CITY OF Los ANGELE~ KEN SIMMONS CALIFORNIA INFORMATION TECHNOLOGY INTERIM GENERAL MANAGER AGENCY

ASSISTANT GENERAL MANAGERS ROOM 1400, CITY HALL EAST CLIFFORD K. ENG 200 NORTH MAIN STREET GENE GAMACHI LOS ANGELES, CA 90012 KAMTON M. JOE (213) 978-3311 MARK P. WOLF FAX (213) 978-3310 WWW.LACITY.ORC;ITA

ANTONIO R. VILLARAIGOSA MAYOR

March 21,2007 REF: SPP-145-07

Honorable Members of the City Council City of Los Angeles Room 395, City Hall Los Angeles, CA 90012

Subject: COX COMMUNICATIONS RATE ADJUSTMENTS IN FRANCHISE AREA N - COUNCIL FILE NO. 06-1029

Dear Councilmembers:

This notice provides information pertaining to rate changes that will be implemented by Cox Communications (Cox). Subscribers affected reside in Council District 15 (Hahn).

Effective April 25, 2007, Cox will be increasing rates on a number of services including Cox Limited Basic, Cox Expanded and Cox Standard Services as well as several advanced services including DVR service and various premium packages. Cox will also reduce rates on a number of services as well, including High Definition installations. The rate increases Cox intends to implement are contained in the attached notice. (See Attachment A.)

Please note that on March 7, 2007, the Federal Communications Commission (FCC) issued an order granting Cox's effective competition petition. Under the FCC order, the City no longer has authority over basic rate regulation for Franchise Area N (San Pedro). (See Attachment B - SPP-143-07.) Background This report is made in response to Information Technology and General Services Committee instructions issued on December 12, 2006, whereat the Information Technology Agency was instructed to notify Los Angeles elected officials of any proposed cable television service and/or rate adjustments.

Fiscal Impact This change may have an impact on franchise fees received by the City.

I¡Co If/ c)13-:,_, AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER Cl.:l.TOO:IT\V å Honorable Members of tne City Council March 21, 2007 Page 2

Recommendation This report is provided for information only. Please note and file.

Questions regarding this information may be directed to Richard Benbow of the Consumer Services Division at (213) 922-8367. ¡;i.iy~m~

William P. Imperial, Acting Manager Services Regulatory Division

Attachments cc: Honorable Antonio Villaraigosa, Mayor Honorable Laura Chick, Controller Marcus Allen, Deputy Chief of Staff, Mayor's Office Office of the City Administrative Officer Office of the Chief Legislative Analyst Lonnie Eldridge, Office of the City Attorney Mark P. Wolf, Assistant General Manager . ,

43 Peninsula Center Rolling Hills Estates, CA 90274 131D13n1800 Ot."''"i'' .,.. f\ ¿: t,oft, ':'/ ;',:, SPP-145-07 - Attachment A Page 1 of 3 2007 MAR -8 AI' 8: 40

..i'" ,'::, ,',,'

March 5, 2007 d~~t.TV,Ú"'l;l0';iY FRANCHISE i\GI,¡C,/ ,:,Df"ii,1.

Mr. Ken Sinclair Via Certified Mail City of Los Angeles cox COMMUNICATIONS Information Technology Agency 200 North Main Street, 12th Floor Los Angeles, CA 90012

RE: Rate Adjustment

Dear Mr. Sinclair:

Per FCC rules and regulations, this correspondence will serve as notice of our pending rate adjustment. Effective April 25, 2007, we will be increasing our rates on a number of services including Cox Limited Basic, Cox Expanded and Cox Standard Services as well as several advanced services including our DVR service and various premium packages.

A number of rates will also be decreasing including: HD installations and equipment charges for HD and DVR receivers. Attached is our rate structure.

While we could take a larger increase per our 1205 forms, we have determined not to exercise our full option. We will be notifying customers in their bills 45 days in advance. Please do not hesitate to contact me with any concerns at 310- 265-5842. ry Art Yoon Manager, Government Affairs

"AV ,

Enclosure

Cc: William Imperial, ITA Rate Changes/New Prices Palos Verdes/San Pedro

Service Current New Chani:e SPP-145-07 - Attachment A Cox Limited Basic $ 16.00 $ 17.00 $ 1.00 Page 2 of 3 Cox Expanded Service $ 28.99 $ 30.99 $ 2.00 Cox Standard Service $ 44.99 $ 47.99 $ 3.00

Additional Outlets FREE FREE No Change! Cox Standard Service is FREE on Additional Outlets.

