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Minutes

Committee Hearing, June 5, 2006

Philadelphia City Council Committee HearingsJun 5, 2006

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Ms. Schlotterbeck

Actually, I have a marked-up copy, and I'm waiting for the other to be entered into the record. This is a marked-up version I have. 50 06/05/06 Public Property/Works Bill No. 060338

Councilman Clarke

First of all, I want to thank Councilman DiCicco. I know he's been working on this. As a Councilperson relatively new to the area boundaries of our districts, I know they are close to the facility, and I want to thank him for what he's done with that community to move this project forward. Councilman Kenney?

Councilman Kenney

Thank you Mr. Chairman. Commissioner, in the amendment, I recognize the need to ensure that it's going to be used for nonprofit use. During the course of the control of the properties by the civic association in the event that the construction of a facility there is not feasible, could the properties be sold and the proceeds used to build or acquire a property for similar use at another location? We've run into this problem -- not problem but situation before in Queen Village when PennDOT conveyed a property 51 06/05/06 Public Property/Works Bill No. 060338 to the Queen Village Association as a headquarters and they really didn't develop it that way and wound up selling it but using the proceeds to do, I think, the parking area or some parking area under 95. So there was ultimately nonprofit use. However, during the course of their ownership, let's say they discover it's just not feasible to reconstruct or to renovate, could they then use the proceeds of a sale to a private person to do the same thing but at another location within the neighborhood?

Ms. Schlotterbeck

I guess it's doable, but it would have to be a part of the amendment.

Councilman Kenney

I don't want to play with the language. You can see the circumstance that may arise as you get into doing this kind of redevelopment. It may be economically unfeasible, and if a property becomes available down the street that they could 52 06/05/06 Public Property/Works Bill No. 060338 purchase for the resale of the current parcels to, say, a private developer.

Councilman Clarke

Could that be done with a separate ordinance at the time or do they need to sell the property? I guess we should ask --

Ms. Schlotterbeck

Actually, I think it could be done. I've never had this specific issue come before me. (Henry Schwartz from the Law Department comes forward.)

Councilman Kenney

Could it be done in a separate ordinance?

Mr. Schwartz

It has to be done in a separate ordinance as well.

Councilman Clarke

Thank you, Mr. Schwartz. Any other questions of these witnesses on this particular bill? (No further questions.)

Councilman Clarke

There being none, is there anyone else who wishes to testify on this bill? (No response.) 53 06/05/06 Public Property/Works Bill No. 060338

Councilman Clarke

There being no further questions, thank you very much. I don't even know if...

Ms. Schlotterbeck

Do you want me to hand you --

Councilman Clarke

We would like to have the adjusted amendment.

Ms. Schlotterbeck

Okay. Thank you.

Councilman Clarke

Could I ask one of the Sergeant-at-Arms to ... make copies. Do you have enough copies? I have five. Thank you, Commissioner.

Ms. Schlotterbeck

You're welcome.

Councilman Clarke

Okay, let's proceed. Mr. Carter, thank you. Will the clerk please read the title of the next bill. * * * 54 06/5/06 - Public Property/Public Works - Bill 060440

The Clerk

Bill No. 060440, an ordinance consenting to the assignment of Area II Cable Television franchise from Time Warner Cable, Incorporated to Time Warner NY Cable LLC to further assignment of such franchise from Time Warner NY Cable, LLC to Cable Holdco Exchange VI LLC and to exchange control of such franchise from Time Warner, Incorporated to Comcast, Incorporated, under certain terms and conditions.

Councilman Clarke

Thank you. (Witnesses come forward.)

Councilman Clarke

Please proceed.

