RESOLUTION 93-20774 •
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RESOLUTION 93-20774
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA AUTHORIZING 1) THE ADMINISTRATION TO
NEGOTIATE WITH GOLD COAST CABLEVISION RENEWAL AND
MODIFICATIONS OF ITS CABLE TELEVISION FRANCHISE AGREEMENTS; 2)
TO AUTHORIZE THE ADMINISTRATION TO CERTIFY TO THE FEDERAL
COMMUNICATIONS COMMISSION FOR CABLE RATE REGULATION AUTHORITY;
3) TO AUTHORIZE THE ADMINISTRATION TO RETAIN LEIBOWITZ &
SPENCER AS OUTSII;E COUNSEL TO REPRESENT THE CITY IN CABLE
TELEVISION MATTER`,; 4) TO AUTHORIZE THE ADMINISTRATION TO HIRE
AN OUTSIDE ENGINEERING FIRM FOR A TECHNICAL AUDIT OF THE GOLD
COAST CABLE TELEVISION SYSTEM; 5) TO AUTHORIZE THE
ADMINISTRATION TO CONDUCT A FINANCIAL AUDIT OF GOLD COAST
CABLEVISION; AND 6) TO AUTHORIZE THE ADMINISTRATION TO
CONSIDER THE POSSIBILITY OF MUNICIPAL OWNERSHIP OF CABLE
TELEVISION AND TO REPORT BACK TO THE COMMISSION WITH A REPORT
AND RECOMMENDATIONS.
WHEREAS, the rules and regulations of the Cable Television
Consumer Protection and Competition Act of 1992 create an
environment wherein the ultimate consumer and the City of Miami
Beach under these new rules and regulations are able to
substantially maximize the proceeds, quality, and availability of
cable television service to the residents of the City of Miami
Beach; and
WHEREAS, it is in the best interests of the City of Miami
Beach to maximize cable revenue paid to the City of Miami Beach;
and
WHEREAS, the best interests of the City require that the City
Manager be directed to proceed pursuant to his recommendations.
NOW THEREFORE, BE IT RESOLVED that the City Manager and City
Attorney are hereby directed as follows:
1 . To negotiate with Gold Coast Cablevision regarding
implementation of new rules and regulations pursuant to the Cable
Television Consumer Protection and Competition Act of 1992 with
respect to customer service and rate regulation; to negotiate
renewal and modifications of the Gold Coast franchise agreements to
maximize the quality and availability of cable television service
to the residents of Midmi Beach and maximize cable revenue paid to
the City.
2 . To File a certification with the Federal Communications
Commission for rate regulation authority and to propose specific
rate regulation authority and to propose specific rate regulation
procedures to the Commission for adoption.
3 . To retain Leibowitz & Spencer as special communications
counsel on cable television service to the City of Miami Beach,
pursuant to Attachment A of the Administration recommendations.
4 . To retain outside engineers to perform a technical review
of the Gold Coast system at a cost not to exceed $5 , 000 . 00 .
5 . To conduct a financial audit of the Gold Coast
Cablevision to deter_mize whether past franchise fees paid to the
City appropriately reflect Gold Coast ' s obligations under the two
cable franchise ag: eemonts.
6 . To consider the possibility of a municipal owned cable
television system and to report back to the City with
recommendations.
PASSED AND ADOPTED this 8th day of
April 1993 .
ATTEST: / /
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FORM APPROVED
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ATTACHMENT A
LEIBOWITZ & SPENCER
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
MATTHEW L. LEIBOWITZ, P.A. SUITE 1450 SUITE 500
JOHN M. SPENCER, P.C. SUNBANK INTERNATIONAL CENTER 1000 CONNECTICUT AVENUE, N.W.
JOSEPH A. BELISLE WASHINGTON, D.C. 20036
ONE SOUTHEAST THIRD AVENUE
OF COUNSEL
MIAMI, FLORIDA 33131-1715
SAN FORD L. BOHRER
TELEPHONE(305)530-1322
NOT ADMITTED TO TELECOPIER(305)530-9417
FLORIDA BAR
DRAFT
March 31 1993
Laurence Feingold, Esq.
