HomeMy WebLinkAbout2015/09/23 - ADMIN - Minutes - Community Technology Advisory Commission - RegularOFFICIAL MINUTES
ST. LOUIS PARK TELECOMMUNICATIONS COMMISSION
MEETING OF SEPTEMBER 23, 2015
ST. LOUIS PARK COUNCIL CHAMBERS
MEMBERS PRESENT: Maren Anderson, Bruce Browning, Dale Hartman, Cindy
Hoffman, Toby Keeler and Rolf Peterson
MEMBERS ABSENT: Andrew Reinhardt
STAFF PRESENT: Reg Dunlap, Civic TV Coordinator; Jacque Larson,
Communications and Marketing Manager; John McHugh,
Community TV Coordinator
OTHERS PRESENT: Brian Grogan, Attorney for Moss & Barnett, Patrick Haggerty,
CenturyLink Director of Regulatory and Legislative Affairs, and
Kirstin Sersland, CenturyLink Director of Local Government
Affairs.
1. Call to Order
Chair Browning called the meeting to order at 6:10 PM.
2. Roll Call
Present at roll call were Commissioners Anderson, Browning, Hartman, Hoffman, Keeler
and Peterson.
3. CenturyLink application for a Cable TV franchise
Mr. Dunlap thanked the Commissioners for attending the special meeting. He said the
City franchise negotiation team has met with CenturyLink five times since the last
Commission meeting August 12, and has made great progress. He thanked
Commissioners Keeler and Browning for their assistance. He said that the draft franchise
is not available tonight, and that he was asking the Commission to make a
recommendation to the City Council based on the staff report and the testimony of
Commissioners Browning and Keeler. Mr. Dunlap introduced Brian Grogan of Moss &
Barnett, the City’s attorney, to provide background on the draft franchise.
Mr. Grogan gave a PowerPoint presentation. He said the franchise is substantially
complete with a few details left which do not raise to the level of deal-breakers.
He said the Federal Cable Act specifically allows a franchising authority to grant one or
more franchises, and “may not unreasonably refuse to award an additional competitive
franchise.” He said the goal for franchise negotiations with CenturyLink was to offer a
level playing field with the franchise currently in place with Comcast, not giving either
company a competitive advantage. The starting point was the Comcast franchise, which
CenturyLink marked up with changes and provided to the City in July, 2015.
Mr. Grogan said the goal was nearly identical franchises, and that we’ve come reasonably
close to that.
A lot of issues relate to the difference in systems. Comcast is a hybrid fiber coax system,
and CenturyLink is an IP delivery system, which means only one channel is provided to
the customer’s home at a time.
One distinction is that Comcast runs the cable system and owns the facilities in the right
of way. Qwest Broadband Services, Inc. (QBSI), doing business as CenturyLink, will
run the cable system, but Qwest Corporation owns the facilities in the right of way.
QBSI will be the content provider who contracts with HBO, for example. Because we
have sister companies involved, one section in the franchise clarifies the relationship
between the companies.
Mr. Grogan said that there are several reasons that the CenturyLink franchise is for a five
year term. One is that the Comcast franchise ends in about five years, so that when it’s
time to talk about franchise renewal, the talks can be synched up.
The second reason is state law’s build out requirement in five years. There’s some
dispute about whether this applies to CenturyLink, but with the five year franchise term,
the City can look at the build out progress CenturyLink makes in that term, and has the
unilateral right to renew the franchise for between five and ten years, if they’re happy
with the progress made.
Mr. Grogan said that CenturyLink franchise defines households as “living units,” which
includes single family homes, multi-dwelling units and business locations. Any living
unit that meets minimum technical qualifications, at least 25 megabits per second internet
speeds, are called “qualified living units” to receive the CenturyLink Prism TV service.
Mr. Grogan said he’s seen the maps of qualified living units for the vast portion of the
southern metro area, and St. Louis Park has one of the best maps for the service that
CenturyLink can make available. The City’s franchise negotiating team was quite
pleased with that.
Mr. Grogan said that system build out was the most controversial area of the franchise
and one that we struggled with. The franchise requires that CenturyLink will serve a
minimum of 15% of the living units in the city within two years, and quarterly meetings
to verify compliance with build obligations. That number is a low threshold, but based
on the confidential and proprietary maps provided by CenturyLink, staff is confident that
number is low compared with what CenturyLink is going to be able to initially provide.
Once CenturyLink reaches 27 ½ % of the households capable of receiving cable service,
they are required to build an additional 15% of the City. At the first quarterly compliance
meeting, the City will be able to review what CenturyLink’s effective footprint is. So
within three months of the effective date of the franchise, that 15% number will change to
reflect the real world footprint, which is substantially higher. Once that number is set,
CenturyLink will be required to build an extra 15% above that number. It’s a complicated
procedure but is consistent with CenturyLink’s approach in other markets like Seattle,
Omaha and Minneapolis.
Chair Browning asked if Mr. Grogan could give an example to clarify how it would
work. Mr. Grogan used the example of a city with 100,000 households, or living units.