Mr. James

Good afternoon. My name is Joseph James. I have my testimony and it's been circulated, and I would just like to read it into the record. I am Joseph James, Deputy Commissioner of the Department of Public Property. I'm appearing before the committee today to recommend that City 55 06/5/06 - Public Property/Public Works - Bill 060440 Council give its approval for the transfer of control cable television franchise for Area II from Time Warner Cable to Comcast Corporation. The plan transaction includes two parts: First, an internal transfer of the franchise to Time Warner subsidiary named Time Warner New York Cable, LLC; and second, a further transfer of the franchise to a new subsidiary named Cable Holdco Exchange VI LLC, which I will be acquired by a subsidiary of Comcast Corporation. These transactions are being done in the context of a larger transaction involving the acquisition by Time Warner and Comcast of the cable franchises of Adelphia Communications, which declared bankruptcy,and the swap of certain franchises between Time Warner and Comcast. Pursuant to the terms of the City's franchise agreement with Cable Television's provider, a transfer of the 56 06/5/06 - Public Property/Public Works - Bill 060440 franchise from one owner to another or a change of the control of the franchise requires that the City be notified of the proposed transaction and provided, consistent by ordinance of City Council to each of the proposed transfer. The Federal Communications Act also provides that information about the proposed transaction be provided to the local franchising authority and establish a framework for the review and consent of the locality. Time Warner Cable and Comcast notified the City of a proposed transfer and provided the City a copy of the required Federal Communications Form 394 in January of this year. The City, in February and April, issued requests to Time Warner and Comcast for additional information with respect to the transactions, and both companies responded to each request with additional data, which was reviewed by the Department as well as by the Law 57 06/5/06 - Public Property/Public Works - Bill 060440 Department and the City's cable television consultant, TCS International. This information has been provided to members of the committee of Council in white binders. And based upon the materials submitted and the discussions pursuant to this transfer and recommendations of the City's cable consultant, it is my recommendation that City Council give its approval for these transaction transactions. Bill No. 060440 was introduced May 18, 2006. The bill reflects terms for an agreement that will best serve the needs of the communities, provides for enforcement of performance obligation, and also incorporates commitments which have previously been entered to by Urban Cable Works of Philadelphia and Time Warner Cable. Time Warner and Comcast have agreed to maintain these commitments following each of these two consecutive franchise transfers. Warner and New York 58 06/5/06 - Public Property/Public Works - Bill 060440 Cable LLC and Cable Holdco Exchange VI LLC will accordingly enter Assumption Agreement, forms of which are Exhibit C and D to Bill No. 060440. Comcast Corporation has agreed to provide a guarantee of the performance of all franchise agreement commitments by its subsidiary, Cable Holdco Exchange VI LLC. A form of such affirmation of guarantee is Exhibit E to Bill No. 12 060440. Comcast Corporation is the nation's largest cable operator in terms of subscribers served. 4 million customers in 35 states and in the District of Columbia.

Mr. James

The information provided to the City on FCC 394 in January and the additional information submitted to the City during the past months is sufficient for the Department to ascertain Comcast Corporation's financial, technical, and 59 06/5/06 - Public Property/Public Works - Bill 060440 legal qualifications to provide cable services to the City's franchise area through its subsidiary. In conclusion, the terms to which Time Warner and Comcast Corporation have committed are acceptable to the Department. I respectfully ask the committee that the rules of Council be waived to allow this bill to be reported out of committee and have its first reading at the next Council session. Also, in addition to this, because of time, I was not able to reach all of the members of Council directly to explain that very large white binder, so I plan to meet in the next couple days with at least Councilwoman Blackwell to give her a direct briefing on the materials that are in the binder. And if any member I did not speak to directly wishes to have a similar briefing, I'll be glad to arrange that. 60 06/5/06 - Public Property/Public Works - Bill 060440 I'm available for any questions.

Councilman Clarke

This franchise also lies within Councilwoman the boundaries of Blackwell's district?

Mr. James

That is correct.

Councilman Clarke

Okay. Thank you. Commissioner, do you have any testimony on this?

Ms. Schlotterbeck

No. 13

Councilman Clarke

You'll leave it up to Mr. James, then, huh?

Ms. Schlotterbeck

Yes. Delegating.

Councilman Clarke

Okay, thank you, Mr. James. Are there any questions of Mr. James by members of the committee? Councilwoman Miller?

Councilwoman Miller

Thank you. Thank you, Mr. Chairman. Good afternoon, Mr. James.

Mr. James

Good afternoon, 61 06/5/06 - Public Property/Public Works - Bill 060440 Councilwoman.

Councilwoman Miller

I was wondering. I remember -- I was not a member of City Council, but I do remember reading and hearing about cable coming to Philadelphia. And back then, you know, they divided the City up into franchises, and I think one of the issues then -- and I want to get your opinion on this matter -- is that the City didn't want one cable company to control the entire city, correct?

