Agenda - 02-17-2004-9b - Laserfiche WebLink

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Shopping/QVC conunissions and advertising.. The Cable Industry has demonstrated uncanny adroitness with respect to passing franchise fee on to its customers.. The Cable industry stopped paying franchise fees on cable modems. At least 25% of Time Warner's cable customers subscriber to its high-speed hrternet service. Many local governments believe that Time Warner and other cable operators terminated the franchise fee levy on cable modem service prematurely as the FCC has not issued a final ruling on the matter. In a similar maneuver, Time Wamer intends to pass on to its customers apro-rata share of the franchise fee levied on advertising revenues in Tanuary 2004. Normally, this expense is typically born by the business, not added as a line item on the customer's monthly statement. Summary: That nationally rate hikes across most viewed cable tiers averaged 6%. However, in markets where there is head-to-head wireline competition rates were I S% less than in those markets without competition. GAO report noted that the cost of programming increased 34% during the past three years Many subscribers view a hand full of channels and would prefer to purchase "just those channels." The GAO noted that "an a-la-carte approach would facilitate more subscriber choice but require additional technology and customer service."` Whereupon, advertising revenues to cable netwodcs would decrease and programming costs would be increased to offset the revenue loss.. One possible outcome is that the cost per channel would increase and minimize any redttetion in the cost for cable service,. FCC1235 Cable System Upgrade Costs Time Warner Cable submitted in 2000 and 2001 an abbreviated FCC1.235 Cost of Service Filing for Cable Network Upgrades for BST services' to establish a Cost of Service rate. This fee is "Added on" to the BST rate, Under the FCC's Hiles, cable operators are permitted to recover system upgrade outlays on a tier-by-tier basis. FCC rules allow capital upgrade costs to be apportioned among the cable tiers, e g, BST, cable program service tier (CPST), new product tiers (NPT), eta Issues Related to Competition and Subscriber Rates in the Cable Television Industry, United States Genernl Accounting Oftiee, Ocrober 2003 Since 1995, pursuant to [he Social Contract, T ime Warner collected substantial pre-capitalization upgrndc fees amounting to seve rnt dollars monthly from CPST subscribers The PCC has ruled that these fiords cannot be applied to off-set that portion of the cable operator's cost to upgrade the portion of the network used to distribute 6ST services Consequently, Time Warner is able to recover from its BST customers only the cost of the network upgrade associated with the distribution of IIST cable services Action Audits, LLC Cable Rate, Franchise Fee, Utility Tax Auditing Se Telecommunication Administration 101 Pocono Lane, Cary, North Carolina 27513-531 G Voice tf 919.467 5392 Fos # 9 i9 460 6868