HomeMy WebLinkAbout8A - Application for a Franchise for a Cable Communication System
AGENDA ITEM:
DISCUSSION:
PUBLIC HEARING TO CONSIDER AN APPLICATION FOR A FRANCHISE
FOR A CABLE COMMUNICATIONS SYSTEM.
Introduction
The purpose of the public hearing is to receive information pertinent to the
consideration of a franchise for a cable communication system. The City's
Notice of Intent to Franchise provides that each applicant will be given time
during the public hearing to summarize its application and provide information
responsive to City Council questions.
Historv
For over two decades, the City has been a party to a franchise agreement for
cable communications. Triax was the first company which provided cable
services to Prior Lake. In 1999, Triax transferred its interests to Mediacom and
the City entered into a franchise with the successor company. Currently the only
other option for television services is through satellite television providers who
are not required to enter into franchise agreements.
Current Circumstances
The City has not solicited additional cable communication franchises in the past.
When City staff researched potential options for competitive systems, the
competitive cable companies indicated that the capital investment necessary to
install the system infrastructure was cost-prohibitive. However, over time
technology has advance and providers are crossing traditional boundaries
between television, telephone and internet service options. The City is hopeful
that technology may provide additional opportunities for providers to compete in
the Prior Lake market with a less costly investment.
In accordance with state and federal requirements and the City Code, a notice of
intent to franchise was published twice in the City's official newspaper, and a
Request for Proposals was prepared requiring interested companies to complete
and submit information about its proposed system by April 15, 2009.
One company, Integra Telecom, submitted the attached proposal.
Conclusion
The City Council should open the public hearing, hear the testimony related to
the issuance of a second cable communications franchise and close the public
hearing. The City Council may not act upon the proposal submitted by Integra
for a minimum of seven days. In this case, the item would be placed on the City
Council's next meeting agenda on May 4, 2009.
In the interim, the staff and City Attorney's office will work together to prepare a
franchise agreement for consideration. The terms and conditions of the
agreement will be outlined for the May 4, 2009 meeting.
www.cityofpriorlake.com
Phone 952.447,9800 / FCix 952..447.4245
ISSUES:
FINANCIAL
IMPACT:
ALTERNATIVES:
RECOMMENDED
MOTION:
Franchise Acreement - It is a common misconception that entering a franchise
agreement means that no other vendors may compete for services. Franchise
agreements are not exclusive agreements. More than one vendor may offer
cable communications services within the same community. Under the terms of
Prior Lake's existing franchise agreement, cable television ordinance, and state
statutes, the terms of franchises awarded to different providers may be no more
beneficial and no less restrictive to anyone vendor. In other words, all things
considered, both companies must be treated similarly. The proposal submitted
by Integra Telecom indicates an interest in providing cable communications
services to portions of the community they are authorized to serve by the Public
Utilities Commission (PUC).
Other: Additional issues may be identified as part of the public hearing.
City Attorney and staff time will be required to prepare a franchise agreement.
The staff will outline any additional costs to the City as part of the City Council's
consideration of the terms and conditions of the franchise agreement on May 4,
2009.
In general, having multiple competitors in a given market will have positive
financial impacts for the consumer. By providing customers choices in meeting
their service needs, it helps to control increases in costs for the services, and
leads to demand for new and better products. From a City perspective, the
franchise agreement will also generate additional public education and
government access fees that staff will more fully outline as part of the
consideration of the Franchise agreement in May.
1. Conduct the p.ublic hearing to solicit input on the issuance of a cable
communications franchise, and provide staff with any additional direction.
Alternative #1
integra'
TELECOM
4690 Colorado Street S.E.
Prior Lake, Minnesota 55372
Telephone: (952) 226-7000
Fax: (952) 447-6016
April 10, 2009
Frank Boyles, City Manager
City of Prior Lake
City Hall
4646 Dakota Street SE
Prior Lake MN 55372
Re: City of Prior Lake, Minnesota Request for Proposals Official Application Form
Dear Mr. Boyles:
Enclosed please find two original notarized copies of the City of Prior Lake, Minnesota
Request for Proposals Official Application Form submitted by Scott Rice Telephone
Company dba Integra Telecom. This application is filed pursuant to the City of Prior
Lake's Notice of Its Intent to Consider an Application for a Franchise, which was publicly
noticed on March 21, 2009, and March 28, 2009.
Thank you.
