June 21^st, 1999

City County Building
Indianapolis, IN 46204

MEMBERS PRESENT:

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

MEMBERS ABSENT:

Charlie Hiltunen

OTHERS PRESENT: 

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

SUMMARY OF DISCUSSION

The first agenda item was the approval of minutes for the Cable Board’s May 17^th, 1999 meeting. Motion was made by Mr. Leonard and seconded by Mr. Nelson, to approve the minutes of the Board’s May 1999 meeting. Motion carried unanimously.

Mr. Curry requested a moment of reflection for the lives of Brian Hiltunen and Karen Rhodes.

The next item on the agenda was the Status Report on Audit of Cable Operators. Ms. Piety stated in last month’s board packets there were copies of the final report for the audit which was conducted by Mr. Karrison on the 1997 revenue and receipt transactions for both Comcast and Time Warner. Ms. Piety stated the Board asked Mr. Karrison to conduct the review to verify compliances with the new franchise agreement. Calendar year 1997 was the first full year the operators operated under the new franchise agreements.

Ms. Piety summarized Mr. Karrison’s report for Comcast and Time Warner. Comcast audit exceptions included bad debt deduction and launch fee revenues with $47,779 in franchise fees at issue. Time Warner audit exceptions were amounts billed as franchise fees but not treated as revenue launch fee revenues, and trip charges with $107,312 in franchise fees at the issue.

Mr. Leonard stated that the Board should discuss what the vote was several months ago regarding launch fees. Mr. Leonard also stated that it was his understanding that this issue had been determined and was an issue Mr. Karrison did not have to look into.

Mr. Nelson asked Ms. Piety what was the fee for Mr. Karrison’s review.

Ms. Piety stated the fees were between $15,000 and $20,000.

Mr. Curry asked Comcast and Time Warner if Ms. Piety characterized the letters and positions accurately with both operators responding yes. Mr. Curry stated the issue before the Board is whether or not the Board chooses to take any further action in response to the audit report. He stated Mr. Leonard raised a point that the Board voted at one time not to pursue this fee on fee issue.

Mr. Leonard stated his comment was not on the fee issue but the launch fees. Mr. Leonard also stated it was his understanding that Mr. Karrison would be instructed not to focus on the launch fee issue.

Mr. Curry stated that he recalls that with respect to launch fees, the Board decided to do nothing prior to 97 and would only look from this time forward because there had been a clear settlement of all issues of prior years. He recalls that the Board was going to look and see if moneys cam through the books and were not accompanied an offset for the same category. Mr. Curry stated as the Chair of the Board the position he has taken is cash is cash. If there is an offset for marketing expenses, since the money does not go through the books, that is not a revenue and there should not be a franchise fee charge. If the money comes through the books with an offset, it would be considered a revenue and a franchise fee charged. Mr. Curry stated he remembers the Board requesting Mr. Karrison to review Comcast and Time Warner to determine whether the launch fees are in this category.

Mr. Curry stated the question before the Board is whether to proceed to seek payment from Time Warner and Comcast for these franchise fees.

Mr. Leonard stated that he can agree with the cable companies if the amounts are offsets.

Mr. Nelson asked Ms. Piety what is the Board’s position legally regarding the position Comcast and Time Warner have taken. He asked Ms. Piety her opinion on these positions.

Ms. Piety stated how the operators account for their moneys either for accounting purposes or as shown on their books is not determinative as to whether those amounts should be included in gross revenues for franchise fee collection.

Mr. Leonard stating it’s his view that these gross revenues should not be considered as part of franchise fees. Also he stated that if the Board were to access the franchise fee, it would result some increase to cable subscribers.

Motion was made by Mr. Leonard, seconded by Mr. Nelson, to exclude launch fees from the gross revenues. The vote was 2 to 1, with Chairman Curry voting "No".

Mr. Curry stated the bad debt deduction for Comcast has been taken care of. Mr. Curry asked Comcast to confirm the resolution of this bad debt with Mr. Karrison.

Mr. Wilson stated that Comcast has sent a letter to Mr. Karrison in reference to the bad debt issue.

Mr. Curry stated in reference to amounts time Warner collected for trips to collect payments, the amount of franchise fees due is $2890.

Ms. Piety stated the representation from Time Warner is, as of January 1^st of 1999, Time Warner began paying a franchise fee for those amounts.

Mr. Satterfield stated it came to Time Warner’s attention that franchise fees were not charged on collection trips, and Time Warner began doing it on January 1^st.

Mr. Curry asked whether Time Warner has given thought to a plan to catch up on amounts billed as franchise fees but not included in gross revenues.

