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Cable Communication agency 1998 annual business report
1998 was a tremendous year for the Cable Communications Agency that was marked with achievement and noteworthy firsts. Like the previous two years, the Cable Communications Agency has made a positive impact on local, state and national telecommunication and cable issues.
LOCAL EFFORTS & ACCOMPLISHMENTS
Occasionally, the efforts that the Cable Agency apply to local issues impacts national issues and agencies. As an example, the Federal Communications Commission (FCC) issued a ruling on the rate complaint filed by the Cable Communications Agency against Time Warner Cable and found in favor of the City of Indianapolis and its Cable Communications Agency. The Agency had actually filed two rate complaints, one for 1997 and one for 1998. The FCC, in mid-year 98 gave their ruling. Consequently, Time Warner customers received credits to their cable bills adding up to about $500,000 in total.
Near the end of 1997, the Cable Agency had filed a rate complaint on behalf of the Comcast cable subscribership, but the FCC found in favor of Comcast as to the reasonableness of their rates.
Through initiatives made by the Cable Communications Agency, the Indianapolis Public School (IPS) Board now has their meetings cable casted on educational access . This was a long running effort that the Cable Agency had worked on for the last three years. The Agency was diligent in keeping this matter visible and therefore viable through its contacts at IPS and other entities. The coverage of the IPS Board meetings is consistent in keeping with our mission and goal of coverage of meetings of entities that are tax payer funded. Media accounts in the Indianapolis Star note that lately the meetings have run smoother. The exposure these meetings receive from cable casting and the accessibility generated by their airing has proven to be a real positive for the Indianapolis community.
A couple of years ago the Cable Communications Agency took Mayor Stephen Goldsmith's idea for in-kind service accounting and incorporated it into our business plan at Channel 16, the City of Indianapolis Government Access Station. This also reflects the 'value added' service philosophy of the Administration. From this, the Cable Agency targeted those UNIGOV agencies that were ripe to raise revenue for through TV production projects and marketing at Channel 16. From this, over $3 million dollars was raised for the Children's Guardian Home through this Agency initiative. Channel 16 produced a touring video that the Guardian Home and its Foundation was able to play at presentations before the philanthropic community.
Additionally, Channel 16 played back this video presentation as well as producing a 30 second public service announcement (PSA) that the Cable Agency secured via its talks with Comcast, which serves home to the Indianapolis Interconnect. This allowed the PSA to be played thousands of times locally on popular cable networks such as CNN, MTV and ESPN. The Christel DeHaan Family Foundation and the Lilly Endowment were the big contributors to this noble cause. Others contributed through estate planning or otherwise after they saw the 30 second public service announcement produced by Channel 16 air on either Channel 16 or another cable channel. Through the success of this initiative, the Cable Agency has matched Channel 16 with the Indianapolis Public Library Foundation in implementing an identical program in an effort to raise money for this taxpayer supported entity. Producer Jeff Coats of Channel 16, received a national Telly Award for his production efforts of the Children's Guardian Home Foundation Video.
Channel 16 continues its in-kind policy initiated by the Cable Agency three years ago. For 1998, Channel 16 provided $135,372 through in-kind services to UNIGOV departments and agencies. These were services that these agencies and departments would have otherwise had to pay for should they have contracted out the services.
The Cable Communications Agency provided extensive research at the request of City-County Council members and city officials from other departments. This research included the areas of right of way management and compensation as well as personal communications services (PCS) tower siting and zoning matters. The Cable Agency submitted filings to the Federal Communications Commission that spoke to upholding local authority on tower siting issues. The Agency made recommendations to the Department of Capital Assets Management (DCAM) regarding their proposed Wireless Tower Zoning Ordinance. After extensive research, as well as the exposure of attending a number of sessions on the issues, two of the key recommendations that the Cable Agency offered was to keep PCS towers away from residential areas by creating a minimum buffer or camouflaging towers that are in or buffer those residential areas or greenways and parks. The Agency also strongly pushed for co-location of sites. The Cable Agency also researched management companies that market city property to find a provider in order to generate some revenue but more importantly, to encourage co-location and therefore minimize the porcupine effect that the explosion of tower site construction will create.
During July of 1998, the Cable Agency facilitated a tour of Channel 16 for the City of Terre Haute and the Mayor of their sister city of Tajimi, Japan with the idea in mind that Tajimi wanted some pointers on forming its own government access station back in Japan. The Mayor of Tajimi noted that his tour of Channel 16 was the highlight of his trip.