City Attorney
City of Miami Beach
1700 Convention Center Drive
Miami Beach, FL 33139
Re: Special Counsel for Cable Television
Dear Mr. Feingold:
This letter is to set forth the Agreement of the City of Miami
Beach to retain the Law Firm of Leibowitz & Spencer as Special
Counsel for the purpose of representing the City in the area of
cable television, including specifically the following areas:
1. Review the City' s present cable ordinance and cable
franchise agreements, and make recommendations for
appropriate modifications thereto.
2 . Advise the City with respect to its existing cable
franchise relationship and assist the City in negotiating
a renewal thereof, if appropriate.
3 . Advise the City regarding competitive cable franchises,
including but not limited to, municipal owned cable
systems.
4 . Advise the City regarding new federal cable statutes and
implementing FCC rules and regulations, including but not
limited to, rate regulation, customer service and cable
technical standards.
5 . Represent the City before the FCC in cable television
matters, including but not limited to, filing for rate
regulation authority.
6. Advise the City regarding enforcement of existing and
future cable services offered to the City and its
residents.
Laurence Feingold, Esq.
March 31, 1993
Page Two
Leibowitz & Spencer will also advise the City as to
procedures, notices, public hearings, required approvals and
filings, and other legal matters related to the provision of cable
television service to the City. In addition thereto, Mr. Leibowitz
will attend any City hearings related to cable television services
and as needed, Mr. Leibowitz will agree to provide verbal reports
to the City Commission. To avoid any non-productive time, the City
will schedule Time Certain for any such appearances.
It is understood and agreed that Leibowitz & Spencer currently
charges hourly rates for attorney time from $185 to $250 and $60
for paralegal times. These rates are subject to revision from time
to time. It is further understood that Matthew L. Leibowitz will
be the attorney primarily responsible for the City' s work and that
his current hourly rate is $250. However, in recognition that the
City is a muncipality and is currently facing severe budgetary
restrictions, Leibowitz & Spencer agrees to bill the City only
seventy percent (70%) , on a current basis, for Mr. Leibowitz ' s
services rendered covered by the scope of the work above. The
balance of the fees will be due when the City authorizes either a
renewal franchise with its existing franchisee or a new franchise
with a new cable operator and the City receives payment of a
renewal fee or an initial franchise fee or other payment by the
cable operator, provided that the deferred payment shall be limited
to the amount by which the renewal fee, initial franchise fee or
other payment by the cable operator exceeds the expenses and non-
deferred fees previously paid or payable to Leibowitz & Spencer
under this agreement.
Unfortunately it is not possible to establish a fee cap at
this time. The FCC has not yet adopted its new cable rules and
regulations. In addition, it is not possible to ascertain, at this
time, a reasonable projection of time related to advising the City
with respect to its existing relationship with its cable franchisee
and negotiating a renewal thereof, if appropriate. Nor is it
possible, at this time, to reasonably ascertain the City' s needs
to investigate competitive cable franchises and/or municipal owned
cable systems.
However, in order to assure financial responsibility in the
provision of services by Leibowitz & Spencer, Leibowitz & Spencer
recognizes that by this Agreement the City authorizes work not to
exceed $50, 000 in non-deferred fees. In the event this authorized
amount is reached, the City and Leibowitz & Spencer will determine
whether it is appropriate and/or necessary for the City to continue
the services of Leibowitz & Spencer and if so, they will negotiate
a new maximum authorized limit and/or if appropriate, a specific
cap of fees for the remaining work to be completed so that
Leibowitz & Spencer will be fairly and reasonably compensated for
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Laurence Feingold, Esq.
March 31, 1993
Page Three
their services remaining to be rendered on behalf of the City.