Mr. Satterfield stated he did not read in the Settlement Agreement that Time Warner had to pay before the Board requested Time Warner to do so.

Ms. Piety stated that the Settlement Agreement should be reviewed to come to an understanding as to what the agreement with the City says. The Board postponed until July a decision on this issue.

The next item on the agenda was the Status report of the Review of Cable Operators rate filings.

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. Mr. Maultra stated Comcast and AT&T reached an agreement to stave off their bidding war over Media One. Mr. Maultra stated if the deal is approved, this arrangement may prove beneficial for Indianapolis Comcast subscribers. Comcast President Brian Roberts has stated that Comcast wants to offer residential local and long distance phone service. The resultant effort could provide consumer choice between Ameritech and Comcast for local exchange phone service.

Mr. Maultra stated the Cable Agency has updated its website and has included new links to recent stories regarding the Media One takeover, AT&T’s bid and other cable news related stories that affect cable consumers of Indianapolis and Marion County.

The Agency has reviewed Comcast’s response with counsel as to Agency’s initial query about possible noncompliance issues and has followed that up with a response that eliminated some items from the list. Some issues remain unresolved at this time. The Agency is hopeful that its informal discussions prove successful in resolving pending concerns.

The FCC Chairman Kennard recently issued the Cable Consumer Bill of Rights in light of the recent cable deregulation for expanded basic service A copy of this document has been included in Board packet. Mr. Maultra stated the Cable Communications Agency will have this document available on its website via a link to the FCC.

The Cable Agency took a number of cable complaints over the past month and worked with Comcast and Time Warner in an effort to resolve those matters.

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 May. In May, there were 40 hours and 49 minutes of Live Meeting coverage. Tape Delay meetings totaled 3 hours. Special Events Production totaled 11 hours and 31 minutes.

In the area of In-Kind Production, Channel 16 had 13 hours and 58 minutes. Series Programs totaled 4 hours. Total new production for the month of May was 744 hours.

Mr. Montgomery stated in reference to additional notes that Crackback: One Neighborhood at a Time continues to earn accolades. The program was cited for a special judges’ choice award in the Hometown Video Awards, sponsored by the National Alliance for Community media.

Mr. Montgomery also addressed Channel 16 recommendation for Public Bid #ITB 1842, DVC-PRO Equipment. Mr. Montgomery stated that Dallas Richards in the City’s Purchasing Department has provided him with the responses to Public Bid #ITB 1842. There were five respondents from the thirteen bid invitations that were issued. Two of the respondents chose not to bid on the technical support gear, items 9 through 16 on the specifications sheet. Mr. Montgomery stated discussing with engineer, Jack Tapp, the need for technical repair tools for new machines with a year warranty. Channel 16 has decided to forgo the acquisition of repair tools this year. They will be budgeted for acquisition in 2000 or 2001, about $7K.

Mr. Montgomery included copies of all bid responses, noting that Communications Systems Group, Roscor and Consolidated Media have substituted Panasonic model AJ-d450 units for the AJ-D650, and/or AJ-D440 units for the AJ-D640. The substituted machines are Panasonic’s newest models, having more features for a lower cost. Mr. Montgomery stated, based on the bids submitted, he is recommending that the Communications Systems Group of Cincinnati, Ohio, be awarded the contract as the lowest responsive and responsible bidder, in an amount not to exceed $94,380.00.

Mr. Curry asked if the bid was within budget.

Mr. Montgomery stated yes, that this bid is under budget.

Motion was made by Mr. Leonard, seconded by Mr. Rhodes, to go with the low bid of $94,380 (Communications Systems Group). Motion carried unanimously.

The next item on the agenda was the Cable Operator’s Report. Mrs. Shary Johnson stated Time Warner lost 598 customers in its full cable service. Installations: Time Warner had scheduled 3,558 and completed 2,810. Incoming calls for the month were 40,260 with 92.3% answered in 30 seconds. Busy rate 1.02%. Service calls fore the month were 2,112 scheduled and 2,054 completed. Time Warner had 6 planned outages and 53 total outages. Mrs. Johnston stated that Time Warner had minor construction for the month, adding 5 units to an apartment complex.

The Community involvement reports supports a lot of different community events and programming, including producing a commercial promoting the Artsgarden Sunday Jazz concerts cosponsored by Time Warner and the Bravo Network.

Mr. Curry stated that from his understanding, Time Warner has an item in regards to Channel 8 which Time Warner would like to address the Board with a motion.

Mr. Satterfield stated that Time Warner has proposed relocating WISH TV channel 8 signal from cable channel 9 to cable channel 3.

