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HomeMy WebLinkAbout1978-11-07 Info PacketYl�wtl)r iLALu BY JORM b11CROLAB —. • CEDAR RAF...., AND DES 'I" . ..`. 'N CITY OF IOWA CITY CIVIC CENTER- 410 E. WASHINGTON ST IOWA CITY IOWA 52240 • (319) 354.180D November 2, 1978 Mr. James Powers 2324 Mayfield Iowa City, Iowa 52240 Re: Ralston Creek Contract Dear Mr. Powers: Your letter of October 3, 1978, detailed a basis for the City to resolve with you the outstanding payments under the Ralston Creek contract. I have again reviewed the facts concerning this matter with the Director of Public Works and the legal staff. You stated in your letter that a suggested preliminary development plan was prepared for the Glasgow tract and that work on this was initiated after a phone call was made by Mr. Plastino's office to Mr. Lindley asking for it. The contract expressly provides that there are no oral agreements that have not been reduced to writing in this instrument. I believe that you are aware that the agreement, which defined the scope of services and established the amount of compensation, was expressly authorized by the City Council. Dick Plastino had no authority to authorize either additional work or additional payment and he did not. The City records indicate that on March 29, 1977, the Director of Public Works sent a letter to you stating ". . . (y)ou have sent a billing for professional service for Scott Boulevard/Glasgow project." "The City of Iowa City did not request that work be done by Mr. Lindley for Mr. Glasgow." "Although the work has been of use to the City, I believe we will have to have Mr. Glasgow assume responsibility for this project." "If there were any conversations or written documents that would seem to indicate otherwise, please let me know." To this date we have never received any reply indicating that there were any other conversations or written documents except that you indicate there was a phone call by Mr. Plastino to Mr. Lindley. It is our recollection that during October 1976, Mr. Plastino did call Mr. Lindley concerning a statement which Mr. Glasgow made at a Council meeting when he complained that Mr. Lindley was slow in providing information for him. Our records further indicate that this matter was discussed with you on March 31, 1977, at which time you indicated that you would bill Mr. Glasgow. The second statement in your letter indicated that ". . . modification studies for information requested by the committee for effect on outflow 2osS MICROFILMLD BY DORM MICR+LAB ;I CEDAR RAPIDS • DES MOINES i Yl�wtl)r iLALu BY JORM b11CROLAB —. • CEDAR RAF...., AND DES 'I" . ..`. 'N CITY OF IOWA CITY CIVIC CENTER- 410 E. WASHINGTON ST IOWA CITY IOWA 52240 • (319) 354.180D November 2, 1978 Mr. James Powers 2324 Mayfield Iowa City, Iowa 52240 Re: Ralston Creek Contract Dear Mr. Powers: Your letter of October 3, 1978, detailed a basis for the City to resolve with you the outstanding payments under the Ralston Creek contract. I have again reviewed the facts concerning this matter with the Director of Public Works and the legal staff. You stated in your letter that a suggested preliminary development plan was prepared for the Glasgow tract and that work on this was initiated after a phone call was made by Mr. Plastino's office to Mr. Lindley asking for it. The contract expressly provides that there are no oral agreements that have not been reduced to writing in this instrument. I believe that you are aware that the agreement, which defined the scope of services and established the amount of compensation, was expressly authorized by the City Council. Dick Plastino had no authority to authorize either additional work or additional payment and he did not. The City records indicate that on March 29, 1977, the Director of Public Works sent a letter to you stating ". . . (y)ou have sent a billing for professional service for Scott Boulevard/Glasgow project." "The City of Iowa City did not request that work be done by Mr. Lindley for Mr. Glasgow." "Although the work has been of use to the City, I believe we will have to have Mr. Glasgow assume responsibility for this project." "If there were any conversations or written documents that would seem to indicate otherwise, please let me know." To this date we have never received any reply indicating that there were any other conversations or written documents except that you indicate