Julie S. Omelchuck Mt. Hood Cable Regulatory Commission NATOA National Conference October 1, 2014 Obtaining PEG HD Channels in Your Next Franchise Agreement
Obtaining PEG HD Channels in Your Next Franchise Agreement Strategies for negotiating PEG HD channels and related elements in franchise agreements Working with the cable operator to manage the transition to HD channel delivery
Comcast Franchise Background Community Needs Assessment: Late 2009- Early 2010 Negotiated Comcast renewal franchise March 2010- October 2011 Comcast was simulcasting analog and SD access channels Comcast renewal franchise effective January 2012 Initial 2 HD PEG channels June 2013 Rolling activation remaining 6 by early 2016
HD Current or Future Community Need? Broadcast Channels in HD 1996 Cable Systems carry HD Channels -- 1998 Cable HD Channels in MHCRC area 2003 Current System: 100 HD Channels total 70% available on Digital Starter 25 commercial channels Basic Service nearly half simulcast in HD
Negotiating Strategies Community Needs Assessment Franchise Package DO NOT isolate PEG obligations from other issues Provide Cable Company with their talking points
Community Needs Assessment
HD Current Community Need Evaluate Current System: HD channel availability Questions on Community Surveys Sub viewing habits How subs find programs Amount of PEG programming produced in HD formats SD and HD video compression technology advances
Negotiating Strategies Community Needs Assessment Franchise Package DO NOT isolate PEG obligations from other issues Provide Cable Company with their talking points
Franchise Renewal Key Topic Areas 7/21/11 Handout: Informal Renewal Negotiations TOPIC STATUS: AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS UPGRADE PARTIES AGREED ON LANGUAGE 5/3/11 Meets Comcast s stated goal of no requirement for Comcast to upgrade its cable system to Fiberto- the-premises (FTTP) or other comparable cable technology. Provides major regulatory and financial relief for Comcast; MHCRC Jurisdictions would forgo an upgrade and associated capital investment in local community, despite Ascertainment findings and despite Frontier FTTP investment and build in East Multnomah jurisdictions. Includes an extremely limited cable system technology assessment after Year 7; the minimal element necessary for MHCRC to support a franchise package containing no upgrade requirement. TOPIC STATUS AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS CUSTOMER SERVICE STANDARDS PARTIES AGREED ON LANGUAGE 6/7/11 Addresses Comcast s stated desire for regulatory relief and business operations flexibility. Provides Comcast with significant financial and business operations benefits to reduce staffing required to meet current standards. Provides competitive equity with the Verizon franchise, even though Verizon franchise represents only 15% of the MHCRC subscribers. Provides Comcast with consistency in its reporting for the regional system and aligns with methodology uses internally to monitor business operations. Addresses Comcast s stated desire for regulatory relief and business operations flexibility. Provides Comcast regulatory relief and reduces customer service standards, despite the Community Needs Ascertainment identifying significant consumer protection concerns among the local population. Comcast is given surety by way of memorializing the interpretations in an attachment to the franchise. TOPIC STATUS AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS REPORTS & RECORDS PARTIES AGREED ON LANGUAGE 5/3/11 Significantly addresses Comcast stated desire for regulatory relief from annual reporting requirements under current franchise. Eliminates requirement for provision of: Regional and franchise area-specific financial statements, audited or reviewed by independent auditor; Audited financial statements of Guarantor; and Parent Corp annual report & audited financials. Reduces annual operational reporting requirements. Includes language recently agreed to in Comcast s Tacoma, WA, franchise for an annual statement of Gross Revenues. Accommodates Comcast s request to provide a statement of Gross Revenues certified by an officer in lieu of audited statement. Reporting info is largely based on records that Comcast produces for its own purposes. Proposal is competitively neutral with other franchises. TOPIC STATUS AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS GROSS REVENUES Treich sent Comcast follow-up information request on June 20; received a response that Robbin Pepper would look into it on June 23; Robbin Pepper responded on July 26; Treich sent additional clarifying info on Aug. 5. TOPIC STATUS AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS COMPETITIVE PARITY PARTIES AGREED ON LANGUAGE 5/3/11 Provides modification process upon Comcast request in lowering franchise fees or reducing PEG channels. Provides Comcast an option to reduce the term of the franchise and commence renewal. Treats franchisee and competitors similarly in Multnomah County: Comcast does not seem to have consistent or normative franchise language on this issue in the region or nationwide based on staff research of Comcast s recently renewed franchises. TOPIC AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS TERM PARTIES AGREED ON 5/3/11 (tied to agreement on Competitive Parity language) TOPIC AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS I-NET Comcast proposal 2/1/11 MHCRC proposal circulated on 3/22/11 Further Discussions 7/21/11 meeting Achieves a compromise between the parties based on initial positions on franchise term. Provides a reasonable term in relation to the resources required of both parties to fully participate in a franchise renewal process under the three-year process mandated under Federal law. Eliminates a cost-based methodology for calculation of allowable monthly I-Net rates as desired by Comcast. Provides a stable increase in Comcast s I-Net rates year-to-year. Establishes SLA and service technical requirements consistent with other Comcast I-Net business service contracts.
Negotiating Strategies Community Needs Assessment Franchise Package DO NOT isolate PEG obligations from other issues Provide Cable Company with their talking points
TOPIC STATUS AGREEMENT/LANGUAGE REGULATORY ADJUSTMENTS PEG CHANNELS MHCRC PROPOSAL CIRCULATED ON 7/25/11 Gives up at least 38 MHz currently dedicated to PEG access channels thus freeing up additional bandwidth for commercial use over the next 10 years. (In current standards this equates to about 13 HD channels; use goes from 54 MHZ to 22 MHZ to 16 MHz.). Is less than number of PEG channels required under all other competitive franchises in Multnomah County, which implicates give back of channels under other franchises. Meets Comcast s stated desire to provide defined number of channels and transmission technology; does not dedicate bandwidth as is required under current franchise. Provides Comcast a reasonable and defined planning timeframe to include access channels in HD, by allowing a stepped activation approach over four years Allows Comcast to manage delivery methods and compression ratios for PEG channels similar to other local channels (ie: some HD in 3:1 compression -2 MHz per channel; industry testing 4:1 compression technology). Severely limits the ability for Access Providers to transition to currently emerging technologies (ie. 3D) or future channel distribution technologies, despite Ascertainment findings to the contrary. Access providers will be ready and capable of transmitting all channels in HD by 2012: this proposal allows half in 2012 and remainder by 2014. Treats all franchisees the same in PEG programming interconnect requirements. Allows Comcast to reassign access channel numbers when analog tier is discontinued.
Franchise Agreement Considerations Access provider ability to provide all channel signals in HD format only Activation of HD channels: Criteria and timeline Demarcation for HD channel signal to Company Simultaneous carriage of SD & HD channels All components of HD format channels Technical quality: Transport, functionality, signal quality and testing
Related HD Franchise Considerations HD channel placement in channel lineup Accessibility in program guides Live HD video transport VoD
Timeline HD Channel Signal Conversion Players: Comcast, Two Access Centers, MHCRC staff First HD planning meeting -- April 2012 Activation Goal: January 2013 Key Issues: Demarc drove who paid for what equipment Access Center readiness design decisions Live remote video sites design and costs Channel Activation: June 2013 Promotion: August-September 2013
Julie S. Omelchuck Mt. Hood Cable Regulatory Commission julieo@mhcrc.org 503-823-4188 www.mhcrc.org