MINUTES OF A PUBLIC HEARING HELD BY THE MAYOR AND COUNCIL OF THE

TOWN OF CHAPEL HILL, NORTH CAROLINA, MONDAY, FEBRUARY 7, 1994

Mayor Broun called the hearing to order. Council Members in attendance were Joyce Brown, Joe Capowski, Mark Chilton, Pat Evans, Lee Pavao, Barbara Powell, James Protzman and Rosemary Waldorf. Also in attendance were Town Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine Miller, Assistant to the Manager Greg Feller and Town Attorney Ralph Karpinos.

Mr. Feller noted that Cablevision had submitted a cable television refranchising proposal to the Town on January 18th. He stated that the this evening's hearing was an opportunity to receive public comment on the cable company's informal proposal. Mr. Feller said staff requested that the Council refer comments from this evening's hearing to the Town's cable television negotiating team.

Randall Rhoden, Cablevision of Raleigh‑Durham‑Chapel Hill legal counsel, said his client's main interest this evening was to hear comments from the council and public about cable television related matters. He stated that Cablevision officials Randy Fraser, Bob Herman and Bill D'Epainger were in attendance this evening. Mr. Rhoden stated that Time‑Warner had taken over responsibility for the cable television system approximately eighteen months ago. He said that during this period Time‑Warner had invested over $1 million in the system to address customer service concerns. Mr. Rhoden stated that new mandatory Federal Communications Commission rules for cable television had resulted in an increased volume of complaints to public officials. He added that efforts to address customer service concerns continued. Mr. Rhoden stated that following this evening's hearing Cablevision officials would meet with the Town's negotiating team to begin working on customer concerns.

Mr. Rhoden said that Cablevision's proposal was to offer an entirely different cable television system. He added that a prototype of the proposed system using fiberoptic cabling was being tested in Orlando, Florida. Mr. Rhoden stated that fiberoptic cable television systems would offer tremendous improvements in picture quality. He said the estimated costs for two‑way communication system improvements would total about $15 million. He added that customers of the proposed new system would be able to receive up to eighteen basic channels without a converter box.

Acting Cable Television Advisory Committee Chairperson Robert Joesting presented a summary of the Committee's recommendations concerning Cablevision's proposal. Mr. Joesting requested that Committee members in attendance this evening stand to be recognized by the Council. A copy of the Committee's recommendations are on file in the Clerk's Office.

Roland Giduz, Director of Public Affairs for the Village Companies said he had regularly produced and hosted a half‑hour show (Chapel Hill Almanac) on local cable television for several years. Mr. Giduz said he had enjoyed good relations with Cablevision staff throughout this period. He also stated that Cablevision was a good corporate citizen in the area of non‑commercial local programming, cablecasting local events such as the annual Christmas parade and election returns.

Clarence Wakefield said although he had limited personal experience with cable systems, he believed that other systems offered better service than the Town's current cable television franchisee. Mr. Wakefield also said he concurred with the Cable Television Advisory Committee's comments about converter boxes. He stated that the proposed term for the franchise lease, twenty years, was too long. Mr. Wakefield said such a long‑term lease was not a good idea given the potential for rapid technology changes in the future.

Irving Freedman questioned the integrity of Cablevision in dealing with its customers. He encouraged Cablevision officials not to mislead the public about cable television concerns. Reiterating his concerns about Cablevision's integrity and truthfulness Mr. Freedman urged the Council to consider alternate proposals for the Town's future cable franchise.

Watts Hill, Jr. said Cablevision's signal quality left a lot to be desired. He urged the Council direct staff to investigate the programming types and costs of other cable television systems. Mr. Hill also stated that none of the improvement$ of the last decade were readily available using Cablevision's existing equipment. He urged the Council to make certain Cablevision be specific about what programming would be offered in its proposed basic eighteen channel system.

Fred Johnson said the Cable Television Advisory Committee had done a very good job of capturing customer concerns in its recommendations to the Council. Mr. Johnson said a franchise renewal period of two years, rather than twenty years, was a good start. He also expressed hope that the Council would hold a formal hearing in the future to receive citizen comments on cable television franchise proposals.

Roy Bradford said he had paid a flat fee to receive cable television service a number of years ago. Mr. Bradford stated that Cablevision had an ethical obligation to honor this previous commitment. He added that if Cablevision were not willing to honor this contract, the Council should be careful in its future dealings with Cablevision.

A. P. Spadaro said Cablevision should receive a maximum of a twoyear franchise renewal if it could show its good corporate partnership to the community. Mr. Spadaro expressed concern that cable customers were paying for services on an "a la carte" which had been offered free of charge in the past. He stated that Cablevision's history with the Town had been a poor one. Mr. Spadaro also expressed concern that the "educational enticements" offered by the company's "pay‑per‑view" system generally included sporting events and soft‑core adult programs, rather than programs of an educational nature.

