AGENDA #1

 

MEMORANDUM

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:       Public Hearing: Consideration of Resolution Finding Time Warner Cable Basic Service Tier Rates as Consistent with Federal Regulations

 

DATE:             January 14, 2002

 

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 tonight’s public hearing is to receive comment on the increase in Time Warner Cable’s Basic Service Tier rates. 

 

A resolution is attached, which accepts the cable consultant’s report and finds Time Warner’s proposed rates to be accurately calculated according to FCC rules and regulations.  

 

BACKGROUND AND DISCUSSION

 

On October 2, 2001, Time Warner Cable notified us that it intended to set the Basic Service Tier rate at $10.10 a month for Chapel Hill customers and $13.40 a month for Durham customers for the upcoming year.  This is an increase from the 2001 monthly rate of $9.50 for Chapel Hill and a decrease from $13.70 for Durham customers.

 

The Federal Communications Commission (FCC) requires cable operators to file a basic rate adjustment request with the local franchising authority 90 days prior to the effective date of the proposed change.  After the 90 days, the operator may change the rate, unless the local franchising authority has rejected the change as unreasonable.  Rate changes have taken effect on cable customer bills as of January 1.

 

Mr. Adrian Herbst, the Town’s cablevision consultant, 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.     

 

The consultant reviewed the data and discussed the submitted FCC Forms 1240 and 1205 with Time Warner officials.  It is the conclusion of the consultant, based on the review of the forms as well as discussions with Time Warner, that the rates are accurately calculated according to the rules of the FCC.  Prior to approval, however, the public must be granted the opportunity to offer comment on the matter (Attachment 1).

 

 

RECOMMENDATION

 

That the Council receive public comment on Basic Cable rates and refer comments to the Manager.  We also recommend that the Council adopt the attached resolution, which accepts the consultant’s report and finds Time Warner’s proposed rates to be accurately calculated according to FCC rules and regulations.   

 

ATTACHMENTS

 

1.      November 7, 2001 Report and memorandum from Mr. Adrian Herbst (Re: Time Warner Cable’s FCC 1240 and 1205 Rate Filings) (p. 4).

2.      October 25, 2001 Letter to the Town Manager from Time Warner (Re: Chapel Hill Franchise) (p. 15).

3.      October 25, 2001 Letter to the Town Manager from Time Warner (Re: Durham Franchise) (p. 18).

A RESOLUTION ACCEPTING THE CABLE CONSULTANT’S REPORT AND FINDING TIME WARNER CABLE’S PROPOSED 2002 BASIC SERVICE TIER RATES TO BE ACCURATELY CALCULATED ACCORDING TO FCC RULES AND REGULATIONS (2002-01-14/R-1)

 

WHEREAS, Time Warner Cable submitted Federal Communications Commission (FCC) Form 1240 Updating Maximum Permitted Rates for Regulated Cable Services; and

 

WHEREAS, Time Warner submitted FCC Form 1205, Determining Regulated Equipment and Installation Costs; and

 

WHEREAS, the Town of Chapel Hill is certified with the FCC to regulate Basic Service Tier rates provided by Time Warner Cable in franchise NC-0234; and

 

WHEREAS, the Town’s cablevision consultants have reviewed the rates and have determined that they are accurately calculated according to the rules of the FCC;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council accepts the cable consultant’s report and finds Time Warner Cable’s proposed 2002 Basic Service Tier rates to be accurately calculated according to FCC rules and regulations.

 

This the 14^th day of January, 2002.