10/09/1978 Meeting - Laserfiche WebLink

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Those speaking in favor were the following: e Dennis Percell, 5055 Nectar Wa~, attorney representing Teleprompter. Experts had been employed who 1ndicated a 15-year franchise term is reasonable. He reviewed for Council's consideration what the effects of changing that term might be. Businesses must allocate a period of time over which to amortize their debts to get a fair rate of return on their investment. The result of a 15-year franchise is of benefit \ to the subscribers in lower rates. Teleprompter is committed to a $900,000 investment over a three-year period. After that, to keep up with growth, the investment will be approximately $1 million per year. If the franchise term were reduced, it would be necessary to renegoti- ate the franchise because of the effect on amortization of these debts. He noted critics say the 15-year term "locks" the city in. He said they are not locked in, as all issues in the franchise can be reopened for negotiation whenever there is a problem, or every three years. Such things that could be discussed are how channels are used, extension policy, 'technical quality, franchise fee, and all new technical and legal problems that might arise. The effect of the renegotiation clause would be that, if Teleprompter did not agree, then it would go to arbitration. If after arbitration Teleprompter did not comply, the jurisdictions can penalize Teleprompter or can terminate the franchise. In regard to profits, Mr. Purcell had reports that showed Telepromter's e profits in this area were not unreasonable. He also said Teleprompter puts more money into the community than it takes out. Rega rdi ng the competitive bidding system, he said this is a nonexclusive franchise and asked Council to also consider the motives of the opposition. Initially, their criticism was whether or not a public body would pro- vide $70,000 for public access. Since that time, the 15-year franchise term has been raised. He asked Council to consider the critics expertise as opposed to the expertise of those who had negotiated the franchise agreement. He thanked the Commission and staff members for their hard work, and said he felt this was a good franchise. Those speaking against the franchise were as follows: Don Chalmers, 2500 Spring Boulevard, felt it would be a mistake for Eugene to tie itself into a 15-year franchise. He noted there will be an installation charge rate increase immediately after this ordinance is adopted. He said Teleprompter will be Changing from HBO to Show Time, whose programming is significantly less than HBO. Teleprompter operating profits had gone from 28.6 percent to 39.7 percent in two years. In regard to the testimony by Mr. Horn, that a l5-year franchise term is reasonable, he said Mr. Horn is funded by cable TV companies and would thus be inclined to support their view. He cited five experts who felt a 15-year term was too long, and favored a lO-year maximum franchise. e, - 10/9/78--5 "5