HomeMy WebLinkAbout1994-01-03 - City Commission Workshop Meeting MinutesCITY OF TAMARAC
7525 Northwest 88 Avenue
Tamarac, Florida 33321-2401
Phone (305) 722-5900
Fax (305) 722-4509
December 27, 1993
WORKSHOP MEETING
CITY COUNCIL OF TAMARAC, FLORIDA
There will be a Workshop Meeting of the City Council on Monday,
January 3, 1994, at 10:00 a.m., in Conference Room #1 at
Tamarac City Hall, 7525 N.W. 88th Avenue, Tamarac, Florida.
The purpose of this meeting is as follows:
1. DISCUSSION regarding Cable Television, presentation by
Matthew L. Leibowitz.
The City Council may consider such other business as may come
before it.
All meetings are open to the public.
In the event this agenda must be revised, such revised copies will
be available to the public at the City Council meeting.
=�
Patricia Marcurio
Acting City Clerk
PM/kj
Pursuant to Section 286.0105, Florida Statutes
If a person decides to appeal any decision made by the City Council with
respect to any matter considered at such meeting or hearing, he will need a
record of the proceedings and for such purpose, he may need to ensure that a
verbatim record includes the testimony and evidence upon which the appeal is
to be based.
The City of Tamarac Complies with the provisions of the Americans
with Disabilities Act. If you are a disabled person requiring any
accommodations or assistance, please notify the City of such need
at least 72 hours (3 days) in advance.
THE CITY OF TAMARAC IS AN EQUAL OPPORTUNITY EMPLOYER AND DOES NOT DISCRIMINATE ON THE BASIS OF HANDICAPPED STATUS
City Council Workshop Meeting
01/03/94 - IZ
Page 1
CITY OF TAMARAC
CITY COUNCIL WORKSHOP MEETING
MONDAY, JANUARY 3, 1994
Mayor Bender called this meeting to order on
Monday, January 3, 1994 at 10:00 a.m. in Conference Room #1
of City Hall.
PRESENT: Mayor H. Larry Bender
Vice Mayor Irving Katz
Councilman Norman Abramowitz
Councilman Joseph Schreiber
Councilman Henry Schumann
ALSO PRERMNT: Dina M. McDermott, Interim City Manager
Mitchell S. Kraft, City Attorney
Irene M. Zander, Secretary
1. DISCUSSION regarding Cable Television, presentation by
Matthew L. Liebowitz, Esquire.
C/M Schreiber asked if the public would be allowed to
participate in this discussion. Mayor Bender said he would
permit the public to make statements and ask questions.
Mr. Kraft said Attorney Matthew Liebowitz is present to
explain his function as legal representative regarding the
cable TV industry and its application by City government.
Mr. Kraft said the City of Tamarac re -filed many cable TV
issues for certification, established rules by Ordinance and
will proceed further on this issue. He said Mr. Liebowitz is
reviewing the possibility of a group cable project with
Lauderhill, Sunrise, Plantation and Tamarac.
Mr. Liebowitz said cable TV is an issue regularly reported on
the front pages of newspapers and on television and reflects
the level of expectations created by the cable TV industry
and the U.S. Government due to the recent 1992 Cable Act
passage.
Mr. Liebowitz stated upon examination of the cable TV
industry and its regulations, the expectations far exceeded
reality ever since the industry began. He said the 1972
report the Federal Communications Commission (FCC) issued on
cable TV indicates the cable industry was, at that time,
promising interactive television, water meters, 500 channel
cable systems, etc. He said the difference between 1972 and
today is the level of technology and economics compared to
the potentials, hypotheticals and the outrageous economic
costs confronting consumers.
Mr. Liebowitz said the U.S. Congress stripped the cities of
authority to oversee cable TV in 1984 and, as a result, cable
TV became an unregulated monopoly. He said it is possible to
have two cable companies in any given area where the law
requires a non-exclusive license.
Mr. Liebowitz said the amount of competition of two heads of
cable companies is very small across the entire country and
the monopoly has been unregulated since 1984. He said as a
result, the complaints have been rampant for failure of
customer service and increased rates, etc.; therefore,
Congress passed the Consumer Protection Act for cable TV in
1992. He said the President vetoed this Act and it was the
City Council Workshop Meeting
01/03/94 - IZ
Page 3
C/M Schreiber said the basis of the discussion is
for
consumers
at a disadvantage because they do not receive
what
they pay
for. He said with basic service, several desirable
channels
were removed and replaced with other channels
the
citizens
did not want. He said although the citizens are
not
paying more,
they are not receiving what they originally
paid
for. He
said this practice is unfair to the public and asked
what the
local franchising authority could do about
the
problem.
Mr. Liebowitz said channel changes are not within the
authority of the City or the FCC because the FCC said the
first amendment states they cannot enter into programming
decisions that affect comparisons of the values of channels.
He said the FCC only looks at the issue on a numerical basis
as opposed to a qualifying basis.
C/M Abramowitz asked if ten channels are still ten channels
even if nine channels are in a foreign language the citizens
cannot understand. Mr. Liebowitz said theoretically, that was
correct, and unfortunately, the citizens elect to the whim of
the cable company.
Mr. Liebowitz said the concept of the 1992 Act was to
encourage competition either by another company, which most
people perceived would be the telephone company, the wireless
cable companies on Direct Broadcast Satellite and/or that the
cable companies would provide an al la carte menu so citizens
do not pay for a channel they dislike.
Mr. Liebowitz said although not present today, the whole
theory of rate regulation is to offer a channel on an
individual basis unregulated.
Mayor Bender said he was told if citizens of a City form a
group as required by the FCC, they can decide what channels
to receive.
Mr. Liebowitz said on a Federal basis, the local franchise
authority, the City, has no authority to determine or dictate
the channels to the local franchise company. He said the
City can express their preference for local news, local
sports, or education channels.
Mayor Bender asked if cable companies are required under the
FCC regulations to establish a committee to find out what
types of servicing the citizens desire. He said if the City
wanted to use their own company, the City would be required
under FCC regulation to establish a committee.
Mr. Liebowitz said no committee would be required and prior
to 1984, there was an ascertainment process used by the
television stations and cable companies. He said the process
required the stations and companies to determine, by
interview, the desire of the public. He said they were
supposed to program according to the response but the process
was abolished. He said currently there are no requirements or
mechanisms that allow anyone except the cable company to
decide on the channel package.
Mr. Liebowitz said a situation predominant in Florida and
experienced by the City is bulk rate contracts. He said a
customer of bulk rate may negotiate as a non -government
entity for certain channels even though the Government is not
allowed and the individual subscriber does not have the
economic clout.
City Council Workshop Meeting
01/03/94 - zz
Page 5
Mr. Platz said if a contract does not exist and the number of
channels are increased, the price can be increased at their
option because the freeze only addresses the current number
of services.
C/M Abramowitz said based on the discussion in this meeting
he wants to buy stock in cable companies.
Mr. Liebowitz said when Congress and the FCC adopted these
rules they were not familiar with the operation of bulk
rates. He said he was at a seminar in Miami one week after
the 500 page document was issued and a Head'cf the new Cable
Bureau said she did not understand the bulk rate concept.
He said he immediately discussed the issue with her.
Mr. Platz said Congress does not favor cross subsidization
which makes bulk rates a problem. He said a cable company
cannot distinguish between a multi -family unit and high-rise
unit or a home owners association and a local franchise
authority must make that distinction.
Mr. Platz said there may be different cost savings between a
home owners association and a high-rise condominium
association and classifications will be determined by the
City.