In addition to fees, Leibowitz & Spencer shall be entitled to
payment of out-of-pocket expenses and reimbursements, including
without limitation, long distance telephone calls, air express
charges, printing, photocopying, facsimiles, hand delivery, travel,
lodging, filing, and other out-of-pocket expenses.
All fees and expenses will be billed monthly and payable
within thirty days of billing.
This Agreement may be cancelled at any time by either the City
or Leibowitz & Spencer upon receipt of reasonable written notice.
However, if the City elects to terminate this agreement prior to
renewing its existing franchise or issuing a new franchise, the
City will remain responsible for the payment of the full fees
incurred to the date of termination, payable upon renewal of the
current franchise or issuance of a new franchise and receipt by the
City of a renewal fee or an initial franchise fee or other payment
by the cable operator, provided that the deferred payment shall be
limited to the amount by which the renewal fee, initial franchise
fee or other payment by the cable operator exceeds the expenses and
non-deferred fees previously paid or payable to Leibowitz & Spencer
under this agreement.
If the foregoing meets with your approval, please so indicate
by signing this letter where indicated and returning an executed
copy to our office for our records.
We look forward to working with you and the other City
officials on this very exciting project.
Sincerely yours,
Matthew L. Leibowitz
The undersigned, being duly authorized, hereby accepts this
engagement.
By:
Laurence Feingold, City Attorney
City of Miami Beach
Date:
CITY OF MIAMI BEACH
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CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH FLORIDA 33139
OFFICE OF THE CITY MANAGER TELEPHONE: (305) 673-7010
FAX: (305) 673-7782
COMMISSION MEMORANDUM NO. 41)93
DATE: April 8 , 1993
TO: Mayor Seymour Gelber and
Members of the City Commission
FROM: Roger M. Carlton -
City Manager
Laurence Feingold, Esq. •�'
City Attorney
SUBJECT: RESOLUTION AUTHORIZING: 1) THE ADMINISTRATION TO
NEGOTIATE WITH GOLD COAST CABLEVISION RENEWAL AND
MODIFICATIONS OF ITS CABLE TELEVISION FRANCHISE
AGREEMENTS; 2) TO AUTHORIZE THE ADMINISTRATION TO
CERTIFY TO THE FEDERAL COMMUNICATIONS COMMISSION FOR
CABLE RATE REGULATION AUTHORITY; 3) TO AUTHORIZE THE
ADMINISTRATION TO RETAIN LEIBOWITZ & SPENCER AS OUTSIDE
COUNSEL TO REPRESENT THE CITY IN CABLE TELEVISION
MATTERS; 4) TO AUTHORIZE THE ADMINISTRATION TO HIRE AN
OUTSIDE ENGINEERING FIRM FOR A TECHNICAL AUDIT OF THE
GOLD COAST CABLE TELEVISION SYSTEM; 5) TO AUTHORIZE THE
ADMINISTRATION TO CONDUCT A FINANCIAL AUDIT OF GOLD COAST
CABLEVISION; AND 6) TO AUTHORIZE THE ADMINISTRATION TO
CONSIDER THE POSSIBILITY OF MUNICIPAL OWNERSHIP OF CABLE
TELEVISION AND TO REPORT BACK TO THE COMMISSION WITH A
REPORT AND RECOMMENDATIONS.
ADMINISTRATION RECOMMENDATION
The Administration recommends that the City Commission adopt the
attached Resolution which provides for the following:
1. To authorize the Administration to negotiate with Gold
Coast Cablevision regarding implementation of new rules
and regulations pursuant to the Cable Television Consumer
Protection and Competition Act of 1992 with respect to
customer service and rate regulation; to negotiate
renewal and modifications of the Gold Coast franchise
agreements to maximize the quality and availability of
cable television service to the residents of Miami Beach
and maximize cable revenue paid to the City.
2. To authorize the Administration to file a certification
with the Federal Communications Commission for rate
regulation authority and to propose specific rate
regulation procedures to the Commission for adoption.
