January 19, 1999

City County Building
Indianapolis, IN 46204

MEMBERS PRESENT:

Carlton Curry, Chairman
David Leonard, Member
Steve Nelson, Member
Stuart Rhodes, Member
Charlie Hiltunen, Member

OTHERS PRESENT:

Chairman Curry brought the meeting to order at 2:30 P.M.

The first agenda item was the approval of minutes for the Cable Board’s December 21, 1998 meeting. Mr. Curry stated that Ms. Piety suggested a change in the last paragraph of December 21 minutes concerning Mr. Montgomery’s and Mr. Maultra signature authority to contract for freelance engineering services. Motion was made by Mr. Rhodes and seconded by Mr. Leonard, to amend the minutes of the Board’s December 21, 1998 meeting as suggested. By consent the amended minutes of the Board’s December 21, 1998 meeting were approved. Motion carried unanimously.

The next item on the agenda was the status report of the Audit of Cable Operators. Ms. Piety stated Mr. Karrison has received complete information from Time Warner and the review for Time Warner is complete. Mr. Karrison has made a supplemental request for additional information from Comcast. Comcast has stated that until the Board has resolved the launch fee/ cash for carry issue, Comcast will not respond to this request.

 The next item on the agenda was the Amendment of Crowe Chizek Audit Agreement. Mr. Curry stated this amendment would allow Crowe Chizek to do a review of both operators for launch fees/cash for carriage amounts for 1995 and 1996 for a fee not to exceed $10,400. Mr. Curry suggested channels which might have launch fees associated with them would have to be checked.

Ms. Piety stated that both operators sent letters to the Cable Communications Agency explaining why the amounts they received from programming services were not revenues. Ms. Piety stated the purpose of amending Mr. Karrison’s contract is to allow him to verify the information contained in the letters from the cable operators to assure the Board that these amounts are not revenues.

Mr. Curry stated that the issue is whether there is a desire by the Board to pursue this review of all 26 channels, to reduce the number, or to check non at all.

Mr. Rhodes stated he feels that Board should at least verify the information received from the cable operators. He feels that verifying all 26 channels is not needed, but that it is necessary to verify the information from Comcast and Time Warner. Mr. Rhodes moved the amendment but limited the review to 10 channels.

Mr. Curry stated the motion is to adopt the amendment to the agreement but to reduce the scope to the review of 10 channels.

Mr. Hiltunen asked whether the Board is trying to determine whether the cable operators received monies and did not include them as revenues.

Mr. Curry stated that the responses from both cable operators indicated there are no revenues that have not been reported.

Mr. Hiltunen asked how the City would verify whether the amounts are revenues.

Ms. Piety stated Mr. Karrison would need to verify that the amounts are there and not treated as revenues. Ms. Piety stated the review that Mr. Karrison has conducted does not specifically include the review of any cash for carriage or launch fee amounts.

Mr. Curry stated that both Time Warner and Comcast state there are no revenues that would fall in the category of revenues subject to franchise fees.

Mr. Curry seconded Mr. Rhodes’ motion, to adopt the amendment with the review limited to ten channels.

Mr. Wilson of Comcast stated that it appears there is already a preliminary report from Mr. Karrison as the Cable Agency’s letter to the operators states that no launch fees or cash for carriage amounts have been included as revenue. Mr. Wilson stated that as Comcast attorneys have written to the Board Comcast accounts for launch funds as an offset to expenses. Mr. Wilson stated that whether there are any revenues in Comcast’s financial statements has already been acknowledged by Mr. Karrison.

Mr. Curry stated the issue is whether the amounts are recorded as revenues or not. If no amounts are recorded as revenues because the accounting records show no cash flow to the company, but instead an offset to expenses. Then there is no revenue and therefore franchise fees are due. Mr. Curry stated Mr. Karrison as an expert would be asked to determine whether not in fact that is how the books read.

Mr. Jay Satterfield of Time Warner asked, if the City goes through the actual review, what would satisfy the City as accurate information? What is it that Lou Karrison is checking?

Mr. Curry stated that Mr. Karrison will be checking whether the characterization of amounts as represented by letter by both cable operators is the fact and not revenues existing for the franchise fee calculation.

Mr. Rhodes and Mr. Curry voted in favor of the motion to adopt the amendment. Mr. Nelson, Mr. Hiltunen and Mr. Leonard voted against the amendment. The motion failed, 3 to 2.

The next item on the agenda was a fiscal ordinance presented by Mr. Montgomery to move $23,000 from character 1 to character 3 in the budget. Mr. Curry stated before this ordinance proposal is sent to the Council for introduction, he would like to have the Board’s approval. Motion was made by Mr. Rhodes, seconded by Mr. Hiltunen, to transfer $23,000 from character 1 to character 3 for Channel 16 to pay for the contractual services. Motion carried unanimously.