Mr. Curry stated there was a plan to have a test in September for the Y2K and also work with the Emergency Management in Marion County. Mr. Curry stated that it is his thought that Channel 16 would produce some Y2K announcements that would inform and educate the public in reference to Y2K aspect in the Marion County.

Mr. Leonard stated it appears that the City will have use of the Channel after July 31^st 1999.

Mr. Curry stated that is correct.

Mr. Leonard stated there was a question that was asked of him concerning the operators use of the channel when PAI is not permitted to use the channel by the Franchise Agreements. Mr. Leonard stated it’s his understanding that the operator has a temporary use for the channel which would make the operator’s request distinct from the PAI request.

Ms. Piety stated that both the Cable Act section 611(D) and the City code section 851-403(E) gives the Board authority to establish conditions under which unused access capacity can be returned to operator with conditions on how the capacity can be used and conditions as to when the capacity will be returned to the City.

Motion was made by Mr. Leonard, seconded by Mr. Nelson, to approve Time Warner’s request for the temporary return of certain channel capacity currently designated as cable 17, is used to relocate WTBS as part of the resolution of the WISH 8 digital signal interference problem. The period of use by Time Warner will not exceed July 31^st, 1999, and in exchange of this use, Time Warner will donate 250 ad avails for use by the City County Y2K campaign. Motion carried unanimously.

Mr. Apple presented the Cable Operator’s May Management report for Comcast. Mr. Apple stated that Comcast had a good month with subscriber growth in May. Comcast had 102,160 calls; 67.25% of those calls were answered in 30 seconds or less. Comcast had 138 outages for the month, 52 of them were planned. Comcast received and scheduled 3047 calls and completed 2941; 33.0% were completed within 24 hours; 98.65 were completed in 36 hours or by customer request. Comcast scheduled 3730 installations and 3523 of those scheduled were completed.

Mr. Apple stated during the month of May, Comcast had 76.5 hours of community programming aired on Channel 50. WAV53 had 153.5 of locally produced programming. Comcast aired and produced 22 public announcements and 15 newsmaker segments. For Comcast events and sponsorships, see report.

The next item on the agenda was the ETC Report. Mr. Donaldson stated ETC conducted an organizational leadership summit on May 21^st, 1999. There were 17 member institutions represented. The primary discussion topic addressed was long range leadership for ETC. Since 1989, unpaid volunteers, serving the organization beyond their normal jobs, have provided leadership to ETC.

ETC stands firmly on a proven track record of management of the educational access resources of Indianapolis and Marion County. ETC has developed and implemented business strategies that have provided growth and quality programming on the primary educational access channel.

Mr. Donaldson stated while this operational strategy has kept educational access operational, it hasn’t provided for long range organizational growth. ETC will focus on establishing a paid management position to provide long-range leadership for educational access in Indianapolis and Marion County.

The dedicated manager will improve focus on the overall scope and direction of the organization. ETC is preparing for a major thrust in improving the programming on the EPS channel and fundraising.

Mr. Donaldson stated for discussion of the Board, ETC is requesting consideration for base funding of $50K annually from the Cable Franchise Board to sustain basic annual operations. These funds would be limited to funding for master control/playback, student intern stipends and programming expenses. ETC will continue to pursue avenues for external fundraising.

In 1994, ETC agreed to pursue a plan to reduce its dependence on funding from the Cable Franchise Board as its primary source of operational support. Funding provided from these Public Purpose Grants has been reduced from $75,000 to $30, 000.

During this same period, ETC has increased the amount of locally originated programming and started the process of building a second educational access channel (EPS).

The mission and dedication to preserving this local resource has been solid and efficient. ETC has pursued funding from local and regional foundations with little success. The current strategy, in conjunction with the Indianapolis Economic Development Corporation (IEDC) is to pursue corporate underwriting. In this effort, ETC has the support of IEDC Vice President Gerry Dick.

Mr. Donaldson stated the funding being requested for consideration is small in comparison to other initiatives funded by Cable Franchise Board and will provide stability for educational access in Indianapolis and Marion County.

In other business, Mr. Donaldson state ETC is evaluating an implementation plan for automated playback equipment similar to that used by WCTY, Channel 16 (Governmental Access). Leightronix Control Products is among the systems being evaluated. Upon completion of the evaluation, ETC will likely submit a capital equipment request for the purchase of the equipment.

