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HomeMy WebLinkAbout05-05-1992 City Council agenda packetAGENDA CABLE TELEVISION FRANCHISE EXTENSION AND SYSTEM REBUILD PROPOSAL - SOUTH BAY CABLEVISION TIME: Tuesday, May 5, 1992, 7:30 p.m. PLACE: City Council Chambers, 13777 Fruitvale Avenue TYPE: Community Workshop I. Welcome and Introductions II. Outline of the Process for the City to Review the Proposal for Franchise Extension and System Rebuild by South Bay CableVision A. Community Workshop B. Franchise Negotiations C. Public Hearings on Franchise Ordinance and Agreement Revisions III. System Rebuild Proposal Presentation A. Introduction 1. Introduction to South Bay CableVision 2. Introduction to InterMedia Partners B. Franchise Renewal 1. History of Saratoga Franchise 2. Current Status 3. Renewal Process and the 1984 Cable Act C. Description of the Current System 1. Overview of How a Cable System Operates 2. Overview of Current Saratoga System a. Technology in Place b. Performance History 3. Limitations of the Current System D. Rebuild and Upgrade Proposal 1. Overview of Proposal 2. Master Headend 3. Utilization of Fiber Optic Distr$bution Cable 4. "Fiber to the Feeder" Architecture 5. Channels and Services 6. Construction Timetable 7. Franchise Extension E. Summary IV. Community Views and Questions. V. Adjournment Cable Television Ft ,hise Extension and Syste►. _ebuild Proposal Community Workshop - May 5, 1992 PLEASE FILL IN YOUR NAME AND ADDRESS AND STATE YOUR QUESTION. Name: 'PO N ALD Z, VZ t I G 4-3 t✓ �-- Address: ►'JoZTo°J -5Ae.ATO6 -A Question V\,wz al"A bLwv,, 4u reC1 y i V`e. Sov n �Ve �UG( av`e-a5 7t�we. ctjv,-- t2 t - Ga le — rzyL�- 6-4 Gi {U GDUn&l ( W�e.�h 5 b(US n 7v r "TV vwS `.,uc& k. r--z2 +PtJ ) �1-fj� 0 ) G N iJ) gtG . Cable Television Franchise Extension and System Rebuild Proposal Community Workshop - May 5, 1992 PLEASE FILL IN YOUR NAME AND ADDRESS AND STATE YOUR QUESTION. Name: Address: Question: 1) WLLL- a Pa--i;-: j--cA aGGO�„i w t �� sv� g�sck I C Ej�,r -r n c r�►. _ F.-r�i ? 3) \„r t r. r, -rur C-P4 -r -r-r7 -Mi 1-1 n r, -- Lc (7 ,— A r%w YU T-to 37 chI WnJ t r w N Y tia— 62-0 D 1/, 17 A L_ co (-)P C !1 kp-g- cT E D t, nI E) �i a: 1,/V C�2 A X 1 N s'--r AA 9 F F IB F R? ;' mac. s) caniKu�GG� ea � -mad ✓�Gt -- May 4, 1992 Mr. Willem Kohler, Mayor City of Saratoga Dear Mr. Kohler, b Le 0� MAY ` 1992 CITY NAGEWS OFF CE CITY h! • - We have just heard from another Saratoga Resident that you are considering giving our local cable station (South Bay Cable) a fifteen year contract! We have been residents of Saratoga for almost four years and have found the current price and service of South Bay Cable to be fairly unsatisfactory. Why can't they carry VH1 (music channel)? We are in our early 40's and do not enjoy MTV anymore. Surely the mature age population in Saratoga can justify VH1. We both enjoy the CNN half -hour news channel (only news which changes every half -hour) and that is also missing from the service we receive. What sort of power would the residents of Saratoga have over a company that knows no matter what happens, they will not have to worry for fifteen years whether or not they will continue to receive payment for services? We don't feel that South Bay Cable has great customer service now. I would shudder to think what it would be like if they had a fifteen year contract! Is there anyway to get some competition with this cable business? Why are we given only one option as far as which company we can use? We are not the only residents who feel this way. I have not met one person yet in Saratoga ( or anywhere) who feels that the consumer gets a fair shake with cable companies. Sincerely, )6� -1 � Mr. and Mrs. Terry Keeley 19950 Lanark Lane Saratoga, Ca. 95070 MAY .5 1992 May 3, 1992 City Council Members Saratoga City Council 13777 Fruitvale Ave. RE: South Bay Cable Contract Saratoga, 95070 Dear City Council Members: Our experience with South Bay Cable has been quite inconsistent; unfortunately, the favorable experiences have been overshadowed by the frequent unfavorable ones. To be specific, within the past 12 months, we have had to exchange cable boxes at least 4 ,different times because they were not decoding properly, thus providing us with an unsatisfactory (or no) signal. At times, the problems would be channel specific, other times affecting all channels. We have returned to the South Bay Cable office personally to exchange the decoder boxes at least 4 times, one of which was a "turn around" situation; we ended up trading one non - functioning box for another non - functioning box and had to return the next day to obtain yet another one! In retro - spect, we wondered if the boxes had ever been repaired; it seemed as if they were put right back on the shelves, to be given out to some other, poor unsuspecting customer. Other services from South Bay Cable have been marginal in spite of the continuing increase in service fees. Too often we have felt that it was a waste of money and provided more aggravation than pleasure. It seems to us that quality service has not been provided. Unless marked improvements both in servicing home based equipment and on site equipment is imminent and sustained, that South Bay Cable service should be cancelled; surely some other company would be able to provide the necessary and desirable quality without further increases in cost. 4 Sinc rely, I Ga and Marcia Fariss 18983 Saratoga Glen Place f OTIMJ �x /`fG3s� LJm6zie, 1��� /s CITY of SARATOGA SYSTEM UPGRADE PROPOSAL E c E � w E 0 APR 2 81992 CITY OF SAHATOGA CITY MANAGER'S OFFICE APR 2 8.1*21 PRESENTED BY South Bay CableVision Apri124, 1992 r a 1 TABLE OF CONTENTS SECTION TOPIC PAGE I. EXECUTIVE SUMMARY 2 II. OVERVIEW 6 M. BACKGROUND 7 IV. DESCRIPTION OF CURRENT SYSTEM Overview 9 Summary 11 V. PROPOSAL Proposed Upgrade 17 Channels and Services 20 Institutional Communications Services 21 VI. SYSTEM CONSTRUCTION Construction Methods 22 Density Standard 22 Codes 23 Upgrade Timetable 23 VII. UPGRADE SUMMARY Upgraded System To 550 MHz 24 VIII. FRANCHISE EXTENSION 27 IX. FINANCIAL BACKGROUND 28 X. APPENDICES Appendix I 29 Appendix II 31 Appendix III 33 XI. ATTACHMENT 34 1 a EXECUTIVE SUMMARY Brenmor Cable Partners, L.P., which has successfully provided cable television service to the City of Saratoga since January, 1990, as South Bay CableVision, proposes to rebuild the cable system to 550 MHz - capacity. This project, which would cost an estimated $4.5 million in 1992 dollars, would give the cable system an eventual capacity of approximately 80 video channels using current technology. In consideration of this substantial investment