Attachment 3 CITY OF Los ANGELES INF'ORMATION TEcHNOLOGY Llv.. M. LOWERY CAI..IF'ORNIA C:HIEI'"' IHI"'ORM,,"'JION O...PICltR AGENCY ·THlt'ftA G. 6.ItAIJIlH,o,W ROOM 1400, CITY HALL EAST I!XECUTIVIE 'OFF"ICI!!R" 200 NORTH MAIN STREET LOS ANGELES, CA 90012 ASSISTANT G.ENI!;RAL. MANAGERS (213) 486·2892. CLlFI'"ORb ENG FAX .C21S) 847-3512 KAMTON JOe: MARY K. KOU:MAN ,JAMES K. HAHN MAYOR March 15, 2004 REF: OAP-132-04 The Honorable Members of the City Council City of Los Angeles Room 395, City Hall Los Angeles, CA 90012 Subject DBS CARRIAGE OF LA CITYVIEW 35 AND COST ASSOCIATED WITH HANDLING DBSCUSTOMER SERVICE COMPLAINTS (CF #034110) Dear Councilmernbers: ThIS report is in response to Motion -.WeissJZine (Council File. No. 03-1710) wherein the Information Technology Agency (ITA) Was instructed to provide information in response to inquiries made at the February 5, 2003 ITGS Committee· meeting. Specifically, this correspondence identifies potential broadcast partnerships to gain Direct Broadcast Satellite (DBS) distribution of LA Cityview 35 programming and calculates casts associated with handling ass customer service complaints and inquiries. Also Included are responses to Councllrnember LaBonges' questions in Council an February 6, 2004 regarding the number of televisions, Cable subscribers, and DBS subscribers in the City of Los Angeles. Background On August 6, 2003, the ITGS Committee acknowledged the popularity of [iBS service and requested that ITA research various issues that may impact City resident subscribers of DBS service. In particular, thelTGS Committee inquired about the City's regulatory authority over such service, policies for processing DBS customer complaints, possible revenue sharing models, and LA Cityview carriage by DBS providers. In a report, dated October 3D, 2003, ITA addressed and answered the questions posed by the City Council ITG8 subcommittee meeting held August 6, 2003, Subsequent inquiries regarding potential broadcast partners to gain DBS distribution for LA Cityvlew 35 programming and City costs associated with processing DBS complaints are discussed below. AN EQUAL EMPLOYMENT OPPORTUNITY - AFflRMATIYE ACTION EMpLOYER The Honorable Members of the City Council March 15 .2004 Page 2 of 6 Potential DBS Broadcast Partners Both DlRECTV and Dish Network aTe providing programming from local television broadcast stations in Los Angeles. Some of these broadcast stations sell airtime to third party content producers via a timeshare agreement. As noted by ITGS committee members, it is possible for the' City to enter into a timeshare agreement with one or more of the broadcast stations carried by the DBS providers. DIRECTV and Dish Network retransmit major broadcast networks such as CBS, NBC, ABC, and Fox and retransmit local independent broadcast television stations such as KXLA, KAZA, KJLA, and KLCS. While it is certainly possible for LA Cityview 35 to enter into a carriage agreement with one of the major networks to gain DBS distribution, there is a greater possibility of entering into this type of agreement with one of the local independent broadcasters carried by the DBS providers. Please find a list of the local major and independent broadcasters retransmitted by DIRECTV and Dish Network and rate sheets of those independent broadcasters that expressed interest in a timesharing arrangement with LA Cityview 35 attached hereto. (Attachment A) Cost of Processing/Handling DBS Complaints In 1995, pursuant to State law, the City of Los Angeles enacted the Consolidated Consumer Service Standards (CeSS) for consumers of multichannel video services. These standards were enacted to provide consistent consumer service standards for multichannel video providers so consumer rights and responsibilities would not vary throughout the City, no matter the franchise area or provider. While DBS providers have communicated that they are not legally obligated to comply with these standards, they have cooperated, within the context of the CCSS, with ITA staff in the resolution of DBS complaints ITA receives. The burden rate associated with the enforcement of the eess for DBS