ETC has been evaluating program suppliers for foreign language providers, and recently examined programming from the International Channel. The International Channel could supplement programming provided by SCOLA or Duetsche Welle. The International Channel provides entertainment and culturally oriented programming. The programming does include product endorsement commercials

Finally, ETC has elected Earl Harris as president of ETC, effective July 1, 1999. Earl is currently the Senior Producer Director of IPS Television for the Indianapolis Public School System. Earl has the capacity to serve ETC extremely well, as he served ETC as a student intern for several years as a student at IUPUI. Amy Warner, Executive Director of the Community Learning Network, IUPUI, will assume financial management accountability and David Donaldson will manage playback operations. Mr. Donaldson stated in May ETC had 0 hours of paid programming 382 hours of free or donated programming and 316 hours of SCOLA and 30 hours of Deutsche Welle.

Under Old Business, Mr. Curry stated that Public Access has presented a business plan which requested the amount of $300,000 for the issues laid out and the use of the 4^th access channel. Mr. Curry has stated a number of times that the channel is not available for Public Access, because it is an educational or governmental channel under the franchise and contracts. Mr. Curry stated that PAI does not have money for production and he would like to ask for $75,000 in the Cable Board budget to be made available to PAI as a grant for use in production. Mr. Curry stated he would like to know if the Board would support the recommendation to the Council Committee on Administration of the $75,000 grant to PAI.

Mr. Price stated that PAI has outlined 3 options for the Board which would make the 4^th access channel available for the community: 1) Officially designate the channel as a government (or education) access channel, and use the capacity to implement "community TV" in the interest of the public. 2) Change the City Code to require a public access channel or channels. 3) renegotiate the Franchise Agreements. Ms. Price stated she would encourage the Board to read the Time Warner vs. City of New York case stating the case shows that PAI can use the channel whether designated for Educational or Governmental use. Ms. Price stated the City has the ability to decide what can be done with the channel. Ms. Price suggested the Board allocate a sufficient amount of money that could accommodate the business plan PAI put in place asking for $300,000 of franchise fees a year as well as the amount of money PAI was asking for, separately, inside the PEG Equipment grant fund. She stated then it could be taken up whether or not the Board can make the 4^th channel available for use at the next month’s meeting.

Mr. Curry stated that he suggested proceeding with the allocation of the $75,000 figure. Mr. Curry stated to Ms. Price there were two opportunities for Ms. Price to make a supplemental case: 1) at the July board meeting, and 2) at the council committee meeting that will hear the Cable Board budget.

Ms. Price asked Mr. Curry how the $75,000 figure was determined.

Mr. Curry stated the PAI business plan was very well written but has a large "choke factor." Mr. Curry stated he feels he could get $75,000 through the budgeting process.

Ms. Price stated that she would like the Van Eaton law firm to give an assessment on the PAI business plan. Ms. Price also stated she feel PAI business plan is possible.

The next item on the agenda was the discussion of the RFI for the use of the fourth access channel. Mr. Montgomery stated the 1996 Cable Franchise agreements between the City of Indianapolis/Marion County and the two cable television operators (Time Warner and Comcast Cablevision) specifies the addition of a fourth educational/governmental access channel upon completion of the system rebuilds for both operators. By early 1999, both cable operators had completed the technical rebuilds of their respective systems, and notified the Cable Franchise Board that the required fourth access channel was available for programming.

Mr. Montgomery proposed the Migration of Programming from Channel 16 to the new 4^th channel. It is proposed that either the meeting or public affairs/informational programming that currently appears on Government Access Channel 16 be moved permanently to the fourth access channel. Mr. Montgomery stated the two benefits of taking this approach would be 1) Increased accessibility to meeting coverage; 2) elimination of Information/Public Affairs Program pre-emptions. See Proposal for Usage of the Fourth Educational/Government Access channel in Indianapolis/Marion County report.

Mr. Curry stated that, in anticipation of using the second government channel for government, a fiscal ordinance for the amount of $31,250 is necessary.

Mr. Montgomery stated that a fiscal ordinance may not be necessary. Earlier, when he presented the bid proposal to the Board, the bid amount was $96,000; however, the budgeted amount was $140,000, so there are extra unallocated moneys in character 4.

Motion was made by Mr. Rhodes, seconded by Mr. Leonard, to implement the plan for the 2^nd government channel. Motion carried unanimously.

Under new Business, Mr. Leonard discussed a proposed communication policy applicable to employees with the City who are assigned to the Cable Communications Agency and WCTY Channel 16 and are subject to the authority of the Cable Franchise Board. Mr. Leonard stated this policy applies to all staff members of the Cable Communications Agency and WCTY Channel 16 when making statements or preparing communications as a representative of or speaking on behalf of or for the Cable Communications Agency WCTY Channel 16, and/or the Indianapolis-Marion County Cable Franchise Board.