SinCereIY~/t1 ;U
David Kunde
General Manager,
Scott Rice Telephone Company dba Integra Telecom
"Your local communications partner for home and business."
~,~~ Ih-\'d~ t/IID/lJ~
CITY OF PRIOR LAKE, MINNESOTA
REQUEST FOR PROPOSALS OFFICIAL APPLICATION FORM
Applicants interested in submitting a proposal for a cable communications franchise shall
submit the following information as required by Minnesota Statutes Section 238.081 (subd. 4) to the
City of Prior Lake, Minnesota ("City") on or before April 15, 2009.
A. Plans for channel capacity, including both the total number of channels capable
of being energized in the system and the number of channels to be energized
immediately.
The technology to be used by Scott Rice Telephone Company dba Integra Telecom
(Integra Telecom) will be able to provide an "unlimited munber" of programmed
channels subject only to obtaining authority from the programmers. Because the
Integra system will deliver one channel at a time, the system has no limitation on the
possible number of channels it can deliver. The only limitation will be obtaining
consent from the programmer and the costs associated with delivery of the
programming. Initially Integra anticipates providing eighty (80) or more channels
with additional channels to be added to meet consumer demand in the region.
Unlike other cable operators, Integra will make programming decisions based not
upon national viewing trends, but rather on the viewing preferences of customers
residing in and around the City of Prior Lake.
B. A statement of the television and radio broadcast signals for which permission
to carry will be requested from the Federal Communications Commission.
Integra Telecom will request permission from the Federal Communications
Commission (FCC) for any television and radio broadcast signals that are under the
purview of the FCC and necessary for Integra Telecom to provide the services
contemplated under the franchise. We will pursue either mandatory carriage or
retransmission consent from all local television broadcasters. We intend to provide
digital music channels and will not be retransmitting local radio broadcasts. A
tentative channel line-up is attached as Attachment B. Although the final channel
line-up will resemble the attached, some programming options may change based
upon negotiations with programmers and as determined in Integra's sole discretion.
C. A description of the proposed system design and planned operation, including at
least the following items:
1. The general area for location of antenna and headend, if known;
The antenna and satellites will be located at the Scott-Rice maintenance
facility at 5786 Credit River Road SE., Prior Lake, MN.
2. The schedule for activating cable and two-way capacity;
The tentative schedule for activating cable service- is 4th Quarter 2009.
Integra already provides two-way capacity through its telecommunications
service. Because the implementation of the video system consists of
1
electronic upgrades utilizing our existing fiber optic and copper network,
there will be no disruption to the right of way.
3. The type of automated services to be provided;
Subscribers will be able to reach trained service personnel by telephone
during Normal Business Hours. While Integra focuses on live answering, it
reserves the right to have subscribers' calls reach an automated response
system outside of Normal Business Hours, with calls returned by Integra
Telecom on the next business day. Other automated services of product
offering are: High-definition capability, digital video recording option and
the integration ofIntegra's voice and Internet services access.
4. The number of channels and services to be made available for access
cable broadcasting; and
Integra Telecom will mal(e channels available for public, educational and
governmental (PEG) access in accordance with the provisions of the Cable
Act. Integra Telecom will match the number of PEG channels currently
provided by the incumbent cable operator serving the City subject to
negotiations between the City and Integra.
5. The schedule of charges for facilities and staff assistance for access cable
broadcasting.
Integra will contribute capital support for PEG production facilities in a
manner which matches the proportionate, per subscriber capital support
provided by the City's incumbent cable operator.
D. Terms and conditions und'er which particular service is to be provided to
governmental and educational entities.
One (I) cable drop connection will be provided free of charge to each public
building located within the Integra Telecom certified service territory with no
installation charges or monthly service charges. Said drop connection and service
provision will be provided no later than eighteen (18) months from the City's grant
of a franchise to Integra Telecom.
E. A schedule of proposed rates in relation to the services to be provided and a
proposed policy regarding unusual or difficult connection of services.
Integra has the vast majority of its plant already in place. The standard installation
rate will initially be set at $ 99.99 plus appropriate taxes, fees, and surcharges, and
may be waived during promotional offers and as determined by Integra. Should
unusual circumstances require Integra to charge more than standard installation
rates, time and material charges may apply. Specific montWy rates have not been
determined at this time but will be competitively priced.
F. A time schedule for construction of the entire system with the time sequence for
wiring the various parts of the area requested to be served.