operators, specifically the processing of complaints and inquiries, is estimated to be $77,314.81 per year. The detail of this calculation is attached hereto. (Attachment B) Number of Televisions, subscribers of Cable, and subscribers of DBS In Council on Friday, February 6, 2004, counctlrnember LaBonge inquired about the number television households in the City; the number cable subscribers in the City; and the number of DBS subscribers in the City, While ITA does not maintain record of the number of television households in the City, Nielsen Media Research estimated that in 2002 there were approximately 5,303,490 television households in the Los Angeles designated market area (OMA). Please see Attachment C. .... -.:' The Honorable Members of the City Council March 15 2004 I· Page 3 of 6 ! . f - With regard to cable, there are approximately 645,000 cable subscribers in the City. f . Currently, there is not published data detailing the number of DBS subscribers in the City. However, ITA estimates that there are between 232,000 and 320,000 DBS subscribers in the City. This range was calculated utilizing the average between 16% DBS penetration in California and a 22% DBS penetration in the United States. Fiscal Impact Statement 1. As outlined above, the City will incur costs associated with attaining DBS distribution of LA Cityview 35 programming, namely costs associated with purchasing airtime from DBS providers directly or in a timesharing agreement with one Of more of the aforementioned independent broadcasters. As instructed by the ITGS committee, ITA will continue to research these costs. 2. The cost associated with processing DBS service complaints and inquiries has an estimated burden rate of $77,314.81 per year. Recommendations 1. ITA recommends that ITA and the Office of the City Legislative Analyst (eLA) pursue discussions, as recommended by the ITGS committee, with identified independent broadcasters that have expressed an interest in some -form of a time share programming arrangement with LA Cityview. 2 ITA continues processing and handling DBS complaints and inquiries. Please contact me at (213) 485-2892 if YO!J have any questions regarding the above. Respectfully submitted, ~~ral<s~ Thera G. Bradshaw Acting General Manager cc: Honorable James K. Hahn, Mayor Honorable Rockard Delgadillo, City Attorney Board of Information Technology Commissioners . Doane Liu, Deputy Mayor Office of the CLA Office of the CAD Liza M. Lowery, CIO Tony Ighani · "':1.': The Honorable Members of the City Council March 15 2004 Page 4 of 6 ATIACHMENT"A" Local Broadcast Stations Carried by DIRECTV & DishNetwork Local Network Affiliate Channel # KCBS 2 NBC KNBC 4 WB KTLA ABC KABC 7 KCAL 9 KTrV 11 KCOP 13 Independent KSCI 18 TMO KWHY 22 KVCR 24 KCET 28 30 (not in KPXN DlshNetwork Local Pkg.) Independent KVMD 31 Uni KMEX 34 Independent KXLA 44 TFT KFTR 46 KOCE 50 KVEA 52 KAZA 54 Independent KDOC 56 Independent KJLA 5'7 PBS KLCS 58 Independent KRCA 62 Independent KADY 63 Independent KHIZ 64 The Honorable Members of the City Council March 15 2004 Page 5 of 6 A.TTACHMENT "B" Consumer Service Support Staff Salary Title Annual Salary Clerk $37,145,52 Student Professional Worker. $27,707.76 Management Assistant: $51.,156.00 Management Analyst. $72,015.12 Programmer AnalystIv" $43,158.96 Total $231,183.36 D8S Actual Comp (-Monopoly) 2865 404 Total Inquiries 5842 1385 Total Phone Calls 8707 1789 DBS percent 20.55% DBS cost , $47,508.18 DBS Burden Rate $77,314.81 *50% of Programming Analyst .IV salary used for support and rnalntenance.ot the complaint tracking system database and server. The Honorable Members of the City Council March 15 2004 Page 6 of 6 ATTACHMENT "C" Nielsen Media Research '1 :,~i~~~~;1~(f ~"8;,~:6f;)l~r1!,$- -, . -f;lnn~r:felphl~:' ,_~~]Q_5~~rr..;~;~P~'lD1[j,-' -:':I~:i: ,;~"ij~j~~~j~r-,:~4ii~;i~.;·~1:2;~ :J~8tl-, ---, . ' ,:~:{,.;.~:: ,,ie!~¢h' -, ,:.,,,,-~:P';'·:;"';. ,~~a!ras~t~W~rtlil - . .~'-:::.;:! - ':- .;;:."- '-'S'"- o.~; llf!C; -)1.;~::e .,'f "" .9 "Ht -Z' :~Atf~t~i. ~1~~~V~~~.~.-". ~'S_L;Y¥[ ::l"f~:'<:' .~ _~~;:~'~:_:-~- ': . -i:~:i~~.~~~~Y;+t. 1Oy·;~t -: -' ::~:~@lt ;-':;1'i~'ji]B1~.@' ;~~-.