►
Description
San Bruno City Council Meeting May 24, 2011
10c. Cable TV Services & Rates
B
Honorable
mayor
members,
city
council,
good
evening,
tenson
gelston,
cable
television
director
as
part
of
the
annual
budget
development
process,
staff
review
programming
contracts
and
other
operating
costs
for
changes
in
consultation
with
the
city
council,
cable
television
subcommittee
has
developed
a
service
and
rate
adjustment
proposal
for
your
consideration
and
adoption.
This
evening.
The
city's
programming
costs
increased
by
over
fifteen
percent
last
year,
mainly
due
to
Stevie
licence
fee
increases
implemented
by
Comcast
SportsNet
and
the
city
implemented
a
14.8
six
percent
rate
increase
to
cover
those
costs.
B
Programming
costs
are
increasing
again
this
year
by
over
six
percent,
which
is
much
lower
than
last
year,
but
still
a
large
increase.
Nonetheless,
while
there
is
a
need
to
fully
recover
cost
increases
by
passing
it
on
as
a
rate
adjustment,
the
city
is
sensitive
to
the
impact.
A
six
percent
plus
rate
increase
may
have
on
customer
sentiment
in
this
highly
competitive
environment,
but
Sandberg
similar
residents
have
a
choice
of
service
providers
for
the
video
service
today.
B
Also,
given
the
depressed
state
of
the
economy,
customers
are
switching
back
back
and
forth
between
service
providers
who
take
advantage
of
promotional
offers
to
save
money,
to
address
the
shift
and
customer
behavior
and
to
compete
effectively
in
this
new
environment.
The
City
Council
recently
approved
a
expanded
promotional
campaign
to
attract
new
customers
and
to
stabilize
the
city's
market
share.
The
first
postcard
mailer
of
this
campaign
was
delivered
to
prospective
customers
this
last
Friday
and
has
begun
to
generate
new
customers
already.
B
Given
the
heightened
level
of
competition,
every
service
provider
providers
customer
base
is
comprised
of
two
groups:
customers
with
the
company
standard
rates
and
a
group
with
a
group
of
customers
that
has
a
companies
promotional
rates,
although
it
appears
to
us
that
the
competing
service
providers
have
only
a
discounted
promotional
rate,
as
they
do
a
great
job
of
promoting
it,
they
also
have
established
standard
schedule
of
services
and
rates
generally
when
a
promotional
period
expires.
The
customers
rate
changes
to
the
company
standard
rate.
B
If
the
customer
signed
a
service
contract,
then
the
customized
to
stay
and
pay
the
standard
rate
to
the
contract
term
or
face
a
penalty.
Similarly,
the
city
has
a
standard
schedule
of
services
and
rates
which
the
city
annually
adjusts
and
maintains
to
cover
operating
costs
and
to
ensure
the
continued
viability
of
the
enterprise.
The
city
also
has
promotional
rates
to
attract
new
customers,
and
when
these
promotional
periods
expire,
the
city
standard
rates
apply.
So
a
company's
promotional
rate
is
not
extended
to
exist
existing
customers
and
should
not
be
interpreted
as
the
standard
rate.
B
The
recent
past
has
been
challenging
and
the
days
ahead,
no
doubt
will
continue
Beach
to
be
challenging
as
jostling
for
market
share
continues.
The
city
lost
nearly
800
basic
cable
customers
during
fiscal
year,
usually
increased
competition
and
generally
depressed
economic
climate.
This
is
a
phenomenon
that
is
being
experienced
by
the
entire
cable
industry.
According
to
the
national
cable
television
association,
the
basic
cable
video
penetration
of
homes
past
for
the
industry,
has
declined
to
46
and
a
half
percent.
B
Although
the
city's
basic
cable
penetration
to
homes
past
is
declining,
it
still
has
a
penetration
of
nearly
fifty
one
percent,
which
is
slightly
better
than
the
industry
average.
