AgdaPkt 2000-08-14 - Laserfiche WebLink

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1 � •` � 1 � � � ' Y Z ��- iF • , ' '' ~a�i Y -f �� .J ��POR�T � - � M �-� y �, ._ _ . : �.�� . _ �'' � - � �°�= Se- � � To the: Honoratile Mayor and - City .'Council - .�-: � - . . ' � -' From the:City;Manage� ,. . : , � .. ' . - ' .. . � ' -;' ` .., ' . r . : o� �.' .: . . . �+r. '. .�:., December 6, 1999 Subject Telecommunications Industry Changes and the Effect on Local Government Recommendation Staff is not presenting a recommendation at this time. Council will receive an oral report from the Director of Finance and Financial Planning and Carl Pilnick of Telecommunications Management, Inc., the consultant engaged by the City to negotiate a franchise agreement with RCN, Inc., for the provision of a cable television system and local telephone system in Redwood City. A copy of a report from Mr. Pilnick is attached for your review. � This report will focus on recent changes in the telecommunications industry and the effect that these changes will likely have for local residents. This report is not intended to discuss issues relative to the RCN's application for an encroachment permit in the Redwood Shores area. - Executive Summary Background As a result of the Telecommunications Act of 1996 and the growing popularity of the . Internet, many communities are now beginning to realize competition for local telephone and -cable television services. Historically, Iocal telephone service has been a regulated monopoly with Pacific Bell providing service to this area. l�lthough never legally entitled as a monopoly, cable television service has been provided by TCI (now known as AT&T since AT8�T acquired TCI earlier this year) without the benefit of any effective competition. , A product of these regulatory changes is that it is now financially feasible for other telecommunications providers�to construct the necessary infrastructure and offer local telephone service, cable television, and Internet access. Previously, a single provider coutd only offer one of the foregoing services, which in turn would generate one stream of revenue for the provider. Now a provider may offer three different services and accordingly, generate three streams of revenue. With these additional revenue streams, there is a financial incentive for another telecommunications firm to enter the area being served by an existing cable operator and construct the necessary infrastructure to deliver these services and compete with the existing cable operator and local telephone service provider. The advantage to subscribers is that after many years of monopoly and near monopoly conditions, they will have a choice between providers for local telephone service and cable television. Also, rates may decrease or a least stay level. Some of the �