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<br /> <br />Offices in 470 U.S. Bank Plaza <br /> <br /> <br />200 South Sixth Street <br />Kennedy <br />Minneapolis <br />Minneapolis MN 55402 <br /> <br /> <br />& <br /> (612) 337-9300 telephone <br />Saint Paul <br /> <br />(612) 337-9310 fax <br /> <br />Graven <br />www.kennedy-graven.com <br />St. Cloud <br />rvose@kennedy-graven.com <br />CHARTERED <br />Affirmative Action Equal Opportunity Employer <br /> <br />M E M O R A N D U M <br /> <br />DATE: December 14, 2018 <br /> <br />TO: Sherburne-Wright Counties Cable Commission <br /> <br />FROM: Bob Vose <br /> <br />RE: Franchise Renewal <br /> <br /> <br />By letters to the member cities in May, 2017, Charter requested renewal of its franchises. The <br />franchises were last renewed in 2004 and expire in early 2020. <br /> <br />The Commission discussed Charter’s renewal request in June, 2017. At that time, I reported that <br />cable operators were beginning to seek to reduce the availability of PEG channels, limit the <br />availability of high definition (HD) for PEG (because it uses valuable capacity), and reduce PEG <br />funding in franchise renewals. Based on this feedback, the Commission directed me to seek to <br />preserve the current arrangement to the extent possible. The Commission emphasized a desire to <br />protect the current community programming arrangement and its two PEG channels, provide for <br />the future delivery of PEG in HD, and preserve franchise fee and PEG fee funding. <br /> <br />Our negotiations with Charter have been productive. However, as I recently advised, many cable <br />operators have changed their bargaining positions in renewals due to a recent proposed FCC <br />rulemaking. The FCC has proposed rules that would allow cable operators to offset the “value” <br />of a variety of in-kind commitments from franchise fees. By proposing to allow cable operators <br />to reduce their franchise fee payments by the “value” of certain other franchise commitments, the <br />FCC has given cable operators added leverage in pending negotiations. <br /> <br />Notwithstanding, we have achieved the Commission’s primary goals. In turn, we have <br />compromised regarding the provision of “free” cable services and converters to city and <br />institutional sites, and regarding the addition of language to address the future potential for <br />competition. <br /> <br />I am comfortable having the Commission recommend approval and adoption of the negotiated <br />renewal to its member cities. A summary of the most significant changes to the franchise and <br />regulatory ordinance follows. <br /> <br /> The Franchise(s) will be renewed again for 15 years even though the cable industry <br />generally is seeking shorter (often 10 year) renewals. We view this as beneficial. <br />RJV-254155v1 <br />1 <br />SH255-1 <br /> <br />