3 . To authorize the Administration to retain Leibowitz &
Spencer as special communications counsel on cable
television service to the City of Miami Beach, pursuant
to Attachment A hereto.
136
AGENDA
ITEM
DATE _g_ 93
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4 . To authorize the Administration to retain outside
engineers to perform a technical review of the Gold Coast
system at a cost not to exceed $5, 000.
5. To authorize the Administration to conduct a financial
audit of the Gold Coast Cablevision to determine whether
past franchise fees paid to the City appropriately
reflect Gold Coast's obligations under the two cable
franchise agreements.
6. To authorize the Administration to consider the
possibility of a municipal owned cable television systems
and to report back to the City with recommendations.
BACKGROUND
EXISTING RELATIONSHIP:
The City of Miami Beach has awarded to CATV franchises. The first
franchise was awarded to UltraCom of Dade County, Inc. in 1979.
This franchise was for a fifteen year period. A second fifteen
year franchise was awarded to All-Rite Satellite, Inc. , in 1986.
In March, 1988, both Miami Beach franchisees were transfered to
Rifkin/Narrangansett South Florida CATV Limited Partnership d/b/a
Gold Coast Cable. Since that date, Gold Coast has been providing
CATV service to Miami Beach under both franchises.
The Ultracom franchise is up for renewal in 1994 and, thus the City
is the renewal process. In contrast, the All-Rite franchise is not
up for renewal until the year 2001.
In Dade County, cable operators also receive a franchise from the
County. In 1992, Dade County amended the Metropolitan Dade County
Code relating to cable television and in doing so, not only updated
its general franchise ordinance, but also increased its share of
the gross revenue paid to the County to 3%.' On September 15, 1992,
Dade County renewed the Rifkin/Narragansett cable franchise for a
ten year period beginning May 16, 1993 and ending May 16, 2003 .
The terms and conditions of the renewal license comply with the
update code of Metropolitan Dade County including the increased
franchise fee. As a result, the City will lose 1% of the gross
revenue to Dade County starting on May 15, 1993 under the Ultracom
franchise.
FRANCHISE FEE ANALYSIS:
Under the Ultracom franchise, the franchisee was required to pay
3% of a very narrowly defined gross revenue which specifically
excluded auxiliary services and add revenue. In contrast, the All-
Rite franchise required a 4% fee and defined gross revenue
significantly more liberally.
The amended County Ordinance may allow for the City to avoid the
loss of the 1% fee.
'Under federal law the maximum franchise fee is 5%.
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PAST DUE FRANCHISE FEES:
In March, 1988 when the City granted to Gold Coast the transfer of
both franchises, Gold Coast accepted the obligations of two (2) fee
payments to the City.
It is our understanding that subsequent to the transfer, Gold Coast
merged all assets, including subscribers, from both franchised
operations into one.
However, it is unclear on what basis Gold Coast has been making its
franchise payments since 1988 - under a 3% calculation of the
narrowly defined gross revenue or 4% of the more liberal definition
ofg ross revenue, or a hybrid, recognizing the continued existence
of both franchises.
Clearly one must assume that, to the extent Gold Coast may have
segregated it customers, Gold Coast made every effort to convert
any All-Rite subscribers to a higher paying Ultracom subscribers,
thus increasing its revenue, while correspondingly, lowering its
payment to the City.2
Accordingly, it would be appropriate to seek past due franchise fee
payments from Gold Coast from March 1988 to the present, based on
a percentage allocation of subscriber as of the date of transfer,
in addition to late fees and interest.'
MODIFICATION OF :
Both the Ultracom franchise and the All-Rite franchise are
seriously flawed and outdated. Since the time those franchises
were issued, cable television law has evolved substantially,
including but not limited to, the adoption by Congress in 1992 of
the Cable Television Consumer Protection and Competition Act of
1992. As a result thereof, the City should seek numerous
significant modifications in the franchise agreements with Gold
Coast. Modifications would result in potentially increased revenue
to the City, as well as, increased cable services to the City
including dedicated channels for the City's use and programming of
the City's governmental activities. In addition thereto, the City
should modify the terms of the agreement to allow for the new rate
regulations to protect residents of the City as well as customer
service standards and new technical standards.
