What you need to know to set up a successful Government access

channel:

Negotiation of the Franchise

Presented by:Kenneth S. Fellman, Vice-President

Kissinger & Fellman, P.C.Denver, Coloradowww.kandf.com

3CMA Annual ConferenceDenver, Colorado

September 2, 2004

I. Preliminary

Make it clear who will spearhead the effort (elected officials, staff, citizen advisory committee, consultant, etc.)

Document known cable operator deficiencies now

Inform cable operator

II. The Needs Assessment

A comprehensive evaluation of the cable communication needs of the communityWhy perform a Needs Assessment? Forms the basis for negotiation between community

and cable operator Represents a legislative determination of the needs

of the community Courts will give a thorough Needs Assessment

considerable weight in litigation May take up to 6 months to perform

II. The Needs Assessment: Components

Survey Includes entire community – current subscribers and

non-subscribers Method: Mail or Phone Issues Addressed:

PEG Programming Customer service Signal quality Range of programming offered Willingness to pay for cable services Others raised by community

II. The Needs Assessment: Components (Cont.)

Focus Groups Business, education, government, health care,

libraries Help to determine sector-specific cable systems

needs and desires

Public Hearings Solicit information and suggestions from general

public

II. The Needs Assessment: Components (Cont.)

Technical Analysis of current cable system to identify: Capacity/Capabilities Condition Compliance with technical standards Growth potential (INET, broadband, etc.) Requirements to bring system up to current

broadband industry operating standards

II. The Needs Assessment: Components (Cont.)

Specific PEG analysis Current Operations Future Opportunities Equipment Needs/Costs Capacity on Cable System Other sources of revenue?

PEG Issues to be aware of Cable operators less willing today to contribute to

PEG LFA bargaining position stronger when it commits

funding to some part of PEG Changing technology

III. Review of Current Franchise

Review past performance history Compliance Customer service and satisfaction

Financial Review Review of cable operator’s records May indicate past underpayments

Review technology changes since current Franchise was adoptedReview statutory and regulatory changes since current Franchise was adopted

IV. Political Support

Why do you need it? Becoming harder and harder to negotiate LFA

benefits, especially PEG There must be elected official and community

support before cable operator will treat the issue seriously

How do you get it? Educate your elected officials early and often The Needs Assessment process can also

communicate potential benefits

V. Negotiations

Use Needs Assessment and Review of Current Franchise to create a renewal proposal

You control the document!

V. Negotiations (Cont.)

The renewal proposal should include: Technical capacity/upgrade INET Rights-of-Way access/construction requirements Universal service throughout community Length of franchise term Franchise does not authorize Telecommunications

and Internet services Programming categories Availability of records Violations and remedies

V. Negotiations (Cont.)

The renewal proposal – PEG operations P should be separate from E & G

Control issues First Amendment issues

Cable operator capital contribution Ongoing capital support Requirements must take into account costs of

cable operator compliance Some of what you’re negotiating

What is a channel? Conversion to HDTV Criteria for additional capacity Commercials on access channels

V. Negotiations (Cont.)

Let the cable operator know you are serious, knowledgeable and professionalConduct negotiations efficiently and

professionallyTake control of meetings (face to face,

agenda, schedule, draft key documents, action items)

Get “easier” issues out of the way earlyOnly written agreements are binding

V. Negotiations (Cont.)

Formal vs. Informal If proceeding informally, specifically

reserve right to change to formal process Informal negotiations can occur at any timeFormal renewal process follows rigid

timeline with duties assigned to each party

Past performance, not promises is best indicator of capabilities

V. Negotiations (Cont.)

Structure agreement to create proper incentives for cable operator to comply with agreement Remember cable company may be sold to

less cooperative company; language as to duties must be clear

VI. Funding Access

Government fundingCable operator funding Capital contributions are not considered part of

franchise fee: §622(g)

Sponsorships/CommercialsSeparate entity should fund and control public access Independent non-profit organization is

recommended Local government should arrange for channel

capacity, if interest for public access is there

Questions