Mr. James

That is correct. It was looking for a diversity of companies to operate.

Councilwoman Miller

Excuse me?

Mr. James

It was Looking for a diversity of companies to operate the franchises.

Councilwoman Miller

Okay. And why was that? What was the reason?

Mr. James

I think the intent 62 06/5/06 - Public Property/Public Works - Bill 060440 was to try to have -- and it was conducted through an RFP process, and it was to have companies -- at that time, it was still an emerging industry, to have competition and hopefully have companies that really wanted to target to a specific area and serve those constituents. It was hopeful that, you know, that the new companies would grow and, just like a lot of industries, and develop but. As we see, it's becoming more of a commonality today is that there is a consolidation of media, whether it's in telecommunications space or in other segments of the market.

Councilwoman Miller

So now we're moving into one company having all of the franchise areas in Philadelphia. And certainly we all know that Comcast has the ability to deliver the services and whatnot; they've sure been around long enough. So it never really had to do 63 06/5/06 - Public Property/Public Works - Bill 060440 with competition or price controls or any of that? Keeping prices down?

Mr. James

Again, I was not here at the time, but from what I read in the history of it, at the time, the idea was just to allow cable to happen. I mean, there was a lot of -- an interest by folks in the community that they were missing out on kind of an emerging part of technology that would allow people to have cable TV at locations where they were having trouble just getting, you know, regular over-the-air reception. And, of course, there was a lot of promises of new services and some new channels that were seen in other markets that eventually would come to Philadelphia. It didn't specifically target as its main goal competition or lower rates. It was the opportunity to have a service that was starting to appear in most major cities, and it was something 64 06/5/06 - Public Property/Public Works - Bill 060440 that was very important to see here in Philadelphia. And that's not to say that the competition will not arise. There is competition today, even though Comcast will probably be the company that's going to own all of the franchise, but through DirecTV and dish, and I'm sure Comcast will tell you, there's a number competitors who are offering similar products as well as talking at the federal level of allowing new competitors into the market to offer similar services.

Councilwoman Miller

All right. Okay, thank you. Thank you, Mr. Chairman.

Councilman Clarke

Are we allowed to, as a city, allowed to offer an opportunity to another cable company in the City of Philadelphia?

Mr. James

Yes. The franchises are not exclusive. So if another company -- as you 65 06/5/06 - Public Property/Public Works - Bill 060440 remember a couple of years ago, there was a company, RCN, that wanted to enter into the market.

Councilman Kenney

I remember.

Mr. James

And there is no 7 restriction to keep anyone out of the mark. That transaction did not work out, but these are not exclusive franchises.

Councilman Clarke

Okay. Councilman Rizzo?

Councilman Rizzo

To the point, what will our constituents see once the transaction occurs? Will they see rate increases? Will they see changes in programming in the franchise area? What will the impact of the consumer be?

Mr. James

From the information that we understand from Comcast -- and probably Comcast is better prepared to answer your question. But I think what we will see is finally a consistency in the market, that 66 06/5/06 - Public Property/Public Works - Bill 060440 we will have a consistent level of programmings and channel lineups that's similar to the other three segments that the City currently experiences. I'm not sure if there will be a significant difference in rates. The rates are pretty much standard now in the industry. What you also will see -- and Time Warner has been working on this themselves -- is an proved level of customer service and responsiveness to the community. So I think for those areas, that you will see more consistency, probably a better standard of service, and a better responsiveness to the needs of the community.

Councilman Rizzo

So, in most cases -- that's where I was headed. In most cases, a current customer will not see a significant increase in their rates to continue with cable television?

Mr. James

I can't speak 67 06/5/06 - Public Property/Public Works - Bill 060440 directly to it 'cause I think Comcast should answer that question. But in the similar cases where Comcast has acquired other franchises in the City, there has not been a jump in rates. In most cases, as I said, in most of the these companies, the rates are really driven by the content providers and the programming that they receive, and their ability to deliver service. And I think what you will find out is that with Comcast having scale in the other three franchises, the areas that their cost for operations is probably not going to cause them a see a spike in the increase in their rates.

Councilman Rizzo

That's what I'm interested in, the basic cable, not all the bells and whistles.