Premium Services HBO $ 11.95 $ 11.95 No Change! $ 11.95 $ 11.95 No Change! ShowtimefTMC $ 11.95 $ 11.95 No Change! STARZ! $ 11.95 $ 11.95 No Change!

International Channels 1 TV Japan $ 24.95 $ 24.95 No Change! CTI-Zhong T¡an $ 14.95 $ 14.95 No Change! CCTV-4 Free wI err Free wI CTI No Change! The Filipino Channel $ 11.95 $ 11.95 No Change! Zee TV $ 14.95 $ 14.95 No Change! RAI $ 11.95 $ 11.95 No Change! 1 Subscription to Cox Digital Cable required to receive International Channf

COX Digital Cable2 Cox Digital Gateway $ 6.50 $ 6.50 No Change! Cox Digital Cable $ 9.50 $ 10.50 $ 1.00 Cox Digital Cable Deluxe $ 12.95 $ 13.95 $ 1.00 Cox Digital Cable $ 15.95 $ 16.95 $ 1.00 Cox Digital Cable Additional Outlet $ 1.49 $ 1.00 $ (0.49)

Advanced Services2 Digital Video Recorder Service $ 4.95 $ 9.95 $ 5.00 Basic HD Programming FREE FREE No Change! High Definition Tier $ 4.95 $ 4.95 No Change! (ESPN HD. ESPN2 HD & Discovery HD Theater)

Equipment Analog Receiver & Remote $ 4.00 $ 5.25 $ 1.25 Digital Receiver & Remote $ 4.00 $ 5.25 $ 1.25 HD Receiver & Remote $ 9.95 $ 525 $ (4.70) DVR Receiver & Remote $ 9.95 $ 5.25 $ (4.70)

2SUh.criptlon to Limited Ba.;cSe'vioe ,nd rncoiverrerll requ"ed '0 receivo Cox DigilalC.o'e Cox Dig~al Cahl. and HDIDVR ,eoeive, re"t.i ,,,uiced 10 reoe'V& High Defiortion or Digil.IVideo Record., Serv'c~ Cox Digital Gat""!, vaild with Limrted 9..ic Servioe, includo.lhe On_'O""'" program guido, .ccess 10 muMiplexed premium oh,on.'" On O.mand, p'u, 12 ooannel.ormus,c&t.lkr.dio

Digital Cable Packages (Price Per Month)'

Digital Cable Packages3 All Digital Packages include' Cox Standard Service 5 Discovery Networks 46 Channels of Music Choice Access to On Demand on Channel 1

Cox Digital Cable Movie, Sports & Info, Family & Variety or Choose One Digital Tier' Paquete Latino

Service Current New Chani:e Cox Digital Choice Hits One premium service/9 screens $ 63.99 $ 69.24 $ 5.25

Cox Digital Greatest Hits Two premium services/18 screens $ 70.49 S 74.49 $ 4.00

Cox Digital Trio Three premium services/27 screens S 75.99 $ 80.74 S 4.75

Cox Digital Total Hits Four premium services/36 screens $ 80.99 $ 87.99 $ 700 C Jigital Deluxe Cable Movie, Sports & Info, Family & .ety Choose Three Digital Tiers: or Paquete Latino

Cox Digital Deluxe Choice Hits SPP-145-07 - Attachment A One premium service/9 screens $ 67.99 $ 7224 $ 4.25 Page 3 of 3 Cox Digital Deluxe Greatest Hits Two premium services/18 screens $ 73.49 $ 7749 $ 4.00

Cox Digital Deluxe Trio Three premium services/27 screens $ 78.99 $ 83.74 $ 4.75

Cox Digital Deluxe Total Hils Four premium services/36 screens $ 83.99 $ 90.99 $ 7.00

3RECeivOfrenl.i (!5,25Imo) roquired 10 ,"ceiv. Cox Digrt.i C.ble Cable Installation Services'

Service Current New ChanQe Primary Installation Digital Cable Fast Connect Kit $ 12.95 $ 12.95 No Change! HD/DVR Fast Connect Kit $ 15.95 $ 15.95 No Change! HDMI or DVI Faet Connect Kit $ 45.95 $ 45.95 No Change! Unwired Residence Installation $ 52.50 $ 55.95 $ 3.45 Analog Installation $ 31.95 $ 31.45 $ (0.50) Digital Cable Installation $ 39.95 $ 44.95 $ 5.00 HD Installation $ 69.95 $ 55.95 $ (14.00) DVR Only Installation $ 39.95 $ 44.95 $ 5.00 Transfer $ 31.95 $ 31.45 $ (0.50) Additional Outlet Installation At Time of Initial Installation $ 21.23 S 24.95 $ 3.72 After InitialInstallation Wired Residence $ 31.95 S 31.45 $ (0.50) After Initial Installation Unwired Residence $ 52.50 $ 55.95 $ 3.45

Other Services (Price Per Month)"

Service Current New Chanqe Monthly Fees Cox Service Assurance Plan $ 395 $ 3.95 No Change! FCC Fee $ 0.06 $ 0.06 No Change!