The next item on the agenda was the status report of the review of operator rate filings. Ms. Piety stated that Mr. Karrison has provided to the Cable Agency a second request for documentation from Comcast and Time Warner. Ms. Piety stated the City is reviewing Time Warner 1240, which is the basic tier cable rate, and for Comcast the City is reviewing both the 1240 and 1205 forms.

Ms Piety stated that on December 21, 1998, Time Warner sent to Mr. Maultra a 1999 Form 1205 which Time Warner had filed with the FCC. Ms. Piety stated this form shows equipment and service rates for basic tier service. Time Warner’s Social Contract permits Time Warner to establish blended equipment rates by geographic region with such rates adjusted annually. Time Warner may begin charging the new rates upon thirty days’ notice to subscribers. New rates are subject to refund if the FCC concludes lower rates are appropriate. The local franchising authority is responsible for enforcing the FCC established rates. Time Warner’s Form 1205 rates for 1999 were compared to its actual published charges. Time Warner’s actual charges are equal to 3 or less that the Form 1205 rates.

The next item on the agenda was the Cable Agency Report. Mr. Maultra presented the Cable Agency report which highlighted the events that have taken place at the Cable Agency in the last month. The Cable Agency received a high volume of cable complaints this month. Most of those were directed at Comcast due to the problems they have incurred when they switched companies that perform their billing. Most of the complaints were from subscribers who thought they had been double billed: That is, a subscriber would have paid $30 on January 8 and then receive a bill for double that amount a few days later. Essentially the Cable Agency, based on Comcast’s advice, has told subscribers that appear to be double billed to subtract what they previously paid from the new bill’s amount and that should be their balance. The appearance of the double billing has taken place because, when Comcast switched over to the new billing company, there was some lag time in how the subscribers would normally receive their bills. As an example, subscribers who normally would have received a bill the first part of December were receiving it in late December, then receiving a new bill a few days later from the new billing company. It is the Agency’s understanding that late fees will be waived by Comcast. Comcast may want to add shed some light on the billing quandary when it present its monthly report.

The Cable Agency received a second request for information to the cable operators from Lou Karrison of Crowe/Chizek so that he might perform the rate review on the original submissions of the FCC 1240 forms, which pertains to rate, and the Form 1205, which generally pertains to rate adjustments to associated equipment.

The Cable Agency participated in a meeting at the Federal Communications Commission (FCC) regarding a number of cable issues that included filing rate complaints before March 31 1999 as well as those pending before the Cable Services Bureau. The franchising authority was invited to this meeting that included other participants.

The Agency has done some follow-up work with its filing pertaining to the SBC/Ameritech takeover. As the FCC’s Common Carrier Bureau is handling the matter, the Agency wants to ensure that the cable competition questions and concerns are addressed regarding this potential business transaction.

The Cable Agency has worked with both cable operators in mediating a number of customer cable problems with a summary and breakdown of the problems attached to the Agency report.

Mr. Hiltunen asked about the phase out of the rate regulation of the expanded basis tier service and when that phase out takes place.

Mr. Maultra stated the phase-out will take place on March 31, 1999. Mr. Maultra stated the Board regulations for the limited basic tier will be the extent of rate regulation of cable operators.

Mr. Leonard asked if Mr. Maultra would know how the Federal Government is treating the SBC merger in regard to cable service?

Mr. Maultra stated that the Government feels that Ameritech/SBC merger will be decided sometime mid -summer.

The next item on the agenda was the Channel 16 Programming Report presented by Mr. Montgomery. Mr. Montgomery highlighted some of the activities of Channel 16 for the month of December. In December there were 27 hours and 26 minutes of live meeting coverage. Tape Delay meetings totaled 2 hours and 32 minutes. Special Events Production totaled 12 hours and 55 minutes.

In the area of In-Kind Production, Channel 16 had 16 hours and 4 minutes. Series Programs totaled 6 hours. Interactive Information Service Usage totaled 640 calls for the month and 10,639 calls for the year. Mr. Montgomery presented a 1998 Activity Summary showing comparison with past years’ monthly production out and live meeting coverage etc.

The next agenda item was the Cable Operator’s Report. Ms. Shary Johnston thanked Mr. Maultra and the Cable Board for the use of Channel 17 for its programming of CSPAN 2. Time Warner completed 3,226 installs for the month of December with 3,887 scheduled. The subscriber report in Time Warner’s monthly report is not accurate, and the Board should receive a revised report shortly. Incoming calls for the month were 39,543 with 97.1% answered within 30 seconds or less. Busy rate was 0.8%. Service calls for the month were 1,758 scheduled and 1,710 completed. Time Warner planned 0 outages for the month and had 33 outages. Ms. Johnston stated the upgrade is completed.