The
city
recognizes
the
impact
of
this
negative
trend
and
has
and
has,
and
will
continue
to
take
steps
to
maintain
its
competitiveness,
as
previously
directed
by
City
Council,
beginning
july,
two
thousand
eleven.
B
Even
though
a
direct
product
comparison
to
competitors
cannot
be
made
so
the
way
the
products
are
packaged,
the
rates
for
comparative
products
are
reasonably
close.
In
addition
to
a
lo,
a
la
carte
rates,
the
low
ellicott
rates
in
the
city
offers
a
wide
choice
of
deeply
discounted.
Video
and
multi-product
bundle
packages,
since
the
city
does
not
require
a
contract,
customers
are
free
to
upgrade
and
down
great
the
service
anytime.
The
city
also
offers
free
service
calls
to
all
its
customers.
These
are
added
values
that
that
are
not
offered
by
other
competing
service
providers.
B
The
challenge
faced
by
staff
and
the
cable
sub
committee,
consisting
of
Marouane
and
cast
member
Cano
in
developing
the
recommended
service
and
rate
adjustment
proposal
before
you
this
evening,
was
balancing
the
need
to
cover
rising
costs,
while
preventing
negative
customer
sentiment
in
this
competitive
environment.
After
deliberately
deliberating
on
alternatives,
including
foregoing,
a
basic-cable
rate
altogether
and
implementing
a
lesser
rate
increase,
the
subcommittee
advised
staff
to
scale
back
the
rate
increase
to
a
reasonable
level
that
would
strike
a
balance
between
the
two
equally
important
concerns.
B
As
such
staff
developed
a
rate
adjustment
of
three
thousand
four
cents
or
five
percent
on
basic
cable
service.
He
proposed
basic
cable
increased,
coupled
with
other
adjustments
to
digital
cable
premium
services
and
Internet
service,
as
described
in
your
report,
is
valued
valued
at
approximately
six
and
twenty
six
thousand
dollars
in
additional
revenue.
If
the
proposed
service
and
rate
increase
increase
approved,
the
additional
revenue
will
only
partially
cover
increases
in
programming
costs
and
leave
a
budget
gap
of
112
thousand
dollars.
This
revenue
shortfall
will
add
to
the
existing
cable
fun
deficit.
B
The
cable
thermic
committee
recommends
City
Council
approval
of
the
proposed
services
and
the
radius
budget
and
rate
adjustments
following
City
Council
action.
The
rating
Chris
will
take
effect,
July
1
2011
and
is
required
by
municipal
code
and
federal
regulations.
Staff
will
notify
customers
through
a
villain,
sir,
in
the
june
billing
statement
and
additionally
post
notices
on
channel
one
and
the
department's
website.
So
that
concludes
the
presentation.
I'll
take
any
questions
tenzin.
A
B
There
are
20
broadcast
stations
in
the
bay
area
that
San
Bruno
receives
10
of
them,
and
every
year
these
brought
these
broadcasters
make
an
election
with
FCC,
whether
they
want
to
be
a
must
carry
station
or
a
retransmission
consent
station.
When
the
elect
must
carry,
then
every
cable
opera
in
the
area
has
to
carry
that
station
and
have
you
have
no
choice
but
to
carry
it,
but
when
a
station
elects
retransmission
consent,
then
the
cable
operators
have
to
see
consent
from
the
broadcaster's
to
carry
that
station.
In
the
past
these
Japanese
negotiations
have
been.
B
We
will
be
able
to
reach
an
agreement
on
these
negotiations
through
in-kind
consideration.
In
other
words,
we
would
exchange
advertising
ransom,
villain,
search
for
the
broadcast
etc
and
be
able
to
reach
an
agreement
by
doing
that
in
for
carriage,
but
on
a
going-forward
basis.
The
broadcast
may
be
the
last
to
retransmission
consent
periods.
These
actually
the
consent
players.
Every
three
years
occur
every
three
years,
the
one,
the
one
that
we're
in
right
now
will
expire
in
December
31st.
