[NOTE: "NRS" hereinbelow abbreviates "Nevada Revised Statutes." When you see "MCO," that means the City of Reno's "Master Cable Ordinance." The acronym "SNCAT" means "Sierra Nevada Community Access Television," the Reno-Sparks-Washoe County cable access TV system.]

I. The Issue

Reliance on a single cable television operator who may decide, for any number of reasons, that providing any form of television programming to the greater Truckee Meadows area would no longer be in its own best interests or, who may decide to change the focus of its product delivery from cable television to some other form of technology, would be to place both the governmental agencies the Truckee Meadows and their citizens in a most tenuous position regarding the advantages currently derived from the cable operator’s presence.

The question to be placed before the City Council is "What action(s) should the City of Reno take to ensure that cable television service continues without interruption in its present form or is replaced with some form of technology that provides at least similar advantages to the City and consequently its citizens?"

While the assumptions made and the conclusions reached in this paper can, and probably shall be, debated, the paper’s purpose is to offer to City Council a recommendation to be used as a starting point from which the City can attempt to answer the question posed.

II. Acting in Concert

While it is possible for the City of Reno to make decisions in a vacuum concerning cable television service and the advantages it provides without consulting and collaborating with its sister governmental entities, the City of Sparks and Washoe County, who are equally impacted by the present cable operator’s presence, that approach would obviously not be in the best interests of any of these governmental bodies and certainly not in the best interests of their citizens. Administrators of each of these governmental entities should keep in mind what their citizens would be losing should there be no cable operator or some similar service. Presently, the only viable alternatives for television viewing, absent a cable operator, are satellite television, Quadravision and antenna reception of over-the-air broadcasts. The City’s advisor about cable television issues, Action Audits, outlined in its report to the City of Reno in 2003, many advantages of having a cable operator’s presence. Advantages which the alternatives to cable television cannot, and in all likelihood, will not provide.

III. Advantages — What the local governmental entities and their citizens would be losing should there not be a cable operator in the area includes the:

A. Franchise Fees – Without a cable television operator, local governmental entities would experience a substantial loss of revenue since there would be no billing for television service. It follows then that there would be no collection of franchise fees presently available to the City—fees which represent some 5% of each cable television customer’s total bill. This would be a financial loss which would undoubtedly need to be compensated for by either a reduction in governmental services or an increase via some other revenue stream, for example, a property tax increase. The alternatives to cable television provide not one penny to this revenue stream.      B. Emergency Alert System (EAS) Warning – The EAS warning for citizens in this geographical area is provided by only one FM, only one AM radio station, certain local over-the-air stations (if they are notified) and all channels distributed by the cable operator. With only these few options for warning the public (in a somewhat less than timely manner) in the event of a disaster that can, within seconds or minutes negatively impact thousands of citizens and visitors, it is imperative that our governmental agencies make every effort to ensure that even this minimal warning device be kept intact. To that end, cable television is an active player in warning at least some of the populace. Satellite television and Quadravision are under no obligation to transmit EAS warnings in this area. And, it is highly unlikely that, without governmental intervention at the federal level, never shall be.      C. PEG Programming– Public, educational and governmental programming (PEG) via channels 13, 16 and 17 is tailored for televising activities specific to the Truckee Meadows. Lacking a cable television operator this type of programming would be unavailable to the public given that the media for the distribution of PEG programming is presently only available via the cable operator’s distribution system. Providing PEG programming is not a requirement for alternative television service providers.      D. SNCAT (Media Center) – Without PEG programming, SNCAT would be unnecessary. SNCAT is, for the most part funded, by portions of the franchise fee and from lump sum Cable Grants. These funds provide state of the art PEG programming broadcast equipment. Losing the cable operator could, if not tolling the death knell for independent access SNCAT television broadcasts, at the very least, severely limit SNCAT’s ability to provide the level of broadcasting it does presently. Any reduction in the quality and quantity of broadcasts of PEG programming would lessen the ability of the citizenry to be informed about activities (governmental, cultural, social) throughout the Truckee Meadows. Support of this type of media center is not required of, or available through, alternative television service providers.         Should SNCAT’s activities be eliminated, or appreciably reduced, training in television programming and transmission of television broadcasts as conducted by Truckee Meadows Community College, in association with SNCAT, would be, if not eliminated, at least severely curtailed. This valuable training in state of the art television broadcast equipment would be lost along with the potential of placing trained individuals into the local workforce. Alternative television service providers are not required to be, nor are they involved in this type of community training.        E. Cable in the Classroom – The present cable television operator offers distribution of its service to numerous educational institutions throughout the Truckee Meadows, at no charge. Loss of a cable television operator would severely limit student access to programming they presently receive, in particular specialized PEG programming, which itself would no longer be available. To replace this service would place an additional strain on an already financially troubled school district. Alternative television service providers do not engage in the delivery of such a service.      F. Service Discount for the Socially and Economically Disadvantaged – Lost, at least to the citizens of the City of Reno, would be the present 20% discount of "Basic Tier" charges as provided for in the existing franchise agreement. While not an enormous sum by some standards, this discount may mean the difference between individuals and/or families having access to more than just "over-the-air" broadcasts. None of the alternative television providers offer a discount of this type.      G. Contributions – Should there be no cable operator, the loss of its share of contributions to local charities and social and cultural functions sponsored or supported by the City, would place a strain upon the various entities receiving support from those contributions and may very well cause them to limit their activities or curtail them altogether.