One~Time Charges . Agent Assisted Payments $ 4,95 $ 495 No Change! Printed Statement Reuqest $ 4.95 $ 4,95 No Change! Non-Suffcient Funds $ 25.00 $ 25.00 No Change! Cable Late Fee $ 4.75 $ 4.75 No Change! Cable Reconnect Fee $ 21.23 $ 21.23 No Change! High Speed Internet Reconnect Fee $ 50.00 $ 50.00 No Change!

Non~Return Charge Analog Receiver $ 18.00 $ 18.00 No Change! Digital Receiver $ 218.00 $ 218.00 No Change! HDTV ReceÎver $ 359.00 $ 359.00 No Change! HDfDVR Receiver $ 50300 $ 503.00 No Change!

'A 5)5% franchise fee wiil be adóed to each service price Franchise fees do rot appiy ~.o Air Force Housing

Fran# 4R?,483,484,41)6 488,4119 492 'pP-145-07 - Attachment B - Page 1 of 5 CITY OF Los ANGELES KEN SIMMONS CALIFORNIA INFORMATION TECHNOLOGY INTERIM GENERAL MAN"C.ER AGENCY

ASSISTANT GENERAL MANAGERS ROOM i 400, CITY HAL.L. EAST CLIFFORD K. ENG 200 NORTH MAIN STREET GENE GAMACHI LOS ANGELES, CA 90012 KAMTON M. JOE (213) 978-331 1 MARK p, WOL.F FAX (213) 978-33\ 0

WWW.LACITY.ORG/ITA

ANTONIO R. VILLARAIGOSA MAYOR

March 15, 2007 REF: SPP-143-07

Honorable Members of the City Council City of Los Angeles Room 395, City Hall Los Angeles, CA 90012

Subject: FCC'S GRANTING OF COX COMMUNICATIONS PETITON FOR EFFECTIVE COMPETITION DATED MARCH 16,2005- FRANCHISE AREA N - (COUNCIL FILE 06-1029)

Dear Councilmembers:

This notice provides information pertaining to a petition filed by Cox Communications on March 16, 2005, to the Federal Communications Commission (FCC) to terminate the City's authority to regulate Cox's basic cable television service rates in the City's cable television Franchise Area N. On March 7, 2007, the FCC issued its orders granting Cox's petition that eliminates the City's rights to regulate basic television service rates/pricing in basic tier programming, equipment, labor and installation costs in Franchise Areas N. (See Attachment A - Cable Franchise Areas Map.)

The FCC's granting of the Cox petition affects cable television subscribers in Franchise N (San Pedro). Subscribers affected reside in Council District 15 (Hahn). (See Attachment B - Cable Franchise Subscribers By Area and Effective Competition.)

The City is not affected by the FCC's Order of March 7, 2007 in any other manner. The City may continue to collect franchise fees, receive PEG Access support, and control its rights-of-way under local, state and federal law. The City wil lose rate regulation authority over Cox Communications when Cox Communications obtains a state franchise from the California Public Utilities Commission which ITA anticipates wil occur sometime in 2008.

Background Under federal law, the City is granted the authority to regulate the pricing that a cable television operator can charge to its customers for basic service rates in programming (basic service tier), equipment, labor and installation costs. The City has exercised its

,

. friil¿" ~' 3-1- (:o.TlaTii AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER . P-145-07 - Attachment B - Page 2 of 5

Honorable Members of the City Council March 15,2007 Page 2 authority in the past in regulating these basic service rates in all but two franchise areas, Franchise Areas K (South Los Angeles) and L (Boyle Heights). Subscribers affected reside in Council District 8 (Parks); Council District 9 (Perry); Council District 10 (Wesson); Council District 14 (Huizar) and Council District 15 (Hahn). The City did not oppose Time Warner's predecessors' effective competition petition filings for Franchise Area K in 1994 and Franchise Area L in 1997.

Also pursuant to federal law, a cable operator is permitted to seek an FCC order finding that a cable television operator is no longer subject to rate regulation by a local franchising authority (the City) where legally sufficient competition exists from other video television services in a particular franchise area. This petition is formally referred to as a Petition for Effective Competition. The FCC must find that a cable operator has presented proof establishing that a cable television franchise area is ".. .served by at least two unaffilated multichannel video programming distributors (MVPD) each of which offers comparable programming to at least 50 percent of the households in the franchise area" and "the number of households subscribing to multichannel video programming other than the largest MVPD exceeds 15% of the households in the franchise area." (47 U.S.C. § 543(1 )(1 )(B)(I) and (ii)).