2
System construction is dependent upon head-end equipment installation and not the
construction of outside plant facilities. Post franchise approval, the system install is
estimated to require approximately 120 days. Implementation and testing of the
System is estimated to require an additional 90 days.
G. A statement indicating the applicant's qualifications and experience in the cable
communications field, if any.
Integra Telecom currently operates and maintains a fiber optic and copper
communications system which provides telecommunications and information
services to residents and businesses within the City of Prior Lake pursuant to
authority prescribed in the Certificate of Need issued by the Minnesota Public
Utilities Commission. We have maintained this system for over 60 years with a
technologically proficient staff of over 40 individuals. The City of Prior Lake will
be the first City in which Integra provides cable services. Integra will be augmenting
its experienced telecommunications staff with video expertise and personnel from
CISCO, DASCOM and JAC!.
H. An identification of the municipalities in which the applicant either owns or
operates a cable communications system, directly or indirectly, or has
outstanding franchises for which no system has been built.
Applicant does not currently own or operate a cable system.
I. Plans for financing the proposed system.
Because the Integra telecom video product will be implemented utilizing our
existing infrastructure, the investment will be minimal and will be internally
funded from Integra Telecom corporate operating cash.
J. A statement of ownership detailing the corporate organization of the applicant,
if any, including the names and addresses of officers and directors and the
number of shares held by each officer or director, and intercompany
relationship, including the parent, subsidiary or affiliated company.
Scott-Rice Telephone Company dba Integra Telecom employs 47 people in
Minnesota in the provisio11 of voice, data, and long distance telephone services.
Scott-Rice Telephone Company dba Integra Telecom is a wholly owned subsidiary
ofIntegra Telecom, Inc., with headquarters at 1201 NE Lloyd Blvd., Suite 500"
Portland, OR 97232. Integra Telecom, Inc. is a privately held company which
provides voice, data and long distance communications to thousands of business,
carrier and residential customers in 11 Midwestern and Western states, including
Minnesota. Integra owns and operates a best-in-class fiber-optic 11etwork comprised
of metropolitan access networks, a nationally acclaimed tier one Internet and data
network, and a 4,700-mile high speed long haul network. Primary equity investors
in the company include Warburg Pincus, Banc of America Capital Investors and
BOst011 Ventures.
3
Dudley Slater, CEO, who is also a co-founder of the company, heads Integra
Telecom's management team. Mr. Slater has extensive experience in acquiring
and managing local and competitive telephone properties. Prior to founding
Integra, he served as a Principal of Rural Link Communications, an investment
company that invested in and provided management services to a number of ILEC
and ICP properties.
Jim Huesgen is President and Chief Operating Officer of Integra Telecom.
Mr. Huesgen has over 20 years experience in executive management roles in
telecommunications, including as Executive Vice President and Chief Financial
Officer for Pacific Telecom (PTI).
David Kunde is Senior Vice President - Integra Telecom ILEC Operations and
General Manager of Scott-Rice Telephone Company dba Integra Telecom. David
Kunde joined Integra in September 2007 to lead Integra's ILEC operation in Prior
Lake, Minn. Previously, Mr. Kunde had served as Vice President of Operations
and Technical Planning with Eschelon Telecom since 1999.
K. A notation and explanation of omissions or other variations with respect to the
requirements of the proposal.
N/A.
Substantive amendments may be made to a proposal after a proposal has been submitted
only upon approval of the City and before the award of a franchise. All proposals must be notarized
and must include responses to the above information requests, as well as the information requested
in the Notice by the City of Its Intent to Franchise a Cable Communications System, attached hereto
as Attachment A.
The City reserves its rights to request additional information of applicant at any time during
this process.
Any questions regarding this Request for Proposals or the exhibits attached hereto may
be directed to Frank Boyles, City Manager.
4
I declare under penalty of perjury under the laws of the State of Minnesota that the foregoing is
true.
Date: April J 0 ,2009
Subscribed and sworn before me this
16 d
DONALD~INBARLAGE
~^ N .. e Ii Q
. \ 1 \. ,..
