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LMCCC - August 1993 Meeting <br />Rage 3 <br />FCC minimum standards, enforce the franchise agreement standards, enforce the individual <br />city ordinances and will provide Triax with 90 days written notice of the LMCCC's intent <br />to enforce these standards as set forth. <br />Creighton then asked for questions. Olds asked if a motion to adopt this <br />resolution would have anything to do with the FCC Rate Regulations also at question. <br />Creighton stated that Rate Regulations are a completely separate issue and would not be <br />effected by the passing of this resolution. <br />Motion 8.17.93.4_ Olds moved to adopt the official resolution as presented by <br />Attorney Creighton. Thies seconded. Motion passed unanimously. <br />Daniels then asked for direction as to what is next required. Creighton replied <br />that a written notice must now be sent to Triax Cablevision stating that Resolution <br />8.17.93.4 has been officially adopted. It will be in effect 90 days after notice is sent. <br />* Rate Regulation - Creighton explained that in 1984 the Federal Government took <br />away rate regulation rights from cable commissions. The new legislation gives regulatory <br />rights on basic rates and all equipment associated wUh basic rates. However, this is a <br />d•scrationarv right meaning it is up to the Commission if it wants to regulate the cable <br />company. The FCC decided regulation was necessary because the cable companies had no <br />competition. The task is to find out if Triax's cable rates are reasonable and meet a <br />benchmark rate that is set from a comparison of "competitive" rates as established by the <br />FCC. <br />Creighton explained that to become a regulatory body the LMCCC has to appl} to the <br />FCC for certification. He then recommended that if the Commission wants certification, <br />the application should not be sent any later than September 15. 1993 to provide ample time <br />for processing. The current cable rates are frozen by the FCC until November 15, 1993. <br />The Commission wouldn't want to wait until after this date, because any increases could <br />not be regu’iated and would set a new benchmark rate. If the LMCCC is certified and adopts <br />the FCC rules, Triax would then have 30 days to provide the financial information required <br />to determine their standing on the "Benchmark Rates of Competition". If they are below or <br />meet those rates they are official. However, if Triax is above the benchn;ark and a roll­ <br />back is directed by the Commission, they must roll-back or fight it with a Cost of Service <br />Hearing. If a Cost of Service Hearing fight is waged, it may cost as much as $10,000 - <br />$12,000. Creighton stated he felt this was an unlikely occurrence due to the fact it <br />would cost Triax the same if not more to get into a legal battle. <br />He then stated that there are many "pros" and "cons" to regulating rates and would <br />outline a few on each side of the issue. <br />On the "con" side of the issue, the costs associated with regulation has to come <br />out of the franchise fees. Approximately $2,000 - $4,000 of regulatory expenses are <br />looked at overall. Politically, when constituents asked about rates and increases (which <br />will occur occasionally) prior to having a regulatory authority it was easily deferred, <br />however, with the authority comes the additional burden of having to explain any increases <br />and why it's been allowed. Currently a non-antagonistic relationship with Triax is <br />enjoyed - rate regulation could change this. The luxury of having a "hands-on" knowledge <br />of almost every issue will no longer be possible. Some issues will have to be left to the <br />professionals and the Commission will have to trust their judgement to do what is <br />necessary and correct. <br />There is one major item on the "pro" side of the issue and that is that the <br />Commission was originally formed as a regulatory body. Regulation also gives the <br />Commission Triax's financial information and that is always beneficial. <br />Commissioner Gray left the meeting at 5:48 pm. <br />Creighton then stated that if the Commission decides to request certification an <br />official motion instructing Administrator Daniels to request certification by application <br />to the FCC and to give written notice of this intention to Triax is necessary. <br />Salazar 'thanked Creighton for his very informa'.ive presentation, then asked for <br />questions from the floor.