Mr. Platz said the City is the enforcing agency as it relates
to discrimination matters at the present time and because
most franchises contain anti -discrimination clauses,
according to the City, enforcement mechanisms are based on
the existing franchise.
C/M Abramowitz said the cable company knows promotional rates
are in accordance with the law.
Mr. Platz said current franchise documents must be examined
to define promotional activities and non-discrimination until
the new regulations are in force. He said the FCC is
scheduled to rule on the appeals on January 13, 1994 but the
date may be rescheduled and subjected to another set of
appeals.
V/M Katz recommended opening the meeting to the public
following Council discussion. He referred to the cross
subsidization issue and said the home owners associations and
condominium associations may or may not have bulk rate
contracts. He said they may not have 100% participation so
people living in the same home owners association or condo
association may pay a higher rate. He said if there are 100
units in a home owners association, 80 units may have bulk
rates and 20 units may not. He said the 20 units subsidizing
the 80 units are a control mechanism for limiting the
increase the non -participants pay without usury.
Mr. Platz said cross subsidization is not 20% of the 20
people but the individuals not in the condominium home owners
association living in other areas. He referred to the
general concept of rate increases and said the cable
companies will have to prove their rates are in compliance.
Mr. Liebowitz stated the rates cannot be raised if the
company is not in compliance and what the FCC will do
concerning the bulk rates is unknown. He said the choices
are: a) avoid current bulk rates; b) if present rates are
avoided, does an individual pay the same as everyone else or
will there be phasing; c) will the price be voided and the
non -regulated price be effective, or will there be phasing
upon the termination of the contract. He said unfortunately
no one has the answer.
City Council Workshop Meeting
01/03/94 - IZ
Page 7
mechanism probably did not contain a specific method for
punishment.
Mr. Liebowitz said the bulk rates converted many of the
franchises into exclusive franchises and requires 100%
participation for cable service.
V/M Katz said Tamarac required 80% participation and the
remaining 20% were subsidizing the 80%. He said a bulk rate
contract exists when every resident is billed with their
water bill instead
of one third of the
City subsidizing the
other two thirds of the City.
Mr. Liebowitz said
all of the bulk rate
contracts differ and
a 80/20 split is a
major step forward.
He said in most bulk
rate contracts the
20% could not take
their service on the
telephone company.
He said this is a
problem of exclusive
franchises.
C/M Schreiber said if they limit it to exclusive easements to
prevent competition there will be instances where service at
bulk rates will be offered without an exclusive easement, and
in that case, tie in with Bell South or AT&T will be
possible because of no contractual obligation.
Mr. Liebowitz referred to the easements and said the City
cannot offer exclusive contracts.
C/M Abramowitz said six years ago, a former cable company
made unrealistic promises when the company paid for the
wiring inside the building. He said when the City solicited
by letter for new cable companies, the former company said
the City either buys their wiring or buys it from the new
company.
Mr. Liebowitz said the absence of competition and an
effective company to make changes was apparent until the new
satellite companies provided alternatives. He said even if
the City would have invited 100 cable companies, there would
have been no response because cable companies and telephone
companies compete. He said the response was not expected by
the U.S. Congress and Southern Bell responded extremely
slowly.
Mr. Liebowitz said the 1992 Act addressed wiring and ruled
the cable companies could depreciate the value over a period
of time, but not at the original cost. He said cable
companies have the right to remove their wiring but must
either abandon or return the building to its original state.
He said it is unlikely a cable company will return to remove
their wiring.
Mr. Liebowitz said the matter can be bypassed if they abandon
the period of waiting. He said the cable company owns all of
the wiring they installed in the building. He said a few
developers complete their own wiring and some homeowners are
pre -wiring their new home.
Ms. McDermott said an integral issue is discrimination
between single-family homes and multi -family homes and asked
if there was a mechanism that specifies discrimination or if
there is a method for evaluation.
Mr. Liebowitz said according to the new law, this Commission
establishes reasonable classifications.
Ms. McDermott said the City of Tamarac is examining different
methods and she asked if criteria has been established for
reference purposes by other cities and government agencies.
City Council Workshop Meeting
01/03/94 - IZ
Page 9
1
item, they get one result, but if they audit you on ten
items, they may get different results.
C/M Schreiber said every city experiences the same basic
problems as Tamarac.
C/M Abramowitz said not every City has the same Ordinances or
franchise agreement.
Mr. Liebowitz said rate regulation has more federal
regulation than the City's franchise.
V/M Katz asked for legal clarification if the City cable
company is considered utilities and, if any easement granted
by a homeowners association or individual does not allow
cable companies to utilize utilities easement, must they have
their own easement, in the event a telephone company does
have the right to get involved with the cable transmission.
Ms. McDermott asked if other companies can be considered in
joint opportunities. She said each City has their own
franchise agreement but Tamarac has a non-exclusive agreement
and she asked if this process examines the agreements.
Mr. Liebowitz said the scope of the work of a joint entity
could be as large or small as the cities among themselves.
Ms. McDermott said the proposal favors a joint effort sharing
one common goal and objective.
C/M Schreiber said that would not have an effect on another
company wanting a franchise because the City has a right to
offer a franchise to them.
C/M Abramowitz said the City may be prohibited from offering
a franchise to another company with an interlocal agreement.
Mr. Liebowitz said these possibilities depend on the scope of
the interlocal agreement and the present agreement was
drafted as an advisory only. He said there are no
requirements at this time.
Ms. McDermott said Tamarac has enacted several Resolutions to
be the regulating authority. She said the City receives
complaints daily relative to poor service, lack of service
and rates. She asked if this type of proposal includes these
areas or would the City need to provide their own contract
administration.
Mr. Liebowitz said the current drafted proposal does not
include a common contract administrator but there are groups
of cities that will hire a common administrator because the
problems will be essentially the same when served by the same
cable company.
Mr. Liebowitz said one City may encounter more problems than
another and should delegate the day-to-day operation and not
the overall responsibility.
V/M Katz said he attended a meeting where Broward County
Commissioners said in the event Tamarac connected with the
County, they would administrate on behalf of the joining
cities.
C/M Abramowitz said when Broward County made their
presentation to the Broward League of Cities, they did not
address who would handle the cost if Tamarac united.
City Council Workshop Meeting
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Page 11
Mr. Liebowitz said the City has the ultimate decision -making
authority within the FCC guidelines and numbers. He said if
the company complies and illustrates entitlement to a $10
rate, the City must abide. He said on the other hand, if $10
is charged and the FCC limit is $9, then the City can advise
the company they over charged.
Mr. Liebowitz said the extent of the bulk rate analysis is
still on appeal. He said theoretically the City will have
the same authority but whether or not the City will expire or
be pre-empted is unknown.
C/M Schrieber asked if there would be restrictions on the
authority the FCC has regarding regulation under the
interlocal agreement supposition representing four cities and
would the FCC handle a complaint filed by the City on behalf
of the subscriber.
Mr. Liebowitz said it would be shared to the extent there is
common work but will be the City's responsibility if the City
extends into additional issues.
Mayor Bender said the cities will never be in unison unless
we are aware of what is going on in the cities.
V/M Katz said City Council could request public information
from the other cities.
Mayor Bender said if information is distributed, Council
would not have to request it.
Mr. Liebowitz said that information can be included.
Mayor Bender said this method is more efficient because all
of the cities will become aware of how problems were handled.
Ms. McDermott asked what is the traditional length of time
for this process. . .
Mr. Liebowitz said this process is quick. He said if the
rate freeze ends on February 15, 1994 and the City already
has the Ordinance in place and gives local notice, the cable
company has 30 days to respond with their figures.