S. D. Overdyk said he opposed offering a long‑term cable franchise contract to Cablevision. Mr. Overdyk expressed concern that Cablevision's current operating system could not be used to temporarily disconnect service to persons who were absent from Town for parts of the year. He also voiced his concern that Cablevision appeared to unilaterally make programming changes without consulting with its customers about their preferences.

Dr. Stuart Schnider expressed concern that he had had to pay approximately $2,000 for one hundred feet of cable in order to receive cable television service. He stated that if this type of cabling could not be provided at a nominal cost, it was very unlikely that fiberoptic cable costs to .customers would be less than current costs. Stating that Cablevision had not acted honorably in its past dealings with the Town, Dr. Schnider urged the Council not to give Cablevision a twenty‑year franchise.

Dave White expressed his support for public access programming. Mr. White said he did not believe that Cablevision placed sufficient emphasis on the public access aspect of the cable television system. Mr. White requested that the Cable Television Advisory Committee and Town's cable television franchise negotiating team place an emphasis on the public access aspect of programming.

Kim Barker, an area resident of approximately eighteen months, said he had formerly paid about $60 per month for cable services and was currently paying about $82.25 per month. Mr. Barker noted that a community in Louisiana where he had formerly resided had a cable system which offered individual pricing for each of the channels on its cable system. He said this made it possible for cable customers to have optimum freedom of choice in cable television programming.

Seung Kim urged Cablevision to permit its subscribers to make optimum use of their cable‑ready televisions. Mr. Kim added that technology was currently available to address the concerns raised earlier by Mr. Overdyke about citizens wishing to voluntarily disconnect their cable service for brief time periods. He also noted that Cablevision could benefit significantly from recent technological advances made in controlling audio level and color differences between and across channels.

Todd Morman urged Cablevision to place greater emphasis on the provision of public access programming opportunities and related training by Cablevision staff. Mr. Morman said good public access programming was a community asset. He stated that although Cablevision staff had been very helpful with its public access training, existing cable access equipment was very outdated.

Tyler Johnson said the University was working with Cablevision to improve signal quality on cable channel 11, the University's access channel. Noting the importance of outreach to children and teachers, Mr. Johnson expressed disappointment that the University access channel was not available at all Chapel Hill‑Carrboro schools. Mr. Johnson stated that the provision of full‑service cable networks would be good in fostering competition and in bringing prices down.

Katherine Elkins stated that she and her family had experienced difficulties in attempting to install cable television service at their new home. She noted that the estimated cable installation cost totalled about $2,510. Ms. Elkins said that there appeared to be some significant internal communication problems between members of Cablevision's technical and service staff.

David Kasper said he had a vested interest in communication and public access matters. He added that two‑way communications offered the opportunity for cable television customers to receive an expanded array of services. Mr. Kasper also said he looked forward to opportunities for citizens to communicate with one another via an information superhighway. He expressed concern that some corporations and governmental officials were exploiting available technology to further their own interests. Mr. Kasper requested that Cablevision ensure the full potential for community access television. He also suggested that the control and management of access programs should be separate from cable television operations.

Joel Harper stated that Cablevision had recently cablecasted two community programs at no charge.

Ron Webber said although his cable television service was reliable and the reception was good, he did not want his children subjected to advertisements for adult programming. Mr. Webber also said he favored having additional religious programming on cable television.

Robert Gandley said Cablevision's service and signal quality had been very poor. Mr. Gandley expressed concern that Cablevision officials had repeatedly dodged customer service complaints. He urged the Council to solicit other cable television providers for a franchise term of less than twenty years.

Robert Reda urged the Council to be cautious in its negotiations for the Town's new cable television franchise. He noted that alternative cable television providers such as Southern Bell and GTE might be able to provide cable television service during the next five years.

Council Member Protzman inquired whether Cablevision proposed to offer separate public access programming opportunities for Town and Durham residents. Mr. Feller said the Town was concerned about this matter. He added that the current proposal was for television signals to emanate from Cablevision's studios in Durham. Council Member Protzman noted the importance of providing advertising opportunities for local merchants.

Council Member Powell inquired where Mr. Webber resided. Mr. Webber said he lived off Homestead Road. Noting that the Council had received many complaints from constituents about poor picture quality, Council Member Powell inquired how Cablevision intended to address these concerns. She also inquired about the possibility of having separate public access and cable company staffing. Cablevision representative Bill D'Epainger said Cablevision was fully supportive of the Cable Committee's recommendations about public access facilities. He added that Cablevision technical staff could be called upon to attempt to resolve reception problems. Noting that reception generally appeared to be better on Raleigh and Durham Cablevision, Council Member Powell inquired about the differences between these systems and the Town's cable system. Mr. D'Epainger said the equipment used in these systems was substantially newer than the equipment in the Town's system. Council Member Powell inquired about the timeframe for possible system improvements. Mr. D'Epainger said work on a new system could begin as soon as a franchise agreement was finalized. He also said it would take about eighteen months to complete system improvements.