Councilman Rizzo

If it's $22.50 a month now, will it be somewhat 68 06/5/06 - Public Property/Public Works - Bill 060440 in that area and not a significant increase. I think we should know that, and we'll ask Comcast that question.

Councilman Rizzo

Thank you, Mr. Chairman.

Councilman Clarke

Thank you. Any other questions? Councilman Nutter?

Councilman Nutter

Thank you, Mr. Chairman. Mr. James and Commissioner Schlotterbeck, the overall agreement, what's -- the Area II franchise was renewed in...?

Councilman Nutter

2000?

Councilman Nutter

Took care of it in '99?

Mr. James

Yeah. Most of them started in '99, 2000. I think they were renewed in 2000.

Councilman Nutter

Okay. So 69 06/5/06 - Public Property/Public Works - Bill 060440 in this situation, technically, there are still getting to be four franchise areas, notwithstanding the sole ownership --

Mr. James

That is correct.

Councilman Nutter

-- by one company?

Mr. James

That's correct. And still maintain the four franchises.

Councilman Nutter

And so if the transfer goes through, they would be picking up a franchise that has technically nine years left or so on its --

Mr. James

Right. All of the agreement, whether they started in '99 or 2000, they all expire around 2015, 15-year agreements.

Councilman Nutter

2015?

Councilman Nutter

And is there any particular reason at the moment, or after this moment, to still maintain technically four separate franchise areas and four different 70 06/5/06 - Public Property/Public Works - Bill 060440 agreements as opposed to one consolidated agreement?

Mr. James

If you're asking my opinion, I mean, the original structure was created by City Council, and I think it was done that way because we wanted to be able to see the performance across segments of the community. I still think it's beneficial that they maintain the four-franchise structure 'cause it does allow, in the future, should there be an opportunity for competition or someone decide to enter into the market, that they won't have to build the entire city; they could go after a particular franchise area and be able to enter in the market and maybe achieve what Comcast has achieved.

Councilman Nutter

Okay. All of the cable companies are at the moment too, are required to file a number of reports with us about performance, penetration rates, minority and female business opportunities, and employment 71 06/5/06 - Public Property/Public Works - Bill 060440 and the like. What are the array of required reports by the companies?

Mr. James

Well, the companies are required to, of course, file any kind of rate increase reports with us. And sometimes, you know, depending on your cable bill, they may come more frequently than we would like. But generally, we would see a rate (indiscernible) once a year, but they are required to submit to us minority participation goals to identify the --

Councilman Nutter

Hold on for one second.

Councilman Nutter

They're required to file any rate increases with you, which are primarily for the purpose of notice? I mean, it's not like you can do anything about it, is there?

Mr. James

Well, most of -- you know, most of the rate regulation was 72 06/5/06 - Public Property/Public Works - Bill 060440 removed by Congress sometime ago. We still review the rate filings to make sure that, consistent with the federal regulations, that if the rates are being categorized in the right allocation as the federal regs are. So ours is more to make sure they conform to the compliance. We do review and check their calculations and make sure that as they calculate it, that the money that is the right amount of money for the fee that they are going to charge. And we still review it, and we still think it's beneficial for us to continue to review that.

Councilman Nutter

Okay. What else do they file?

Mr. James

They file monthly reports with us that kind of explain to us their activities as far as the number of subscribers, their ads and deletions, the numbers of home paths, if that's increased. 73 06/5/06 - Public Property/Public Works - Bill 060440 And they also identify to us the number of complaints. They provide information on any training programs that they may have going on, the scholarship activity, their community involvement, their local origination programming, the amount of hours that they put aside for local origination programming, the amount of hours they had in a particular period of time on leased access programming of a particular market. And they also provide us an employment report to kind of show us kind of the demographics of their employee base.

Councilman Nutter

Okay. And all -- and in this particular matter, for both companies, are all reports up to date?

Mr. James

Yes. We are double-checking that to make sure. The last review we have, they have submitted the reports. 74 06/5/06 - Public Property/Public Works - Bill 060440 We just received Comcast's annual report, which we hoped to have gotten it earlier, but we just received that today. But all of them file an annual report as well.

Councilman Nutter

Can you forward for our review a copy of that to the Chair?

Councilman Nutter

Okay. Have you had a chance to review it?

