SUBJECT: THIRD AMENDMENT TO AGREEMENT WITH MILLER & VAN EATON FOR CABLE FRANCHISE CONSULTING SERVICES
Adopt a resolution authorizing the City Manager to negotiate and execute a third amendment of an agreement with Miller & Van Eaton for cable franchise consulting services in an additional amount of $350,000 for a total contract cost not to exceed $696,000 and to extend the term of the consultant agreement to June 30, 2002.
BACKGROUND
Negotiations have been ongoing since 1999 with Heritage Cablevision of California, formerly dba “TCI of San Jose’, now AT&T Broadband. Council is aware that negotiations have progressed very slowly and as a result, the franchise has been extended twice, with the most recent extension effectively to September 30th, 2001.
The federal Cable Act provides two renewal procedures: a formal process and an informal process. From the outset, the City pursued both processes in parallel fashion. Most franchises are renewed through the informal negotiation process, which is the approach that the City has followed from the outset of the renewal process in 1999. Concurrent with these negotiations, however, due diligence was pursued to prepare for entering into the formal negotiation process, should that be necessary. This has included conducting past performance investigations and future needs assessments.
Due to the complexities of the cable franchise renewal process, the City contracted with Miller & Van Eaton (MVE), a nationally recognized law firm specializing in federal telecommunications law. MVE has extensive experience assisting municipalities with cable franchise renewals and other telecommunications-related matters. The MVE contract includes the services of two subcontractors: 1) The Buske Group, specializing in the community ascertainment process as prescribed by the Cable Act; and, 2) Columbia Telecommunications Corporation, engineering specialists with expertise in cable system design.
Though some progress has been made in the City’s effort to reach a negotiated settlement with Heritage, significant issues remain unresolved, including: support for Public, Education and Government (PEG) Access and creation of an Institutional Network (I-Net), a fiber optic system carrying voice, video and data to connect government buildings and link the City’s nineteen school districts and approximate 200 school sites.
The City is now preparing to proceed with the formal process, as directed by Council at its March 20, 2001 meeting. Miller and Van Eaton, The Buske Group, and Columbia Telecommunications Corporation will provide consulting services to complete the process as established in the federal Cable Act that consists of the following:
· Complete an analysis of the cable operator’s past performance
· Complete an analysis of the community’s needs and interests
· Prepare and issue a request for renewal proposal (RFRP) to the cable operator that establishes basic requirements that AT&T must meet
· Evaluate responses to the RFRP. If the response is received favorably by the City, the franchise can be renewed. If the City believes that the proposal is inadequate, the renewal may be denied. The cable operator may then request an administrative proceeding. In that event, the City Council makes the final decision to grant or deny a franchise renewal based on the record of the administrative proceeding and issues a written final decision. The City’s decision may be appealed to a court, but it will not go to court. Rather, the court’s review will be based on the record of the proceedings conducted by the City.
The following timetable has been established for completion of the RFRP process.
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June 19th |
Council receives public input on draft needs assessment and draft RFRP |
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August 21st |
Council considers approval of final needs assessment and RFRP |
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October 19th |
Heritage Proposal Due |
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TBD |
Council considers Heritage Proposal |
If AT&T’s proposal is responsive, a new franchise could be completed quickly. If the City Council preliminarily denies the proposal, additional timing becomes more difficult to project. While this process is underway, informal negotiations will continue with Heritage as long as the company is willing to participate.
The time and cost involved in these negotiations are significant. However, there is currently an approximately $13 million gap between the City’s and Heritage’s positions, and it is the opinion of the consultants and City staff that the likely benefit from the formal process far outweighs the additional expenditure under this contract extension.
COST IMPLICATIONS
The additional $350,000 necessary for consultant services to pursue the formal franchise renewal process with Heritage, was approved by City Council during the FY 2000-01 mid-year budget process.
Additional meetings will be held during the first step of the formal process to complete the future needs assessment.
This report was coordinated with the City Attorney’s Office.
Tom Manheim
Public Outreach Manager