and such other requirements as may be desired by the City for a renewal of its present Franchise, Brenmor respectfully requests that its franchise be renewed until August 30, 2012. The design of the new cable system would commence immediately upon the approval by the City of a new Franchise Ordinance and construction would commence within six (6) months after the adoption of the Ordinance. Barring acts of God or other unforeseen developments, construction would be completed within eighteen (18) months after the time it commences. The new cable system would make extensive use of Fiberoptics and would be designed to meet or exceed the stringent new standards of the Federal Communications Commission, and such other national and local construction codes as may be applicable. Thus, the citizens of Saratoga can look forward to enjoying superior picture quality and the highest possible system reliability. It is anticipated that the new system will require significantly less maintenance than the present 10- year -old system, which will help reduce operating costs and moderate upward pressure on customer rates. By way of background, Brenmor Cable Partners, L.P., purchased the Saratoga cable system in January, 1990, from Hearst Cablevision. Hearst held a franchise which expired on September 3, 1992, and which would be extended at the request of either party for five additional years. 2 As a condition of the City's agreement to transfer the franchise to Brenmor, the City and Brenmor agreed to begin good -faith negotiations in September, 1990, for the upgrading of the cable system. Accordingly, Brenmor submitted to the City a proposal for a 60- channel cable system on August 30, 1990. The City responded on November 20, 1991, with a "request for information and refinement of the System Upgrade Proposal." This document is a response to that request. Without additional input from its customers and the elected officials and staff of the City, it is not possible at this time for Brenmor to anticipate all the features of the new system which the City would desire to meet the needs and interests of the community. However, it is likely that the new system, at a minimum, would possess the following capabilities and refinements: 1. The system would be "addressable;' meaning that customers would be able to instantly add or delete premium services -- or order pay per view events -- via telephone. Thus, customers would not be required to bring their converters to an office or be visited at their homes by employees of South Bay CableVision to upgrade their cable service. 2. A total of three channels would be dedicated for public, educational and governmental access. 3. Free cable television connections and free basic service would be provided to all public elementary and secondary schools; all libraries; City Hall, and such other public facilities as may be determined by the City in the Franchise Ordinance. 4. Two-way capability would be available to permit live cablecasting from City Hall and such other public buildings as may be determined by the City in the Franchise Ordinance. 5. Institutional Communications Services would be provided to interlink City offices, Fire Stations and Law Enforcement offices. 3 6. The rebuilt cable system will include such other features and refinements as are necessary to meet the cable- related needs and interests of the community, as set forth in the Franchise Ordinance. In consideration of the system upgrade proposal contained herein, Brenmor Cable Partners, L.P., formally requests the renewal of its franchise under the provisions of Section 626(h) of the Cable Communications Policy Act of 1984, which states, in part: "[A] cable operator may submit a proposal for the renewal of the franchise pursuant to this subsection at any time, and a franchising authority may, after affording the public adequate notice and an opportunity for comment, grant or deny such proposal at any time...." As detailed elsewhere in this document, Brenmor believes it has met the criteria for franchise renewal set forth in Section 626(c)(1) of the Cable Act, specifically: "(A) the cable operator has substantially complied with the material terms of the existing franchise and with applicable law; "(B) the quality of the operator's service, including signal quality, response to customer complaints, and billing practices, but without regard to the mix, quality or level of cable services or other service provided over the system, has been reasonable in light of community needs; "(C) the operator has the financial, legal and technical ability to provide the services, facilities, and equipment as set forth in the operator's proposal; and, "(D) the operator's proposal is reasonable to meet the future cable - related community needs and interests, taking into account the cost of meeting such needs." IU Mindful of its responsibility to take into account the cost of meeting the needs and interests of the community, Brenmor Cable Partners, L.P., will endeavor to share with its customers and the officials of Saratoga the anticipated effect on subscriber rates of the new cable system and any additional requirements imposed by the new Franchise Ordinance. The officers and staffs of Brenmor Cable Partners and South Bay CableVision look forward to working with the officials of Saratoga to determine as rapidly as possible the specifics of the system upgrade and the accompanying renewal of the franchise. Please feel free to call upon any of us at any time. 5 OVERVIEW In January, 1990, Brenmor Cable Partners, L.P. (dba South Bay CableVision) purchased the cable system serving the City of Saratoga from Hearst Cablevision of California, Inc. As a condition of the transfer, South Bay CableVision, agreed to begin good faith negotiations with the City in September, 1990, for the upgrading of the cable system. This revised proposal is presented for the City's consideration pursuant to that agreement. As contemplated by the parties, once an upgrade plan has been agreed upon, the existing franchise, which expires on September 3, 1997 (with a five -year extension available under the existing franchise), will be extended to permit Brenmor to amortize the cost of the upgrade. South Bay CableVision's proposal for an eighty (80) channel, 550 MHz upgrade is set forth below. in BACKGROUND A cable television franchise to serve the City of Saratoga was granted to Video Engineering Inc. on August 3, 1977, and construction of the system began immediately thereafter. On August 22, 1985, the cable system was sold to Hearst Cablevision of California, Inc. As a part of the sale of all of its cable systems, Hearst