05-770Couricil File # �S' 77b
Green Sheet #�0�11��`(
Presented By
Refened To
RESOLUTION
CITY O�' � PAUL, MINNESOTA '�
�
Committee: Date:
WI��AS, under Section 623 of the Cable Communications Policy Act of 1984, 47 U.S.C. § 543, as amended
("Cable Act") the City of St. Paul, Miunesota ("City"), is permitted to regulate rates for basic cable service and
equipment (including installations); and
W�REAS, Comcast of St. Paul, Ina ("ComcasY') submitted a filing on or about February 27, 2004 purporting
to support basic service rates for the period June 1, 2004 through May 31, 2005 (the 2004 Form 1240 Filing);
and
W��AS, by Council File # OS-150 the City adopted a Maximum Permitted Rate of $9.95, inclusive of any
amounts attributable to external costs, including amounts paid for and in support of PEG, and including the
FCC Regulatory Fee; and
WHE�AS, the City also directed Comcast to submit fuhxre filings in accordance with a 2004 Form 1240
prepared by the City's consultant, Ashpaugh & Sculco CPAs, PLC; and
WHEREns, Comcast thereafter submitted a rate filing purporting to comply with Council File # OS-150 and
supporting basic service rates for the period June 1, 2005 through May 31, 2006 (the 2005 Form 1240 Filing);
and
WxEREas, Comcast also appealed Council File # OS-150 to the Federal Communica$ons Commission, as
permitted by applicable law; and
WHEREAS, Comcast and the City have reached a settlement with respect to rates that may be charged, for the
period June 1, 2004 through May 31, 2006, and the parties agree that the settlement is consistent with FCC
rules; and
WHEREas, the City Council finds it is in the best interest of the City to enter into the settlement.
TrIEREFORE, BE IT RESOLVED,
1. The City herewith sets a revised Maximum Permitted Rate of $10.15 for the period June 1, 2004
through May 31, 2005, based upon the 2004 Form 1240, Attachment 1 to E�ibit A. The
effectiveness of this rate is contingent upon Comcast complying with all its obiigations under
Exhibit A. Council File # OS-150 is hereby modified as required to effectuate the foregoing.
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Provided that, if Comcast fails to comply with its obligations under E�ibit A, or if for any
reason E�ibit A is not fully enforceable according to its terms, then Council File # OS-150 shall
remain in full force and effect as adopted.
2. T'he City herewith sets a Maximum Pernvtted Rate of $10.78 for the period June 1, 2005 through
May 31, 2006, based upon the 2005 Form 1240, Attachment 2 to E�ibit A. The effectiveness of
this rate is contingent upon Comcast complying with all its obligations under E�ibit A. If Comcast
faiis to comply with its obligations under E�ibit A, or if for any reason Exhibit A is not fully
enforceable according to its terms, then the City may adopt alternative rates based on fiuther review
of the 2005 Form 1240.
The Mayor is authorized to enter into the settlement in substantially the form attached hereto on
behalf of the City.
PASSED AND ADOPTED this day of August, 2005.
Yeas Nays Absent
Benanau �
Bostrom ,/-
Harris ✓
Helgen �
Lantry
Montgo�
Thune
Adopted k
Adoption
By:
Approved
By:
Requested by the Office of Technology
By: "'�1�-vl�,
Form Approved by City Attomey
2
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TE 'fechno]ogyandMaoagementServ
Contact Person & Phone:
Mike Reallon
Z6fr8875
Must Be on Council Agenda by (Dafe):
24-AUGOS
ContradType:
REi2ESOLUiION
Date Initiated:
1&AUG-05
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Assign
Number
Por
Routing
Order
Green Sheet NO: 3027704
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" AcGon Requested:
�, � Resolufion for Setting Basic Services Rates Charged by Comcast of St Paul, Inc., Pursuant to Settlement Between the Ciry of St. Paul
and Comcast of St. Paul, Inc., Regazding FCC Form 1240s Filed in 2004 and 2005
�tlations: Appio�e (A) or F
Planning Commission
CIB Committee
Citil Sensce Commission
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Must Mswer the
1. Has this person/firm e�er worked under a contract for this department?
Yes No
2. Has this persoNfirtn e�er been a city employee?
Yes No
3. Does this persoNfirtn possess a skill not rrormally possessed by any
curtent city employee?
Yes No
Explain all yes answers on separete sheetand attach to green sheet
Initiadng Problem, Issues, Opportunity (Who, What, When, Where, Why):
AdvantageslfApproved:
DisadvanWqes IfApproved:
Disadvantages If Not Approved:
Total Amount of
Transaction:
Fundinp Source:
Financiallnformation:
- (Explain)
CosflRevenue Budgeted:
Activity Number.