So
over
the
last
two
reckon
retransmission
consent
periods.
B
The
broadcaster's
have
began
a
big
and
demanding
cash
cash
license
fees
for
carriage
and
but
so
far,
through
the
last
year
process
to
processes.
The
city
has
avoided
paying
any
license
fees,
but
over
the
over
the
last
two
years
last
few
years,
the
larger
cable
operators
have
begun
paying
a
license
fee
for
retransmission
consent.
So
it's
making
very
making
it
very
difficult
for
small
uppers
like
the
city
to
kind
of
get
away
with
not
paying
a
license
fee.
So
on
a
going-forward
basis.
B
B
And
the
stations
that
we're
going
to
be
that
are
coming
up
for
negotiations
at
the
end
of
the
year,
our
ABC,
which
is
the
local
ABC
broadcast
station
KTVU
channel
2
and
its
sister
station
ki,
see
you
ktsf
and
also
as
the
city
cast
member
remember
three
years
ago.
We
coffee
we
would
negotiate
with
coffee,
and
since
we
could
not
reach
a
non-cash
agreement
at
the
station
orders
to
drop
the
station
so
now.
B
The
reason
why
we
weren't
able
to
do
that
is
because
had
we
paid
coffee
cash
then
would
end
up
paying
everybody
else,
cash
that
would
raise
the
rates
overall.
So
we
kind
of
balanced
that
and
said
you
know
what
we're
going
to
continue
to
keep
the
rates
low
as
much
as
we
can,
but
as
we
as
the
things
I
evolving,
now
we're
more
and
more
people
are
paying
cash
for
carriage.
B
C
I
just
like
to
say
that
I
mean
as
I
started.
Reading
the
staff
report
I
started.
Getting
that
sentiments
that
I'm
sure
that
the
subcommittee
got
and
I
was
very
pleased
because
we
did.
We
did
talk
a
lot
about
getting
those
customers
back
and
what
type
of
incentives
we
went
through.
Reviewing
the
postcard
and
everything
and
I
and
I
really
look
forward
to
seeing
how
that
how
that
turns
out,
but
once
I
turn
the
page
I
was
very
proud
to
see
that
the
subcommittee
reduced,
you
know
reduced
the
rate.
C
D
B
Eighty
percent
of
the
revenue
comes
from
the
video
business
and
we
have
about
twenty
percent
coming
from
internet
business
right
now,
and
the
commercial
service
service
is
just
like
picking
up
right
now
so
represent
a
very
small
portion
of
our
revenue
structure
and
out
of
the
video
side
on
the
video
side.
The
bulk
of
it
is
is
in
preferred
basic
cable,
which
is
the
rate
if
I
person
rate
that's
going
to
hit
that
that
segment
of
the
cost
in
that
segment
that
serviced
here
and
there
we
have
almost
seventy
five
hundred
customers.
B
B
Its
that's
a
very
interesting
question
because,
as
you
as
I've
said
in
the
past,
the
as
you
can
see
in
the
industry
statistics
and
also
what
we're
experiencing
in
terms
of
what
the
how
how
customers
are
consuming
video
today,
it's
going
to
be
very
interesting
to
see
where
this
all
ends
up,
because
more
and
more
customers
are
are
going
to
Netflix
blockbuster
amazon
to
get
you
know,
movies,
etc.
So
what
I'm
noticing
is
that
the
trend
for
online
video
is
increasing
so
so
I'll
be
that
that
people
are
changing
the
way
they
consume.
B
Video
from
a
city
perspective,
we
provide
both
the
video
product
and
we
also
provide
internet
product.
So
as
consumers
begin
to
utilize
more
bandwidth
on
the
Internet
services,
that
side
of
the
business
is
going
to
continue
to
grow,
and
in
order
to
address
that
issue.
Last
year
we
launched
our
commercial
services
in
that
process.
We
updated
upgraded
our
internet
network
to
handle
that
capacity,
and
we
already
have
begun
offering
25
x,
50m
economic
services.