Mr. Liebowitz said cities are initially given thirty days to
examine the agreement and it would be wise for the City to
draft new questions for the cable company to answer. He said
the City will have another 90 days to make their decision
concerning service on a individual basis or with a unified
group.
Mr. Liebowitz said at the end of the 90 day period a report
will be issued and the City will vote regarding the granting
or lowering of rates and the distribution of refunds with
interest.
C/M Schreiber asked if the FCC or the court of law would be
the next step if the cable company refuses to accept the
decision.
Mr. Liebowitz said for the first time the City will have
enforcement authority and the FCC will not take kindly to
cable companies ignoring local franchise authorities.
C/M Schreiber asked if contacting the FCC is the first step
to take if the cable company refuses to accept the
franchising authority decision.
City Council workshop Meeting
01/03/94 - TZ
Page 13
A resident commented on the change -over from 20 to 25
channels and the basic rate staying uniform throughout the
City.
Mr. Liebowitz said the comments were correct but with
variations. He said until the FCC decides whether to pre-
empt, the cable company can increase the basic rate, assuming
the contract does not exist and they want to increase the
number of channels.
Mr. Liebowitz said that decision will apply across the City
to the extent the cable company is offering a basic tier,
and will have to be offered on a non-discriminatory basis
City-wide.
Mr. Ross commented on contracts not listing channels, basic
rates per month, 20% participation to join a community where
they live, and places that would not have the bulk contracts.
He asked if it is discriminatory not to offer bulk rates to
everyone.
Mr. Liebowitz said promotional rates can be very
discriminatory and, unfortunately, there are not many laws
defining promotional laws. He said there are some State laws
that may apply and the Florida Attorney General's office is
investigating the matter.
Mr. Liebowitz said he assumes the franchise and the FCC does
not define this issue and the absence of this definition by
State, Federal and local government provides the cable
companies freedom to do what they want.
Mr. Ross expressed his comments regarding promotional rates.
Mr. Liebowitz said if a promotional rate is in place for
seven years it is not a promotional rate.
Mr. Ross commented on cost of service rates and customers
reimbursing Continental Cable for buying out American Cable.
Mr. Liebowitz said it is the intent of the FCC and Congress
for subscribers not to pay the premium price.
Mr. Ross said the City should consider assembling an Advisory
Committee similar to committees other cities have organized
to address unresolved legalities, how the freeze prevents a
rate increase and other problems.
Mr. Liebowitz said the rates are frozen and cannot be raised
if the cable company has maintained the level of service.
C/M Abramowitz said the bulk rate is less than the basic
rate.
Mr. Ross commented on the expiration of basic rate contracts
during the freeze period and the rate continuing as specified
in the contract.
Bob Steinert, President of Continental Cable, said $10.95 is
the monthly service rate.
C/M Abramowitz said sometimes the basic rate is more
expensive than the bulk rate and he suggested continuing to
pay the rate until the company threatens to cut service.
V/M Katz said the freeze exists on all of the services
provided on three tiers or levels for basic and channels
above basic. He said the billing rate should apply until
expiration if the bulk rate agreement is $10 for all 40
channels.
City Council Workshop Meeting
01/03/94 - IZ
Page 15
Bernie Caveat, resident of Green Haven Grove, and Chairman of
the Cable Community, said he did not hear from any of the
people outside of cable subscription regarding television
channel boxes that were not cable ready.
Mr. Caveat said his Continental Cable contract expires June
1, 1994 and he is charged for the use of the control -boxes.
He said in some instances people are double billed for basic
services. He said he is trying to determine if a breach of
contract exists because the contract states subscribers are
entitled to two outlets and table hook -ups -but are charged
$2.68 for a control box and $1.48 for an uncontrolled box.
Mr. Caveat said his development is instructing the home
owners to refrain from payment until all legal aspects are
investigated but he does not want the subscribers to be
removed from cable and asked for comments regarding this
possibility.
A Continental Cable Company letter mailed to every cable
customer was reviewed at this time,
Mr. Liebowitz said according to the new law, the Cable
Company is required to unbundle which means there are no
separate charges for programming and equipment joined
together in bulk rate contracts. He said there are no
definitive answers because this issue is on appeal.
Mr. Liebowitz said for example, if someone was charged $10
for programming and the box during the freeze, although they
were supposed to unbundle, the total cost could not exceed
$10 for the average cable subscriber. He said the cost of
equipment can be investigated and regulated and a tremendous
price variation exists nationally. He said the City, as a
rate regulator, could investigate the monthly box price.
V/M Katz said without raising legal questions, the validity
of the balance of the.contract is his concern. He asked what
would happen to the rest of the contract if a part of the
contract is unbundled.
C/M Abramowitz said he was advised the current contract would
be honored.
Mr. Liebowitz said he does not have the answers for many of
the questions.
A resident asked what advice should be given to the
individual homeowners that are still paying under the
contract for basic cable at a bulk rate. She said these
people are receiving bills for services they already paid for
according to the contract.
Mr. Liebowitz said a complaint may be filed with the FCC
indicating the resident's lack of understanding on this issue
and suggested requesting their guidance to resolve the
matter.
A resident said two individuals under the bulk contract for
many years were billed for basic cable service and received a
complete and entire total bill. She asked if this means the
person handling the Continental Cable billing is confused.
She said charges differ between the home owners.
Mr. Liebowitz said this is a confusing and difficult time for
the homeowners and the cable companies and suggested the
individuals experiencing this problem contact the cable
company to resolve the matter. He said if a homeowner
believes his charges violate the rate increase, a complaint
City Council workshop Meeting
01/03/94 - IZ
Page 1
CITY OF TAMAR.AC
CITY COUNCIL WORKSHOP MEETING
MONDAY, JANUARY 3, 1994
Mayor Bender called this meeting to order on
Monday, January 3, 1994 at
10:00
a.m, in Conference Room #1
of City Hall.
PRESENT* Mayor H. Larry
Bender
Vice Mayor
Irving
Katz
Councilman
Norman
Abramowitz
Councilman
Joseph
Schreiber
Councilman
Henry
Schumann
Dina M. McDermott, Interim City Manager
Mitchell S. Kraft, City Attorney
Irene M. Zander, Secretary
1. DISCUSSION regarding Cable Television, presentation by
Matthew L. Liebowitz, Esquire.
C/M Schreiber asked if the public would be allowed to
participate in this discussion. Mayor Bender said he would
permit the public to make statements and ask questions.
Mr. Kraft said Attorney Matthew Liebowitz is present to
explain his function as legal representative regarding the
cable TV industry and its application by City government.
Mr. Kraft said the City of Tamarac re -filed many cable TV
issues for certification, established rules by Ordinance and
will proceed further on this issue. He said Mr. Liebowitz is
reviewing the possibility of a group cable project with
Lauderhill, Sunrise, Plantation and Tamarac.
Mr. Liebowitz said cable TV is an issue regularly reported on
the front pages of newspapers and on television and reflects
the level of expectations created by the cable TV industry
and the U.S. Government due to the recent 1992 Cable Act
passage.
Mr. Liebowitz stated upon examination of the cable TV
industry and its regulations, the expectations far exceeded
reality ever since the industry began. He said the 1972
report the Federal Communications Commission (FCC) issued on
cable TV indicates the cable industry was, at that time,
promising interactive television, water meters, 500 channel
cable systems, etc. He said the difference between 1972 and
today is the level of technology and economics compared to
the potentials, hypotheticals and the outrageous economic
costs confronting consumers.
Mr. Liebowitz said the U.S. Congress stripped the cities of
authority to oversee cable TV in 1984 and, as a result, cable
TV became an unregulated monopoly. He said it is possible to
have two cable companies in any given area where the law
requires a non-exclusive license.
