to: Roger L. Stancil, Town Manager
from: Sabrina Oliver, Communications and Public Affairs Director
Catherine Lazorko, Public Information Officer
subject: Consideration of Resolution Finding Time Warner Cable Basic Service Tier Rates Consistent with Federal Regulations
date: January 12, 2009
Federal regulations allow the Council to review Time Warner Cable Basic Service Tier rates to determine whether such rates are accurately calculated and consistent with applicable rules. The purpose of this memorandum is to provide information about the rates that are to become effective in January 2009.
An Order is attached, which is designated Resolution 01-12-2009/R-3, which accepts the cable consultant’s report and finds Time Warner’s proposed rates to be accurately calculated according to FCC rules and regulations.
A public notice about this matter was published in the local newspaper, The Chapel Hill News, and a news release was issued by the Communications and Public Affairs Department.
On December 9, 2008, Time Warner Cable notified us (Attachment 1) of its rates for 2009, following its submission of FCC Forms 1240 and 1205 (Attachment 2). The rate for Basic Cable Service for Chapel Hill has increased from $9.33 to $9.50, while the rate for Basic Cable Services for Durham will decrease from $14.12 to $13.00.
The rates for Tier 2 and Digital Tier, both of which are unregulated, also have increased. Chapel Hill customers receiving Basic Cable Service, Tier 2 and Digital Tier have seen an increase from $67.22 per month in 2008 to $71.15 per month in 2009. Monthly rates for Durham customers receiving the same service level will increase from $68 in 2008 to $71.95 in 2009.
In addition to the Basic Cable Service, the Town reviews the rates on some cable equipment and installation rates. Other cable television services such as Tier 2 and Digital Tier are not subject to regulation by either local franchising authorities or the FCC. Basic Cable Service consists of about 20 channels of mainly broadcast stations that are received off the air and public, education and governmental access channels. Tier 2, according to Time Warner Cable, consists of about 50 channels for Durham and Chapel Hill. The Digital Tier currently consists of about 90 video channels.
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Time Warner Cable Basic Tier Rates
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1996 |
1997 |
1998 |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
|
Chapel Hill System |
$7.70 |
$7.70 |
$9.04 |
$7.67 |
$8.28 |
$9.50 |
$10.10 |
$11 |
$11.25 |
$10.60 |
$10.60 |
$9.35 |
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|
|
Durham System |
$9.63 |
$10.00 |
$10.25 |
$9.99 |
$12.39 |
$13.70 |
$13.40 |
$14.25 |
$14.30 |
$14.50 |
$14.50 |
$13.91 |
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Each year, Time Warner furnishes the Town with information about rate changes, which we provided for review to Robert Sepe, the Town’s cablevision consultant. Dr. Sepe has reviewed the data to determine whether Time Warner calculated the updated Basic Service Tier rates in a manner consistent with Federal Communications Commission (FCC) guidelines, the Time Warner Social Contract, and the Telecommunications Act of 1996. It is the consultant’s conclusion that the Basic Service rates are accurately calculated according to the rules of the FCC (Attachment 3).
It also is relevant to note that AT&T filed a Notice of Franchise with the NC Secretary of State on November 13, 2008, and has 130 days in which to provide video service in Chapel Hill. When AT&T files its Notice of Service with the NC Secretary of State’s office, Time Warner Cable is permitted to terminate its Chapel Hill franchise and secure a State video service franchise from the Secretary of State’s office. Such action by Time Warner Cable could be expected as early as the middle of March 2009. We will keep the Council informed on these matters.
RECOMMENDATION
That the Council adopt the attached resolution, which approves the Order finding that Time Warner Cable’s proposed 2009 FCC Form 1240 Basic Service Tier Rates and Form 1205 Installation and Equipment Rates Comply with the FCC’s Rates Rules.
ATTACHMENTS