EMBARGOED

CONFIDENTIAL

Briefing on Current Status of Cable TV

Renewal Franchise Negotiations
September 14, 2010

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Cable TV Franchise History in NYC

• Time Warner Cable

• N. and S. Manhattan franchises granted 1970, renewed
1990, again 1998
• Queens, Staten Island and Western Brooklyn granted
1983, renewed 1998
• Cablevision Systems
• Bronx and 2/3 of Brooklyn (1983, 1998)
• Verizon FIOS
• Citywide, under construction, 2008

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Federal Law Limits

• Caps franchise fee at 5% of cable service revenue

(with narrow exceptions to be discussed)
• Bars franchise requirements for specific channels
or programs (except set-aside for public,
educational, governmental channels)
• Bars regulation of cable TV subscriber rates

• Requires renewal of franchises unless at least one

of four factors is met

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Four Cable TV Franchise Renewal Factors

• Renewal required unless franchisee:

• Has failed to comply with material terms of franchise
• Service quality (signal quality, complaint response, billing
practices) has not been reasonable in light of community
needs
• Is not willing to meet reasonable, future, cable-related
community needs and interests, taking into account the
cost of meeting such needs
• Lacks the financial, legal, or technical ability to meet such
needs

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So What Can A Cable TV Franchise Include?

• Universal service requirements

• Consumer protection

• “PEG” channels and capital support

• “Institutional Network”

• Street management

• 5% of cable revenue as cash franchise fee

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Term Length

• Through July, 2020 (matching Verizon)

• But City can terminate early if franchise fees
decline 22.5% from their peak

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Franchise Fee

• 5% of cable TV revenue, maximum permitted by

law

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Public, Educational and Government
Channel Capacity

• 9 current channels plus 8 new channels phased in

over next several years (matching Verizon)

• At least one channel will be high-definition

• 25 hours of video-on-demand for educational/

government programming

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 I-Net

• More than $20 million in new funding for I-Net (contributed

proportionally by CV and TW)
• I-Net overview:
• City of New York’s private metropolitan area network, supplies the
fundamental backbone for data communications among the 350,000
municipal employees.
• Hosts more than 400 applications for several dozen Mayoral and City
agencies.
• Services:
• Agency to Agency Connectivity • Public Safety Support
• Access to Mainframe Applications (FMS) • Wireless Network Backhaul
• Back up and Storage (NYCWiN)
• Voice Over IP (VoIP) • Streaming Video
• Video Conferencing

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Commercial Economic Development

• $1.8 million per year ($1.2 million from TWC,

$600K from CV) to bring fiber into commercial
buildings not currently being served
• TWC to install 20 miles per year on commercial
blocks and will wire Brooklyn Navy Yard;
Cablevision already serves the commercial blocks
in its service area
• More than $1.5M for “media lab” to support new
media research in NYC

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Community Broadband Internet Projects

• TWC to develop 40 (4 per year) community

broadband access centers, in partnership with not-
for-profits, providing free access to computers
hooked up for broadband internet access
• CV developing program with DOE to provide new
services to public school students

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Community Broadband Internet Projects:
Parks

• TWC and CV to spend approx. $10M to build Wi-Fi

broadband internet service to City parks (expected
to serve about 32 parks across the City)
• All users will be able to use the service all day for
99 cents
• But service is free for ten minutes up to three
times a month and 99 cent fee is waived for all
TWC/CV broadband subscribers

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Consumer Protection

• Agreed to match the consumer protection provisions negotiated

with Verizon in 2008
• In addition, maintain at least current standards until 2012
• Substantial upgrades to phone answering systems have been
implemented
• New systems to confirm appointments via email, phone, internet
will be implemented

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