During the NATOA (National Association of Telecommunications Officers & Advisors) Annual Conference, Cable Franchise Board Chairman Carlton Curry, Assistant Corporation Counsel Peggy Piety and Cable Agency Director Rick Maultra had positive discussions with Ameritech New Media (ANM, Ameritech's cable TV division) about possibly providing cable competition to the Indianapolis/Marion County marketplace in the future.
Over the last four years, the Cable Agency and Channel 16 have been good stewards of the franchise fee appropriations granted to us by the Cable Franchise Board and the City-County Council. The following shows monies that involve both the Cable Communications Agency and Channel 16 combined.
BUDGET ACTUAL SPENT RETURNED TO GENERAL FUND
1998 $841,096 $682,886 $158,210
1997 $841,096 $659,279 $181,817
1996 $761,296 $618,557 $142,739
1995 $874,342 $655,680 $218,662
Finally, the franchise fee revenue that the City of Indianapolis receives from the cable operators per the franchise agreement, came in higher than projected for 1998. The projected franchise fee amount from Marion County's two cable operators, Comcast and Time Warner was $3,356,484. The actual received for 1998 was $3,965,308 for a difference of $608,824 in the positive.
Cable complaints at the end of 1998 were 831 for Comcast and 528 for Time Warner. This compares to 959 for Time Warner and 918 for Comcast in 1997. From this, we can draw a conclusion that Time Warner has improved its cable system via the fiber optic rebuild over the last year and therefore improving its reliability. We would also conclude that Time Warner has improved upon its customer service staffing from 1997 to bring down their complaint numbers in 1998.
While the numbers for Comcast appear to be a wash from 1997, their numbers increased dramatically for a one month measurement in December when they suffered from their change in billing company debacle that registered over 150 complaints for December alone. Otherwise, we conclude that Comcast has made some moderate improvement in the number of complaints received by our offices. This is probably due in large part to the completion of their fiber optic upgrade and the system becoming more reliable. This is certainly evidenced by the outage comparisons for year end 1997 compared to year end 1998. The reliability of Comcast's system improved nearly two-fold while the reliability of Time Warner's system has improved three-fold over what it was a year ago.
Where the cable operators need to improve, in the estimation of the Cable Agency, are in the following areas:
For Comcast, their largest complaint is in rates, nearly six times the rate complaints as Time Warner customers report for year end 1998. This indicates a real problem and perception among Comcast subscribers. Comcast needs to exercise greater restraint in pricing or improve their explanation for value to their customers. Additionally, Comcast needs to improve in their customer service. This would also include a needed improvement in meeting the FCC requirements for answering the phone within 30 seconds and busy rate thresholds under the FCC rules.
For Time Warner, there is still room for improvement in the area of outages, though the Agency thinks that this is becoming a reality given their 1998 performance as well as their high marks in their December of 1998 report. What concerns the Cable Agency is Time Warner's continuation of billing customers for services that they did not order. This happens with the monthly program guide as well as Pay Per View (PPV) movies. This is the consistent feedback our office receives from Time Warner customers and the Harvard Cable Television Quality and Value Survey would certainly support this. In fact, in the survey, 48% of the Time Warner subscribers polled said that they were receiving program guides without requesting them and later billed. The same survey indicated that 43% of the Time Warner subscribers were being billed for movie specials or pay-per-view movies without having ordered them.
STATEWIDE EFFORTS & ACCOMPLISHMENTS
The Cable Agency continued its efforts on the IACT (Indiana Association of Cities & Towns) Telecommunications Task Force in developing a model Right-Of-Way (ROW) Ordinance that may be used by Indiana municipalities. The Agency also testified before the Indiana House Commerce Committee and provided documentation to both the House and Senate Commerce Committees that spoke of proper compensation by those who use the public right of way. Users of the ROW being those who cut and degrade public streets and easements and therefore should properly compensate the City, as taxpayers have paid for and continue to pay for the maintenance and acquisition of the public right of ways.
The Agency assisted the City of Columbus in establishing a government access station with their franchise by reviewing and offering advice on the station's business plan as well as facilitating a tour of our Channel 16.