The Community Involvement Report supports a lot of different community events and programming, including producing promotional spots for the Phoenix Theatre’s "How I Learned to Drive", the Indiana Repertory Theatre’s "Ballyhoo", the American Cabaret Theatre’s "Take this Job-Part", "Six Thirty P.M’s Blade Promotion", and "Rangeela Punjab" the February 6, celebration of Northern Indiana culture sponsored by Time Warner Cable. Ms. Johnston also stated there were some reporting errors in the Harvard Survey, and she would like the Harvard staff to review her concerns.

Mr. Mark Apple presented the Cable Operator’s December Management Report for Comcast. Mr. Apple stated that Comcast went from 28 billing cycles to 4 which means fewer billing days for Comcast. This change caused Comcast to have numerous of calls from subscribers in regard to billing issues. Mr. Apple stated in regard to the Emergency Alert system, Comcast has the system up and running as of last week

Mr. Apple stated Comcast’s ending total subscribers are 110,575. For incoming calls, Comcast had 108,652 calls; 60.47% of those calls were answered in 30 seconds or less. Comcast had 53 outages for the month, 0 of them were planned. Comcast received and scheduled 3,062 calls and completed 2,659; 61.0% were completed within 24 hours; 95.8% were completed within 36 hours or by customer request. Comcast scheduled 3,949 installations and 3,848 of those were completed.

Mr. Apple stated that during the month of December, Comcast had 35 hours of community interest programming aired on Channel 50. WAV 53 had 147 hours of locally produced programming. Comcast aired and produced 10 public service announcements . for Comcast community events and sponsorships. See Report.

The next item on the agenda was the ETC Report. Mr. Donaldson presented the ETC report. Mr. Donaldson stated the Recovery Network was successfully launched on the Education/Public Safety Channel (EPS) on January 1, 1999. ETC will be airing student-produced segments from Pope John Paul II’s visit to St. Louis January 26-28 . Four area High School Students from Cardinal Ritter H.S. and Bishop Chatard H.S. will accompany WRTV Channel 6 reporter to St. Louis and file daily reports about the Pope’s visit. ETC has reserved a one-hour from 10-11 am slot to air the reports. Media Releases have been sent to Indianapolis schools wishing to view the programs. Checks for the unused allocations of the Capital Equipment Grants for ETC in the amount of $4618.11 and $6812.89 have been sent by Indiana University to the City of Indianapolis, to the attention of Jeff Seidenstein in the Controller’s Office. Mr. Donaldson stated due to bad weather, programming on Wednesday, January 13^th was pre-empted with satellite programs at 5:00 PM. This was a result of the cancellation of classes and activities at IUPUI. Deutsche Welle has been contacted about adding their programming to either ETC or EPS as a permanent programming block. This programming has been used in the past as ad hoc programming to fill certain time slots. The Indiana College Network will be modifying its programming schedule effective June 30, 1999. These changes will likely impact the programming currently scheduled on the Education/Public Safety Channel. Current plans call for locally produced educational programs to replace the ICN programming.

Under Old Business, Mr. King and Mr. Stoughton presented the Harvard Survey study of Time Warner and Comcast defining their qualities and values. See Harvard Survey in December board packet. There were some corrections that were suggested by the cable companies and by Harvard staff.

Mr. Curry stated that there were 2 to 3 specific pages with errors. He asked the best way to replace those with corrected so that all copies receive them.

Mr. King stated that the pages of the Harvard Survey distributed will be redistributed with corrections.

Mr. Curry thanked Mr. King and Mr. Stoughton for presenting the Harvard Survey and making all necessary corrections ahead of time.

Under New Business, Mr. Montgomery submitted for the Board’s consideration a 1999 PEG grant funding request. Mr. Montgomery stated the request for PEG grant funding for Channel 16 is for $70,950 and will replace playback decks. Mr. Montgomery stated the description and quantities of the purchase for 1999 is 15 Panasonic AJD 220 playback decks.

Motion was made by Mr. Rhodes and seconded by Mr. Nelson, to adopt the 1999 PEG grant funding request by Channel 16. Motion carried unanimously.

 Under Public Comment, Andrea Price stated that PAI was pleased with the Harvard Survey. Ms. Price also requested about 30 minutes during the next Board meeting for presentation of PAI business plan and for comments and questions.

Mr. Curry stated that if time allows M. Price will be put on the agenda under New Business.

Mr. James Smashey addressed the issue of telephone, cable, and rate increases and the sunset ruling. He is upset with the new increase by Time Warner and the sunset ruling of the expanded basic tier.

Mr. Curry congratulated Mr. Nelson and Mr. Leonard on their re-appointment by the mayor to the Cable Franchise Board. Mr. Hiltunen and Mr. Curry are in the process of being re-appointed by the Council.

There being no other business to come before the Board, Mr. Curry adjourned the meeting at 4:45 P.M.

_______________________________
Mr. Carlton Curry, Chairman

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Mr. Charlie Hiltunen, Chairman

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Mr. David Leonard, Member

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Mr. Steve Nelson, Member

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Mr. Stuart Rhodes, Member

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Ms. Janise Winston, Recording Secretary