Well, I'm not really sure if Verizon is considered a choice of the Housing Authority at this moment in time.
Verizon knows I have a list, so that's going to be on the next question to them. Thanks. (Witness approached witness table.)
Councilman, I think as a legal matter, Verizon as a provider of resale or Direct TV probably 128 12/11/08 - PUBLIC PROPERTY - BILL 080879 could market its product to those residents. The FiOS will be different because it's using the public right-of-way and is, therefore, a regulated product. But Wilco does not have agreements, to answer your earlier question, which would prohibit it from doing business with Verizon or Comcast. The one other point, if I may -- Sharif Street, by the way, for the record, counsel to Wilco. I would say that the Council -- it was intonated earlier that Council did not have the right or the power to provide conditions to its approval. Council can provide conditions to its approval of the use of the right-of-way so long as the Council maintains a rational basis for those conditions. And there's no federal law, despite what was intonated earlier, that would limit Council's ability to do that.
Thank you. Any other questions of these 129 12/11/08 - PUBLIC PROPERTY - BILL 080879 witnesses? (No response.)
There being none, thank you very much for your testimony.
Next up we have Louis Massiah, Board Chairman of Public Access Corporation; Mr. Jonathan Stein; Patricia Mattern; Danielle Redden; and Reverend Adan Mairena. I hope I didn't butcher that name. (Witnesses approached witness table.)
Good afternoon, Chairman Clarke. Jonathan Stein, Vice-Chairman of the newly formed Philadelphia Public Access Corporation Board. I'll let my colleagues introduce themselves.
I'm Adan Mairena. You tried, but it's Adan. 130 12/11/08 - PUBLIC PROPERTY - BILL 080879
m. and had to leave by this time. Good afternoon, Chairman Clarke and fellow Councilmembers. It's a distinct pleasure for us, the City Council and Mayoral appointees to the newly formed Philadelphia Public Access Corporation, to make our first formal appearance before City Council today on one of the most important funding and policy issues to face our new corporation and the future of Public Access broadcasting in the City, the proposed Verizon cable TV franchise agreement. We're here to seek amendment of the agreement because of our strong belief that Public Access and the residents of the City of Philadelphia are being shortchanged in this proposal. The Verizon financial commitment to Public 131 12/11/08 - PUBLIC PROPERTY - BILL 080879 Access in the franchise agreement was negotiated with the City without us at the table. It does not constitute parity with Comcast's commitment to Public Access, and is inadequate. Verizon would not make any operating grants in seven of the years of their proposed franchise 9 agreement, and both their operating and 10 capital payments would be delayed. 11 And we were pleased to hear at 12 the onset of this hearing, Chairman 13 Clarke, that the Public Property 14 Commissioner clarified her testimony to 15 make clear that the Verizon operating payments are only for eight of their 15 years, leaving seven years, almost half of their agreement, with zero operating support for the Public Access Corporation. And so we agree with the City on those facts, and I think that's an important fact as we go on. We believe that Council should take no further action to adopt this bill 25 until the amendment we appended to our 132 12/11/08 - PUBLIC PROPERTY - BILL 080879 testimony is incorporated into the bill. As you know, thanks to City Council, Philadelphia has finally taken the leap to join the over 2,000 other cities and communities that are delivering quality, non-profit, community-generated Public Access broadcasting to residents hungry for programming that relates to their lives, their work, their communities, programming not burdened by obtrusive commercials and programming that will be created through the dedication and creativity of community residents, young and old. You can view us as an ongoing civic resource or informational utility that must look to ongoing yearly support from the commercial franchisees to sustain operations into the long term. Late last year, with an amended Comcast franchise agreement and legislation, Council passed and the Mayor approved the details for the five-channel cable TV Public Access network and our 133 12/11/08 - PUBLIC PROPERTY - BILL 080879 independent non-profit, Public Access Corporation. Our Board has begun the hard work of getting this network and programming off the ground, and we shall keep Council informed of our progress over time. 7 million capital contribution, two-thirds of which will be coming later into 2009. Although we welcome this Comcast support, we know that Comcast's 500,000 annual operating support will be no more than about a quarter of what the Corporation will later need for its full operations. We hope to begin putting programming out in early 2009, and when a central facility gets established, begin to create new locally generated programming for the five channels dedicated to Public Access. We hope to 134 12/11/08 - PUBLIC PROPERTY - BILL 080879 have youth-oriented programs to nurture and inspire children and teenagers; programming oriented for senior citizens and those who have limited mobility to get around the City; programs for ethnic and language minority communities who have no programming on commercial television. Churches and faith groups will create programming from choral performances to social service messaging. Every arts and culture group in the City will have an opportunity to create programming to extend the reach of their creative work and multiply tenfold their audiences.