Mr. Liebowitz said the amount of competition of two heads of
cable companies is very small across the entire country and
the monopoly has been unregulated since 1984. He said as a
result, the complaints have been rampant for failure of
customer service and increased rates, etc.; therefore,
Congress passed the Consumer Protection Act for cable TV in
1992. He said the President vetoed this Act and it was the
City Council Workshop Meeting
01/03/94 - 1z
Page 2
only time in the President's Administration a veto was over-
ridden.
Mr. Liebowitz said the attendance at this meeting is a
reflection of the local cable TV concerns. He said there is
more unknown information than known information as a result
of the Act and clarified the results of the Act, cable
technology and the powers of the City and the citizens.
Mr. Liebowitz said the two primary areas the Act covers are
customer service and rate regulation. He referred to customer
service and said the FCC complied with U.S.. Congress when
they empowered the FCC to adopt national minimum standards
for phone rings, installations and accurate billings. He
stated cities can adopt national standards by Resolution, may
pre-empt the existing franchise and may become effective 90
days thereafter.
Mr. Liebowitz said Federal standards are vague and there are
many instances where there are no enforcement mechanisms
because they are the City's responsibility. He said further
contract definition, like specific services to be provided
during normal business hours on a national basis, is
necessary and night-time and weekend hours must be decided by
the City.
Mr. Liebowitz said in terms of customer service, the City is
empowered to oversee the cable company and regulate customer
service. He said they are not prohibited in the existing
franchise from adopting the Federal standards and/or
increased standards. He said the cities can act now instead
of waiting until the franchise terminates in 1999. He said
there will be a cost to the City for someone or a group of
people within the City handling the oversight matter.
Mr. Liebowitz said rate regulations are the second most
written about topic addressed in the 1992 Act and are pre-
emptive because they do not have to wait for the City's
existing franchise to terminate. He said effective with the
passage of the Act, a City may adopt rate regulations and
oversee the cable company.
Mr. Liebowitz said rate regulation is a very complicated
process. He said the U.S. Congress made the FCC regulate the
industry in six months and in their first attempt they
published a 500 page document setting forth the basic rules
of rate regulation.
Mr. Liebowitz stated the document is on appeal, is subject. to
72 appeals and is not complete. He said there are a series of
other rules that supplement the original document but the
current framework of regulation will be discussed today. He
said the City can regulate local basic rates, equipment and
installation. He said the minimum basic service covers over
the air television stations and any access channels and the
cable company may, although not required, add additional
channels to the service.
Mr. Liebowitz said the City can functionally regulate the
basic level of services, the cost of equipment and cost of
installation.
C/M Schreiber asked if basic service can be removed in
exchange for other channels. Mr. Liebowitz said yes, and
proceeded to explain two issues identified with the exchange.
He said a freeze became effective immediately after the
passage of the Act and during the freeze, the cable company
was allowed to change rates as long as the average monthly
rate did not change. He said the cable company may change the
channel line up in any manner after the freeze.
1
1
1
City Council workshop Meeting
01/03/94 - 1Z
Page 3
C/M Schreiber said the basis of the discussion is for
consumers at a disadvantage because they do not receive what
they pay for. He said with basic service, several desirable
channels were removed and replaced with other channels the
citizens did not want. He said although the citizens are not
paying more, they are not receiving what they originally paid
for. He said this practice is unfair to the public and asked
what the local franchising authority could do about the
problem.
Mr. Liebowitz said channel changes are not within the
authority of the City or the FCC because the FCC said the
first amendment states they cannot enter into programming
decisions that affect comparisons of the values of channels.
He said the FCC only looks at the issue on a numerical basis
as opposed to a qualifying basis.
C/M Abramowitz asked if ten channels are still ten channels
even if nine channels are in a foreign language the citizens
cannot understand. Mr. Liebowitz said theoretically, that was
correct, and unfortunately, the citizens elect to the whim of
the cable company.
Mr. Liebowitz said the concept of the 1992 Act was to
encourage competition either by another company, which most
people perceived would be the telephone company, the wireless
cable companies on Direct Broadcast. Satellite and/or that the
cable companies would provide an al la carte menu so citizens
do not pay for a channel they dislike.
Mr. Liebowitz said although not present today, the whole
theory of rate regulation is to offer a channel on an
individual basis unregulated.
Mayor Bender said he was told if citizens of a City form a
group as required by the FCC, they can decide what channels
to receive.
Mr. Liebowitz said on a Federal basis, the local franchise
authority, the City, has no authority to determine or dictate
the channels to the local franchise company. He said the
City can express their preference for local news, local
sports, or education channels.
Mayor Bender asked if cable companies are required under the
FCC regulations to establish a committee to find out what
types of servicing the citizens desire. He said if the City
wanted to use their own company, the City would be required
under FCC regulation to establish a committee.
Mr. Liebowitz said no committee would be required and prior
to 1984, there was an ascertainment process used by the
television stations and cable companies. He said the process
required the stations and companies to determine, by
interview, the desire of the public. He said they were
supposed to program according to the response but the process
was abolished. He said currently there are no requirements or
mechanisms that allow anyone except the cable company to
decide on the channel package.
Mr. Liebowitz said a situation predominant in Florida and
experienced by the City is bulk rate contracts. He said a
customer of bulk rate may negotiate as a non -government
entity for certain channels even though the Government is not
allowed and the individual subscriber does not have the
economic clout.
City Council workshop Meeting
01/03/94 - 1z
Page 4
Mr. Liebowitz said the home owners could advise the cable
company they have approximately 800 people desiring different
channels.
Mr. Liebowitz said bulk contracts are very problematic for a
number of reasons. He said rate regulations based on the U.S.
Congress and the FCC state that bulk rate contracts must
contain two elements: Mr. Liebowitz stated one element is
non-discriminatory with basic standards decided by the City.
He said if a 100-unit facility or home owners association and
another home owners association with the same number of
people and same channel offering subscribes -to 40 channels,
the same fare must be paid. He said theoretically, this
element is illegal.
Mr. Liebowitz said the second element is cost -based, even
though most of the issues are not cost -based. He said wiring
a single building at the time of construction as a cost -basis
to offer a discounted number in realty is not a cost -basis.
He said people served under the bulk rates are cross -
subsidized by individual home owners who pay more for the
same service. He said the U.S. Congress determined this
method to be improper.
C/M Abramowitz said many of the single family, fee simple,
home owners associations also have bulk rates.
Mr. Liebowitz said the question .is what happens if the U.S.
Congress and the FCC say it must be nondiscriminatory and
cost -basis. He asked if it would go away today, is it pre-
empted or does it pre-empt at the end of term which may be
five or eight years. He said no one knows the answer and
there will be another Order on January 13, 1994 that will
advise the new ruling. He said in the interim period even
bulk rates are governed by the freeze.
C/M Abramowitz said if rates are not supposed to be raised in
an area that still has a bulk rate and that area
contractually continues for another couple of years, will
the contract be honored. He asked what happens when the
agreement ends contractually.
Discussion was held regarding the agreement continuing for
many years and the possibility of the FCC pre-empting and
discarding the contract.
C/M Abramowitz said citizens do not want the original, less
expensive contract to be discarded for a higher rate.
Leo Platz, resident, referred to the term of service
remaining the same during the freeze period and rates
increasing only if the average subscriber bills remain the
same. He said it is difficult to increase a substantial
number of homes without raising the average rates.
Ms. McDermott asked if a company adds ESP1, Home Cooking and
other channels during the expiration process and retains the
same basic package, will the changes justify a rate increase
or will the rule prevent an increase.
Mr. Platz said a rate increase can be requested if the number
of channels are increased.