IV. Considerations

A. Lack of "Effective Competition" – There is no effective competition, by definition, to the present cable operator within the Truckee Meadows geographical serving area. This lack of competition allows the present operator, without fear of a serious challenge to:            1) Arbitrarily dictate to the local franchising authorities what programming it will offer on its Basic Tier Service and at what price and            2) To unilaterally set the price for programming viewing over and above Basic Tier Service. The raising of rates could easily cause the migration of the cable operator’s present subscribers to the shadow competition of either satellite television or Quadravision. This migration of customers to these alternative providers would mean a loss of revenue to the cable operator resulting in a subsequent loss of several "Advantages" to the city.      B. High Speed Data Service – Discussion of high-speed data service is not, per se, an issue of concern to a local franchise authority, since said authority has no regulatory province over the technology. Yet two possible scenarios come to mind concerning the cable operator’s present provisioning of high-speed data that require consideration by local governing authorities so that the "Advantages" presently available to them and their citizens are not lost entirely.          The first scenario might be that the cable operator, for whatever reason, no longer provides any high-speed data service. While it is true that there are alternatives such as Digital Subscriber Line (DSL) service and wireless internet access, neither of these services can presently offer the advantages of the speed, reliability and reasonable cost of the broadband high-speed data as provided by the present cable operator. The loss of access to this form of high-speed data would place in jeopardy any claim that the Truckee Meadows area might have to being a world class location to which businesses should consider coming.          In the other possible scenario, the cable operator shifts its marketing focus, given new technology, from delivery of television programming in its present form (i.e., receiving programming signals via satellite or microwave at a local "headend" and then distributing those signals to individual receivers where programming is obtained by "channel changing.") to one in which access to the internet and connection to broadband video streaming and consequently television programming is via high-speed data. At that time, which may be too late, the local governing authorities should ask;              1) "Under what conditions might a local governmental authority regulate the now ex-cable operator who delivers television programming using a type of technology not addressed by any federal, state or local statute, but one which requires the continued use of the local government’s rights-of-ways and possibly the use of certain portions of the local government’s existing transport infrastructure, i.e., conduit, manholes, etc.";               2) "What would be the status of an existing Master Cable Ordinance which provides some regulation over the present form of television programming delivery" and               3) What would be the status of a Franchise Agreement between the local governing authority and the ex- cable television operator?" C. A Constituency not Addressed — There is little thought given to a constituency of viewers who would be severely impacted by the loss of cable television. This constituency is comprised of viewers who are renters, who are numerous in the Truckee Meadows, and who live in housing that restricts television viewing to one of two options:              1) Via cable television whose wiring is concealed within the walls of the rental units, the changing of which is not allowed by the landlord and which connects to only the cable operators television distribution system or;              2) via "bunny ears" antenna that are attached directly to the television set. These renters do not have the option, as condominium owners do, of being able to install small satellite dishes or rooftop antennae. They are restricted by landlords who will not allow such reception options. Consequently they are limited to only the ability to use bunny ears to provide a reasonable quality of TV reception. While it may be possible for these renting subscribers to receive cable television via a satellite dish located within the confines of their particular rental unit, reception is dependent on the unit’s window being positioned appropriately relative to the satellite position in the sky that is transmitting the signal, making this option not possible, but very improbable and mostly highly unlikely. Given the loss of cable television, renters must either do without television service or be severely restricted in its reception.