sold the system to Brenmor Cable Partners, L.P., on January 17, 1990. Since acquiring the system, South Bay CableVision has focused on improving the overall service to consumers. At the time of the sale, the system passed 9,102 homes and served 5,215 basic subscribers. These numbers have been increased, respectively, to 9,441 homes passed and 5,722 basic subscribers. Other improvements have been made in the cable service offered to the customers served by the system. Some of these improvements include: * Expanded Customer Service department * Expanded Repair Service department * Upgraded computer system * Upgraded and expanded telephone system to create more customer trunk lines * Company -wide training in customer service techniques * Added 2 new Pay- Per -View Services * Added Turner Network Television and Bravo to the Basic cable line -up at no additional charge * Added Encore as a low cost Premium Channel * Added Sports Channel Pacific * Computer Aided training for all field operations * Employee safety program and training As a result of South Bay CableVision's efforts to improve the quality of its pictures, an aggressive maintenance program has been put into place. Field operations have been restructured to allow for the specialization of personnel in the system. These aggressive preventive maintenance programs have resulted in a decrease in the number of service calls in the system and a decrease in outages caused by equipment failure. 91 DESCRIPTION OF THE CURRENT SYSTEM: OVERVIEW CABLE PLANT The current Saratoga cable plant is about ten years old. As a result, a large percentage of the cable, trunk and distribution is Parameter 3 (P -3) gas injected coaxial cable. Since P -3 coaxial cable is the type specified for all new construction or rebuild projects, cable replacement would be expected to be minimal in both aerial and underground applications. The older style P -1 coaxial cable existing in the system may not have to be replaced unless there is significant damage or multiple splices in the line. We will make the final determination as to how much cable will be replaced when the final system design is completed. The Saratoga system currently operates 107 trunk amplifier locations including 72 bridger amplifiers. There are nearly 185 line extender amplifiers in the system. The current maximum cascade length is 23 trunk amplifiers. The current active electronics are only capable of passing 300 MHz. Pending individual evaluation of the passive devices - splitters, couplers, taps, and power inserters - it is assumed that all of the existing passives will require replacement in this rebuild. South Bay CableVision has had under way, for the last 2 years, a drop replacement policy for all service calls and installations. All older non - messengered drops are replaced as part of the service call or install activity. New drops are installed to meet a much more stringent operating standard than that in place during initial construction. All non- messengered drops will be replaced and grounded and all drops currently not grounded will be upgraded as part of this rebuild. N The Saratoga cable system amplifiers are powered by 60 VAC power supplies. Roughly 50% of the power supplies are the emergency standby type. These are battery backup power supplies that convert DC voltage from the batteries to 60 VAC to operate the amplifiers. Under normal loading conditions, the power supplies will stay operational for up to 3 hours on battery power. This means the cable system stays running in the event of an electrical power outage. Based upon the final powering design of the system, it. is assumed that the existing power supply locations will be relocated. The new design will require the installation of several additional power supplies. The site for receiving the off -air broadcast channels is located on a horse ranch on a hill above Saratoga. The building is small and not adequate to expand or enhance current reception. There is a coaxial cable line that runs from the off -air site to the satellite receive site on Saratoga/Sunnyvale road. As in the upper site, this location is also crowded and does not allow for any expansion or adequate spacing of existing equipment. 10 DESCRIPTION OF THE CURRENT SYSTEM: SUMMARY A. LOCATION Satellite Office Main Business Office Headend B. TRUNK 151 N. Santa Cruz Ave. Los Gatos, CA 2700 Scott Blvd. Santa Clara, CA 12333 Saratoga/Sunnyvale Rd The trunk system is presently operating at its maximum channel loading capacity of 37 channels at 300 Mhz. Calculations have shown that the existing trunk system bandwidth cannot be extended to 550 MHz, which would give the system the capacity to carry 80 standard NTSC television channels. All of the existing amplifiers, housings, connectors and passives require replacement. The primary improvements to upgrade the system are the replacement of the trunk electronic modules, the- re-powering of the system to meet South Bay CableVision's design specifications, and the improvement of system grounding. C. DISTRIBUTION The distribution system can be divided into two general categories: ORIGINAL DISTRIBUTION SYSTEM - The original distribution system makes use of P -3 and P-1,.500 JA series jacketed coaxial cable. Passives are Jerrold STC series splitters and Jerrold FXQ "fleV' taps. The strand and hardware is in generally good condition with very few cases of corrosion being observed. While the cable is in generally good condition and will pass the extended bandwidth, the passive devices limit the higher 11 frequency operating range. Channel expansion of the original distribution system will require new connectors, passives and electronics. RECENT DISTRIBUTION SYSTEM - Since South Bay CableVision began Saratoga operations, several areas have been upgraded with 450 MHz passives. Additionally, all new construction in the last 4 years was designed to operate with extended bandwidth and employs passives with a high frequency limit of at least 450 MHz. It will be necessary to replace these devices to meet the 550 MHz design. D. CONVERTERS Scientific Atlanta 8580 and Jerrold 450 addressable converters with remote capability are provided for premium services and basic service (if required). These addressable Scientific Atlanta and Jerrold converters employ state of the art technology and include many advanced features, such as parental control, favorite channel memory, and VCR timer. E. FM SIGNALS FM Service is provided via a wideband FM antenna and wideband processor. The Saratoga headend is located at 12333 Saratoga/Sunnyvale Road. The television signals are received at that site in a number of ways: BROADCAST STATIONS in the area are picked up locally and individually processed to ensure consistent RF level and frequency control and arrive from a remote pickup location via a dedicated transportation trunk line. SATELLITE STATIONS are received from 4 C -BAND satellites, decoded as required, and individually modulated for transmission on the cable system. 