AgdaPkt 2007-09-10 - Laserfiche WebLink

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6.3A _ _ _ _ _ Page 1 REP�RT To #he H�norable Mayor and Cit� ��u-n�i� From the �i# Nfana �r Septer�ber 10, 2007 SUBJECT Second Amendment to Astound Broadband Franchise Agreement RECOMMENDATION lt is recammended that the City Council introduce an ordinance approving a second amendment to the fran�hise agreement with Astound Broadband (formerly RCN Telecom Services} for the primary purpose of permitting Astound Broadband to itemize the fees for the support of the public, educa#ional, and governrnental access channel. BACKGRQUND In August 2000, the Cifiy Council approved a #ranchise agreement with Asfound Broadband to provide cable television services to residences and businesses in Redwood City. At that time, Astound Broadband was required �o pay the City $0.25 per subscriber per month to provide financiai support for the public, educationai, and governmental (PEG) access channel. Moreaver, the agreement does not permit Astound Broadband to itemize this fee on the bills sent their customers. The agreement also requires Astaund Broadband ta match the incumbent cable operator's PEG access fund obligation. Consequently, should the other cable operator that serves Redwood City (Comcast) agree to pay an amount greater than $0.25 per subscriber per month, Astound Broadband would be required to pay the same amount. In January 2006, the City entered into a new franchise agreement wfth Camcast that among other matters provides for Comcast to pay the City a PEG fee of $0.55 per subscriber per month. This agreement, however, does permit Comcast to i#emize #his fee on their bills. In April 2007 Comcast began itemizing this on the bills sent to fheir subscribers. Like the �ncumbent, Astound is currently paying a PEG fee of $0.55 per subscriber per month. Cansisten# with its franchise agreement and in the interest of equity, Astound Broadband has requested that they also be permitted ta itemize their PEG fee on subscribers' bills. City staff believes that there will be no significant adverse impacts to the City ar Astound Broadband's subscribers should Astound Broadband's request to itemize their PEG fees on subscribers' bills be granfied. ALTERNATIVES The Council may elect to deny this request in which case Astound Broadband would be required to continue ta include t�� PEG fee in their ba�� rates on their subscribers' bills. This may place Astound Broadband afi somewhat of a campetitive disadvantage against Comcast. FISCAL IMPACT There is no fiscal impact assaciated with this requested change as the PEG fee revenue received by the City will be unaffected whe#her or not this request is gran#ed. 1