So,
as
that
demand
increases,
customers
can
switch
and
take
those
products
as
well.
B
So
from
that
perspective,
it'll
just
be
a
shift
and
then,
in
terms
of
market
share,
it
will
be
it's
going
to
be.
Like
I
said
in
my
presentation,
this
can
be
jostling
for
market
share
because
of
the
new
entrant
in
the
market
and
as
soon
as
that
stabilize
a
little
bit,
then
it's
just
a
matter
of
competing
effectively
and
growing.
Each
business
segment,
yeah.
D
Because
one
of
the
things
I
was
thinking
about,
is
you
know
at
some
point
it
becomes
unprofitable
to
to
absorb
all
the
cost
of
this
in
it
and
another
another
thing
I
was-
and
this
is
may
be
out
of
this
questions
directed
at
my
colleagues
on
the
subcommittee.
It
has
there
been
any
thought
about
rethinking
the
franchise
fee
and
how
how
how
the
franchise
fee
is
really
affecting
the
health
of
the
enterprise.
D
It
definitely
helps
the
general
fund,
and
maybe
now
in
current
economic
situation
is
not
the
time
we
would
want
to
consider
cutting
that.
But
if,
if
the
enterprise
is
in
a
situation
where
it's
not
economically
healthy
and
there
is
that
huge
contribution
to
the
general
fund,
would
we
want
to
consider
reducing
that.
E
Just
to
be
clear,
I
think
that
you
mean
the
not
the
franchise
fee,
but
the
equity
transfer.
They
there
is
a
federal
law
provides
for
eight
five
percent
franchise
fee,
which
is
also
collected
and
I
only
draw
the
distinction.
We
could,
because
that's
directly
connect
collected
as
it
as
an
add-on
as
directly
collected
from
ratepayers
as
every
other
cable
operator
in
the
in
the
country
goes.
But
in
addition
to
that
there
is
the
equity
transfer
into
the
general
fund
and
one
of
them
assist
the
general
fund.
E
One
is
really
much
more
discretionary
on
our
part,
and
the
answer
is
yes.
At
least
I
think
that
is
a
there
was
preliminary
discussion
among
the
City
Council,
so
committee
and
I
think
it's
a
topic
that,
as
difficult
as
it
is,
is
something
that
needs
to
be
considered
within
the
broader
context
of
what
is
the?
A
We
hope
to
do
that
with
just
the
flyer
that
went
out
just
the
other
day.
People
realize
how
consistent
we
are.
You
know
in
regular
basis,
it's
going
to
make
a
difference,
but
trying
to
get
that
word
out
when
somebody's
dangling
a
couple
of
dollars
in
front
of
you
for
six
months,
it's
difficult
to
do
so.
It's
an
educational
process
and
we're
trying
real
hard
to
get
that
out
there
Rico
yes,
question.
D
Oh
gosh,
one
one
more
one
last
comment:
just
from
a
strategic
sort
of
thinking,
standpoint
I
noticed
a
lot
whenever
we
talk
about
cable
it
always
it's
always
cable
television
and
the
subject
of
this
is
cable
television
services.
It's
always
cable,
too,
and
I
was
thinking
that
perhaps
a
rebranding
and
rethinking
of
how
we
view
that
enterprise,
where
we
focus
more
on
a
more
modern
but
more
focused
on
a
data,
not
just
television,
might
make
it
more
more
attractive
to
consumers
that
are
more
interested
in
in
data
and
within
a
claim.
D
B
I
mean
part
of
the
strategy
is
described.
My
report
is
to
eliminate
some
of
the
extra
tears
that
we
have
on
the
data
site
to
kind
of
beef
up
and
have
a
strong
product
that
will
appeal
to
a
majority
of
customers
and
I.
Think
that's
the
strip
one
of
the
strategies
we've
taken
in
terms
of
and
rebranding,
so
to
speak,
I
mean
Sam
using
Sam.
Boone
I
mean
we're
a
municipal
operation,
so
using
san
bruno
is
sounds
like
I
mean
even
in
our
latest
post
card,
to
be
prepared.
B
We
want
to
put
a
city
logo
on
there
to
kind
of
distinct
distinguish
us
from
any
other
cable
operator.
So
in
that
perspective
rebranding
it
using
something
other
than
we
thought
about
in
the
past,
but
talked
about
with
the
subcommittee
as
well,
but
using
non
using
san
bruno
in
that
name.
Somehow.
So
our
diminishes
our
sort
of
a
homegrown
quality
sort
of
speak
out
who
we
are,
but
I
mean,
we've
clearly
grown
from
just
being
a
cable
TV
operation.
That's
for
sure
I
mean
we're
no
longer
just
a
cable,
TV
operation.
B
We
provide
data
services,
we
provide
commercial
services,
so
essentially
phone
services.
So
essentially
we
are
more
of
a
telecommunications
company
more
so
than
just
a
cable
company.
So,
yes,
I
think
we
do
need
to
start
thinking
more
strategically
in
terms
of
how
we
promote
ourselves
and
how
we
get
more
recognition
for
the
fact
that
we're
more
of
a
broadband
player
than
just
a
cable
TV
company.
So
we
will
continue
to
look
and
pursue
that
in
a
more
aggressively.
Thank.
F
You
good
sure
to
thank
you.
The
mayor
just
indicated
this,
but
we
obviously
have
folks
that
have
left
mentioned
800.
Then
they
signed
up
for
a
particular
period
of
time,
normally
use
two
years.
Some
of
the
service
providers
have
we
taken
the
look
at
seen,
who's
left
almost
to
you
to
two
years
ago,
realizing
that
that
contract
is
about
up
and
then
trying
to
promote
what
we're
currently
offering
to
gain
them
back,
because
obviously,
there's
will
go
up.
Ours
is
down
to
three
years
and
therefore
we
can
maybe
win
them
back
over.
B
I
mean
that's
exactly
what
we're
doing
today.
I
mean
we're
not
really
just
sending
to
those
people
that
are
expiring
within
two
years,
so
to
speak,
but
we're
looking
at
all
the
customers
that
are
not
subscribing
to
our
services.
So
that's
going
to
capture
not
only
the
people
that
are
coming
off
of
a
two-year
agreement
with
a
competitor,
but
also
that
I've
just
recently
left
or
just
recently
moved
into
san
bruno
looking
at
the
whole
segment
of
customers
that
that
are
not
not
subscribe
to
it.
F
I
understand
that's
what
the
card
went
to,
but
are
we
trying
to
strategically
and
made
personal
what
we
can
back
out
and
saying
you
know
right.
You
know
the
TLC
that
letting
you
know
were
in
your
backyard.
We
come
out
we're
right
here.
You
can
get
a
live
person.
You
can
come
down
and
see
us
in
person.
You
know
maybe
their
experience
wasn't
the
best,
and
so
they
like
to
come
back
home.
That's.
B
Mean
to
sell
everybody
steep
or
does
it
has
an
excellent
job
of
going
out
and
talking
to
customers
and
keeping
customers
and
Al
and
myself
we
try
to
today
even
a
commercial
side
of
the
business.
It's
just
a
land
I.
Actually
you
know
going
to
knock
it
on
businesses
to
get
sign
up
for
our
services.
So
we
continue
to
do
that
on
a
day-to-day
basis.
So
just.
F
E
I
was
good,
I
was
gonna,
make
one
comment
and
I'll
introduce
resolution
I'm,
also
to
remind
people.
We
are
the
only
cable
operator
that
offers
a
twenty-five
percent
discount
for
any
families
and
residents
who
are
in
low
income
bracket.
So,
yes,
this
is
a
five
percent
raise,
but
that
still
is
out
there.
It's
still
offered
because
we
are
owned
by
ourselves.
So
with
that
I'll
introduce
the
resolution,
councilmember
O'connell
I,
councilmember,
Medina,
art.