Mr. James

It just came today. I have not had a chance to review it.

Councilman Nutter

Okay. From your past experience, do you have anything to share with us with regard to specifically performance in either employment or contracting as it relates to minority and female businesses?

Mr. James

Just from our team. I mean, we've worked to try to meet with them either monthly or quarterly, depending on what amount of activity is going on with the different franchises. 75 06/5/06 - Public Property/Public Works - Bill 060440 And, for the most part, they seem to be on target in meeting their goals and meeting their performance. So, um --

Councilman Nutter

The goals are contained within their franchise agreements?

Mr. James

Right. And the goals in their particular Appendix I, which lay out their performance areas and minority participation and subcontracting and small-business opportunities, community business.

Councilman Nutter

Do you recall what the goals are?

Mr. James

I think I have it. In the Appendix I section, it lays out a minimum of 37 and one half percent of capital expenditures shall be placed through local businesses. A minimum of 38.5 and one half percent of capital expenditures, inclusive of capital related to the upgrade.

Councilman Nutter

To the 76 06/5/06 - Public Property/Public Works - Bill 060440 what?

Mr. James

To when they do their upgrades.

Councilman Nutter

Upgrades, right.

Mr. James

Right. And percent of capital, 9 inclusive of capital expenditures related 10 to the upgrade shall be procured through local female-owned businesses. A minimum of 32 and a half of the dollar value of non-intrinsic goods and services other than capital expenditures shall be procured through local businesses. 30 percent of dollar value of nonintrinsic goods and services inclusive of any other nonintrinsic expenditures shall be procured through local minority-owned businesses. And 10 percent of the dollar value of nonintrinsic goods and services other than capital, inclusive of any non-intrinsic goods and services shall be 77 06/5/06 - Public Property/Public Works - Bill 060440 procured through local female-owned businesses.

Councilman Nutter

So -- and these goals are by franchise area?

Mr. James

That's correct.

Councilman Nutter

Okay. And you can -- you would be able to take a look at the report you received today and forward us an analysis of that report?

Mr. James

Yes. And we are also preparing an analysis that we've conducted ourselves to kind of show the performance over last year and identify some of the top ten companies that they spend a significant amount of dollars in small and minority businesses.

Councilman Nutter

Okay. Do you have any estimates on the use of, for lack of a better term, satellite television in the City?

Mr. James

No. I have no 23 information on that.

Councilman Nutter

Okay. Can you give us an update on the situation 78 06/5/06 - Public Property/Public Works - Bill 060440 regarding public access from the City's side?

Mr. James

Well, from the City's side, we've been working on this issue with members of the Public Access Coalition for a number of years now, starting in --

Councilman Nutter

It would be about now, right? 11

Mr. James

Well, yeah. This 12 issue is -- has been before the 13 Administration a number of times, and 14 different administrations have different 15 approaches to it. 16 But in this current 17 administration, in 2003, the Coalition 18 produced a business plan, which was 19 reviewed by the Administration, and there 20 was subsequently discussions that were entered with members of the Coalition to see whether or not we could come up with a viable plan to actually see public access happen. And those discussions have been 79 06/5/06 - Public Property/Public Works - Bill 060440 shared out of the Managing Director's Office and has members of my team and my staff and members of the Law Department and the Managing Director's Office has assigned people to work with the Coalition to kind of understand what are the legal and technical and operational issues to bring it about. And we've had some very good discussion, and we've put together some proposals that we would -- you know, we submitted to the Administration for consideration.

Councilman Nutter

And so what's the status of those submittals?

Mr. James

We still have more work to do, as we -- you know, as we provide answers, we were asked more questions, and we continue to try to respond to the questions so that we can give the information to the Administration to make a decision.

Councilman Nutter

Okay. Well, let me get a couple facts on the 80 06/5/06 - Public Property/Public Works - Bill 060440 record.

Councilman Nutter

What do you estimate to be the cost of operating a public-access entity?

Mr. James

Well, if we were to start -- and this is clearly, you know, speculation; this is not concrete 'cause we haven't produced an operating budget specifically. But based upon the information we've took from the operating plan that was submitted by the Coalition, and we reviewed it with our consultant, it's in the range of $100,000 to get started. And it's a sliding scale that could go up. But based upon the information we've taken from other cities, there is really no rhyme or reason to the amount of dollars that are spent. Some jurisdictions a million dollars in operating, and some spend as little as a hundred thousand in operating. 81 06/5/06 - Public Property/Public Works - Bill 060440 And it's not relative to the number of access channels, nor is it relative to the number of subscribers.