C/M Abramowitz asked can the rates be increased if the cable
company decides the bulk rate covers 25 stations instead of
22 stations.
Discussion was held regarding how the contractual law could
prevent a cable company from increasing rates in that method.
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City Council Workshop Meeting
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Page 5
Mr. Platz said if a contract does not exist and the number of
channels are increased, the price can be increased at their
option because the freeze only addresses the current number
of services.
C/M Abramowitz said based on the discussion in this meeting
he wants to buy stock in cable companies.
Mr. Liebowitz said when Congress and
the FCC adopted
these
rules they were not familiar with
the operation of
bulk
rates. He said he was at a seminar
in Miami one week
after
the 500 page document was issued and
a Head Qf the new
Cable
Bureau said she did not understand
the bulk rate concept.
He said he immediately discussed the
issue with her.
Mr. Platz said Congress does riot favor cross subsidization
which makes bulk rates a problem. He said a cable company
cannot distinguish between a multi -family unit and high-rise
unit or a home owners association and a local franchise
authority must make that distinction.
Mr. Platz said there may be different cost savings between a
home owners association and a high-rise condominium
association and classifications will be determined by the
City.
Mr. Platz said the City is the enforcing agency as it relates
to discrimination matters at the present time and because
most franchises contain anti -discrimination clauses,
according to the City, enforcement mechanisms are based on
the existing franchise.
C/M Abramowitz said the cable company knows promotional rates
are in accordance with the law.
Mr. Platz said current franchise documents must be examined
to define promotional activities and non-discrimination until
the new regulations are in force. He said the FCC is
scheduled to rule on the appeals on January 13, 1994 but the
date may be rescheduled and subjected to another set of
appeals.
V/M Katz recommended opening the meeting to the public
following Council discussion. He referred to the cross
subsidization issue and said the home owners associations and
condominium associations may or may not have bulk rate
contracts. He said they may not have 100% participation so
people living in the same home owners association or condo
association may pay a higher rate. He said if there are 100
units in a home owners association, 80 units may have bulk
rates and 20 units may not. He said the 20 units subsidizing
the 80 units are a control mechanism for limiting the
increase the non -participants pay without usury.
Mr. Platz said cross subsidization is not 20% of the 20
people but the individuals not in the condominium home owners
association living in other areas. He referred to the
general concept of rate increases and said the cable
companies will have to prove their rates are in compliance.
Mr. Liebowitz stated the rates cannot be raised if the
company is not in compliance and what the FCC will do
concerning the bulk rates is unknown. He said the choices
are: a) avoid current bulk rates; b) if present rates are
avoided, does an individual pay the same as everyone else or
will there be phasing; c) will the price be voided and the
non -regulated price be effective, or will there be phasing
upon the termination of the contract. He said unfortunately
no one has the answer.
City Council Workshop Meeting
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Page 6
V/M Katz said he is not limiting people to a specific
association and is concerned about this system because of the
lack of control. He said it is unfair for someone to
subsidize another person and the City has the right to
control but does not have an enforcement mechanism.
Mr. Liebowitz said the cable company must provide
justification for their basic cable rate increase in order to
increase the rates of the 10,000 non -bulk customers. He said
all that is necessary is for one subscriber or the City to
complain on behalf of the subscribers to make the FCC follow
the same process.
Mr. Liebowitz said benchmark and cost of service are used in
rate regulation. He said benchmark is simplified and
easier than cost of service. He said cost of service is the
old public service showing the rate of .regulation, the rate
of profit, the cost base and definition of depreciation and
other complicated issues that provide employment for lawyers
and accountants.
Mr. Liebowitz said the same methodology the City uses for
basic rates is used by the FCC. He said if the City makes a
finding on benchmark and follows the same procedures,
theoretically, the Commission cannot stray too far, prompting
an argument for another reason the City, not only the
subscriber, should become involved locally and file the
complaint to the FCC..
C/M Abramowitz said when the cable company presents benchmark
or actuality methods to the City reasons for charging the
fees are provided. He said the City also needs a reason why
they determined the figures were high.
Mr. Liebowitz said since no one has regulated the rates, the
cost is unknown and the cable industry in general has lead a
major public relations campaign to convince cities not to
regulate rates through outrageous figures of $80,000 per
year. He said the real cost to a City for rate regulation
will be much smaller and the benchmark methodology will be
used by most companies.
Mr. Liebowitz said the cost of rate regulation, customer
service and regulation of cable is being addressed by this
City and other cities and can be lowered through interlocal
agreements with the other cities. He said this cable company
serves other cities and the same issues regarding levels of
service apply to them.
Mr. Liebowitz stated that joining together would be more
effective and reduce the cost of over regulation and
oversight for Tamarac, Lauderhill, Plantation and Sunrise and
prevent accountants and lawyers from receiving unnecessary
compensation.
C/M Schreiber said the City was a franchising authority prior
to the FCC regulation act in 1992. He said if 10% of the non -
bulk rate customers are subsidizing the other 20,000, the
Tamarac franchise authority would have the authority to do
something about it prior to the new law.
Mr. Liebowitz said the City should review the franchise
document to see how their right can be exercised. He asked
who would be the replacement if the City notified the cable
company their license was going to be revoked.
Mr. Liebowitz said the 1984 Act gave many types of authority
and rights to the cable company. He said although the City
has authority in the franchise document, the enforcement
1
1
City Council workshop Meeting
01/03/94 - I2
Page 7
mechanism probably did not contain a specific method for
punishment.
Mr. Liebowitz said the bulk rates converted many of the
franchises into exclusive franchises and requires 100%
participation for cable service.
V/M Katz said Tamarac required 8096 participation and the
remaining 20% were
subsidizing the 80%.
He said a bulk rate
contract exists when every resident is billed with their
water bill instead
of one third of the
City subsidizing the
other two thirds of the City.
Mr. Liebowitz said
all of the bulk rate
contracts differ and
a 80/20 split is a
major step forward.
He said in most bulk
rate contracts the
20% could not take
their service on the
telephone company.
He said this is a
problem of exclusive
franchises.
C/M Schreiber said if they limit it to exclusive easements to
prevent competition there will be instances where service at
bulk rates will be offered without an exclusive easement, and
in that case, tie in with Bell South or AT&T will be
possible because of no contractual obligation.
Mr. Liebowitz referred to the easements and said the City
cannot offer exclusive contracts.
C/M Abramowitz said six years ago, a former cable company
made unrealistic promises when the company paid for the
wiring inside the building. He said when the City solicited
by letter for new cable companies, the former company said
the City either buys their wiring or buys it from the new
company.
Mr. Liebowitz said the absence of competition and an
effective company to make changes was apparent until the new
satellite companies provided alternatives. He said even if
the City would have invited 100 cable companies, there would
have been no response because cable companies and telephone
companies compete. He said the response was not expected by
the U.S. Congress and Southern Bell responded extremely
slowly.
Mr. Liebowitz said the 1992 Act addressed wiring and ruled
the cable companies could depreciate the value over a period
of time, but not at the original cost. He said cable
companies have the right to remove their wiring but must
either abandon or return the building to its original state.
He said it is unlikely a cable company will return to remove
their wiring.
Mr. Liebowitz said the matter can be bypassed if they abandon
the period of waiting. He said the cable company owns all of
the wiring they installed in the building. He said a few
developers complete their own wiring and some homeowners are
pre -wiring their new home.
Ms. McDermott said an integral issue is discrimination
between single-family homes and multi -family homes and asked
if there was a mechanism that specifies discrimination or if
there is a method for evaluation.
Mr. Liebowitz said according to the new law, this Commission
establishes reasonable classifications.
