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May 27,2014 Snecial Order of Business -t. Comcast Presentation to the City Council Regarding the Cable Franchise Renewal' Repoft No. 14-i16. CityManagø t otterrçorted Cor V/ilsor¡ with CTV wouldbe coming beforethe C¡uncil onJune 10ü'\Nith information regarding th. .ubl. frtt hise. He indicated Cadey V/amer with Comcast had a presentation for the Council this evening. Cmþ Wamu, Comcas! intoduced he$eHandthankedthe Courcil fortheirtime. She clarified Comcast's position and provided context on the proposed fanchise renewal. She provided the Council with a handorf and was proud of the $1 billion inves[nent Comcast has made in the meto area She discussed what this invesfnentmeantto residents ofNewBrighton and howeach cusücmer nowhad access to cutting edge services, including high-qpeed brc se was abor¡tto expire and noted the City would haveto take Shereportedthe formal negotiation process had commenced. She indicated Comcast was nottying to kill local programming' It *Ã fro opinion, thætheNofih Subrnban Cable Commissionwas conditioning the cable fianchise on untawful monetary demands. She requested the Council understand that Comcast wa.s already paþg New Brighton 5% from cable fees or $500,000 per year. This fee was not in diqprfe, However, on top of these feeq theNSCC was requesting PEG fees in excess of$7.50 permonthper cusücmer,'¡ihichwere significantly higþer than the PEG fees charged to other meto æea customers. She then reviewed the PEG Ës cfratged b-other mefio area residents. Ms. Wamer reviewed the demands that local fiznchises could make basedonFCC limitations statingthatlocal franchises couldnotrequestPEcfees overandabovethe 5% franchise fee. However, local fianchises could request reasonable and adequate PEG capital fees could be made. She reported that the formal negotiation process was established to encotlage investnent in cable systems and to piotect the investnent Comcast has made in the system. Refusing to provide srryport for the fanchise because of the PEG fees was not a lawfi;l reason for denial. She believed that the local network has not planned for the tarsition offofPEG fees. She e¡plained thatthe $7.50 PEG fee would make Comcast unåmpetitive in this mæket. She encouraged tlre local cable commision to mnsider the value addd to its customers tluougþ tlre high PEG fees if they were to continue. She reported that the PEG fees in New Brighton were trigher than anywhere else in the nation. She urged the Corncil to view the April meeting that *^ fr.l¿ in Shoreview, alongwithtlre formal documentprovidedby Comcast cotusel dated Friday,May23, 2014. She explained there would be a long, expensive formal process ifthe City were to deny Comcast's fianchise, Councilmember Burg thanked Ms. Wamer for her presentation. She indicafed she served on the Cable Commission previousty. She asked if tlre PEG fee was simply a pass tluough fee, why the rate mattered. She questioned thè mæket share that Comcast had in the metoo area She inquired uilrat percentage of cusü¡mers úu¿ b*i" cable. Ms, Wamer did not have the statistics on Comcast's ma¡ket share in ûront ofher this evening. She indic¿ted high PEG fees were impacting competitior¡ which led the FCC to set limits. CouncilmembeiBurg asked what PEG fee amount Comcast was proposing. N4s. 'Wamer stated the formal proposal was $0.44 for PEG fees.'Councilmember Burg questionedhowlocal fanchises would continueto operafe zuch a drasic reductionin pEG fees. Ms. Wamer undersürod that a m{or change was being proposed. She reviewed how other municipalities were making this work She indicated fanchise fees were nowto be used for PEG access operæio . She indicated the shift wil not kill PEG pogramming as other muricipalities wel,e making this changework. Cor¡ricilmember Jacnbsen inquired if franchise fees were for rigþtoÊway access. \¡Is. Wamer stated this was conect that Comcast paid fianchise fees for rent on City rightoÊways. She mmmented that the federal govemment has limited pEG access fees, while stil requiring Comcast to provide channels. It was now up to to"a n n"¡ises to tse fanchise fees to cover their progarnming. PEG fees were not set at an amorrrt that would reasonably cover capital costs. Courcilmember Burg asked if Comcast would continue to provide scholarships to local shrdents' Ms. 'Wamer reported the local cable commission would now have to draw from ûanchise fees to cover any fi'rture Page2ofll Special Order of Business l. ComøstPresentation toûreCþC.orncil RegadingürcCable Frærchise Rørewal. Report No. l,l-116.