSES
Operating
Income
Less
Depreciation
Amortization
Interest
on Debt to Corporate Parent/related entities
Other
Interest
Other
Expenses/(Income)