AGENDA #4c

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Catherine Lazorko, Public Information Officer
DATE:	October 22, 2007
SUBJECT:	Scheduling a Public Forum to Consider a Potential Change in Cablevision Public Access Fees Paid by Cable Television Customers

Adoption of the attached resolution would schedule a public forum for November 7, 2007 on a potential change in the public access fees paid by cablevision customers.

“Public access” refers to non-commercial programming produced or submitted by citizens to be carried on the cable system.

BACKGROUND

The cable television franchise approved by the Council and accepted by Time Warner Cable in July 1996 allows the Town to have cable customers billed for a public access fee.

The Town began charging a public access fee of 65 cents under a resolution adopted by the Council on November 11, 1996, and amended that amount to:

66 cents on November 13, 1997
67 cents on November 25, 1998
68 cents on November 22, 1999
69 cents on December 11, 2000
70 cents on November 26, 2001
71 cents on December 9, 2002
72 cents on November 10, 2003
74 cents on November 22, 2004
76 cents on November 21, 2005
78 cents on December 4, 2006

Public access fees collected by Time Warner Cable on behalf of the Town go to The Peoples Channel to provide public access television services. The Council authorized renewal of the performance agreement with The Peoples Channel in September 2007. The Peoples Channel submitted its annual report (Attachment 1) to the Council at the September 24, 2007, meeting.

The purpose of the public access fee is to help cover wages, equipment, rent and other costs for management and operation of public access cable television services. The current 78-cent per month public access fee generated $121,432 for the fiscal year ended June 30, 2006.

Each year, the Council decides whether to increase, maintain, or reduce the public access fee.

OPTIONS

The franchise allows the Town to reduce, eliminate, or increase the public access fee once per year. The increase in a given year is limited to an inflation factor or 3%, whichever is less. The inflation factor is the increase in the most recent Gross National Product-Price Index (GNP-PI) published by the U.S. Department of Commerce, Bureau of Economic Analysis. According to the Federal Communications Commission, the inflation factor for the previous 12-month fiscal period is 2.6.

Substantive Options:

Direct Time Warner to increase the fee by the amount of the inflation factor.
The franchise states that the annual adjustment will be the amount of increase in the Gross National Product Price Index (GNP-PI), subject to a limit of 3% increase per year and subject to an overall limit of $1 per month as the maximum future fee.
A 2.6% change would result in an increase in the fee from 78 cents to 80 cents per customer per month, beginning January 1, 2008, which we believe is a reasonable increase. With the increase, we estimate revenue would be approximately $124,624, an additional $3,192 (calculated at 13,300 approximate subscribers paying 2 cents more per month over 12 months).
Make no change in the current fee.
Reduce or eliminate the public access fee.

Procedural Options:

Call a public forum for November 7, 2007.

Take no further action and leave the fee at its present level of 78 cents per month.

RECOMMENDATION

Manager’s Recommendation: That the Council adopt the attached resolution and refer this matter to the Manager for recommendations and call a public forum on November 7, 2007.

ATTACHMENTS

The Peoples Channel Annual Report to the Town of Chapel Hill for 2006-07 and Financial Statement (p. 4).