12 G. EQUIPMENT Broadcast antennas are commercial grade, tuned to specific channel groups. Satellite equipment includes a Scientific Atlanta 4.6 meter reflector retrofitted for simultaneous reception of multiple satellite signals, a Scientific Atlanta 4.1 meter reflector and Scientific Atlanta and Jerrold LNB type satellite receivers. Processing equipment consists of the latest generation Scientific Atlanta 6150 and 6350 processors and modulators and Jerrold Commander IV processors and modulators. H. CHANNELS AND SERVICES CARRIED The cable system currently delivers 37 channels. Included in this selection are: * 13 Broadcast Channels * 14 Satellite Basic Channels * 1 Cablecast Channel * 7 Premium Channels * 2 Pay- Per -View Channels 13 The channel line -up follows: CABLE CHANNEL CHANNEL AFFILIATION CITY 2 2 KTVU FOX Oakland 3 CNN Cable News Network 4 4 KRON NBC San Fran 5 5 KPIX CBS San Fran 6 Community Service Channel 7 7 KGO ABC San Fran 8 THE DISCOVERY CHANNEL 9 9 KQED PBS San Fran 10 26 KTSF IND San Fran 11 11 KNTV ABC San Jose 12 44 KBHK IND San Fran 13 36 KICU IND San Jose - 14* THE DISNEY CHANNEL 15* REQUEST Pay Per View 16 SPORTS CHANNEL PACIFIC 17 MTV Music Television 14 18 60 KCSM PBS San Mateo 19* THE MOVIE CHANNEL 20 20 KOFY IND San Fran 21 CNBC / BRAVO 22 TNT 23 54 KTEH PBS San Jose 24* CINEMAX 25* HOME BOX OFFICE 26 USA CABLE NETWORK 27 NICKELODEON 28 14 KDTV IND San Fran 29 ESPN Sports Network 30* SHOWTIME 31 LIFETIME 32 TBS IND Atlanta 33 ARTS & ENTERTAINMENT 34 C -SPAN CONGRESS 35 HOME SHOPPING CLUB 15 36 CBN The Family Network 60* REQUEST 2 PPV 61* ENCORE * Premium/Pay Entertainment Service 16 PROPOSAL PROPOSED UPGRADE South Bay CableVision's upgrade and rebuild proposal for the Saratoga system is just one element of a complex and comprehensive plan. This plan includes major improvements to all of the systems operated by South Bay CableVision. At completion of the proposed plan, Saratoga customers will be served by one of the most modern cable systems in the country today. The Saratoga 550 MHz, 80 Channel rebuild plan includes a state -of -the -art design incorporating a Master Headend located in Santa Clara and an Interconnect Network utilizing Fiberoptics. The signals originating at the Santa Clara Master Headend would be transported to Saratoga and other cities via an AM Fiber link to the Fiber Nodes located at key points within the Saratoga coaxial distribution system. There are several advantages to implementing a Master Headend scheme. A. Having a Master Headend reduces the time necessary to respond to any channel problem. B. Headend personnel would be positioned at the Master Headend site full -time to achieve greater system performance and reliability. C. The off -air broadcast stations would be received at the best possible location within the Fiberoptic Network for all systems. D. Since the cost of the Master Headend is shared by a larger subscriber base, it is economically feasible to provide higher quality equipment. This would include items such as generator backup for the Master Headend in case of power outages and uninterruptable power supplies for the data links and the computers which control the converters. Additional services and enhancements would also be more economically feasible. 17 Signals would be delivered from the Master Headend via a Fiberoptic Interconnection scheme. There are several advantages to this type of distribution design, including: A. Fiber Nodes do not require towers, antennas or buildings and they can be strand or pedestal mounted anywhere there is cable plant. Thus they can be located to optimize the rebuild of the coaxial cable plant. B. Much of the cost of a Fiberoptic Interconnect is in the cable protecting sheath and in the installation of the Fiberoptic cables. Multiple Nodes can be installed along a single fiberoptic route further reducing coaxial cable cascades and simplifying the coaxial cable rebuild. C. Since individual Fiberoptic transmitters feed individual optical fibers within each cable, the channel program carriage can be customized for each community to the degree required by local franchises without losing the advantage of a single processing center. D. Locally generated channels can be fed back to the Master Headend using separate optical fibers within each cable. This eliminates processing centers in each community for local insertion. The distribution system will utilize a state -of -the -art "Fiber to the Feeder" architecture. This is ideal for the distribution of today's programming and services and is "future proofed' in providing: A. Sufficient capacity for the future bandwidth increases which may be required for additional channels and the developing High Definition Television (HDTV) concept. B. Sufficient spare optical fibers to be used for interactive services, if interest develops for such services IU C. Sufficient spare optical fibers to be used for future remote performance status monitoring for greater reliability. D. Sufficient bandwidth to theoretically support other services such as high -speed data transportation. South Bay CableVision has chosen to provide Addressable Converters as our mode of channel selectivity once the signals are in the home. South Bay CableVision will provide Addressable units that may provide many consumer conveniences such as Parental Control, Favorite Channel Memory, Remote Control, PPV, VCR timer and a clock. South Bay CableVision will select the converter that meets our requirements for security, reliability, picture quality, stereo compatibility and ease of use. To best utilize the capabilities of the Fiberoptic Interconnection scheme, careful thought and analysis has gone into the design of the Fiberoptic architecture. The architecture chosen for this rebuild is known as "Fiber to the Feeder ". In this type of design, optical fibers are installed deep into the coaxial system. The optical fiber carries all of the cable signals and the routing is of primary importance. The goal of this rebuild is to optimize Node locations to minimize amplifier cascades. The final design of the system is yet to be completed and therefore the actual locations of the Optical receivers are yet to be determined. It is anticipated that amplifier cascades will be less than 10 in succession. This