On March 16, 2005, Cox Communications filed a petition to the FCC for an opinion and order finding that sufficient competition in video programming existed in Franchise Areas N to prohibit rate regulation by the City in this Franchise Area.

Cox's petition to the FCC stated that two satellite providers, DirectTV and Echo Star, are unaffiliated with Cox Communications and offer service to more than 50 percent of the households in the City's cable television franchise area served by Cox; and, that the two satellite providers combined provide service to more than 15% of the households in those franchise areas. The FCC granted Cox's petition and the City is prohibited from regulating basic cable television service rates in Franchise Area N.

The FCC's order of March 7, 2007, does not affect the City's ability to continue to collect franchise fees, receive Public, Educational and Governmental Access support or control its rights-of-way under local, state and federal law. In addition, the City may continue to regulate the rates of Time Warner in Franchise Areas A (West Valley); C (East San Fernando Valley); F (West Los Angeles); G (Sherman Oaks); H (Eagle Rock); and I (Hollywood). Subscribers affected reside in Council District 15 (Hahn).

Fiscal Impact The FCC granting of Cox's Petition for Effective Competition will likely resült in the positive impact to the City's budget due to potential increased basic cable television service rates charged to Cox's subscribers. However, the City's authority to regulate basic service rates has been an effective tool to ensu re that basic cable television services remain reasonably affordable for Cox's subscribers. P-145-07 - Attachment B - Page 3 of 5

Honorable Members of the City Cou ncil March 15,2007 Page 3

Recommendation This notification is provided for information only. Although the City may formally appeal the decision of the FCC, it is unlikely that a Court of Appeal will grant the City's appeaL. Also, the City will lose its rights to regulate basic service rates when Cox Communications is granted a state franchise by the California Public Utilities Commission, as anticipated by the City, in 2008.

If you have questions regarding this information, please contact me or Mark Wolf, Assistant General Manager, at (213) 978-3311.

Ken Simmons Interim General Manager

Attachments

cc: Honorable Antonio Villaraigosa, Mayor Board of Information Technology Commissioners Marcus Allen, Deputy Chief of Staff, Mayor's Office Offce of the City Administrative Officer Offce of the Chief Legislative Analyst Lonnie Eldridge, City Attorney's Offce Mark P. Wolf, Assistant General Manager William P. Imperial, ITA 'P-145-07 - Attachment B - Page 4 of 5 City of L.A. Cable Franchise Areas Competition) r

12

A Time Warner - West Valley

(j 3

D A. Time Warner - West Valley E2 B ~ Time Warner - Sylmar (Effective Competition) ~ C - Time Warner - East SF Valley

rz D - Time Warner - SunlandfTujunga (Effective Competition) ~ E - Charter Cable - Pacific Palisades (Effective Competition) D F - Time Warner - West Los Angeles " D G" Time Warner - Shennan Oaks D H - Time Warner - Eagle Rock D I - Time Warner - HollywoodlWilshire E: J - Time Warner - Westchester (Effective Competition) K - Time Warner - South Los Angeles (Effective Competition L . Time Warner - Boyle Heights (Effective Competition) M " Time Warner - Wilmington (Effective Competition) N - Cox Cable - San Pedro Effective Com etitien 'P-145-07 - Attachment B - Page 5 of 5

Attachment B

City of Los Angeles Cable Television Franchise Areas Effective Competition Chart

Franchise Council Number of Effective Area District(s) Subscribersll) Competition A West San Fernando Valley 3,5,6,12 120,605 No B Sylmar 7 7,841 Yes C East San Fernando Valley 2,4,5,6,7,12 94,613 No D Sunland / Tujunga 2,6,7 19,419 Yes E Pacific Palisades 11 64 Yes F West Los Angeles 5,11 39,981 No G Sherman Oaks 2,3,4,5,11 29,208 No H Eagle Rock 1,4,13,14 45,394 No

I Hollywood I Wilshire 1,4,5,9,10,11,13 145,475 No J Westchester 8,11 12,837 Yes K South Los Angeles 1,8,9,10,15 50,974 Yes L Boyle Heights 9,14 3,379 Yes M Wilmington 15 14,888 Yes N San Pedro 15 8,879 Yes (1) Subscriber count as of 12/31/2006. TOTAL: 593,557 3114/2007