My Commission Expires Jan. 31, 201 '
I I I' ,,' _t
Respectfully submitted,
Scott Rice lflephone C~~pany Jba Integra Telecom
By: nJ/ J ()I /UJJL
David Kunde '
My Commission expires: I - 3 ) - Z 0 I 0
5
ATTACHMENT A
NOTICE BY THE CITY OF ITS INTENT TO FRANCHISE
A CABLE COMMUNICATIONS SYSTEM
NOTICE BY THE CITY OF PRIOR LAKE, MINNESOTA
OF ITS INTENT TO CONSIDER AN APPLICATION FOR A FRANCHISE
Notice is hereby given that it is the intent of the City Council ofthe City of Prior Lake,
Minnesota, to consider the an application for a franchise for the purpose of operating a cable
communications system to serve the City of Prior Lake, Minnesota. This notice is given in
accordance with the requirements of Minn. Stat. S 238.081.
Applications shall be submitted in response to this Notice and Request for Proposals available on
request in the office ofthe City Manager, City Hall, 4646 Dakota Street SE, Prior Lake, MN
55372.
A. The deadline for submitting applications is 4:30 p.m., April 15, 2009.
B. Applications shall be in writing, notarized, in a format consistent with the Request
for Proposals, and sealed with two (2) copies enclosed. Applications shall be
delivered to the attention of the City Manager, City Hall, 4646 Dakota Street SE,
Prior Lake, MN 55372.
C. Applicants are requested to be present at a public hearing before the City Council,
that is presently scheduled to be held at City Hall, beginning at 6:30 p.m. or as
soon as possible thereafter on Monday, April 20, 2009. Each applicant will be
given time to summarize its application and provide information responsive to
City Council questions.
D. The Request for Proposals sets forth in detail the expectations of the City of Prior
Lake Minnesota and the requirements of the content of the franchise proposal and
are made in conformance to the requirements of Minn. Stat. S 238.081, subd. 4.
E. The services to be offered are identified in the Request for Proposals and include
a system providing public, educational and governmental access channels
consistent with state law; a mix, level and quality of programs and services
comparable to other systems in the region serving similar sized communities and
customer services and maintenance plans to ensure quality service to the
subscriber. The Request for Proposals provides further details of the services to
be offered.
F. The criteria for evaluating the applications and priorities for selection are as
follows:
1. The completeness of applications and conformance to Request for
Proposals;
2. Customer service policies and system testing; The legal, technical, and
financial qualifications of the applicant; and
3. The proposal for community services, including public, educational, and
governmental access in accordance with state law.
G. Applications which meet the above criteria in the opinion of the City Council
shall be considered for a franchise.
H. The applicant(s) selected by the City Council will be required to accept the
franchise documents granted within thirty (30) days after adoption.
1. All questions concerning this request should be directed to the City Manager
Date: March 16, 2009
By:
rwJrf--
V
Citv Mana2:er
Its:
Published in:
The Prior Lake American on March 21, 2009 and March 28,2009.
Affidavit of Publication required for each publication.
Attachment B
Integra Tentative Core Programming Line-Up
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Expanded Basic _ Sports Expanded Basic - Movies Expanded Basic - Digital Audio
ESPN Turner Classic Movies (TCM) MTV's TRL
ESPN Classic Chiller Today's Top 40
ESPN News Rhythmic Pop
ESPN U Expanded Basic - News & Views Modern Pop
ESPN2 CNN Cover to Cover
FSN CNN Headline News Soft Pop
Big 10 Network ABC News Now I Love the 70s
MSNBC I Love the 80s
CNBC I Love the 90s
CNBC World Solid Gold Oldies
Weather Channel Discotech
Dance club
Electronica
MTV2
R & B Hits
Classic R & B