RECEIVED
AUG 1 6 Z��5
MAYOR'S OFFICE
August 12, 200511:3Z PM
Page 1
05- 7?0
Executive Summary
Settlement between Comcast and the City of Saint Paul,
Setting Rates for Basic Cable Service
Background
In late February, 2004, Comcast filed with the City FCC Form 1240, that established the
2004 maximum permitted rate (MPR) of $10.60 for the period of June 1, 2004 — May 31,
2005 .(The MPR is the highest permitted rate that can be charged for basic service.) In
2004, the City retained the services of Ashpaugh & Sculco, CPAs (A&S) to review
ComcasYs 1240 filing. In February, 2005 A&S presented its rate review findings that
asserted ComcasYs MPR should be $9.95, not $10.60. The City adopted this MPR
through its February 23, 2005 Rate Order.
Subsequently, Comcast filed an appeal of the Rate Order to the FCC and also filed with
the City FCC Form 1240 for the period of June, 2005 — May, 2006. The new 2005 MPR
rate incorporated some of the A&S findings, but not all. To auoid a potential lengthy
wait for the FCC to take action on the Rate Order appeal, and to address the ambiguities
between the 2004 and 2005 1240 Rate Filings, the City and Comcast agreed to attempt to
resolve the disputed rate issues.
Settlement
Comcast and City staff reached a settlement with respect to the maacimum permitted basic
service rates that may be charged by Comcast for the period of June 1, 2004, through
May 31, 2006.
2004 1240 MPR Rate
Comcast was able to clarify and substantiate its position on some of the factors that
affected their initia12004 MPR rate request. As a result, it was acknowledged that the
2004 1240 MPR should be set at $10.15. While this is a$.20 increase from A&S's initial
findings, it is still $.45 less than what Comcast initially filed.
2005 1240 MPR Rate
Based on a cursory review of subsequent information provided by Comcast, it has been
agreed that Comcast's 2005 MPR is $10.78. This is $.38 less than ComcasYs initial MPR
filing on March 1, 2005 and $.201ess than the conected filing a month later.
In addition, the rate review process has offered the City an opportunity to assure Comcast
subscribers that Comcast is adhering to the FCC rate regulatory rules and thus capping
the ceiling for the Basic Service rate as low as permitted per federal regulations.
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SETTLEMENT BETWEEN TE� CITI' OF ST. PAUL AND
COMCAST OF ST. PAUL, INC. REGARDING
FCC FORM 1240s FII,ED IN 2004 AND 2005
WHE�as, Comcast of St. Paul, Ina ("ComcasY') submitted a filing on or about Februazy 27, 2004 purporting
to support basic service rates for the period June 1, 2004 through May 31, 2005 (the 2004 Form 1240 Filing);
and
VJHEREns, by Council File # OS-150 the City adopted a Masimum Permitted Rate of $9.95, inciusive of any
amounts aitributabie to e�temal costs, including amounts paid for and in support of PEG, and including the
FCC Regulatory Fee; aud
WHEREas, the City also directed Comcast to submit fuhxre filings in accordance with a 2004 Form 1240
prepared by the City's consultant, Ashpaugh & Sculco CPAs, PLC; and
W�REAS, Comcast thereafter submitted a rate filing purporting to comply with Council File # OS-150 and
supporting basic service rates for the period June 1, 2005 through May 31, 2006 (the 2005 Form 1240 Filing);
and
WHE�AS, Comcast also appealed Council File # OS-150 to the Federal Communications Coznmission, as
permitted by applicable 1aw; and
WHEREAS, Comcast and the City have reached a settlement with respect to rates that may be chazged for the
period June 1, 2004 through May 31, 2006, and the parties agree that the settlement is consistent with FCC
rules.
NOW THEREFORE, FOR GOOD ANA VALUABLE CONSIDERATION, RECEIPT OF R'HICH IS
HEREBY ACKNOWLEDGED, THE PARTIES AGREE:
l. Masimum Permitted Rate. Subject to ComcasYs compiiance with its obligations hereunder, and
subject to the City Council's approval of an appropriate Rate Resolution the Parties agree to set the Maximum
Permitted Rate ("MPR") for the basic service fier for the period June 1, 2004 through May 31, 2005 at $10.15,
inclusive of all external costs, including but not limited to expenditures for public, educational and government
access, and inclusive of the FCC Regulatory Fee. The Parties agree to set the Ma�cimum Permitted Rate
("MPR") for the basic service tier for the period June 1, 2005 through May 31, 2006 at $10.78, inclusive of all
extemal costs, including but not limited to expenditures for public, educationat and government access, and
inclusive of the FCC Regulatory Fee. Comcast and the City stipulate that these rates conform with FCC
OS- 7"70
requirements and aze appropriate MPRs. The Form 1240s attached to this Settlement Agreement as
Attachments i and 2 shall provide the basis for determin;ng the appropriate MPR in future Form 1240 filings.