there was a phone call by Mr. Plastino to Mr. Lindley. It is our recollection that during October 1976, Mr. Plastino did call Mr. Lindley concerning a statement which Mr. Glasgow made at a Council meeting when he complained that Mr. Lindley was slow in providing information for him. Our records further indicate that this matter was discussed with you on March 31, 1977, at which time you indicated that you would bill Mr. Glasgow. The second statement in your letter indicated that ". . . modification studies for information requested by the committee for effect on outflow 2osS MICROFILMLD BY DORM MICR+LAB ;I CEDAR RAPIDS • DES MOINES I•uu(Ur iLi'!LU Bf JUkM MICROLAB CEDAR RAPIDS AND 2 from the Hickory Hill structure by varying type and size of opening." "Additional hydrographs and computer runs were made by Ron Rossmiller to comply with this request." Your request is that you receive additional payment for this work. The City records indicate that on June 27, 1977, you, Mr. Padgett and Mr. Orelup, presented a report on the Ralston Creek watershed management plan. At that time you submitted information which included computer simulation of rural and urban watersheds, as well as the effect of different pipe sizes on the 100 year storm. You also in- dicated at this meeting that storm water channel improvements would be needed, however there were no specific recommendations. The committee expressed suprise at that suggestion and asked for additional infor- mation to support that position. In the City's opinion, there is ab- solutely no basis for additional payment for the work done by Rossmiller as we believe that additional clarification was within the scope of the contract. Your last comment is that the initial fee proposed was $110,000, pared back to $80,000 with a revised scope. And further you indicated that this led Mr. Plastino to using the wrong scope in his review of the report. Mr. Plastino's letter to you of September 9, 1977, stated that Section V of the contract had several provisions that had not been addressed by the rough draft of the Watershed Management Plan. He attached a copy of Section V and marked sections considered deficient. He also attached a copy of a more detailed work plan which was provided by your firm to him. After reviewing this material again, I do not believe that (1) the City authorized the work for Mr. Glasgow, (2) that the work by Rossmiller was beyond the scope of the study, or (3) that the scope of work used by Mr. Plastino was inconsistent with the contract. As indicated to you previously, this contract does provide for arbi- tration of any outstanding issues and the City is prepared to arbitrate any issue which you believe remains unresolved. I will be pleased to discuss this matter with you at your convenience. Sincerely yours, 1 .4 &I*1. . r. cc, � / )CI Neal G. Berlin City Manager j cc: City Council Richard Plastino Angela Ryan John Hayek G jm4/31 � . � �Ir'.• 41CROFILMED BY JORM MICR+LAB j I CEDAR RAPIDS • DES MOINES I•LL �,KW iL;'ILu BY JURM MICROLAB CEDAR RAPIDS AND DE Fa CITY OF IOWA CITY CIVIC CENTER' 410 E. WASHINGTON ST. ' IOWA CITY IOWA 52240' (319) 354.180D November 2, 1978 Mr. Don Hebert, President Iowa City Chamber of Commerce 1 P. 0. Box 2358 Iowa City, Iowa 52240 Dear Mr. Hebert: Thank you for your recent letters to the City Council concerning the Chamber of Commerce's position on the proposed new library. The Chamber of Commerce has indicated that while it enthusiastically supports a new library it objects to the proposed site for the library, the fact that it is not designed for a 40 to 50 year period of time, and that there is inadequate parking. To my knowledge the Chamber of Commerce has not provided any specific factual information to support the premises for its objection to the proposed library site. The City employed nationally recognized rede- velopment and library consultants. They agree that the proposed site is extremely advantageous to the City at large and particularly to the j retail business community. Within the next year or two the City of Iowa !I City will be placing into the retail market approximately 240,000 square feet of new leasable space. While the Chamber -of Commerce believes that the proposed site should be used for retail space, the Chamber of Commerce has not considered nor has it provided any factual information to support its premise that this retail