HomeMy WebLinkAboutIR 8545 INFORMAL REPORT TO CITY COUNCIL MEMBERS NO. 8545.
To the Mayor and Members of the City Council Date: 11/18/03
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e�? SUBJECT: REQUEST FOR LIMITED CABLE FRANCHISE TO
SERVE SENDERA RANCH
Strategic Technologies, Inc. (STI), a cable company owned by homebuilder Lennar Corporation, has
applied to the City of Fort Worth for a limited cable franchise to serve the Sendera Ranch area. Lennar is
beginning construction on the first of approximately 15,000 homes it plans to build in Sendera Ranch over
the next seven to 10 years. One of features that Lennar wants to offer potential homebuyers is homes that
are "telecommunications-ready" by being wired for cable, high speed Internet and telephone services.
Lennar has used STi to successfully build a telecommunications system in various developments around
the country, including Little Elm, Texas; Orange County, Florida; Orlando, Florida; and Manatee County,
Florida.
A city is required to grant a cable franchise that allows a cable company to use the city's right of way to
build its cable system. In 1981, a citywide cable franchise was granted to Sammons Cable of Fort Worth.
Through a series of sales, the franchise now is owned by Charter Communications. The franchise will
expire in 2006. The Charter Communications franchise is not an exclusive franchise. Under city, state
and federal law, the City of Fort Worth can grant as many cable franchises as it wants. in addition to the'
Charter Communications franchise, Millennium Cable has a limited cable franchise to service homes in far
Northeast Fort Worth, Optel has a franchise to sere seven apartment complexes and Wide Open West
f/1 WOW), Inc. still holds a city-wide cable franchise. However, the WOW franchise was suspended for up to
five years because of the difficult financial climate those telecommunication businesses have experienced
the last several years. Like Millennium Cable, the STI franchise would have a limited service area. Both
Millennium and STI must apply to the city for a franchise amendment in order to expand their services
areas beyond the current boundaries.
Granting of a cable franchise to STI to build a cable system for the Sendera Ranch development does not
affect the Charter Communications' franchise. Charter will be required to extend its cable system into
Sendera, based on the extension provisions in its franchise. The city believes that the competitive cable
system will benefit citizens by providing them with a choice.
The STI cable franchise is the city's model franchise used in the WOW franchise. A handful of unique
provisions, to meet the conditions of the STI system, are incorporated. The major provisions of the STI
cable franchise are:
• The STI franchise is for 20 years, with expiration set for December 31, 2023.
• STI is limited to provide cable in the Sendera Ranch area only.
• If STI wishes to expand its service area, it must do so in writing to the city. The city will have 90
days to review the request and act.
• If STI's service area is expanded, STI will be required to provide cable service to all residents
between the initial service area and the new service area.
• STI will pay the city a 5 percent cable franchise fee and STi will collect a $1 per subscriber per
month city cable programming fee that will be forwarded to the City Cable Office.
• STi will set aside five channels for local programming.
• STI will secure a $200,000 construction bond.
• STI will provide an institutional network that will be available to the city.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8545
To the Mayor and Members of the City Council Date: 11/18/03
� Page 2 of 2
AP ii
SUBJECT: REQUEST FOR LIMITED CABLE FRANCHISE TO
SERVE SENDERA RANCH
• The STI franchise contains the same customer standards and liquidated damage levels as are in
the Charter Communications and WOW franchises.
• STI will be required to obtain city approval of the sale or transfer of the franchise.
The City Manager's Office, the City Cable Office and the City Law Department have negotiated
extensively with STI representatives over the last few months and recommend the award of the franchise,
which is attached. Unless otherwise directed, an M&C will be placed on the December 2, 2003 City
Council agenda to award a non-exclusive cable franchise to STI. Under provisions of the city charter, the
city is required to publish a notice of the award of the franchise three times before the franchise award is
effective.
If you have any questions, please contact Assistant to the City Manager Pat Svacina at 817 871-6415 or
Assistant City Attorney Peter Vaky at 817 871-7601.
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City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS