1. What you need to know to set up a successful Government access channel: Negotiation of the Franchise Presented by: Kenneth S. Fellman, Vice-President Kissinger & Fellman, P.C. Denver, Colorado www.kandf.com 3CMA Annual Conference Denver, Colorado September 2, 2004

2. I. Preliminary Make it clear who will spearhead the effort (elected officials, staff, citizen advisory committee, consultant, etc.) Document known cable operator deficiencies now Inform cable operator

3. II. The Needs Assessment A comprehensive evaluation of the cable communication needs of the community Why perform a Needs Assessment? Forms the basis for negotiation between community and cable operator Represents a legislative determination of the needs of the community Courts will give a thorough Needs Assessment considerable weight in litigation May take up to 6 months to perform

4. II. The Needs Assessment: Components Survey Includes entire community – current subscribers and non-subscribers Method: Mail or Phone Issues Addressed: PEG Programming Customer service Signal quality Range of programming offered Willingness to pay for cable services Others raised by community

5. II. The Needs Assessment: Components (Cont.) Focus Groups Business, education, government, health care, libraries Help to determine sector-specific cable systems needs and desires Public Hearings Solicit information and suggestions from general public

6. II. The Needs Assessment: Components (Cont.) Technical Analysis of current cable system to identify: Capacity/Capabilities Condition Compliance with technical standards Growth potential (INET, broadband, etc.) Requirements to bring system up to current broadband industry operating standards

7. II. The Needs Assessment: Components (Cont.) Specific PEG analysis Current Operations Future Opportunities Equipment Needs/Costs Capacity on Cable System Other sources of revenue? PEG Issues to be aware of Cable operators less willing today to contribute to PEG LFA bargaining position stronger when it commits funding to some part of PEG Changing technology

8. III. Review of Current Franchise Review past performance history Compliance Customer service and satisfaction Financial Review Review of cable operator’s records May indicate past underpayments Review technology changes since current Franchise was adopted Review statutory and regulatory changes since current Franchise was adopted

9. IV. Political Support Why do you need it? Becoming harder and harder to negotiate LFA benefits, especially PEG There must be elected official and community support before cable operator will treat the issue seriously How do you get it? Educate your elected officials early and often The Needs Assessment process can also communicate potential benefits

10. V. Negotiations Use Needs Assessment and Review of Current Franchise to create a renewal proposal You control the document!

11. V. Negotiations (Cont.) The renewal proposal should include: Technical capacity/upgrade INET Rights-of-Way access/construction requirements Universal service throughout community Length of franchise term Franchise does not authorize Telecommunications and Internet services Programming categories Availability of records Violations and remedies

12. V. Negotiations (Cont.) The renewal proposal – PEG operations P should be separate from E & G Control issues First Amendment issues Cable operator capital contribution Ongoing capital support Requirements must take into account costs of cable operator compliance Some of what you’re negotiating What is a channel? Conversion to HDTV Criteria for additional capacity Commercials on access channels

13. V. Negotiations (Cont.) Let the cable operator know you are serious, knowledgeable and professional Conduct negotiations efficiently and professionally Take control of meetings (face to face, agenda, schedule, draft key documents, action items) Get “easier” issues out of the way early Only written agreements are binding

14. V. Negotiations (Cont.) Formal vs. Informal If proceeding informally, specifically reserve right to change to formal process Informal negotiations can occur at any time Formal renewal process follows rigid timeline with duties assigned to each party Past performance, not promises is best indicator of capabilities

15. V. Negotiations (Cont.) Structure agreement to create proper incentives for cable operator to comply with agreement Remember cable company may be sold to less cooperative company; language as to duties must be clear

16. VI. Funding Access Government funding Cable operator funding Capital contributions are not considered part of franchise fee: §622(g) Sponsorships/Commercials Separate entity should fund and control public access Independent non-profit organization is recommended Local government should arrange for channel capacity, if interest for public access is there

17. Questions