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Comments before cable franchise board: Ordered Comcast social contract
TO : Cable Franchise Board
FROM : Rick Maultra/Director-Cable Communications Agency
DATE : 10/27/97
SUBJECT : Summary & Comments to Comcast Social Contract Order by FCC.
The FCC adopted the Comcast Social Contract on October 9. As you may know, our Agency filed comments and ex-parte comments to the Social Contract and Comcast’s reply comments.
Having said that, here are the main points of the Comcast Social Contract. You will see in the document that Indianapolis and the Cable Communications Agency are referenced several times as it pertains to the issues we had raised.
-The contract as released makes three modifications to Comcast’s creation of a single migrated product tier (MPT), by moving a maximum of four regulated services. These modifications include: 1) subscriber notification when Comcast creates a MPT that subscribers have a right to decline the MPT; 2) When the FCC finds a system subject to "effective competition", any contract provisions which limit Comcast’s ability to take rate increases no longer apply; and 3) Comcast can not create an MPT or NPT (New Product Tier), under the Contract where it was already permitted to create an MPT pursuant to its 1995 settlement of rate complaints.
Contract provisions concerning MPT do not apply to Comcast’s Indianapolis system.
-Secondly, that our franchise agreement with Comcast will not be pre-empted as was originally proposed. Our Agency sought clarification of this pre-emptive language and clarification was incorporated in the order so that local franchising authorities can enforce and negotiate franchise requirements concerning system upgrades and wiring of schools or libraries whether or not such requirements exceed the Contract’s provisions.
-That while the consumer benefits overlap consumer benefits in our franchise agreement, there are new ones. Specifically, cable service to libraries and cable modem service to libraries and schools. What, if any libraries are to be served in Marion County with cable service remains unclear, as the Social Contract, as ordered, requires Comcast to provide this service to 250 libraries in total, nationwide. We hope that Comcast will offer us some specificity for local benefits, sometime in the near future. All consumer benefits, as it relates to the Social Contract, will not be passed through on to the subscribers as an external expense. Each library and school within their franchise area is to be provided with the free Internet access via a cable modem. Additional modems will be made available at cost with the additional Internet service free of charge. There are also some educational and instructional services attached to this, as well.
-That the Internet service, as a consumer benefit, is to be offered within one year of Comcast providing Internet service to its subscribers.
-With respect to system upgrades, the Contract has been modified to require Comcast to distribute its system upgrade efforts so as not to discriminate among subscribers based on socio-economic status. In addition, this Contract was modified to require Comcast to notify affected local franchising authorities that a copy of the annual report Comcast files with the FCC will be available in each system’s public inspection file within 30 days after the report is filed with the FCC. The Cable Agency filed comments that an annual report be submitted to the franchising authorities to monitor the terms of the Social Contract. While the FCC did agree to that, the report is national in scope. If the corporate office breaks down specifics of the annual report to each locality, that should satisfy our request. Nevertheless, while Comcast in Marion County is not compelled to do so, we respectfully request that when they file their Social Contract commitments to the national office, they copy the Cable Agency with the same documents. Additionally, for the sake of fair play, and while they may not be compelled to do so, we ask the same of Time Warner as it pertains to the consumer benefits of their Social Contract.
-While the FCC denied our request for local enforcement of the consumer benefits provisions of the Comcast Social Contract, it did recognize our request to bring concerns and disputes before the Commission. So, we have been invited to play an enforcement role into the Social Contracts as a checks and balances. To do this adequately, it will require the requested data to be reviewed. We would prefer to go this direction rather than contact schools and libraries in the cable operator’s franchise territory.
-The FCC denied our request that Comcast do an outreach program to the schools and libraries informing them and inviting them to participate in the consumer benefits portion of this contract. The FCC simply took Comcast at its word that Comcast was making efforts to notify schools and that it has publicized the Social Contract "through various means". The Agency is disappointed that the FCC did not go far enough to provide binding language in a legal contract, as this is the crux of the Social Contract itself for the public. The FCC went on to say that while they agree with the Agency that schools and libraries "should be apprised of the benefits to them" they noted that the documents of support from certain participating communities attest that such an effort has taken place. The Cable Agency notes that those pockets of support are exclusively from New Jersey, Pennsylvania and Michigan where Comcast is strongest in their corporate offices. It is certainly possible that these letters to attest to the benefits and support of the Comcast Social Contract were solicited by the company itself.
-Finally the FCC felt our concerns over the proprietary nature of the Internet service they are to provide was unwarranted. The Cable Agency had suggested that since Microsoft has a billion dollar alliance with Comcast, that there would be limiting factors over the use of the software. The Cable Agency would simply note that since the Social Contract was ordered that the Justice Department is charging Microsoft with anti-competitive conduct so as to eliminate Netscape from the browser business. The Justice Department has levied fines in the amount of a million dollars a day against Microsoft for this. The Cable Agency is disappointed that the FCC did not share our concerns over proprietary use issues as it pertains to the Internet provisions of the Contract’s consumer benefits.
**The FCC footnotes in the Social Contract that the City of Indianapolis was late in it’s ex-parte comments to the Contract. There were no provisions for filing ex-parte comments to this Contract. The Cable Agency was compelled to comment to Comcast’s Reply Comments as it summarized that the Contract should be adopted in its original format. The FCC made no allowance for comments by any entity to Comcast’s Reply Comments. In essence, there was no deadline. The Cable Agency asked the FCC for permission to respond to Comcast’s Reply Comments. The FCC granted the permission stating they would alter their rules if we served the Comcast corporate office with a copy of our ex-parte comments, which we did.
cc: Dr. Beurt SerVaas
Bob Elrod
Peggy Piety
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