Our many wonderful social service non-profit agencies will be able to reach out to clients and people who have a variety of problems, from domestic violence to employment counseling needs, addiction problems and legal aid. Local sports teams will be able to bring their achievements to a larger audience, and we go down the list. As you can see, there is great 135 12/11/08 - PUBLIC PROPERTY - BILL 080879 potential for serving your constituents and for giving voice to communities who cannot access the commercial media now. We are pleased to see that Verizon wants to enter our cable TV market, offering healthy competition in our city, and pleased to see at least some recognition of their responsibilities to the City and its residents to support Public Access in the proposed franchise agreement. The problem that needs addressing via an amendment that we proposed to Council is that Verizon's financial commitment in the franchise agreement that was negotiated with the City, again without us at the table, does not constitute parity with Comcast, and is very inadequate. On day one of Verizon's cable TV operations, Verizon will hook all their subscribers into all the existing Public Access programming of the Public Access Corporation. They're not delaying 136 12/11/08 - PUBLIC PROPERTY - BILL 080879 access to the public broadcast programming a day or a year or anything more than that. They're going to have it immediately. Yet, under the agreement, Verizon would not even begin making their $500,000 annual operating payments until after the fifth anniversary of the agreement's effective date. And perhaps worse, their 500,000 operating payment would only be made for eight of the 12 years of the franchise agreement's term, 13 giving Public Access a total of only $4 14 million over 15 years. This means for 15 seven years, almost half of the life of the proposed agreement, Verizon makes zero operating support for Public Access. Verizon should be required by City Council to make $500,000 in annual payments for each of the 15 years. 5 million. 5 million under this draft proposal before you. 7 million capital payment, delaying its first installment of $900,000 to after the sixth anniversary of the agreement. 7 million available to the Corporation within the first year of our operations and the total remainder two years later. Early receipt of capital funds is essential to ensuring quality production facilities that are accessible to the communities. We have not heard any sound reason for Verizon not to pay any operating support for seven of the 15 years of the franchise agreement, nor for the very substantial delays in payment of operating and capital money. They apparently have argued that since Comcast did not make payments in the years before 2008 of Comcast's current franchise 138 12/11/08 - PUBLIC PROPERTY - BILL 080879 agreement, they should get a free ride for seven years into the future. But this is a rather specious ground, as there simply was no Public Access Corporation in these prior years for Comcast to make payments into. We also have heard that, well, Verizon needs time to grow their subscribers, but they're not going to delay, as I said, one day in using all of the Public Access programming out there that the Corporation will be producing. And we all know they're making an up-front investment of over $1 billion for their network. All we ask is that they make the minimal up-front investment in Public Access that Comcast is doing. We have drafted a proposal, an amendment, which we urge this Committee and full Council to consider. I won't describe it further here. Let me conclude by saying that we believe the amendment we propose is essential to ensuring that the new Public 139 12/11/08 - PUBLIC PROPERTY - BILL 080879 Access Corporation and its five channels of non-commercial broadcasting receive the necessary support to adequately serve the City of Philadelphia and its residents.
We believe that Verizon has an obligation as part of its license with the City, and they'll be embarking soon on a very profitable venture of their own to provide the same parity of support for Public Access as Comcast has agreed to. This amendment ensures that Verizon will make good on being the good corporate citizen that it represents itself as being today. I would ask if Ms. Mattern or Reverend Mairena would like to add anything.
As a pastor and I'm sure you always hear it -- my name is Adan Mairena. I'm a pastor at the West Kensington Ministry at Norris Square in North Philadelphia. 140 12/11/08 - PUBLIC PROPERTY - BILL 080879 I'm sure you've been to church or synagogues, and we all -- faith leaders are always talking about justice, right? And justice is not putting people in jail and throwing away the key. Justice, defined in Greek and Hebrew, is about relationships, about fair, appropriate relationships. And I think after reading who is doing what and who isn't, the question of justice comes up. And being a pastor in Kensington, where I'm sure you hear a lot about it in the news and you've been there -- I know Councilman Rizzo was at the church last year -- we are facing life and death issues. So this is not just about getting people hooked up with cable or about us providing the community a place where they can create relevant information or media. A lot of this can be related to quality of life issues, because just keeping folks, keeping young people off the streets, letting their creative juices flow, allowing them to 141 12/11/08 - PUBLIC PROPERTY - BILL 080879 express themselves, as you know, it's a part of development, and if we can provide that in a fair and just way, then I think we're all on the right track. Thank you.
Thank you so much. Any questions of these witnesses? (No response.)