Mr. Leonard stated the policy as a staff member of the Agency or Channel 16 may not take the following actions as a representative of the Agency, Channel 16 or the Board without first gaining the express approval of the Board, as evidenced by a majority vote of the members of the Board.

Make any statement of support for or opposition to any proposed rule, regulation,

law or legislation, whether on the local, state of federal level; or

Make any statement or communications with regard to cable television or telecommunications policy, opinion or regulatory actions of other units of government, organizations, the media (including statements made during interviews and in communications, such as letters to the editor or press releases), or other third parties, specifically including but not limited to any formal or informal regulatory filings or documents communicated to other governmental entities, including the Federal Communications Commission, the Federal Trade Commission, or the Department of Justice.

The Board recognizes that some situations may require a statement or communications before the next scheduled Board meeting. In these situations, a staff member will need to consult with the Chairman of the Board regarding the proposed statement or communication. After the requisite public notice, if the Chairman of the Board is able to gain the consent of the most senior member of the Board appointed by the Mayor, the staff member will be authorized to go forward with the statement or communication, and such statement or communication will be ratified at the next Board meeting. However, if the Chairman of the Board is unable to gain the consent of the senior Board member appointed by the Mayor, so statement or communication shall be authorized without a formal, duly noticed meeting of the Board which the Board recognizes may be necessary in some situations to authorize a statement or communication.

Finally, no approval by the Board shall be necessary as to expressions of a staff member’s personal opinions so long as the personal opinions are qualified as such at the beginning of each statement or communication of such opinions. For example, it would be acceptable to the Board if a staff member would qualify such opinions with language such as: "the following is my personal opinion based upon experience as a staff member of the Cable Communications Agency or Channel 16 but does not necessarily represent the policy of the Indianapolis-Marion County Cable Franchise Board, Channel 16, or the Cable Communications Agency." No such statements or expressions of personal opinion are to be made on Agency or Channel 16 letterhead or within or as part of any Agency or Channel 16 communication or statement.

Mr. Rhodes stated that he has reservations concerning this proposed policy. Having served on the National Association of Counties Board of Directors for seven years, he has seen things happen at the spur of the moment. Mr. Rhodes stated that Mr. Maultra is a member of the NATOA board and many times when a statement is made it is not being reported as such. Mr. Rhodes stated that on a short notice Rick or Ken will not be able to stop in the middle of a discussion on something new, come outside, and call Carlton or get one of the Board members. Rick will have some things at the NATOA board that he knows the policy will be discussed and will be able to communicate issues with the Board. He feels this is a gag order against Mr. Maultra and staff stating he trusts the Cable Agency and Channel 16’s judgment.

Mr. Rhodes stated that Mr. Leonard is missing a point that the Cable Board has three appointments by the council and two by the Mayor and it is done that way as a policy statement. He cannot support the Policy concerning communication by the staff of the Cable Communications agency or Channel 16.

Mr. Leonard asked what point is he missing in reference to the three/two appointment.

Mr. Rhodes stated that if Mr. Maultra needs to contact someone it should only be the Chairman of the Board. The Chairman of the Board should not have to contact anyone else.

Mr. Curry stated there are risks in the veto aspect.

Me. Leonard asked that this policy be tabled until July Board meeting.

Under Public Comment, Mr. Chandler stated he would like a copy of the minority suppliers/employees report of the operators. He would like to see Board meeting held out in the community.

Steven Meyers stated he is in favor of the Public Access Business Plan.

James Smashey stated that moving the channels around is confusing and impossible. Mr. Smashey feels there needs to be a way to be more efficient with funding for Channel 16 and PAI.

Mr. Blair Karsch stated he is in favor of the PAI business plan. Mr. Karsh also stated he feels the local programming on TV is boring.

Mr. Carl Kakasuloft stated that he feels the Board being supportive of PAI with a grant of $75,000 is a step in the right direction. However, he feels that the 4^th channel should be used for PAI.

Andrea Price commented on the newspaper article in the Star and News. P.E. MacAllister is former PAI producer and is able to continue his programming. Ms. Price also asked when was the decision made to a 2^nd Government channel. Ms. Price also stated that PAI was against putting a muzzle on the Cable Communications Agency and Rick Maultra. It is necessary for Mr. Maultra to support the interests of the cable subscriber, and it is inappropriate to put limits on him.

There being no further business to come before the Board, Mr. Curry adjourned the meeting at 5:35 p.m.

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Carlton Curry, Chairman

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Steve Nelson, Member

___________Absent__________________
Charlie Hiltunen, Member

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David Leonard, Member

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Stuart Rhodes, Member

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Ms. Janise Winston, Recording Secretary