Ms. McDermott said the City of Tamarac is examining different
methods and she asked if criteria has been established for
reference purposes by other cities and government agencies.
City Council Workshop Meeting
01/03/94 - zz
Page $
Mr. Platz said there are no established classifications and
everyone is currently looking to establish those
classifications.
Ms. McDermott asked for a brief explanation of the rate
regulation and its effect on the access channel.
Mr. Platz said access channels are part of the basic tier
package and rate regulation can be affected by the City. He
said questions concerning access channels and whether. the
City or the cable company pays for the channels is part of
the contractual obligation and part of it is law. He said
the City requires additional dollars on those access channels
at the moment.
TAPE 2
Mr. Liebowitz said whether or not the pro-rata basis is with
the number of subscribers over the life of the contract or
whether it will be pro--rata for one or two years is an issue
the City and the cable company will have to negotiate because
no specification exists to date.
Ms. McDermott asked if a cable contract administrator for a
group of cities could be a mechanism to enact these types of
reviews or should the City wait until January 13, 1994
regarding the bulk contracts.
C/M Abramowitz asked if the proposal considers the cities
working in a joint effort because if there are four cities,
it appears the cost is $600 per hour. He asked if the
proposal represents Tamarac as an individual client and
considers Tamarac anxious to join other cities. ,
Mr. Liebowitz said the proposal is a divider and not a
multiplier and the concept is for the City to enter into an
interglobal agreement allowing the work to be common among
the cities it divides. He said the numbers apply to
Tamarac's request for something different or in addition.
Mr. Liebowitz said the City has filed for certification with
the FCC and when the freeze is over on February 15, 1994,
local notice may be given and the City may implement rate
regulation on their own or in a joint effort between cities.
He recommended the City participate on a joint basis for
economical reasons.
Mr. Liebowitz said in a joint effort, the local government
agreement could provide the specifics for the next
procedures. He said he envisions the local group will have
to hire outside counsel and potentially outside accountants
to individually work with the cable company. He said the
cable company could submit their proposal to each City who
could confer with the consultant which would receive four
copies of the same document.
C/M Abramowitz asked who would be the regulatory commission.
Mr. Liebowitz said the consultant would make a report for
issuance to each City who would vote on the determination.
He said theoretically, one City could say yes and one City
could say no, and be somewhat limited because of the
objective evaluation that must be according to the FCQ rules
and procedures and governed by the same figures the cable
company provides.
Mr. Liebowitz said although there may be some subjective
analysis, the ultimate output should be relatively common
because it is similar to a 1040 tax form audited by the
government. He said if the government audits someone for one
City Council Workshop Meeting
01/03/94 - 1Z
Page 9
item, they get one result, but if they audit you on ten
items, they may get different results.
C/M Schreiber said every city experiences the same basic
problems as Tamarac.
C/M Abramowitz said not every City has the same Ordinances or
franchise agreement.
Mr. Liebowitz said rate regulation has more federal
regulation than the City's franchise.
V/M Katz asked for legal clarification if the City cable
company is considered utilities and, if any easement granted
by a homeowners association or individual does not allow
cable companies to utilize utilities easement, must they have
their own easement, in the event a telephone company does
have the right to get involved with the cable transmission.
Ms. McDermott asked if other companies can be considered in
joint opportunities. She said each City has their own
franchise agreement but Tamarac has a non-exclusive agreement
and she asked if this process examines the agreements.
Mr. Liebowitz said the scope of the work of a joint entity
could be as large or small as the cities among themselves.
Ms. McDermott said the proposal favors a joint effort sharing
one common goal and objective.
C/M Schreiber said that would not have an effect
on another
company wanting a franchise because
the City has
a right to
offer a franchise to them.
C/M Abramowitz said the City may be
prohibited from offering
a franchise to another company with
an interlocal
agreement.
Mr. Liebowitz said these possibilities depend on the scope of
the interlocal agreement and the present agreement was
drafted as an advisory only. He said there are no
requirements at this time.
Ms. McDermott said Tamarac has enacted several Resolutions to
be the regulating authority. She said the City receives
complaints daily relative to poor service, lack of service
and rates. She asked if this type of proposal includes these
areas or would the City need to provide their own contract
administration.
Mr. Liebowitz said the current drafted proposal does not
include a common contract administrator but there are groups
of cities that will hire a common administrator because the
problems will be essentially the same when served by the same
cable company.
Mr. Liebowitz said one City may encounter more problems than
another and should delegate the day-to-day operation and not
the overall responsibility.
V/M Katz said he attended a meeting where Broward County
Commissioners said in the event Tamarac connected with the
County, they would administrate on behalf of the joining
cities.
C/M Abramowitz said when Broward County made their
presentation to the Broward League of Cities, they did not
address who would handle the cost if Tamarac united.
City Council Workshop Meeting
01/03/94 - IZ
Page 10
V/M Katz said the interlocal agreement in this case would be
with the County rather than the City but aggregates the
City's rights based on an interlocal with other cities.
C/M Abramowitz said the Ordinance passed by Broward County
regarding cable television said they would handle the
management of all cities in the agreement if Tamarac signs
their interlocal agreement.
Mr. Liebowitz said that session was informative and very
confusing and other City officials sitting at his table asked
him to clarify the answers. He said he was unable to respond
to the questions because he was not sure of Broward County's
intentions.
Mr. Liebowitz said there are legal questions regarding the
delegation since they are not the local franchise authority
for the municipalities. He said he does not know whether
under Federal law they would have that right or if the City
could delegate that right to them. He said the document
should be reviewed regarding this right.
V/M Katz asked Mr. Liebowitz to expound on the regulation
differences between satellites and cable companies.
Mr. Liebowitz said the rate regulation applies to multi-
channel providers of similar type programming. He said rates
could be regulated with substantial differences if the
telephone company becomes involved and a satellite operator
qualifies as a franchise.
Mr. Liebowitz said a franchise is not required assuming the
satellite operators serve commonly on buildings and do not go
over public easements. He said they can be involved in the
rate regulation if they are competitive to the cable company.
Mr. Liebowitz said the telephone company at this time does
not plan to enter into the cable industry in Florida.
V/M Katz asked Mr. Liebowitz to comment on the City starting
a satellite company and the opportunities associated with
changing to a franchise agreement.
Mr. Liebowitz said because the City has a non-exclusive
requirement, if the City wants a franchise agreement, it must
be considered according to Federal and State law.
V/M Katz asked if the City will become a cable company when a
franchise agreement is granted and Mr. Liebowitz said they
are effectively the same.
Mr. Liebowitz said if a satellite operator's service goes
over public rights -of -way or serves non -commonly owned and
operated companies, the satellite operator is required to
obtain a franchise and regulate in the same manner as the
cable company.
V/M Katz asked if the satellite company becomes a cable
company with a franchise agreement and Mr. Liebowitz said
they are effectively the same.
C/M Schumann asked what method is used to regulate the $1.0
package rates and how far can the rates be reduced.
Mr. Liebowitz said the City has the authority to regulate
basic rates and bulk rates whether or not they are basic or
upper tiers, if a bulk rate contract exists. He said the
individual rates for homeowners and apartment or condominium
owners are according to a formula that decides if the cable
companies are correct or incorrect.
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1
City Council workshop Meeting
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Page 11
Mr. Liebowitz said the City has the ultimate decision -making
authority within the FCC guidelines and numbers. He said if
the company complies and illustrates entitlement to a $10
rate, the City must abide. He said on the other hand, if $10
is charged and the FCC limit is $9, then the City can advise
the company they over charged.
Mr. Liebowitz said the extent of the bulk rate analysis is
still on appeal. He said theoretically the City will have
the same authority but whether or not the City will expire or
be pre-empted is unknown.
