AGENDA #2

MEMORANDUM

TO:                  Mayor and Town Council

FROM:            W. Calvin Horton, Town Manager

SUBJECT:      Public Forum to Consider a Potential Change in Cablevision Public Access Fees Paid by Cable Television Customers

DATE:             November 9, 2005

On October 24, 2005, the Town Council adopted a resolution that called for tonight’s public forum to receive comments on the potential adjustment of the public access fee charged to cable television customers.  The public access fee rate may be:

• adjusted for inflation to 76 cents per month;
• continued at the present rate of 74 cents per month;
• reduced; or
• eliminated.

Following tonight’s forum, we will return to the Council with a follow-up report for consideration on November 21.

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

Notices of tonight’s forum were published in The Chapel Hill News on October 30 and November 6, as well as cablecast on The Peoples Channel (Channel 8) (Attachment 1).

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

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 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 74-cents per month public access fee generated $115,002 for the fiscal year ended June 30, 2005.

Each year, the Council decides whether to increase, maintain, or reduce the public access fee. 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 percent, 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 2.29.

A 2.29 percent change would result in an increase in the fee from 74 cents to 76 cents per customer per month, beginning January 1, 2006, which we believe is a reasonable increase.  With the increase, we estimate that revenue would be approximately $117,635, an additional $2,633.

NEXT STEPS

We recommend that the Council refer all comments from the forum to the Manager and Attorney.  We will present a final recommendation to the Council at its November 21 meeting.

ATTACHMENT

1. Public Forum Notice (p. 3).