space can be integrated into the retail market without seriously injuring the redevelopment project, the prospective new businesses or the existing business community. The Urban Renewal land disposition program was carefully tailored to prevent creating a new blighted area, due to overbuilding new retail areas. Supportable retail space is calculated by considering population trends, income levels, the proportion of the buying power attracted to the CBD, and trade volumes needed to support new construction. I The adequacy of parking for the proposed site has also been questioned. The City Council for a number of years has followed a parking policy which reduces parking immediately adjacent to businesses and other uses in the.Central Business District, both public and private. In that context, it is appropriate for the public library to utilize parking space in a parking ramp which is designed to meet the needs of the j Central Business District. The Chamber of Commerce has proposed that the library be built on the existing site. While in fact the existing site under certain circum - 2Z OY6 ircum-2ZOY6 MICROFILMED BY-� JORM MICR+LAB CEDAR RAPIDS • DES MOINES PLwtUr 11-14Lu BY JORM M[CROLAB CEDAR RAPIDS AND DES 2 stances might beappropriate for a new library, the Chamber of Commerce has implied that additional parking would be available on that site. Again, this is not supported by fact. To meet first floor requirements of the proposed property plus access and other requirements, there will be little room left for parking and, in fact, the parking ramp would still be providing most of the parking for library users, The Chamber speaks of a 40+ year planning frame for a public improve- ment. You will note that in recent years communities across the country have begun to look at approximately a 20 to 25 year time frame for building construction. While in the past, 40 to 50 years may have been a norm, because of very high building costs and changing technology, 20 to 25 years has now become the standard. In addition, there have been very significant changes in the use of media in the last few years. There is every reason to believe that technology will have an ever increasing impact upon media. It is quite possible that libraries will increasingly rely less and less upon books as we know them today and more and more upon microfilm and other for- mats. In this context planning a traditional library for a 40 or 50 year time frame might not be the best investment possible. Growth of the community may dictate that branches or other service outlets are more appropriate than a larger central building. In addition, there are techniques developing to provide library re- sources in other manners, such as two way cable TV and home terminals connected to central information banks. The investment that a 40 to 50 year building would require might preclude the City being financially able to provide access to information resources in what may be a more cost-effective method by the year 2000. The Chamber of Commerce's strong support for the idea of a new library and your continued interest in this matter is appreciated. sincerely yours, Neal G. Berlin City Manager bdw cc: City Council Chamber of Commerce, Board of Directors J. C. Hickman MICROFILMED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES e I 1•IiLW; iLi•ILu BY JOW 1.11CROLAB CEDAR RAPIDS MID City of Iowa City DATE: October 26, 1978 TO: City Council FROM: Dennis R. Kraft, Director of Planning E Program Development RE: New Positions for the Department of Planning h Program Development The following recommendations are made as a follow-up to the discussion which was held at the informal Council meeting of October 23. Consistent with this discussion, a request is made for three new staff positions. All of the positions are to be funded 100% from Community Development Block Grant sources. Along with the request for new positions will be.some reclassification of personnel. It is requested that two new Planner/Program Analyst I positions be authorized along with one Senior Center Coordinator position. One Planner/Program Analyst will be assigned directly to the Redevelopment Division and will be primarily responsible for assisting Paul Glaves in the completion of the City's Urban Renewal Project and in facilitating land acquisition procedures. The second Planner/Program Analyst will be divided equally between