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Item 3.
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| City Council Work Session | |
| Date: | 04/05/2021 |
| Title: | Applicant TDS Metrocom, LLC Seeking Grant of Cable System Franchise |
| Presented by: | Stacy Tenney |
| Department: | Legal |
| Presentation: | Yes |
RECOMMENDATION
On April 12, 2021, City Administration will be submitting a proposed ordinance for first reading which would grant TDS Metrocom, LLC, a nonexclusive cable system franchise. City Administration recommends passage of such ordinance.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
TDS Metrocom, LLC (TDS), is a Madison, Wisconsin cable and high-speed internet services provider which has made application to the City for a nonexclusive cable system franchise with intent to invest $60 million dollars to lay hundreds of miles of fiber optic cable to form a brand-new network throughout the City. See application materials.
TDS is part of TDS Telecommunications Corp., the nation's seventh largest wireline communications company offering broadband, video, and digital voice services to over 900 communities in 34 states. TDS is currently constructing a new network in Coeur De Alene, Idaho, and Spokane, Washington. Billings residents would be its first Montana customers. TDS offers to build an all-fiber cable service - meaning it would lay high-speed fiber connections directly to the doors of homes and businesses - that would offer a minimum of 120 cable channels. TDS would compete against Charter/Spectrum, the City's only nonexclusive cable franchise provider. It is the policy of the City to promote competition in the provision of cable services. However, there is a presumption that a cable franchise that would result in redlining (failure to serve certain areas, especially on economic or racial grounds), or otherwise give the applicant an unfair competitive advantage, shall not be franchised. See §7-1619 (d), BMCC. Under the federal Communications Act, a cable system must obtain a franchise from a local government granting it permission to use the public right of way to provide area cable services. Should the City Council approve a non-exclusive cable system franchise with TDS, it would receive the maximum five percent (5%) of its gross revenue on cable services within the local service area, called a franchise fee. Under federal law, only cable system operators are required to obtain franchises to provide cable services; no other multichannel video programming distributor (MVPD) is required to acquire a franchise to offer video programming except those whose programming is distributed over a cable system.
City Administration will be submitting a proposed cable system franchise ordinance to City Council on April 12th for first reading. This proposed non-exclusive cable system franchise with applicant TDS provides for a 10-year franchise, payment of the maximum 5% of gross revenues from its Billings operations (franchise fee), initial coverage area to a minimum of 70% of the City within four years of the start of construction and further build out terms to 95% within approximately 8-10 years, and provision of two Public, Educational, and Governmental (PEG) channels. Should City Council approve and grant a cable system franchise to applicant TDS franchise, the company intends to begin construction late spring or early summer this year.
At tonight's work session, Joshua UWorrell, Manager of TDS Business Development, will be presenting a PowerPoint introduction about TDS and its services. Josh further welcomes your questions.
TDS is part of TDS Telecommunications Corp., the nation's seventh largest wireline communications company offering broadband, video, and digital voice services to over 900 communities in 34 states. TDS is currently constructing a new network in Coeur De Alene, Idaho, and Spokane, Washington. Billings residents would be its first Montana customers. TDS offers to build an all-fiber cable service - meaning it would lay high-speed fiber connections directly to the doors of homes and businesses - that would offer a minimum of 120 cable channels. TDS would compete against Charter/Spectrum, the City's only nonexclusive cable franchise provider. It is the policy of the City to promote competition in the provision of cable services. However, there is a presumption that a cable franchise that would result in redlining (failure to serve certain areas, especially on economic or racial grounds), or otherwise give the applicant an unfair competitive advantage, shall not be franchised. See §7-1619 (d), BMCC. Under the federal Communications Act, a cable system must obtain a franchise from a local government granting it permission to use the public right of way to provide area cable services. Should the City Council approve a non-exclusive cable system franchise with TDS, it would receive the maximum five percent (5%) of its gross revenue on cable services within the local service area, called a franchise fee. Under federal law, only cable system operators are required to obtain franchises to provide cable services; no other multichannel video programming distributor (MVPD) is required to acquire a franchise to offer video programming except those whose programming is distributed over a cable system.
City Administration will be submitting a proposed cable system franchise ordinance to City Council on April 12th for first reading. This proposed non-exclusive cable system franchise with applicant TDS provides for a 10-year franchise, payment of the maximum 5% of gross revenues from its Billings operations (franchise fee), initial coverage area to a minimum of 70% of the City within four years of the start of construction and further build out terms to 95% within approximately 8-10 years, and provision of two Public, Educational, and Governmental (PEG) channels. Should City Council approve and grant a cable system franchise to applicant TDS franchise, the company intends to begin construction late spring or early summer this year.
At tonight's work session, Joshua UWorrell, Manager of TDS Business Development, will be presenting a PowerPoint introduction about TDS and its services. Josh further welcomes your questions.
ALTERNATIVES
No Council action is required at this meeting. Informative presentation at this time only.
FISCAL EFFECTS
City would receive an annual 5% maximum allowed under federal law) of the gross revenues of TDS Metrocom, LLC, from its Billings cable system operations; this is called a franchise fee. City would receive $0.25 (and up to $0.85) per cable subscriber for PEG capital support for Community Seven, the City's PEG access provider.
Attachments
- Attachment 1 - TDS Board of Directors
- Attachment 2 - TDS 2019 Annual Report
- Attachment 3 - TDS Cable Franchises
- Attachment 4 - Affidavit of Andrew S. Peterson
- Attachment 5 - TDS Application for Cable Franchise 10.27.20
- Attachment 6 - TDS PP