Item 4: Ordinance Granting Comcast of Oregon II, Inc., an Additional Term and Franchise Renewal

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Public Hearing: An Ordinance Granting Comcast of Oregon II, Inc., an Additional Term and Franchise Renewal for the Operation of a Cable Communications System; Amending Ordinance 19775; Adopting a Severability Clause; and Providing an Effective Date Meeting Date: October 15, 2007 Agenda Item Number: 4 Department: Central Services Staff Contact: Pam Berrian www.eugene-or.gov Contact Telephone Number: 682-5590 ISSUE STATEMENT This is a public hearing on a proposal to renewal and amend the current cable television franchise for a 10-year term. Action on the ordinance to adopt the franchise is scheduled for October 29, 2007. As in the past, the cities of Eugene and Springfield and Lane County coordinated their positions on franchise renewal and negotiated jointly with Comcast. The current franchise sunsets in July 2008. BACKGROUND Franchises are long-term agreements for private commercial use of the public rights-of-way. They are not exclusive. Eugene’s current cable TV franchise is 38 pages addressing operating definitions, compensation, reporting, revenue territory, customer service, construction permitting, and provision of community access channels for public, education and government (PEG) uses. Programming and rate issues, except those involving the Basic Tier, are not within local government purview. The 1991 franchise (Ordinance 19775) that is the focus of the current renewal process was between TCI Cablevision of Oregon and the City of Eugene. Identical but separate franchises were adopted by the City of Springfield and Lane County. With City Council approvals, the franchise was transferred to AT&T, and later to Comcast. Under Ordinance 20083 (codified mostly at EC 3.400 to 3.430), rights-of-way use fees and taxes apply to Comcast, subject to a federal statutory 5% limit on franchise fees. Comcast pays the 5% fee for use of the public rights of way plus a 2% cable communications business privilege tax. Comcast and staff for the three local franchising authorities began discussions about franchise renewal nearly two years ago. Comcast asserted that it was entitled to a renewal or extension of the current franchise on the same terms. Staff for the three jurisdictions disagreed and were prepared to initiate formal franchise renewal procedures which would include a Community Needs (or Ascertainment) Survey. After months of discussion, both sides agreed to focus on negotiating terms of a renewed franchise that would be mutually acceptable, instead of resorting to litigation to resolve the procedural disagreement. F:\CMO\2007 Council Agendas\M071015\S0710154.doc