the Plan Administration Division and the Block Grant Program Division. The additional staffing in the Plan Administration Division will free up some of Don Schmeiser's time and enable him to work on higher level specific planning projects. The added time in the Block Grant Division will enable a more complete level of program administration and record keeping. It is requested that, in conjunction with the creation of new positions, one of the present Planner/Program Analyst I positions be reclassified to a Planner/Program Analyst II, thereby resulting in both the Block Grant Division and the Plan Administration Division having a fulltime Planner/Program Analyst II. This is required because of the higher level of technical competence needed as these programs develop as well as allowing the division heads to spend more time on supervision and program development. This will also give assistance to the division heads in the supervision of lower level staff. Consistent with the discussion on developing competence in grant writing, it is requested that the part-time Planner/Program Analyst position I be reclassified to a part-time Planner/Program Analyst II. Because of the degree of expertise needed for grants writing, it is reasonable that this reclassification be made. Once again, this will be funded completely from CDBG monies and will have no direct impact on the City's General Fund. An effort will also be carried out to identify and train a person to be able to become the new CDBG Coordinator subsequent to the anticipated resignation of Julie Vann. The position of Senior Center Coordinator is recommended to be at Group III Administrative level of the pay plan 01,100 to $1,749 per month). This is at a level comparable to that of the Recreation Superintendent or the Division Head 41CROPILMED BY ' 'I JORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES 2OS7 r z' j re I 1•IiLW; iLi•ILu BY JOW 1.11CROLAB CEDAR RAPIDS MID City of Iowa City DATE: October 26, 1978 TO: City Council FROM: Dennis R. Kraft, Director of Planning E Program Development RE: New Positions for the Department of Planning h Program Development The following recommendations are made as a follow-up to the discussion which was held at the informal Council meeting of October 23. Consistent with this discussion, a request is made for three new staff positions. All of the positions are to be funded 100% from Community Development Block Grant sources. Along with the request for new positions will be.some reclassification of personnel. It is requested that two new Planner/Program Analyst I positions be authorized along with one Senior Center Coordinator position. One Planner/Program Analyst will be assigned directly to the Redevelopment Division and will be primarily responsible for assisting Paul Glaves in the completion of the City's Urban Renewal Project and in facilitating land acquisition procedures. The second Planner/Program Analyst will be divided equally between the Plan Administration Division and the Block Grant Program Division. The additional staffing in the Plan Administration Division will free up some of Don Schmeiser's time and enable him to work on higher level specific planning projects. The added time in the Block Grant Division will enable a more complete level of program administration and record keeping. It is requested that, in conjunction with the creation of new positions, one of the present Planner/Program Analyst I positions be reclassified to a Planner/Program Analyst II, thereby resulting in both the Block Grant Division and the Plan Administration Division having a fulltime Planner/Program Analyst II. This is required because of the higher level of technical competence needed as these programs develop as well as allowing the division heads to spend more time on supervision and program development. This will also give assistance to the division heads in the supervision of lower level staff. Consistent with the discussion on developing competence in grant writing, it is requested that the part-time Planner/Program Analyst position I be reclassified to a part-time Planner/Program Analyst II. Because of the degree of expertise needed for grants writing, it is reasonable that this reclassification be made. Once again, this will be funded completely from CDBG monies and will have no direct impact on the City's General Fund. An effort will also be carried