Thank you so much for your testimony today. Earlier I was looking for a number of our members of the clergy who weren't in the room, and I understand that you did want to testify. Please come forward. (Witness approached witness table.) 142 12/11/08 - PUBLIC PROPERTY - BILL 080879
My name is Bishop Robinson, James Robinson. I'm pastor of the Yesha Ministries Worship Center in South Philadelphia. And after hearing everything concerning this franchise agreement and being here also last week, I come and I sit in support of the Verizon franchise network coming to Philadelphia. I'm looking at the investment opportunity that Philadelphia has, looking at the opportunity that the people in Philadelphia receive as a result of this investment. And I guess even hearing the arguments concerning the things that Verizon should bring to the table, after reviewing personally the agreement and seeing the commitment that they're making, I see that -- I feel as if we should really, really make sure 143 12/11/08 - PUBLIC PROPERTY - BILL 080879 that this franchise comes to this City and that -- and I'm hoping that we don't really delay it to the point that we've run this investment opportunity away from Philadelphia. Being a Philadelphian and being born and raised in Philadelphia, in South Philadelphia and also pastor in South Philadelphia, and understanding some of the things -- some of the other opportunities that have come to this town, I think that based on the history that I'm aware of, I think that -- and this is from my perspective -- that we really can't afford not to allow this to come forth and to be put into practice. We need the competition. It's obvious. We need the kinds of investments that they're bringing to the table. Though I agree with some of the changes in things that were suggested by Council, I just really want us to look at it carefully and to move on it expeditiously so that we can realize this 144 12/11/08 - PUBLIC PROPERTY - BILL 080879 kind of investment for our city. With that being said, and I don't want to belabor the point, I don't want to see us run this opportunity away. I think that they've demonstrated that they want to do something positive in the community. I think that they've also demonstrated that they're willing to make the appropriate changes. After listening to Verizon and listening to the Council, I think that there's a good business opportunity at the table. Let's seize the moment. Let's make it happen, so that we can begin to realize this investment and realize this new system coming into Philadelphia. The other thing, finally, is that it is an upgrade in the technological advancement of the City. It's an upgrade. FiOS is an upgraded system. I would like to see that for our young people. I would like to see that for the community. I would like to see that for the members of my congregation. 145 12/11/08 - PUBLIC PROPERTY - BILL 080879 The churches that I fellowship with and the groups I'm a part of are also aware and want this system in place, because we believe that it will give our members an opportunity to have a choice. And I think for too long -- and I have to be very, very candid -- for too long we have operated in the City with really no 10 real choice, no real ability to say, Hey, why can't I choose this or why can't I -- so I think the choice, the competition, the investment, I think it far outweighs even some of the other, if I could say, arguments that were raised, and I think we need to move on this as quickly as possible. Thank you.
Thank you, Pastor. Thank you so much for your testimony, and thank you for being so patient. This concludes our witness list. Anyone else to testify on this bill? 146 12/11/08 - PUBLIC PROPERTY - BILL 080879 (No response.)
Thank you. Thank you. I want to recess for three seconds so we can establish our quorum. (Short recess.)
Mr. James, before we go into our public meeting, we just want to ask you to summarize the amendments as briefly as possible.
Councilman, there's basically one amendment on behalf of the Administration. It's summarized in the replacement of the original franchise agreement that we submitted previously, and it covers two specific areas. In the area of the performance bond, it changes the performance bond value from $13 million from Years One through Seven, and Years Eight through 15 to $3 million. In Exhibit C, it is a replacement of the -- excuse me. It's a change to Exhibit B, Appendix B, which is the franchise area map, which now 147 12/11/08 - PUBLIC PROPERTY - BILL 080879 includes the additional wire centers of Mayfair and Knights Road.
And you did hear the testimony from Councilman O'Neill that he would like to have additional discussion about that proposal?
Yes. And we're prepared to be able to meet with the Councilman and have those discussions and continue to explain the details of that.
I understood what you said, but for the record, Mr. Chairman, we are going to look at whether or not the performance bond is replaced with liquidated damages. Is that what I'm hearing?
Well, what the Administration has in the amended bill is to change the performance bond value, which has been agreed upon, and the dollar amounts for the years during the 148 12/11/08 - PUBLIC PROPERTY - BILL 080879 build. There are already liquidated damages in other portions of the agreement, which is already in there, which was part of the original bill, which we are keeping as is.
But what I'm hearing is that we want to go back and go a step further and consider eliminating the performance bond, where appropriate, and replacing it with liquidated damages.
At this point in time, we are not prepared to do that. We have the --
Okay. Well, I guess we'll be here for a long time until we get that ironed out. But thank you.
In addition to that, part of the Amendment C or Appendix C of the agreement also reflects the change in the wire centers in the two phases that we talked about before, and also establishes the new thresholds for the four-year construction phase in Phase 149 12/11/08 - PUBLIC PROPERTY - BILL 080879 1, with a 45 percent achievement level, and in Year Six, an 85 percent achievement level. Those are the --
That is the summary of the amendment on behalf of the Administration.
Okay. With that, this concludes -- I'm adjourning the public hearing on the Committee on Public Property and Public Works on Bill 17 No. 080879. We will now go into the public meeting. I will ask Councilman Greenlee to please offer the amendment that was referenced in Mr. James' testimony.
Thank you, Mr. Chairman. I move the Administration amendments to Bill No. 25 080879, I move their approval. 150 12/11/08 - PUBLIC PROPERTY - BILL 080879
It's been moved and seconded the amendments to Bill 7 No. 080879 have been approved. We will now recess the public -- I'm sorry. All in favor? (Aye.)
The ayes have it. We will now recess the public meeting until -- the public meeting of the Committee on Public Property and Public Works will be recessed until 9:00 a.m. January 22nd. Thank you. Thank you very much. (Committee on Public Property and Public Works recessed at 1:55 p.m.) - - - 151 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on December 11, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)