Mayor Broun said he received very poor reception on public access channels at his home. Mr. D'Epainger said it was very often possible for Cablevision technical staff to resolve these problems. Mayor Broun suggested that Cablevision notify its customers of this service. Council Member Brown asked whether a fiberoptic system was needed to provide better reception. Mr. D'Epainger said picture quality involved subjective judgements. He stated that the primary purpose of fiberoptic cabling would be to improve the cable system's overall reliability. Council Member Pavao inquired whether it would be possible to improve the signal quality on cable channel four. Mr. D'Epainger said he thought this was correctable in the short term. He said Cablevision staff would look into the matter and report back to the Town.

Noting that many Cablevision customers wanted to discontinue the use of converter boxes, Council Member Evans asked why Cablevision was working with vendors to secure converter boxes for the proposed new system. Mr. D'Epainger said converter boxes were sophisticated devices which would be needed for future cable and satellite television systems. Council Member Evans asked why converter boxes were needed just to watch television. Mr. D'Epainger said up to eighteen channels would be available without a converter box.

Mayor Broun asked why converter boxes were proposed when other systems did not have converter boxes. Mr. D'Epainger said most of Cablevision's customers in Raleigh, Durham and Wake County had converter boxes. Mayor Broun asked why it was not possible to eliminate converter boxes. Stating that Cablevision officials had discussed these concerns with the Town's Cable Television Committee, Mr. D'Epainger said incompatibility among equipment was the major problem. Cablevision representative Randy Fraser said an interactive cable television system would necessitate the use of some sort of device for functionality. He added that some tradeoffs would be needed to comply with new federal regulations concerning cable television.

Council Member Powell asked why a newly upgraded cable system would necessitate the use of cable boxes. Mr. Fraser said there were over 82,000 channel selectors in use by Cablevision customers in Raleigh and Wake County. Council Member Protzman asked whether it was correct that customers not interested in pay‑per‑view services could access programs without the need for a converter box. Mr. Fraser said this applied for hybrid cable television systems. He stated that the Town did not currently have a hybrid cable system. Mr. Fraser also said that federal regulations mandated that cable systems be updated so that basic customers could access pay‑per-view events. Council Member Protzman said although cable systems could provide many options, customers could decide which ones to select. Mr. Fraser said his firm was committed to finding workable solutions to resolve compatibility problems.

Council Member Evans expressed hope that cable television service could be provided to all schools in the Chapel Hill‑Carrboro school system. Mr. Fraser said he believed that cable service was available at all schools within Town limits. Council Member Evans inquired about the possibility of CVI providing cable service to schools located in Carrboro. Mr. Fraser said Cablevision would work with CVI on this matter.

Council Member Protzman asked whether it would be possible to block pay‑per‑view advertisements for adult entertainment. Mr. Fraser said Cablevision staff was currently reviewing this situation. Mayor Broun said Cablevision needed to do something to address this situation.

Hyman Mansberg, noting that he owned stock in Time‑Warner, Inc., said Cablevision's motive in having cable conversion boxes was solely profit‑oriented. He stated that the converter boxes basically reproduced the technology such as tuners and detectors in most television sets.

Noting its good work to date, Council Member Brown inquired about the future role of the Cable Television Advisory Committee. Mr. Horton said the Committee would continue to provide feedback to the Council and the Town's cable television franchise negotiating team.

Council Member Brown asked whether a future hearing date had been set. Mr. Horton said the proposed date was April 19th. Council Member Brown asked whether all items referenced this evening would be addressed at the April 19th hearing. Mr. Horton said every effort would be made to follow‑up on all of the matters. Council Member Powell requested that persons with technical information relative to cable television provide this information to the Town staff.

Council Member Capowski said this evening's hearing was a significant part of the cable television franchise negotiating process. He expressed thanks to former Cable Television Committee Chairperson Grainger Barrett, Acting Committee Chairperson Bob Joesting and Assistant to the Manager Greg Feller for their efforts. Council Member Capowski said he was significantly disappointed by Cablevision's proposal. He stated that cablevision's proposal contained a number of vague "trust me" type proposals. Council Member Capowski also said there was insufficient information about Orlando, Florida's prototype fiberoptic cable television system. He stated that although it was very unlikely that two cable television firms would compete for local business at the same time, such competition had been found to be very useful in keeping service levels higher and costs lower. Council Member Capowski also said he thought it would be a good idea to provide cable television service to dormitories on the University campus.

Council Member Capowski requested that staff investigate the two situations cited by speakers this evening concerning cable television installation costs of $2,000 or more. Council Member Capowski said he looked forward to continuing negotiations concerning the Town's cable television franchise.

COUNCIL MEMBER PAVAO MOVED, SECONDED BY COUNCIL MEMBER POWELL TO REFER COMMENTS TO THE TOWN'S CABLE TELEVISION NEGOTIATING TEAM AND THE CABLE TELEVISION ADVISORY COMMITTEE. THE MOTION W?S ADOPTED UNANIMOUSLY (9‑0).

The hearing concluded at 9:33 p.m.