The franchise says that within two years, CenturyLink must build to 15,000 living units.
But if CenturyLink comes in with a map that shows that they can serve 50,000 living
units immediately, that number becomes the new baseline. Then if they serve 27 ½ % of
those households, they would have to add 15% living units on top of the 50,000 living
units.
Mr. Grogan said the city is in elite company in terms of the favorable nature of the map,
and after the first quarter meeting where that number can be made public, citizens and
commissioners will be pleased.
He said that now that we’ll have two competitors, we can expect that Comcast will also
treat some of their information as confidential and we’ll have to have some procedures to
address that. The companies will both be careful about what they release publicly since
they’ll be fighting for market share.
Mr. Grogan then addressed the carriage of public, educational and government (PEG)
channels. The systems are different; Comcast customers can only watch the St. Louis
Park PEG channels, but CenturyLink customers will be able to watch the PEG channels
for the entire metro area, about 200 channels in total. As a result of so many PEG
channels, CenturyLink uses a mosaic channel, a single channel that shows the
government channel, and in a smaller window, all the other PEG channels for the City.
This is the same arrangement as with other cities. Somewhere between channels 14 and
50 will be the mosaic channel for St. Louis Park, and when a viewer picks the “P” or “E”
channel with their remote control, they’ll go straight to that channel which will actually
be on a channel assignment in the 8000’s. Another feature is that the PEG channels will
be available in both standard definition (SD) and high definition (HD), a different
scenario than Comcast.
He said St. Louis Park and Fridley are unique in having a robust video on demand
allocation with Comcast. That’s a precious commodity on the Comcast system, so they
offer up to twenty hours of SD programs or five hours of HD. CenturyLink will offer all
twenty hours in either HD or SD.
Mr. Grogan said that CenturyLink will provide the exact same amount for PEG
equipment capital, $1.12 per customer. He said free service to public buildings is another
key area in the franchise, and more than half of the public buildings will qualify as living
units, served by CenturyLink. The only qualification is that CenturyLink doesn’t want to
go where Comcast is already offering free service. There’s a provision in the franchise
where the City can take a building off the Comcast list so that CenturyLink will have to
serve it, to create parity in the burdens to each company.
Mr. Grogan said if the City awards a franchise to CenturyLink, we’ve asked that
CenturyLink step in to indemnify the City if that franchise is challenged by Comcast or
another provider, which is an obligation Comcast doesn’t have.
Mr. Grogan said, in conclusion, my recommendation is to recommend to the City Council
to award this franchise to CenturyLink.
Commissioner Peterson asked if in the example, the 50,000 represented living units? Mr.
Grogan replied that those were the qualified living units, in the example. Commissioner
Peterson said that at the quarterly meeting then, we’ll find out that number and the 15%
goes on top of that number. Commissioner Peterson asked about the 27 ½ % take rate, to
require additional 15% build out. Mr. Grogan said that’s an aggressive number, and
would show market success.
Commissioner Keeler said the negotiations went well, and the City was well represented.
The issues that came up were related to equity between Comcast and CenturyLink, and
all parties worked diligently to resolve them. He said it has been a very good process and
the City is well protected as we go forward, and that residents would have another option
to Comcast.
Chair Browning said he agreed with Commissioner Keeler, that the process protected
both sides and that having a competitor is a plus. He said that Comcast has had real
issues with customer service, and asked what CenturyLink’s would be like?
Mr. Haggerty said that the two companies were fundamentally different. He said
customer service will be the differentiator in this market, that whether a customer chooses
us or them, it will be based on the service they receive.
Chair Browning asked where the CenturyLink call centers are located, and if any of them
are overseas? Mr. Haggerty said that all of their call centers are in the U.S. and several of
their operations are in Minnesota, with 3,000 employees in the state including call
centers. He said there’s a likelihood that someone calling customer service would get
someone from the Twin City area. Mr. Haggerty said he appreciated the speed of the
process in St. Louis Park.
Commissioner Peterson asked if the existing copper infrastructure would be used to
deliver the service to the first 50,000 households? He said that in the example of 50,000
living units, those have already been brought up to 25 megabits per second using existing
infrastructure. This is a very capital intensive business. He said CenturyLink is putting
together a business case around the country for what networks will look like in the future,
and that will be fiber all the way to the home. He said they have to find a way to
incrementally build that system, and offering Prism is one of the ways to do that.
Commissioner Peterson said he was looking forward to that future, and that he felt better
about the process because Commissioners Browning and Keeler were involved, rather
than just having staff there.
Commissioner Keeler said it’s a good contract and that he recommends that the
Commission approve the contract. Commissioner Peterson made the motion to direct
staff to complete franchise negotiations with CenturyLink and to recommend that the
City Council adopt the proposed franchise ordinance to allow CenturyLink to offer cable
TV services in St. Louis Park. Commissioner Anderson seconded the motion, which
passed 6-0.
The meeting adjourned at 6:55 p.m.
Respectfully submitted by:
Reg Dunlap