This segregation ation and conversion of customers is supported by data published by the Dade
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County Office of Cable Television Coordination. Gold Coast reported All-Rite subscribers
under the classification of"TV Ticket". In 1991,Gold Coast reported 35,256 subscribers while
TV Ticket reported only 3,194 subscribers. In 1992,Gold Coast reported 39,022 subscribers
while TV Ticket reported only 1,715 subscribers.
'Section 21 of the All-Rite Franchise is entitled"Payment of Fee and Penalties",but fails to
set forth any penalties. This section allows he City to audit the Company's books, at City
expense,for a three year period. Any additional amount owed to the City is required to be paid
within thirty(30) days.
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RETAINING OUTSIDE COUNSEL:
The law surrounding cable television has changed dramatically since
the City issued the Ultracom and All-Rite franchises. There has
been significant legislation on both the federal and state level,
numerous court cases, and adoption of new FCC rules and regulations
governing cable television service. In addition thereto, cities
around the country have taken advantage of these new laws and rules
and regulations to maximize both cable service and revenue to the
City. In light of this complex area of law, we would recommend the
retention of the Law Firm of Leibowitz & Spencer to represent the
City in these matters.
As the Commission will note, Leibowitz & Spencer has previously
performed legal services in the area of cable communications for
this City by filing comments in recent FCC rule makings. The
Administration found that Leibowitz & Spencer provided the highest
quality legal services on behalf of the City.
It is likely although not guaranteed, that as a result of the
negotiations with Gold Coast, that the cost to the City for
retaining Leibowitz & Spencer can be in whole or at least in part
reimbursed by the cable operator. Furthermore, as the Commission
will note, in the Attachment A hereto which is the proposed
agreement between the City and Leibowitz & Spencer, Leibowitz &
Spencer has agreed to provide a discount on its current hourly
billing with the remainder not due until the franchise is
renegotiated and payment is received by the cable company.
Finally, the Commission will note that this Agreement for legal
services does not contain a cap. Unfortunately at this time, given
the dynamic circumstances surrounding cable television including
the fact that the FCC rules and regulations have not even been
issued to date, the Administration believes that a cap is not
feasible. However, Leibowitz & Spencer and the Administration have
agreed to a maximum authorized dollar amount to be spent in this
area. In the event that additional work will be required, the
Administration after appropriate negotiations with Leibowitz &
Spencer will come back to the Commission for additional
authorization.
ENGINEERING AUDIT:
Upon recommendation by Leibowitz & Spencer, prior to completing the
negotiations for renewal or modification of the cable franchise
agreements, we believe it is appropriate to audit the technical
plant of Gold Coast Cablevision. In part, this is also recommended
since the City has received a significant number of complaints
regarding the technical service provided by Gold Coast. Leibowitz
& Spencer has recommended several cable engineering consultants and
the Administration seeks authority to retain the most qualified
engineer on a cost not to exceed $5,000 for such audit. The audit
would ultimately provide the Administration and the City with not
only a technical status of the present system, but recommendations
for future technical modifications to the system to insure that the
City receives state-of-the-art cable television service.
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MUNICIPAL OWNERSHIP:
Both the City's cable franchises are non-exclusive. Over sixty
cities provide cable television service through a municipally owned
system. Such ownership may be beneficial to the City by providing
better cable television service to the residents, while also
increasing the revenue to the City. However, there are many
unknown factors, such as actual performance of these existing
municipal systems and funding requirements. Therefore, the
Administration desires to gather information on municipal ownership
and make a report to the Commission on its findings with
appropriate recommendations.
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ZOO
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RESOLUTION NO. 93-20774
Authorizing 1) the Administration to
negotiate with Gold Coast Cablevision
renewal and modifications of its cable
television franchise agreements;
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