Loading...
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 01/03/94 - Iz 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. 1 City Council Workshop Meeting 01/03/94 - rz 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 01/03/94 - IZ 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. 1 1 City Council workshop Meeting 01/03/94 - IZ 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. 1 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 O1/03/94 - IZ 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. 11 1 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 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. 1 1 City Council Workshop Meeting 01/03/94 - IZ Page 17 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