will enhance our quality and reliability. In order to expand the channel capacity of the trunk and distribution system, all of the electronics, i.e. trunk amplifiers and line extender amplifiers, will be replaced with 550 MHz capacity equipment. All amplifier and passive devices will be installed with an integral mandrel -type connector. This will ensure long life and maximum protection against signal ingress and egress. Heat shrinkable tubing will be used at 19 all connector locations in the cable system, excluding the drop system. The 550 MHz design will employ automatic gain control (AGC) and automatic slope control (ASC) circuitry to ensure optimum system performance over wide temperature variations. South Bay CableVision will specify and use amplifiers to insure the system performs to the desired quality set forth in the rebuild design Standards of Performance for all InterMedia systems across the United States. InterMedia has formalized performance standards for all its systems and it is our commitment that we meet or exceed current FCC standards and future modifications to the Technical Standards for Cable Television Systems. This upgrade plan, by design, will meet or exceed all FCC standards. CHANNELS AND SERVICES At the conclusion of the upgrade of the system to 550 MHz, the cable system in Saratoga would be capable of delivering SO channels of service. This is a 116% increase in the number of channels currently provided. As stated earlier, the system design and use of Fiberoptics to interconnect the system also provides channel and service benefits. While the following services are not anticipated today, the following may be possible, if consumer interest warrants. However, it must be noted that the following features may significantly increase the cost of rebuilding the system - a cost which may have a bearing on the subscriber rates. Potential additional service include: A. Two-way interactive services. B. High Definition Television (HDTV). C. Home shopping and Banking Services. D. Fire and burglar alarms. 20 E. Digital Compression F. Digital Audio services The actual channels carried on the system will be determined through community and customer opinion surveys. South Bay CableVision will conduct an initial survey prior to introducing the new channels offered at the conclusion of the rebuild and conduct annual customer surveys thereafter. INSTITUTIONAL COMMUNICATIONS SERVICES South Bay CableVision will provide such Institutional Communications Services for the City, if the city so desires. One possibility for providing such services would be a network with an upper band limit of 450 MHz. The network could be built as a mid -split system in order to provide the maximum bandwidth for video and data transmission in the upstream direction. The Communications System would serve a mutually agreeable list of City offices, Fire Stations and Law Enforcement offices. South Bay CableVision would maintain and service the Communications System after it is constructed. The design would also provide stand -by power for the Network. SYSTEM CONSTRUCTION CONSTRUCTION METHODS Prior to and during the construction phase of this project, South Bay CableVision will be able to provide a more accurate construction timeline. 21 Quarterly reports on construction in progress, construction completed and planned construction will be provided to the City. The type of design chosen for the rebuild will allow for close control to the timetables placed upon contractors. Each Node will feed signals to a specific number of homes. Construction crews will do all the necessary work within the Node boundaries and the work will be proofed and signed off by South Bay CableVision's Rebuild Manager prior to the crews moving into a new area. In this way, any issues that may come up during the construction process can be resolved before moving on to other areas. South Bay CableVision's contracts specify these constraints and projects typically flow smoothly in this manner. All construction work will be done by qualified contractors. Selected construction companies will be experienced in Fiberoptic construction and general coaxial rebuilds. They will be required to show proof of specific insurance carriages and they must possess an exceptional safety record. DENSITY STANDARD FOR SERVICE EXTENSION South Bay CableVision will extend service to all homes meeting a density standard of Forty (40) homes per plant mile. Standard methods of calculation will be used to determine the home per mile density from the nearest location of distribution cables capable of serving the area. Service will be extended to all homes which do not meet the density standard on a proportional cost sharing basis if the homeowners desire. CODES South Bay CableVision and its contractors will adhere to the codes and requirements set forth in the Pole Attachment Agreements with GTE and Pacific Bell. All work performed will comply with the State of California Public Utilities Commission General Orders 95 and 128 in all regards. The guidelines of the NEC (National Electric Code), for power supply installations and 22 electronic enclosures will be fully observed. UPGRADE TIMETABLE The upgrade of the Saratoga system will be a costly and involved project and will be completed, in the interests of efficiency, in concert with the upgrade of the Los Gatos and Monte Sereno systems. South Bay CableVision would propose to begin construction within six (6) months after the adoption of the Franchise Ordinance. Barring acts of God or other unforseen developments, construction would be completed within eighteen (18) months after the time it commences. A complete schedule will be completed and presented to the City following final design. UPGRADE SUMMARY UPGRADED SYSTEM TO 550 MHz: FEATURES AND BENEFITS CAPABILITIES: 23 * 116% increase in channel capacity from current level * 80 Channel loading possible with standard frequency offset headend * Provide quality signals not only for today's television systems but for future services such as HDTV, Digital Compression and data transmission DESCRIPTION: * Replace all trunk electronics with State -of- the -Art technology * Maintain standby power on all major trunk runs and the Fiber Nodes * Replace all trunk housings, chassis and passives * Replace taps, splitters and connectors on distribution lines, as needed * Install ground rods, where needed * Replace pedestals and vaults as needed 24 * Replace cable, as needed (estimate = 10 miles overhead; 4 miles underground) * Correct GO -95 and GO -128 infractions * Replace drops, as required, and ground at point of entry * Ground all