Item 6: Ordinance on Comcast Renewal

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Action: 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 22, 2007 Agenda Item Number: 6 Department: Central Services Staff Contact: Pam Berrian www.eugene-or.gov Contact Telephone Number: 682-5590 ISSUE STATEMENT The proposed ordinance reflects a staff proposal to renew and amend the current cable television franchise for a 10-year term, shorter than the current franchise. 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. However, if the franchise is not renewed through the informal process that resulted in the tentative agreement described below, the franchising authorities will need to begin a costly formal renewal process immediately in order to complete it before the current franchise expires so that data is available upon which the council can make a decision on renewal. 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 26- pages long and addressed operating definitions, compensation, reporting, revenue territory, customer service, construction permitting, provision of community access channels for public, education and government (PEG) uses and more. Programming, channel line-ups, and rates, except those involving the Basic Tier, are not within local government purview. The 1991 franchise (Ordinance 19775) 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 the City Council approvals, the franchise was transferred to AT&T, and later from AT&T 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 five percent limit on franchise fees. Comcast pays the five percent fee for use of the public rights-of-way plus a two percent business privilege tax (as do other telecommunications companies doing business in the City). Comcast and staff for the three local franchising authorities began renewal discussions nearly two years ago when 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 F:\CMO\2007 Council Agendas\M071022\S0710226.doc