V. Possibilities – The following are a few possibilities that might be initiated by the City and its governmental partners to assist with answering the "Issue" question posed earlier as well as continuing to the greatest extent possible, the previously cited "Advantages." Certainly they are not the sum total of what might be possible. Imagination, creativity, collaboration, etc., should easily provide numerous other possibilities.

A. Of immediate concern should be both the proactive attempt to acquire a second, and perhaps third, cable operator to continue to provide the present form of television service and second, the establishment of proactive "back-up" plans to minimize the impact of the loss of any of the "Advantages" presently accruing. As an added argument, the ability to counter any arbitrary and unilateral programming and/or rate setting by a single cable operator, given both the lack of "effective competition" and the lack of ability, or will, of local franchise authorities to do so, and to continue to reap the "Advantages" cited earlier, is to attract other cable operators to the area so as to provide that "effective competition." With competition from a similar source, i.e., a second cable operator, should come the lowering of rates for all services from those presently offered by the single cable operator, from television programming to high-speed data service. The lowering of rates will, in all likelihood, mean that subscribers will continue to receive their television viewing from a cable operator rather than migrate to an alternative source. Receiving their television viewing from a cable operator will ensure that the "Advantages" derived from such viewing shall continue since, as mentioned earlier, alternative sources of television viewing play no part in their provision.      B. There are numerous issues to be addressed and questions to be answered concerning the following possibility. While the idea, on the surface, may seem far-fetched it should not be rejected out of hand but should be explored as to feasibility. While NRS 711.1751.b, prohibits the selling of the services of a community antenna television system to the public, and while MCO 5.90.1100 reserves to the city the right to purchase the existing system pursuit to section 627 of the Cable Act, the question that comes to mind is, "Would it be possible for the city, along with Sparks and Washoe County, subject to voter approval, to: 1) jointly purchase the defunct cable television system and; 2) offer, not through sale, but through a commensurate increase in, say for instance the property tax, the services previously provided by the ex-cable operator to any household, unit, business, etc., who wants such services and whose taxes are not in arrears?" No sales, by definition, would be involved.      C. Should the improbable occur and the present cable operator’s marketing focus shifts to the delivery of television programming via video streaming, there would be a loss of all of the "Advantages" previously described. In that instance, given that there does not appear to be a statute to prevent it, the various governmental entities might consider the possibility of providing a similar video streaming television viewing service themselves using SNCAT as the delivery vehicle. Said service might be, in one instance sold directly by the governmental entities or, in another instance, provided to property owners in return for an increase in the property tax. In any event, the monies obtained could be used to fund the "Advantages" lost when the cable operator removed itself from its traditional role.          Should the above scenario be found not to be practical and since by federal decree, local franchise authorities cannot regulate the signal transmission of data service, high-speed or otherwise, then governmental authorities should take every step possible to protect the public’s rights-of-ways. A high-speed video streaming signal to reach its destination, assuming the signal is not a wireless one, will require that it be carried over some type of physical distribution system, e.g., coaxial cable and all of the attendant transport accessories, i.e., conduit, manholes, pole lines, pedestals, etc., which are of necessity located on rights-of-ways controlled by local governments. Those rights-of-ways, in the best interest of the public, are and should continue to be regulated as to the use they can be put. This would include regulation of a distribution system regardless of the type of service it may be transmitting.      D. While all of those "Advantages" that might be lost to the citizens of Reno are important, none would be as significant as the loss of the EAS warning given its potential impact upon the life or death of Reno citizens. While the EAS performs a useful function in alerting citizens to be on the lookout for wanted vehicles traveling our roads and highways and in giving early warning of potentially dangerous weather, it is, in the event of a hazardous spill or a chemical, biological or radiological detonation, an "after the fact" warning requiring a significant lapse of time before it is activated.         While a minimal warning in the most dangerous of situations, it is at least, a warning. However, it would be to the direct benefit of citizens living in the Truckee Meadows and perhaps, citizens across the country, should the City Council, after drafting by city staff, pass a resolution petitioning the Federal Communications Commission to impose upon all companies that transmit television signals, by whatever means, the requirement to transmit the EAS warning across all channels that they distribute to those subscribers who would be directly impacted by an emergency or disaster. Granted there would be technical problems associated with such a mandate but given the resources of the television broadcast industry, there should be no problem that cannot be overcome given the willingness and the need to do so.