We moderated a panel on cable TV franchising for IACT's annual conference at the Westin Hotel. From this we found a number of problems and abuses by those smaller communities who have TCI (Telecommunications Inc.,) as their cable operator. We offered IACT an advisory regarding the AT&T/TCI merger and what rights these smaller Indiana communities had regarding the merger's effect on their cable franchising-transfer process.
NATIONAL EFFORTS & ACCOMPLISHMENTS
We have already mentioned the success the Agency had in securing a rebate/refund for Time Warner subscribers in our formal rate complaint filing with the FCC asking them to review the appropriateness of the rate increase.
Congress, in adopting the Telecommunications Act of 1996, sunsetted cable rate regulation for the expanded basic services tier on March 31, 1999. This is the area of service that cities, such as Indianapolis file rate complaints against for the FCC to review. This is also the area of service that subscribers see their biggest increases on their billing.
Rick Maultra, Director of the Cable Communications Agency, was elected to the NATOA (National Association of Telecommunications Officers & Advisors) Board of Directors. NATOA is the national association that represents municipal interests in cable and telecommunications matters. Mr. Maultra had an immediate impact on the NATOA Board as he initiated the Board to formulate and submit a filing to the FCC that was similar to what the City of Indianapolis had filed pertaining to the takeover of Ameritech by SBC (Southwestern Bell Corporation). The issue that the City and subsequently NATOA raised about the takeover was that Ameritech has a cable subsidiary called Ameritech New Media (ANM) and SBC has a history of dumping all video properties that it acquires. ANM has become the model of success as a competitor to incumbent cable operators in the United States and the Midwest where they are overbuilding cable systems.
From an Indianapolis perspective, the possibility of ANM competing with the likes of Comcast or Time Warner could be removed if the takeover is approved and SBC continues its trend of jettisoning the video properties it acquires. Much evidence in the form of various media accounts bares this out. Nationally, the filing looks to address the concerns of where ANM currently operates and where it could potentially operate; that being where Ameritech provides telephone service. Where ANM competes with cable, prices have dropped by 25% or more.
The Cable Communications Agency continues to be diligent in keeping this issue on the minds of top officials at the FCC, as well as those on Capitol Hill. Copies of the City's filing can be obtained off of the Agency website at www.indygov.org/cable and clicking on Find It Fast. The Agency/Channel 16 website is a great place to keep up with the activity of cable television activity in our community. There, one can also review Channel 16's (the City's government access TV station) program schedule and monthly reports to the Cable Franchise Board. The website features filings submitted to the FCC by the Agency on behalf of the City's cable TV subscribership, as well as the cable operator reports of Time Warner and Comcast.
The Cable Agency submitted a filing to the FCC that spoke to the preservation of local authority on zoning regarding Personal Communication Services (PCS), Radio and Broadcast Towers. This same submission spoke to the support of preserving the local franchising of cable TV companies regardless of how those companies arrange or rearrange the ownership of their lines in the streets. This filing brought about personal responses from many elected officials that include Congressman Dan Burton, Senator Richard Lugar, Senator Dan Coats and Senator John McCain of Arizona, to the Cable Communications Agency.
In addition to the filings that were mentioned as submitted to the FCC, the Agency also weighed in on the FCC's solicitation for The Status of Competition in the Multichannel Video Industry.
Before being elected to the NATOA Board last September, Rick Maultra was asked by the NATOA President, at that time, to chair the FCC & Legislative Affairs Committee of NATOA. With that, the Cable Agency worked with NATOA to file comments that spoke to streamlining and removing certain regulations at the FCC's Cable Services Bureau. Mr. Maultra also was asked to participate on NATOA's Advocacy Committee through to the end of the year.
The Cable Agency successfully solicited a $5,000 contribution toward what is commonly referred to as "The ECI Case". ECI (Entertainment Connections Inc.,) is leasing lines through Ameritech and crossing the right of way without the obligation of a cable franchise agreement, where they are providing video services in Chicago, IL. The FCC upheld ECI's and Ameritech's business practices. What this does is set a dangerous precedent for local franchising authorities and their abilities to grant cable franchise agreements. Therefore, the Agency upon NATOA's recommendation, sought approval from the Cable Franchise Board for monies to contribute to help ensure our ability, as a municipality, to franchise cable operators who use our public right of way.
Last summer, the Cable Agency submitted documents during the House & Senate Commerce Hearings on cable rates and their prospective end to regulation. This was done on the invitation of House Commerce Committee Chairman William Tauzin of Louisiana.
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