drop cable currently not grounded ADVANTAGES: * Full 80 channel operation possible * Performance equal to newly built system * Designed and built with the future in mind * Fiber has the capacity to meet the needs of residential and commercial customers alike, for now and for the future * Reduced cascades of trunk amplifiers, which will have the following beneficial effect: 1. Improvement of picture quality 2. Reduced number of subscribers affected by amplifier 25 outages 3. Future proofed for services yet to be developed FRANCHISE EXTENSION In consideration of the substantial incremental investment in the community, Brenmor Cable Partners, L.P., requests an extension of the existing franchise through August 30, 2012. It is requested that this franchise extension become 26 effective upon the agreement of the City and Brenmor to the system upgrade detailed elsewhere in this document. FINANCIAL BACKGROUND Brenmor Cable Partners has fully met all of its financial obligations to the City of Saratoga on a timely basis since it assumed the franchise in January, 1990. 27 Brenmor also has fully met all of its obligations to its investors and lenders since the inception of the partnership in 1988. Brenmor furnished the City of Saratoga information on its structure, its financing and its officers on September 25, 1989. A copy of this document follows. There has been only one material change since the document was submitted. Edward M. Allen has retired for reasons of health, and has been replaced as a General Partner by Edward M. Liebst, Jr. Mr. Liebst, who was one of the founding partners of InterMedia Partners in 1988, serves as the Chief Financial Officer for the InterMedia operating companies with overall responsibility for the financial performance of InterMedia's assets. He brings the experience gained in 11 years of developing and financing cable television transactions to the analysis and financing of InterMedia's acquisitions. Immediately before joining InterWdia, Mr. Liebst was a Vice President in the investment banking unit of Bank of America and BankAmerica Capital Corporation. APPENDIX I: CALCULATED PERFORMANCE, CURRENT SARATOGA SYSTEM System: Saratoga, California, 300 MHz Assumptions: - Existing Cable and Amplifier Locations - Independentheadend - 23 Amp Cascade - PP (Push Pull) Trunks, LEs, Bridgers MANUFACTURER'S PERFORMANCE SPECS UNDER STANDARD CONDITIONS TYPE DEVICE CIN CTB XMOD OUTPUT NOTES 1 Jer PP trunk 58 -80 -86 32 +9 dbmV In 2 Jer PP bridger 55 -59 -58 47 3 Jer PP LE 58 -59 -58 47 INDIVIDUAL DEVICE PERFORMANCE AT OPERATING LEVELS 29 TYPE DEVICE CIN CTB XMOD OUTPUT 1 Trunk Amplifier 58 -80 -86 32 2 Bridgers 55 -59 -58 47 3 Line Extenders 58 -59 -58 47 CASCADED PERFORMANCE CALCULATION TYPE # C/N CUM CTB CUM XMOD CUM 1 23 44.4 44.4 -52.8 -52.8 -58.8 -58.8 2 1 55.0 44.0 -59.0 -49.3 -58.0 -52.4 3 2 55.0 43.7 -53.0 -44.9 -52.0 -46.1 NOTE: INTERMEDIA RECOMMENDED PRACTICES: Meet or exceed current or future modifications to FCC Standards APPENDIX II: PERFORMANCE, SARATOGA FIBER TO THE FEEDER REBUILD System: Saratoga Upgrade to 550 MHz 30 Assumptions: - Utilize existing cables - Multiple Nodes fed via Fiberoptic cables from Master Headend in Santa Clara - <10 Amp Cascade (>95% of customers) - Distribution amplifiers meeting Fiber to the Feeder design parameters MANUFACTURER'S PERFORMANCE SPECS UNDER STANDARD CONDITIONS NOTE : South Bay CableVision's final design and amplifier selection is not yet complete. We will, however, purchase equipment from an experienced and reputable Cable TV electronics manufacturer. The amplifier type and specifications stated below are for comparison purposes only and should not be assumed as the final selection. The actual amplifier specifications will exceed, in general, those stated in this example. TYPE DEVICE ON CTB XMOD OUTPUT NOTES 1 JER AM -550 2FO 53 -65 -65 12db Loss 33 ch 2 JER PD SJ TR 60 -89 -89 35 +8 In, 6db Tilt 3 JER SJBM -550B 67 -63 -63 47 6db Tilt - 4 JLP6 -550 PD LE 65 -71 -71 47 +14 In,6db Tilt INDIVIDUAL DEVICE PERFORMANCE AT OPERATING LEVELS TYPE DEVICE /N CTB XMOD OUTPUT 31 1 AM Fiber Link 53 -65 -65 2 Trunk, PD 61 -87 -87 36 3 Bridger, Std 66 -65 -65 46 4 LE, PD 64 -73 -73 46 CASCADED PERFORMANCE CALCULATION TYPE # CIN CUM CTB CUM XMOD CUM 1 1 53.0 53.0 -65.0 -65.0 -65.0 -65.0 2 10 51.0 48.9 -67.0 -59.9 -67.0 -59.9 3 1 66.0 48.8 -65.0 -56.1 -65.0 -56.1 4 2 61.0 48.5 -67.0 -53.9 -67.0 -53.9 NOTE: INTERMEDIA RECOMMENDED PRACTICES: Meet or exceed current or future modifications to FCC Standards APPENDIX III: PERFORMANCE COMPARISON 32 Push Pull Technology vs 23 Amp cascade vs Conventional Headend vs CURRENT PROPOSED C/N 43.7 48.5 CTB -44.9 -53.9 XMOD -46.1 -53.9 Power Doubling 10 Amp cascade (max) AM fiber Node 4.8 dB 9.0 .0 7.8 dB Footnote: The data on CTB and XMOD is based upon test conditions not representative of actual video performance. The actual video performance as measured under the new FCC Technical Rules, Part 76.605, issued April 1, 1992, will exceed the numbers stated in all performance comparisons by approximately 12 db. 33 iNTERMEDIA PARTNERS David G. Rozzelle General Partner September 25, 1989 Harold Toppel, Esq. Atkinson & Farasyn P.O. Box 279 Saratoga, CA 94042 "If better is possible, then good is not enough" Re: Brenmor Cable Partners, L.P. Dear Mr. Toppel: I am writing to provide you with information concerning the financial qualifications of Brenmor Cable Partners, L.P., the proposed purchaser of the assets of Hearst CableVision of California, Inc., and to discuss, in general terms our operating plans for the Hearst systems. Brenmor and InterMedia Brenmor is a limited partnership composed of two partners: the general partner is Hernandez Communications, Inc. and the limited partner is InterMedia Partners. While each partner will contribute equity to the partnership, it is InterMedia that will contribute the majority of the equity and it is InterMedia that will supply the bank financing that will. complete the acquisition financial package. At your request, I have enclosed a copy of the Brenmor partnership agreement. InterMedia is a limited partnership formed over a year ago for the sole purpose of acquiring, operating and holding cable television systems. Unlike all other limited partnerships in the cable area, InterMedia Partners is composed only of financial institutions, banks, large corporations and pension funds. There are no individuals holding limited partnership interests in InterMedia. Moreover, InterMedia is an operating fund, as opposed to a financial fund. Each of our limited partners invested with the idea that the acquired properties would be held and operated as long -term investments. In short, we offer the citizens of Saratoga the prospect of stable, financially sound ownership of their cable television system. 