C/M Schrieber asked if there would be restrictions on the
authority the FCC has regarding regulation under the
interlocal agreement supposition representing four cities and
would the FCC handle a complaint filed by the City on behalf
of the subscriber.
Mr. Liebowitz said it would be shared to the extent there is
common work but will be the City's responsibility if the City
extends into additional issues.
Mayor Bender said the cities will never be in unison unless
we are aware of what is going on in the cities.
V/M Katz said City Council could request public information
from the other cities.
Mayor Bender said if information is distributed, Council
would not have to request it.
Mr. Liebowitz said that information can be included.
Mayor Bender said this method is more efficient because all
of the cities will become aware of how problems were handled.
Ms. McDermott asked what is the traditional length of time
for this process. . .
Mr. Liebowitz said this process is quick. He said if the
rate freeze ends on February 15, 1994 and the City already
has the ordinance in place and gives local notice, the cable
company has 30 days to respond with their figures.
Mr. Liebowitz said cities are initially given thirty days to
examine the agreement and it would be wise for the City to
draft new questions for the cable company to answer. He said
the City will have another 90 days to make their decision
concerning service on a individual basis or with a unified
group.
Mr. Liebowitz said at the end of the 90 day period a report
will be issued and the City will vote regarding the granting
or lowering of rates and the distribution of refunds with
interest.
C/M Schreiber asked if the FCC or the court of law would be
the next step if the cable company refuses to accept the
decision.
Mr. Liebowitz said for the first time the City will have
enforcement authority and the FCC will not take kindly to
cable companies ignoring local franchise authorities.
C/M Schreiber asked if contacting the FCC is the first step
to take if the cable company refuses to accept the
franchising authority decision.
City Council Workshop Meeting
01/03/94 - IZ
Page 12
Mx. Liebowitz said once the City goes to court for an
injunction the rate cannot be raised without the approval of
the City.
Mayor Bender opened the meeting for public participation at
this time.
A resident of Faircrest, Section 14, expressed his opinion
regarding the cable company charging him 2-1/2 times more
than the rate and recommended inviting cable competition to
Tamarac.
Irving Ross, resident of Section 14, expressed his opinion
regarding another cable company's interest to do business
with the City of Tamarac, related correspondence and his
recommendations for Tamarac to consider NBF Cable Systems,
Inc.
V/M Katz said NBF Cable Systems, Inc., is a satellite
company.
A Spyglass resident asked the difference between satellite
companies and Continental Cable service.
Mayor Bender said he requested clarification on the
differences between cable companies and satellite companies
earlier. He said a satellite company does not have a
franchise agreement and their work is directed to the
building or they use microwave systems that transmit signals.
Mr. Kraft said he was in contact. with Mr. McNorton and the
attorney for NBF Cable Systems, inc., in Woodbridge, New
Jersey and the documents they requested were mailed to him
approximately two weeks ago.
Mr. Ross expressed his opinion concerning the constituents in
unifying to prevent Continental Cable Company from taking
advantage of them.
Mr. Kraft said Mr. McNorton will contact the City Manager
after his review and Council will be informed of all
progress.
Mayor Bender said all information is distributed to Council
members upon receipt.
At this time, Mr. Liebowitz was handed a copy of the cable
company response filed with the FCC which was mentioned by a
citizen earlier in the meeting. He said the response was
filed by the Raywood law firm. He said in contrast to his
comments on benchmark, this cable company uses cost of
service and is more expensive.
C/M Abramowitz said they are making it more difficult if it
costs more to use cost of service.
Mr. Liebowitz said it is still a divided cost and the
potential for an increase is the same if cities join
together. He said the gentleman spoke correctly regarding
the procedural arguments on behalf of the company when he
said only a lawyer can respond to the arguments.
Mr. Liebowitz said one problem in the FCC process is cable
companies out -smarting subscribers and that is why the City
must role play individually or jointly and should, as the
gentlemen requested, file responsive pleadings.
Mr. Ross expressed his comments on NBF Cable Systems' ability
to provide reasonable bulk rates.
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City Council Workshop Meeting
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Page 13
A resident commented on the change -over from 20 to 25
channels and the basic rate staying uniform throughout the
City.
Mr. Liebowitz said the comments were correct but with
variations. He said until the FCC decides whether to pre-
empt, the cable company can increase the basic rate, assuming
the contract does not exist and they want to increase the
number of channels.
Mr. Liebowitz said that decision will apply across the City
to the extent the cable company is offering a basic tier,
and will have to be offered on a non-discriminatory basis
City-wide.
Mr. Ross commented on contracts not listing channels, basic
rates per month, 20% participation to join a community where
they live, and places that would not have the bulk contracts.
He asked if it is discriminatory not to offer bulk rates to
everyone.
Mr. Liebowitz said promotional rates can be very
discriminatory and, unfortunately, there are not many laws
defining promotional laws. He said there are some State laws
that may apply and the Florida Attorney General's office is
investigating the matter.
Mr. Liebowitz said he assumes the franchise and the FCC does
not define this issue and the absence of this definition by
State, Federal and local government provides the cable
companies freedom to do what they want.
Mr. Ross expressed his comments regarding promotional rates.
Mr. Liebowitz said if a promotional rate is in place for
seven years it is not a promotional rate.
Mr. Ross commented on cost of service rates and customers
reimbursing Continental Cable for buying out American Cable.
Mr. Liebowitz said it is the intent of the FCC and Congress
for subscribers not to pay the premium price.
Mr. Ross said the City should consider assembling an Advisory
Committee similar to committees other cities have organized
to address unresolved legalities, how the freeze prevents a
rate increase and other problems.
Mr. Liebowitz said the rates are frozen and cannot be raised
if the cable company has maintained the level of service.
C/M Abramowitz said the bulk rate is less than the basic
rate.
Mr. Ross commented on the expiration of basic rate contracts
during the freeze period and the rate continuing as specified
in the contract.
Bob Steinert, President of Continental Cable, said $10.95 is
the monthly service rate.
C/M Abramowitz said sometimes the basic rate is more
expensive than the bulk rate and he suggested continuing to
pay the rate until the company threatens to cut service.
V/M Katz said the freeze exists on all of the services
provided on three tiers or levels for basic and channels
above basic. He said the billing rate should apply until
expiration if the bulk rate agreement is $10 for all 40
channels.
City Council Workshop Meeting
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Page 14
C/M Schumann asked what does the Motion to Dismiss pertain to
and who was it filed by.
Mr. Liebowitz said there were complaints filed by individuals
arguing the rates on the upper tiers were unfair. He said
the cable company responded with a Motion to Dismiss that
requested the FCC to dismiss complaints upon their filing.
He said a decision is pending and the issue will not be
addressed for a long time. He said the City has a right, but
is not obligated to respond to this Motion.
Mr. Liebowitz said the FCC will review the Motion and decide
according to their merits.
Mr. Liebowitz said the FCC changed their form to make it less
confusing but the changes on the new form are just as
confusing as the first form. He said the FCC is endeavoring
to resolve the confusion problem through an analysis. He said
this problem could be resolved quickly if citizens and the
City responded to this pleading with their viewpoint. He
said the FCC will not dismiss this matter.
Burt Schnieder, President of the Woodmont Property Owners
Association, commented on his many experiences with
Continental Cable. He said the 198E agreement was sold back
to the cable company in 1991 and the present contract expires
on September 30, 1994. He said when he contacted Ellen
Filipiak, Vice President -District Manager, to negotiate a
bulk contract he received a negative response. He said the
Woodmont Association decided to investigate other
opportunities and decided on three different cable satellite
companies.