2. Anueal WithdrawaL Comcast will withdraw its appeal of the 2004 Form 1240 within fliirty days of
the date this settlement is filed, and agrees that it will not challenge the MPR or external cost calculations
underlying the filings set forth in Attachments 1 and 2. In the event the FCC issues an order concerning the
Appeal before it is withdrawn, the parties will joinfly petifion the FCC to reconsider its order and to allow the
terms of this settlement to prevail.
3. Not An Asreement to Princinles. While the parties aze settling disputes as to the MPR and as to the
appropriate external cost amounts to be included in rates, and aze agreeing to use the Form 1240s attached as
Attachments 1 and 2 in setting rates for the future, this agreement is not an agreement as to any particular rate
methodology or calculation, and nothing in this agreement prevents either party from contesting any rate
methodologies and calculations if and as used in fixture filings, except as specifically provided herein.
4. Renresentations and Warranties. City and Comcast (City and Comcast are hereinafter sometimes
referred to as the "Settling Parties") acknowledge, represent, warrant and confirm the following:
(a) Advice of Counsel. The Settling Parties have carefully read and understand the effect of this
Agreement; each of the Settling Parties has had the assistance of separate counsel, or has had the opportwuty to
haue the assistance of separate counsel, in carefully reviewing, discussing and considering all terms of this
Agreement; and counsel for each of the Setkiing Parties, if any, has read and considered this Agreement and
advised such party to execute the same. The parties agree that the Settlement was developed as a reasonable
resolution of disputes with respect to rates, compliant with applicable Yaw and regulations.
(b) No Admission. Nothing in this Agreement is intended as an admission by Comcast that it took
any action that violated applicable laws and regulations, or that required refunds to subscribers.
(c) Authorization. Each of the Settling Parties has full and complete authorizafion and power to
execute this Agreement in the capacity herein stated; and this Ageement, after signing and if and when an
appropriate rate resolution is approved by the City Council, is a valid, binding and enforceable obligation of
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each of the Settling Parties and does not violate any law, rule, regulation, contract or agreement otherwise
enforceable by any of the Settling Parties.
5. Disputes Resardin¢ This Settlement A�reement. Neither Comcast nor any of its affiliates, nor the
City, will file any claim, or raise a defense that challenges any provision of this specific Agreement, or any
provision of the Resolution authorizing entry into this agreement as being contrary to the Cable
Communications Policy Act of 1984, 47 U.S.C., §§521, et seq., as amended by the Cable Television Consumer
Protection and Comperition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992), and by the
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) ("Cable Act"), or to FCC
regulations; nor will they participate with any other person or entity in any such challenge.
6. Miscellaneous Provisions
(a) Binding Agreement. This Agreement shall be binding upon and will benefit the parties hereto
and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns,
and the promises and obligations herein sha11 survive the Effective Date hereof.
(b) Governing Law. This Agreement shali be governed in all respects by the law of the State of
Minnesota and applicable Federal and local laws.
(c) Tnne of the Essence. In determining whether a party has complied with this Agreement, the
parties agree that time is of the essence.
(d) Counterparts. This document may be executed in multiple counterparts, and by the parties hereto
on separate counterparts, and each counterpart, when executed and delivered, shall constitute an original
agreement enforceable against all who si�ed it without production of, or accounting for, any other counterpart,
and all separate counterparts sha11 constitute the same agreement.
(e) Captions. The captions and headings of this Agreement aze for convenience and reference
purposes only, and shall not affect in any way the meaning and interpretation of any provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Settlement Agreement as of the day and yeaz first
above written.
CIfiY OF ST. PAUL, MINNESOTA,
a m cipai corporation.
/ . _ � � /I
Randy Kelly
Mayor
COMCAST OF ST. PAUL, INC.
A Minnesota Corporation
(Title)
�L.C�w � �G'�v��-c.»-� (Title)
Kazen Johnson
Director, Office of Technology
APPROVED AS TO FORM
�/�St{ � w�-
by: Lisa Veith, Assistant Ciry Attorney
Attachment 1: Form 1240 for 2004-2005
Attachxnent 2 Form 1240 for 2005-2006
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