2785 Mitchell Drive • Suite 105 • P O. Box 30600 • Walnut Creek, California 94598 • Tel: (415) 256 -8043 • FAX: (415) 256 -8713 Harold Toppel, Esq. Page 2 September 25, 1989 The limited partners of InterMedia are as follows: 1. Bank of America 2. The Bank of New York 3. Chrysler Corporation Master Retirement Fund 4. Equitable Life Assurance Society 5. Equitable Variable Life Insurance Company 6. Integrity Life Insurance Company 7. Mellon Bank 8. New York Life Insurance Company 9. Salomon Brothers Holding Company, Inc. 10. Sumitomo Corporation 11. TCI Development Corporation 12. Teachers Insurance & Annuity Association These institutions and the general partner of InterMedia Partners have contracted to provide over $100,000,000 in equity. The limited partners will contribute 99% of the equity and the general will contribute 1%. The total equity, when combined with available debt, will provide the partnership with total acquisition funds far in excess of that needed to close the Hearst transaction. Pursuant to paragraph 7 (d) of the InterMedia partnership agreement, the general partner simply calls, on ten days notice, = the necessary equity from the limited partners to complete an acquisition. The actual capital call for the Hearst acquisition will be done at the time of closing on the Hearst properties. The pertinent language of the partnership agreement is as follows: The balance of the capital contributions of the Limited Partners shall be paid in installments on ten (10) days' written notice in the following manner: (i) as the General Harold Toppel, Esq. Page 3 September 25, 1989 Partner determines is necessary or appropriate for identified purchases of or investments in cable television corporations A copy of paragraph 7 (d) is attached for your review. Finally, please be assured that our limited partners cannot withdraw from their partnership commitment except in very carefully defined circumstances. Pursuant to paragraph 8 of the agreement, copy attached, "A Limited Partner may not withdraw from the Partnership in whole or in part prior to dissolution of the Partnership" unless permitted to withdraw by the general partner, or unless continued participation would result in a violation of law. The general partner of InterMedia Partners is InterMedia Capital Management ( "ICM"). ICM is, itself, a limited partnership. The general partners of ICM are Leo J. Hindery, Jr., Edward M. Allen and David G. Rozzelle. These three individuals, in effect, control ICM and InterMedia Partners. Ed and I explained our qualifications to Todd Argow in our earlier meeting with him. Subsequently, we sent Todd a pamphlet describing the management talent that Brenmor will provide. For your convenience, a copy of the pamphlet is enclosed. Attached hereto is a copy of the August 31, 1989, IP balance sheet and income statement. As explained above, the unique nature of InterMedia significantly reduces the usefulness of these documents. As of the moment, InterMedia incurs ongoing liabilities and pays them. Other than the right to draw the total equity pledged by its limited partners, there are no assets or bank balances of significance. In essence it is the nature of InterMedia's limited partners that assures the financial soundness of InterMedia. As you no doubt noticed, the limiteds virtually represent a "Who's Who" of the cable lending and investment community. The Bank of New York will lead a syndicate of banks which will lend InterMedia the money it needs to acquire and operate the Hearst properties. (The banks have already formally committed to lend InterMedia the funds necessary to do a two -stage closing on the Hearst properties, although it appears that only one closing will occur.) It is likely that all or substantially all of the members of the syndicate will be equity holders in InterMedia. Overall, we believe we have structured a very tight, sound and imaginative financial package which is unequalled. Finally, let me address one issue which has been raised by Todd -- the role of Te le- Communications, Inc. in InterMedia. TCI is a limited partner with the same rights, privileges and obligations as the other limited partners. Aside from the clear legal Harold Toppel, Esq. Page 4 September 25, 1989 restrictions on TCI's role given its limited partner status, the stature of each of our limited partners precludes any one of them from exerting undue influence on the operation of the partnership. We must be scrupulously fair and we will be. Although I am certain you understand the legal limitations imposed on our limited partners when it comes to the management of the Hearst properties, enclosed is a letter from Gregg Vignos, our business counsel, which confirms that our limited partners will have no right to interfere with the management of the Hearst properties. Operating Plans Ed Allen and I have already addressed the employees of the Hearst systems and have assured them that their jobs are secure. We do not intend to reduce the number of service representatives, technicians or vehicles. Nor do we plan to reduce office hours, service response time, the system's local origination commitments, or customer relations efforts. Bill Haggarty, the present marketing director for Hearst Cablevision, has agreed to serve as the general manager of the Hearst properties, including the Saratoga system. Bill has been with the system virtually the entire time that Hearst has owned it and has served as Gene Musselman's number two for many years. Given Bill's knowledge of the community and the system, we believe Saratoga will hardly notice the change in ownership. Even the telephone number to the general manager's office will remain the same -- Todd will be able to contact our GM as easily as he now contacts Gene. In short, other than a name change -- probably South Bay CableVision -- the ownership change should be transparent to the system's subscribers. Moreover, we believe we are good enough to improve customer relations and service over time, mindful as we are that Hearst's efforts in those areas will be difficult to top. As for the autonomy of the local manager, Ed and I believe that the local manager is, in essence, the president of his own business. While "corporate" will be involved in annual operating and capital budgets, all of the day -to -day operating decisions will be made by Bill Haggarty. In conclusion, we respectfully submit that InterMedia Partners is clearly qualified to acquire and operate the Hearst cable