Councilman Nutter

How many assess channels do we have?

Mr. James

We have five public-access channels.

Councilman Nutter

And how are they being utilized at the moment?

Mr. James

Currently, the access channels are on loan to the cable operators.

Councilman Nutter

Is there any fee for that?

Councilman Nutter

I'm sorry?

Mr. James

No, there is no fee collected for that.

Councilman Nutter

Okay. And what do you think a budget is to have a full-fledged public-access corporation up and running? And what's involved in the programming side, the capital cost, and the previous -- or I guess the original 82 06/5/06 - Public Property/Public Works - Bill 060440 proposal for public access in Philadelphia had different entities paying certain dollars to make it happen. Can you give us those details, please.

Mr. James

Sure. The original franchise regret from '83 and '84 as well as what was renewed in the 2000 agreements are basically the same amount of dollars and the same configuration. The original plan was for the construction of one central studio and eight satellite facilities, in addition to providing for a van and equipment. The total amount of dollars was $900,000 from all four franchise contributions for the central studio and about $1.5 million for the eight satellite studios, including equipment. Another $300,000 was set aside for replacement for equipment. I believe it was in maybe three or four years out, after the initial outlay. So altogether, we're talking 83 06/5/06 - Public Property/Public Works - Bill 060440 about a $2.8 million capital budget for public access, with five channels. And the operating dollars was, as indicated in the franchise agreement, is in a arrange between 300,000 to 500,000 to be set by members of City Council.

Councilman Nutter

Hold on for a second.

Mr. James

All right.

Councilman Nutter

900,000 for a central studio.

Councilman Nutter

1.2 million for eight satellites.

Mr. James

1.5 million, I'm sorry, for the eight satellites. And 300,000 for replacement equipment.

Councilman Nutter

Okay. So you have 2.7.

Mr. James

2.7, right.

Councilman Nutter

And so, what's the current proposal?

Mr. James

The current proposal is the same as in the franchise 84 06/5/06 - Public Property/Public Works - Bill 060440 agreement. There's -- nothing has changed other than our discussions with the Coalition about the development maybe of one studio, the central studio. And maybe starting out with maybe one or two channels just to get started. And then build some momentum beyond that. Because in the original configuration, it's really not enough money for bricks and mortar. It's not enough money to go out and acquire land and build from the ground up. So a certain amount to our proposal is the City trying to help that by, you know, providing maybe a facility and providing space for them to get started. That way, they don't have to spend that money on capital. And maybe provide some additional in-kind to help that studio kind of get started for the first couple years and get rolling. And then the rest of that is 85 06/5/06 - Public Property/Public Works - Bill 060440 that the Coalition or the nonprofit needs to find out -- or needs to be able to put together their own funding plan to make it sustainable, assuming they have the operating dollars or assuming they didn't have the operating dollars, because it should be something that it could sustain itself. Based upon the level of interests that the Coalition says exists, there are plenty of folks out there who are willing to contribute, there's plenty of people who are willing to volunteer their services to make this happen. It should be something that should not be a big financial burden to get underway.

Councilman Nutter

Now, is it my understanding that a nonprofit or what's generally been referred to as "a public-access corporation" has to be established to run this?

Mr. James

That's correct.

Councilman Nutter

Okay. And 86 06/5/06 - Public Property/Public Works - Bill 060440 how will that get established?

Mr. James

Originally, there's a bill by City Council through ordinance 5 that creates the nonprofit, and the Mayor and City Council sign off and file 7 articles for the nonprofit to be formed. And once the articles are filed, the Administration and Council then assign the first initial set of directors to be -- to run the board and to start the operation.

Councilman Nutter

Well, what's the status of that process?

Mr. James

Well, there was a bill in the past. The bill has not been signed. And there were original bylaws, and they have not been filed. So at this point in time --

Councilman Nutter

I'm sorry. You were a little quick on that. Go back through that.