TAPE 3
Mr. Schneider said they will continue further research to
determine if another provider can be used instead of
Continental Cable because they do not desire a discounted
agreement. He said they do not plan to deal with Continental
Cable on a retail basis because more than half of the 2,200
families they represent are in the Continental contract. He
said there could have been 300-400 more families. He said a
limit on the number of people that could be accepted was
built into the contract and was mutually agreed upon.
V/M Katz asked why the contract was sold.
Mr. Schneider said it was sold to avoid litigation because
there was a question on whether or not the Woodmont.
Association had the right as a watchdog group to negotiate
the contract. He said the contract was drawn favoring
American Cable and the Woodmont Association did not have an
attorney.
Mr. Schneider said the rates were lower than they wanted to
accept upon review. He said they received enough money to
subsidize the balance of the original life of the contract to
avoid monetary detriment.
Mr. Schneider expressed his appreciation for Mr. Liebowitz's
presentation and the discussion on the matter. He said he
hoped the four cities would join together as cable operators
instead of an advisory type system.
Mr. Schneider said there are satellite companies and people
who are willing to handle the business that Continental Cable
is not willing to meet on a price competitive basis. He
suggested the group follow up and decide the best method.
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Bernie Caveat, resident of Green Haven Grove, and Chairman of
the Cable Community, said he did not hear from any of the
people outside of cable subscription regarding television
channel boxes that were not cable ready.
Mr. Caveat said his Continental Cable contract expires June
1, 1994 and he is charged for the use of the control boxes.
He said in some instances people are double billed for basic
services. He said he is trying to determine if a breach of
contract exists because the contract states subscribers are
entitled to two outlets and table hook-ups -but are charged
$2.68 for a control box and $1.48 for an uncontrolled box.
Mr. Caveat said his development is instructing the home
owners to refrain from payment until all legal aspects are
investigated but he does not want the subscribers to be
removed from cable and asked for comments regarding this
possibility.
A Continental Cable Company letter mailed to every cable
customer was reviewed at this time.
Mr. Liebowitz said according to the new law, the Cable
Company is required to unbundle which means there are no
separate charges for programming and equipment joined
together in bulk rate contracts. He said there are no
definitive answers because this issue is on appeal.
Mr. Liebowitz said for example, if someone was charged $10
for programming and the box during the freeze, although they
were supposed to unbundle, the total cost could not exceed
$10 for the average cable subscriber. He said the cost of
equipment can be investigated and regulated and a tremendous
price variation exists nationally. He said the City, as a
rate regulator, could investigate the monthly box price.
V/M Katz said without raising legal questions, the validity
of the balance of the.contract is his concern. He asked what
would happen to the rest of the contract if a part of the
contract is unbundled.
C/M Abramowitz said he was advised the current contract would
be honored.
Mr. Liebowitz said he does not have the answers for many of
the questions.
A resident asked what advice should be given to the
individual homeowners that are still paying under the
contract for basic cable at a bulk rate. She said these
people are receiving bills for services they already paid for
according to the contract.
Mr. Liebowitz said a complaint may be filed with the FCC
indicating the resident's lack of understanding on this issue
and suggested requesting their guidance to resolve the
matter.
A resident said two individuals under the bulk contract for
many years were billed for basic cable service and received a
complete and entire total bill. She asked if this means the
person handling the Continental Cable billing is confused.
She said charges differ between the home owners.
Mr. Liebowitz said this is a confusing and difficult time for
the homeowners and the cable companies and suggested the
individuals experiencing this problem contact the cable
company to resolve the matter. He said if a homeowner
believes his charges violate the rate increase, a complaint
City Council Workshop Meeting
01/03/94 - IZ
Page 16
should be filed with the FCC and Continental Cable will have
to abide by the FCC decision.
Mr. Kraven wanted to know if Continental Cable is authorized
to cut service.
Mayor Bender asked Mr. Stein to investigate the double
billing errors and advise accordingly.
Joe Padwa, resident of Concord Village, said the cable book
published by the newspaper lists 62 as a channel and the
cable guide published by Continental Cable.. lists 61 as a
channel. He said the cable converter box provided by
Continental Cable receives channel 61 and he is charged for a
channel he cannot receive on their own box.
Mr. Steinert, Director of Government Regulations for
Continental Cable, said the total maximum system channel
capacity is 55 channels including Pay Per View, HBO, the
expanded basic and basic service.
Mayor Bender clarified Mr. Padwa's statements and said he
receives channel 62 but his converter box does not reach
channel 62.
Mr. Steinert said there is a cable ready television channel
found on channel 54 and in that case a converter box would be
necessary.
Ms. McDermott requested direction from the City Attorney and
Council or consensus regarding Mr. Liebowitz's proposal
relative to cable TV and joint cities.
C/M Abramowitz said he was impressed with Mr. Liebowitz's
presentation to the Broward League of Cities, and his
knowledge on the subject. He said when reading the first
proposal it was clear a basic rate would exist if an
agreement existed between three or four cities.
C/M Abramowitz said he prefers to review additional. detailed
information regarding the interlocal agreement before
deciding. He said the City has been contacted by other
interested companies and asked what are the requirements for
entering the program and how will the complaints be handled.
Mr. Ross said the City Council should hold a separate meeting
without the Continental Cable representative present.
Mayor Bender agreed that further elaboration is necessary.
Discussion was held concerning a Contract Administrator and
obtaining cable service for Tamarac only versus a coalition
of cities.
Mr. Liebowitz said the City or cities determine who the
Coordinator or Contract Administrator will be.
C/M Schreiber suggested Council avoid further delay and take
steps to resolve the matter.
Mayor Bender said he discussed cable service problems with
the City Attorney. He said the City cannot become involved
in the .legal aspects because they are not attorneys. He said
the City has designated the Consumer Affairs office to handle
calls pertaining to cable service complaints and problems.
Mayor Bender said the City can inform the subscribers to
execute the FCC form and mail it to the Commission and the
City Attorney should receive a copy of the form as a record.
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V/M Katz said he prefers to review the agreement with the
City Attorney before acknowledging his acceptance.
C/M Schreiber said the information provided in the meeting
was adequate and the issues to address are regulating basic
cable, the equipment and an association which the FCC Act
allows. He said although the City has the authority, the
City is not able to handle it alone; therefore, the City
should consider entering into an interlocal agreement with
advice from an expert attorney in the cable industry so the
City is protected. He said Council may desire further
information but he is not in favor of delaying this matter.
Mayor Bender asked Mr. Liebowitz to comment on his proposed
contract regarding contractual binding beyond a certain
point.
Mr. Liebowitz said with respect to City participation in an
interlocal agreement, because the City should have the right
to withdraw, there should be an initial term period. He said
depending upon the structure, there could be notification
without early withdrawal, or the group in itself could have a
natural termination point where they could withdraw at the
end of the term.
Mr. Liebowitz said an issue to consider is whether or not
this stipulation is contained in his proposal or the
interlocal agreement.
Mayor Bender said all participants would be bound by the
interlocal agreement but could separate if they provide a
notice.
V/M Katz suggested Council review the interlocal agreement to
obtain a better understanding before making their decision.
Mr. Liebowitz said the interlocal agreement applies to the
City on an individual basis and affects the shared service
participation between the City and other cities by way of the
interlocal agreement.
C/M Schumann said he will make a decision after further
investigation and discussion with the City Attorney.
Mayor Bender said the interlocal agreement was the most
important issue addressed in this meeting and all previous
Council discussions on this subject were conducted with
limited information.
With no further business, Mayor Bender ADJOURNED the meeting
at 12:15 p.m.
Carol A. vans, CMC
City Clerk