VI. Action To Be Taken

Given their human resources and their access to the latest information concerning the provisioning of cable television service, which is not easily available to individual citizens or even citizen’s groups, it is the opinion of the Reno Citizen’s Cable Compliance Committee that City Staff is the logical entity best equipped to develop various options for the City Council to consider so as to answer the "Issue" question. To that end, this committee recommends that City Staff should be so directed by the City Council. In requesting city staff to provide options, alternatives, recommendations, etc,. the City Council should caution City Staff :

A. To consider that there are two major statutory restrictions placed upon the city:         1. Section 5.90.810 of the city’s newly enacted Master Cable Ordinance prohibits the city from issuing an exclusive franchise to a cable operator.         2. NRS 711.1751.b prohibits the governing body of a city whose population is 25,000 or more from selling the services of a community antenna television system to the general public.      B. To consider what rights the various governmental entities might have to continue to regulate should the core business of the present cable operator shift from the delivery of cable television to some other service, but principally that of high-speed data which utilizes the same physical plant for its method of delivery?      C. To consider how replacement might be made for the "Advantages" cited above, which might be lost to the various governmental entities and their citizens should there be no cable television operator available to provide them.      D. To consider that most, if not all, decisions made by the City affecting cable television service will impact its sister governmental entities, the City of Sparks and Washoe County and that those other entities should be, to the greatest extent possible, be included in finalizing all decisions.

VII. Conclusion

An in-depth review of and expansion upon, the "Possibilities" cited above, would do much to ensure that many of the items listed previously as "Advantages" would not be lost and would continue to be an asset to the community. For local governments to do nothing and take the attitude that citizens can continue their television viewing via alternate means without substituting some means of continuing the "Advantages" derived from the presence of cable television, is to cause a severe setback to the community — financially, culturally and socially.

Doing nothing to prepare for the possible loss of the present cable operator is not a viable option for the City of Reno, the City of Sparks or Washoe County. These three entities would all be impacted by its departure or its change in product direction. Collectively, they need to prepare for the day when the present franchisee may not, for whatever reason, have either a physical presence or have a presence but in some form yet to be devised. The sooner they can direct their staffs to analyze the facts and to suggest options, the better.

Respectfully submitted,

Members of the City of Reno Citizens Cable Compliance Committee
Reno, Nevada
August 26, 2004