Mr. James

Back in '84 -- and don't hold me exactly to '84, but around that time, there was a bill authorizing 87 06/5/06 - Public Property/Public Works - Bill 060440 the formation of the nonprofit.

Councilman Nutter

All right.

Mr. James

The bill was not signed by the Mayor at that time or by City Council at that time.

Councilman Nutter

Whoa, whoa, whoa. Don't -- I think you're mixing the concepts together. I'm assuming the bill passed.

Councilman Nutter

Okay. And was signed by the Mayor?

Mr. James

It was not signed.

Councilman Nutter

Well, did the Mayor veto it?

Mr. James

It -- it -- it -- from what I understand, the bill was never signed, and it's just sitting in abeyance. It's not --

Councilman Nutter

Are you saying the bill wasn't signed, or the articles of incorporation weren't signed?

Mr. James

The bill wasn't signed and the articles of incorporation 88 06/5/06 - Public Property/Public Works - Bill 060440 were not filed.

Councilman Nutter

Well, if the bill wasn't signed -- I mean, it either became law after ten days, or the Mayor vetoed it, so which is it?

Mr. James

My understanding -- and, again, I could be completely wrong -- is that the bill was never signed by the Mayor.

Councilman Nutter

Your legal counsel is jumping up to help you. (Mr. James confers off the record with someone from the Law Department.)

Mr. James

The Law Department has cleared that up for me.

Councilman Nutter

Right.

Mr. James

I had a complete misunderstanding. The bill was signed, the articles of incorporation were not signed.

Councilman Nutter

Right, okay. So the bill was passed by 89 06/5/06 - Public Property/Public Works - Bill 060440 Council, the Mayor signed the bill, and then the articles of incorporation were never signed by the Mayor or the Council President at that time; is that correct?

Mr. James

That's correct.

Councilman Nutter

Okay. So in the first instance, you could say that all that remains to have the articles of incorporation signed by the Mayor and the Council President. Or, in the second instance, since that was over years ago, you 14 might want to have a second look-see at 15 those proposed bylaws because a few 16 things may have changed since then. 17

Mr. James

That's correct. 18

Councilman Nutter

Okay. 19 What's the City's position on the Mayor 20 signing the previously-created but never-signed articles of incorporation?

Mr. James

I really -- I'm not sure if I can answer the question. I understand there's been a review of the bylaws, and there has been some 90 06/5/06 - Public Property/Public Works - Bill 060440 consideration to signing the original bylaws, and there has been some consideration to proposing a new set of bylaws. I don't think a decision has been made one way or another.

Councilman Nutter

So is it fair to say that without the bylaws being signed, whether it's old ones or new ones, you cannot have the public-access corporation or the required nonprofit under the previously approved legislation until certain action is taken by the City.

Mr. James

That's correct.

Councilman Nutter

I'm sorry?

Mr. James

That is correct. I think that's where we've been over the last 20 years is that there has not been a decision to move forward either with new bylaws or with the existing bylaws.

Councilman Nutter

And is it fair to say that even if, back at the time four companies, three companies, 91 06/5/06 - Public Property/Public Works - Bill 060440 presently two companies, possibly soon-to-be one company, if any of those companies were ready to move forward, without the necessary articles of incorporation being signed by both the Mayor and the Council President, you still could not have public access.

Mr. James

That's correct.

Councilman Nutter

Okay. Thank you. Thank you, Mr. Chairman.

Councilman Clarke

Councilman Rizzo?

Councilman Rizzo

Thank you, Mr. Chairman. When Councilman Nutter asked about satellite television, we didn't have any information about what the penetration is. Do we get a sales tax from the satellite providers?

Mr. James

I -- I don't know. I'd have to find out. I don't know if the City gets a tax. It think it may be federal or state tax; I don't know if the 92 06/5/06 - Public Property/Public Works - Bill 060440 City get a tax rids.

Councilman Rizzo

You know, I think, at some point, we really have to do some research on exactly what the corporate presence is of satellite providers. I think it's DirecTV and

Mr. James

And Dish.