out to identify and train a person to be able to become the new CDBG Coordinator subsequent to the anticipated resignation of Julie Vann. The position of Senior Center Coordinator is recommended to be at Group III Administrative level of the pay plan 01,100 to $1,749 per month). This is at a level comparable to that of the Recreation Superintendent or the Division Head 41CROPILMED BY ' 'I JORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES 2OS7 Igiu(UrlLi•lw BY JORM MICROLAB City Council October 26, 1978 Page 2 CEDAR RAPIDS AND levels in the Department of Planning and Program Development. During the time of program development, the Senior Center Coordinator can be compensated 100% from CDBG funds. At such time as the Senior Center becomes operational (late 1979 -early { 1980), other sources of funding must be found. It is anticipated that a five to six month period will be required before the Senior j Center Coordinator will actually be on the job. The hiring will be preceded by the drafting of a job description, advertising, screening, and interviewing. In that work on this project is continuing at a rapid pace at this time, it is requested that a temporary (six to seven month) position of Senior Center Program Supervisor (Level 8) be created at this time for the purpose of promoting and facilitating the on-going activities of the Senior Center. This position would also be 100% CDBG funded and would terminate no later than June 30, 1979. Attached is a proposed organization chart of the Department of Planning and Program Development including both the existing and the proposed positions as discussed in this memo. The new positions are denoted by an asterisk. This item will be on the Council's informal agenda for discussion on Monday, November 6. DRK/ssw Attachment 141CROFIL14ED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES M1�i(UHI_HtU BY JURM MICROLAB CEDAR RAPIDS AND DES MOINES, IOW Y i DEPARTMENT OF PLANNING AND PROGRAM DEVELOPMENT I Ii PROJECTED STAFFING FOR JULY 1, 1978 % CDIIG Program Coordinator Planner/Program Analyst II Planner/Program Analyst II (MI) Planner/Program Analyst I Planner/Program Analyst I Planner/Program Analyst I (!I) Graphics Technician Senior Clerk/Typist Senior Center Coordinator* I Director Secretary Development Coordinator anner/Program Analyst I anner/Program Analyst I* anner/Program Analyst I (31) MICROFILMED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES Senior Planner J anner/Program Analyst II anner/Program Analyst I'OW anner/Program Analyst I� anning Technician i I111�RUi iLI4Lu by JORM 1.11CROLAB W CEDAR RAPIDS AND DE City of Iowa City MEMORANDUM DATE: October 30, 1978 TO: City Council FROM: Dennis R. Kraft, Director of Planning $ Program Development RE: Hiring of a Consultant to Assist in the Preparation of the Small Cities Discretionary Grant As I indicated at the informal meeting of October 23, I'm of the opinion that it is essential that the City hire a consultant to assist in the preparation of a Small Cities Discretionary Grant application if we are to meet the mid-January deadline imposed by the Department of. Housing and Urban Development. If we were confrontedwith an -April 1 or DIay 1 deadline, this would have afforded us the opportunity to hire and train staff for the preparation of the application, however, with the mid-January deadline this appears to be not possible. Even with the authorization of new positions, it is unlikely that we will have staff on the job prior to middle January to middle February, 1979. This will obviously not be of any benefit to the City in the preparation of the Small Cities application for this year. If a consultant is hired, he or she will function in the dual role of preparing the application and in educating the staff in the application preparation pro- cedure. It is my intention to utilize the present staff to the maximum extent permissible in the preparation of the application provided that we do not have to completely close down other projects in the process. The consultant will be paid for 100% by the CDBG funds. The Department will begin recruiting a consultant within the next two weeks unless the City Council determines otherwise. DRK/ssw M CRDf ILMED BY .I JORM MICR+LAB CEDAR RAPIDS DES MOINES r ;z r I111�RUi iLI4Lu by JORM 1.11CROLAB W CEDAR RAPIDS AND DE City of Iowa City MEMORANDUM DATE: October 30, 1978 TO: City Council