properties. We offer highly experienced management skills, knowledge of the industry, a commitment to long -term ownership and a financial base of over $100,000,000 in equity committed by partners whose very names assure their ability to perform when asked. i Harold Toppel, Esq. Page 5 September 25, 1989 If you need anything further for the council to consider, please let me know. Very truly yours, David G. Rozzelle y� . General Partner cc: Todd W. Argow (all w /enc) Ray Hernandez Gene Musselman Bill Haggarty C," a, - & & " Z S /� /a3'�)— A Professional Corporation DATE: December 10, 1991 TO: See Distribution List ' i FROM: Richard A. Littorno, Counsel for the City of Saratoga with respe't to Cable Communications Matters / RE: Request for Preferences and Information I have been retained by the City of Saratoga to assist it in reviewing a proposal made by South Bay Cablevision to upgrade the cable communications system located in the City of Saratoga. In order to provide you with an opportunity to make comments and suggestions which will be considered and possibly incorporated into a new Franchise Agreement with South Bay Cablevision, the following survey is sent to you. Please complete the survey and provide written comments either -in the spaces provided or in the form of an attachment. Please mail the completed survey as soon as possible to this office, using the self- addressed stamped envelope provided, to insure that your input will be received in time to be considered in the negotiations. 1. Bulletin Board /Character Generator The Cable System currently offers a character generator fed message scroll type channel for the delivery of various public interest information to the community. A. Have you ever utilized the existing bulletin board on the Cable System? Yes No B. Do you intend at any time in the future to utilize the bulletin board, and if so for what purpose? Yes No C. Comments: 1 ROBERT J. SEHR, Jr. RICHARD A. LITTORNO Attorneys at Law 39 Quail Court, Suite 300 Walnut Creek, California 94596 Telephone 415.947.1551 Fax 415.947.2695 NEW AREA CODE: 51 C 2. Tape Playback ap ' l ty A. Have you ever utilized the tape playback capability currently available on the cable system? B. Do you intend to make use of the tape playback capability in the future? Yes No C. Comments: 3. Live Broadcasting A. Have you ever utilized the live broadcasting capability currently available on the cable system? Yes No B. Do you intend to make use of the live broadcasting capability in the future and if so, for what purpose? Yes No C. Comments: 4. On -Site Origination, A. Have you ever utilized the on -site origination capability currently available on the cable system? Yes No B. Do you intend to make use of on site origination capability in the future, and if so, for what purpose? Yes No C. Comments: 2 S. Data Transmission. A. Would you make use of data transmission capability if it were available on the cable system? Yes No B. Comments: 6. Voice Transmission, A. Would you make use of voice transmission capability if it were available on the cable system? Yes No B. Comments: 7. Institutional Network. A. Would you make use of an institutional network on the regular cable independent of system linking different locations (eg. schools) on an independent system? Yes No B. Comments: 3 8. Government Access Channel. A. Would you prefer to have one channel on the cable system devoted exclusively to governmental programming including all city council meetings, city planning commission meetings, and various other public meetings? Yes No B. Comments: .t• - -��- A. Would you prefer to have one channel on the cable system devoted exclusively for use by schools and colleges within the city and perhaps, providing the ability to interconnect with the educational channels of surrounding communities? Yes No B. Comments: _ � . R ff Xq; r-TTI we J - - A. Would you prefer to have one channel on the cable system devoted exclusively to public access programming (other than governmental and educational) Yes No B. Comments: 4 11. Please provide any other comments or suggestions you may have with respect to cable communications in the City of Saratoga in this space or in an attachment. Please mail this survey as soon as possible back to this office and feel free to contact me if you have any questions or would like to discuss this survey or any other cable communications matter effecting the City of Saratoga. 1454sb 5 Saratoga Community Library Dolly Barnes, Librarian 13650 Saratoga Avenue Saratoga, CA 95070 (408) 867 -6126 West Valley- Mission Community College District 14000 Fruitvale Avenue Saratoga, CA 95070 (408) 867 -2200 Campbell Union Elementary School District 155 N. Third Street Campbell, CA 95008 (408) 378 -3405 Cupertino Union School District 10301 Vista Drive Cupertino, CA 95014 (408) 252 -3000 Saratoga Union School District 20460 Forest Hills Drive Saratoga, CA 95070 (408) 867 -3424 Fremont Union High School District P.O. Box F Sunnyvale, CA 94087 (408) 735 -6060 Los Gatos - Saratoga Joint Union High School District 17421 Farley Road West Los Gatos, CA 95030 -3396 (408) 354 -2520 Saratoga Chamber of Commerce P.O. Box 161 Saratoga, CA 95070 (408) 867 -0753 Santa Clara County Sheriff's Department Westside Station 14374 Saratoga Avenue Saratoga, CA 95070 (408) 867 -9715 Central Fire District 14700 Winchester Boulevard Los Gatos, CA 95030 (408) 378 -4010 Saratoga Fire District 14380 Saratoga Avenue Saratoga, CA 95070 (408) 867 -9001 Saratoga Community Access Cable TV Foundation Ben Strong, President 19753 Via Escuela Drive Saratoga, CA 95070 (408) 741 -0574 i tj. 4 (Council mail -carr be directed to City Hall GP-4+ome-- addresza� Karen Anderson, Councilmember 19887 Seagull Saratoga, CA 95070 (408) 725 -8015 Martha Clevenger, Councilmember 19337 Titus Court Saratoga, CA 95070 (408) 257 -7544 Willem Kohler, Mayor 21842 Via Regina Saratoga, CA 95070 (408) 867 -4250 (h) (408) 944 -6628 (w) (408) 432 -8629 FAX Victor Monia, Vice Mayor 14665 Granite Way Saratoga, CA 95070 (408) 741 -1376 (h) (408) 745 -0611 (w) (408) 745 -0595 FAX F.L. Stutzman, Councilmember 15195 Park Drive Saratoga, CA 95070 (408) 354 -3420 City Department Heads: Saratoga City Hall 13777 Fruitvale Avenue Saratoga, CA 95070 (408) 867 -3438 (408) 741 -1132 FAX Stanley Eisner, Interim Planning Director Carolyn King, Assistant to the City Manager Larry Perlin, City Engineer Harry Peacock, City Clerk Joan Pisani, Recreation Director Patricia Shriver, Finance Director Dan Trinidad, Maintenance Director Saratoga Senior Center Olga MacFarlane. Director 13777 Fruitvale Avenue Saratoga, CA 95070 ( 408 ) 857 -3438 (408) 741 -1132 FAX