Councilman Rizzo

And Dish Network. They have no corporate presence here from what I can see, other than NASCAR and other major national events involving themselves, I don't think they have much local participation, and I don't think we have much revenue. I did check on one of the issues. The company is outside the City that does their installations, and they do have a business privilege license, but I'm not sure they're protected by the FCC or what. But I understand that there are some cities throughout United States that have done some legislation to bring them into the cities that they serve. 93 06/5/06 - Public Property/Public Works - Bill 060440 So is there something that you could do to have the Law Department or whatever to see -- I believe we might be getting a state tax, and some of that is supposed to be coming back to us in some shape or form?

Mr. James

Well, I'd be glad to take that back to the Law Department, and we'll get you an answer on whether or not we get any type of tax and what efforts we could make on our part to try to engage them.

Councilman Rizzo

Because my point is, we're pushing the cable companies to provide public access, but not the satellite companies; am I right?

Mr. James

Well, they're governed by a different set of regulations by the Federal Communications. Because they don't use the public right-of-way, they're not held to the same requirement as the cable operators.

Councilman Rizzo

And as far 94 06/5/06 - Public Property/Public Works - Bill 060440 as you know, there's no revenue at all that we derive from any satellite TV company?

Councilman Kenney

I'm sorry. Point of information.

Mr. James

We don't receive any revenue from --

Councilman Kenney

Why do not the satellite or dish companies use the public right-of-way? They drive their trucks on our streets, they use our alleyways to install the dish. I mean it's not -- they're not hanging their wires on poles, but they certainly do use the public streets and thoroughfares to do their business. I mean, so they are in the public right-of-way in many ways.

Mr. James

Well, from the way the Federal Communications view it, their understanding is that it's all transmitted in the air as, which we don't know --

Councilman Kenney

But my 95 06/5/06 - Public Property/Public Works - Bill 060440 point is --

Mr. James

Far as them driving the streets and whether or not they should be taxes for working in the City, I think that they have a business-privilege license.

Councilman Kenney

I mean, I think a lot of these dishes and satellite hookups are done through the public alleyways; they need to access the alleyways. They got to put their ladders up on poles for fences or whatever. But, I mean, I certainly understand that there's not hard wire running through, but certain they're making a living and using public property to access their living. Is that fair?

Mr. James

That's fair. It's just the part that, you know, you mentioned is that they don't actually make their connection in stuff that's in the public right-of-way; it's all on private property, even though they may traverse our streets or go through our 96 06/5/06 - Public Property/Public Works - Bill 060440 alleys.

Councilman Kenney

Thank you. Sorry.

Councilman Rizzo

Thank you, Councilman Kenney. One of the observations that I have that is that in most cases, Comcast or other cable companies make a real effort to do a clean, pleasing -- if you could have a pleasing installation. But what I see happening around the City right now with these satellite dishes is that they're nailing them wherever they can. So I think that we need to do start doing and maybe find out what other cities are doing -- don't reinvent the wheel -- to try to get them to be some type of -- like Comcast, you know, they're everywhere in the community, trying to do good.

Councilman Rizzo

I've never seen any presence from any of those 97 06/5/06 - Public Property/Public Works - Bill 060440 companies here in the City, trying to contribute to our city.

Mr. James

I understand your question.

Councilman Rizzo

You understand the question?

Mr. James

And I will certainly take it back to the Law Department and will try to get you a response.

Councilman Rizzo

Good. Thank you. Thank you, Mr. Chairman.

Councilman Clarke

Councilman Kenney.

Councilman Kenney

Thank you very much. Mr. James, what is the definition of public access? What is your definition, and how is it described in either the articles of incorporation or in the legislation? What do you view public access is?

Mr. James

Public access is 98 06/5/06 - Public Property/Public Works - Bill 060440 the -- I guess I would I describe it as -- it's the true electronic soap box. It's the open mic, it's the one non-commercial forum for the members of the community, of a community, to be able to put on programs that they find that's important to them, whether it's, you know, local legislators or it's people running for office or people wanting to do film and media.

Councilman Kenney

Are there restrictions of any kind on the public-access subject matter? Or is it just wide open like a first-amendment issue?

Mr. James

Well, I think a lot of it has matured over time. I mean, over the time period that public access first came about, there was a lot of concern and a lot of programming that was somewhat either sexually explicit or somewhat offensive or maybe even more along the racially-hate-motivated type programming. 99 06/5/06 - Public Property/Public Works - Bill 060440 And much of that has kind of fallen off, as it doesn't have that kind of novelty anymore.