Classic Rap (uncensored)
Modern Rap
Modern Soul
CMT Radio
Bluegrass
Ciassic Country
Wide Open Country
Reggae
Latin Hip Hop
MTV Tr3s
Lati n Jazz
Radio Alterna
Tejano
Easy Listening
Smooth Jazz
Jazz Standards
Blues
Opera
Classical
Christian
Gospel
Pop Standards
Jazzup Broadway
Cinema
Voice Box
Meditation
Dream Sequence
Acoustic Chill
Blue Room
Lounge Beats
Swing
Noggin
Nick Kids
Say It Loud
Comedy (uncensored)
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Integra Promo Channel
C-Span
C-Span 2
C-Span 3
Shop NBC
Local Gov!. & School
KTCA (PBS 2)
WCCO (4)
KSTP (5)
KMSP (9)
KARE 11
KTCI (PBS 17)
WUCW - CW (23)
WFTC (My 29)
KSTC (45)
Expanded Basic - Family
Disney Channel
Toon Disney
Nickelodeon/Nick at Nite
Nick 2
Nicktoons Network
Cartoon Network
Noggin
The N
Animal Planet
Discovery Kids Channel
Expanded Basic - Music
Country Music Television (CMT)
CMT Pure Country
Great American Country
MTV
MTV2
MTV Hits
MTVJams
BET
VH1/Music First
VH 1 Classic
VH1 Soul
BET J
BET Gospel
Expanded Basic - General Entertainment
TBS
ABC Family Channel
USA Network
TNT
truTV
TV Land
A&E
Discovery Channel
Learning Channel (TLC)
History
Investigation Discovery
BBC America
BBC World News
Military Channel
Science Channel
Travel Channel
Spike
Comedy Central
SCI FI Channel
Sleuth
Expanded Basic - Lifestyle
mtvU
MTV Tr3s
Food Network
HGTV
Planet Green
DIY Network
Fine Living
Bravo
Logo
Discovery Health
Fit TV
Page 1 of 3
Attachment B
Integra Tentative Channel Line-Up - Additional Services
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HD Basic
Lifetime HD
LMN - HD
EWTN
TBN
Brigham Young TV
Expanded Basic - Sports
Speed Channel
Fox Soccer Channel
Local RSN
Fox College Sports Atlantic
Fox College Sports Central
Fox College Sports Pacific
OutdDor Channel
Golf Channel
Versus (Outdoor Life Network)
Expanded Basic - Kids & Family
PBS Kids Sprout
Expanded Basic - General Entertainment
FX
Hallmark Channel
National Geographic Channel
Expanded Basic - Movies
Fox Movie Channel
Expanded Basic News & Views
Fox News Channel
Fox Business Network
RFD-TV
Expanded Basic Music
FUEL TV
Expanded Basic Lifestyle
SOAP net
Lifetime
Lifetime Movies
Lifetime Real Women
Wealth TV
Sstyle,
E!
Fox Reality
G4TV
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HD Tier
NatiDnal Geographic HD
Page 2 of 3
BIO
History International
Military History
Crime & Investigation Network
CNN International
Boomerang
Oxygen
im$pliijic;(;tier~~1.!,~
MTV T r3s
Telemundo
CNN en Espanol
History en Espanol
Discovery Familia
ESPN Deportes
mum2
Integra Tentative Channel Line-Up - Core Programming Tiers
Iffq;aTstc~~ . '. .'., ...... ... . . .... '. ........ Premium Channels
Local Broadcaster HD lst1i'Z~~\j.{\~ ;silPWffi!i],~i;,"'lgi,
SciFi HD Starz E Showtime E HD
USA HD Starz W The Movie Channel E HD
TNT HD Animal Planet HD Starz Cinema E
TBS HD Starz Cinema W
Food Network - HD Starz Kids & Family E
HGTV HD Starz Kids & Family W
ESPN HD Starz Comedy E
ESPN2 HD Starz Edge E
Animal Planet HD Starz InBlack E
Science HD Encore E
Discovery HD Encore W
Planet Green HD Encore Drama E
Encore Mystery E
Encore Wam E
Encore Wam W
Encore Action E
Encore Action W
Encore Love E
Encore Westerns E
IndiePlex
RetroPlex
Attachment B
Palladia
A & E HD
Universal HD
StarzHDTV
Encore HD
E
HBOW
HB02 W
HBO Comedy E
HBO Comedy W
HBO Family E
HBO Family W
HBO Latino E
HBO Latino W
HBO Signature E
HBO Signature W
HBO Zone E
HBO Zone W
HBO E HD
HBO W HD
HBO 2 E HD
HBO 2 W HD
HBO Comedy E HD
HBO Comedy W HD
HBO Family E HD
HBO Family W HD
HBO Latino E HD
HBO Latino W HD
HBO Signature E HD
HBO Signature W HD
HBO Zone E HD
at MAX E
MAXE
MAX W 5 Star Max E
More MAX E
More MAX W
ActionMax E
Action Max W
OuterMax E
Thriller Max E
Thriller Max W
WMAX E
at MAX HD
MAX E HD
MAX W HD
5 Star MAX E HD
More MAX E HD
More MAX W HD
ActionMax E HD
ActionMax W HD
OuterMax E HD
Thriller Max W HD
Thriller Max W HD
WMAX E HD
Page 3 of 3