FROM: Dennis R. Kraft, Director of Planning $ Program Development RE: Hiring of a Consultant to Assist in the Preparation of the Small Cities Discretionary Grant As I indicated at the informal meeting of October 23, I'm of the opinion that it is essential that the City hire a consultant to assist in the preparation of a Small Cities Discretionary Grant application if we are to meet the mid-January deadline imposed by the Department of. Housing and Urban Development. If we were confrontedwith an -April 1 or DIay 1 deadline, this would have afforded us the opportunity to hire and train staff for the preparation of the application, however, with the mid-January deadline this appears to be not possible. Even with the authorization of new positions, it is unlikely that we will have staff on the job prior to middle January to middle February, 1979. This will obviously not be of any benefit to the City in the preparation of the Small Cities application for this year. If a consultant is hired, he or she will function in the dual role of preparing the application and in educating the staff in the application preparation pro- cedure. It is my intention to utilize the present staff to the maximum extent permissible in the preparation of the application provided that we do not have to completely close down other projects in the process. The consultant will be paid for 100% by the CDBG funds. The Department will begin recruiting a consultant within the next two weeks unless the City Council determines otherwise. DRK/ssw M CRDf ILMED BY .I JORM MICR+LAB CEDAR RAPIDS DES MOINES !9iu<Uf 1LJ'ILU BY JURM 141CROLAB TO: FROM: RE: CEDAR RAPIDS AND 0 City of Iowa City MEMORANDUM DATE: October 27, 1978 Neal Berlin and City Council r Dick Plastino, Director of Public Works Newsprint Recycling Program Attached is a list of the phone calls tile City fhas failurestoiv September 1, 1978, to October 20, 1978, newspaper. Marks have been placed beside addresses that back more than once. An unquantified visual observation shows that many reside to participate in the newsprint recycling program are no so. According to the phone calls we have been receiving, because papers are not being picked up at all or are beir several days later. If the Council considers it a valid objective to have a r of people participate in the program and a maximum amount recycled, then Public Works definitely recommends termini contract with Alert Towing Service. Public Works has had conversations with City Carton and interested in contracting for the program. They also re a large number of people have dropped out of the program ask that the City participate quite heavily in advertisi weeks to build participation in the program back to its of two and one-half to three tons per day. Also attached to the memo are several pages Of the phone the comments of the residents are listed. This provides information than the summary sheet attached to this memo cc: Newsprint Recycling file Rich Wayner MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES 191i,i<W iLilcu BY JORM NICROLAB CEDAR RAPIDS AND 0 i — Acld, �iL�7�C Ci 1 ]Cii J� QClIc� J770/l G CRG/1 ac%/2g� �n� Ca�:1 TOTAL NOAIBER OF CALLS - 189 7o-? Kl*l-n Lc /�oad ,v. GLA&ef N1 /yay YE wap � C�.QEncfcLC� Ccz«t i3o 3 /�ti $/(0 9un�E2 /30:3 Ca,e2c-0 9 �, 4Kl- nVll 'Da. O/H 18/5 uEnClap& 700 9/U %�1a�ne�cool �an� Uo o a tn" ca.y - 10 44 7 1j. �un,n�it 30/0 �Lve��6e�a2 Illl 3a3 Poac/ eo5 oei?" y D30D a don goo 30i Lee 94.�) /l%yF2 1106 IJV ?°n cf /0-20 -71,5- 933 /.S93s cY�w2� C2f l7/3 Z2. 'r� 2 �20G�YGznd ��QCFi �aC/ Rood 8-3/ E , CL-oey� 81 Al b)4n Lt Doo/ /I�cusca�i�i� 1:503 CEn�fe HiJ� . !a0 / �Pe2 CULC.C� PoS f• CJ�a��;ny�en X803 &Z8140ccd �2a,5/ Il�5kOand vl � Y ✓�iat En C,lc/ -29/-7 Cl'cvEF2 /So53ecokc:ood C2,b� Lane J 309 -r(d c .z . /3 3 I i%`lKc bOdE . K �tlI 4ICROFILMED BY - f JORM MICR+LA9 CEDAR RAPIDS • DES MOINES FIi�NFiLAEb BY JORM 141CROLAB o�`//Q C21JivICCU- 15' CU- s A23/ S09 S. $/a ja Qapm �, sa / GJEv� /Q/2� hca d c2 / •C�: tlg4li�5d C-,Jmo>2E✓LC�t y� l Ctf-A,,eEEj' (F, . 9t// 2 sor Qc�,rn`�G� AId 9'a3 �• ���'ibh°' J�o/1 93 s (f, Cc& l-lo7 % Qum ,�20/5- C iljdj,�, /J/ (3owP1,nJ G2etn t acE �Z)LLjzha/,j Cou�at 1 aDs �, /)J% 11,eIVII Llu)i4,/2 ,35 f 'T�bod CEDAR RAPIDS AND DE - L`J ,ZC /`i Cccc12 /531/ (C�. /2Q•QiE as C%1ienpoaal 09/& ���nnfr2cf Nc E• /.3 �. ♦un �ueeil a�3� •l32ad�o�d l ►L q a 7 t_ t k:E, Cou2� 310 g1cY -��d�2 1 X03 L<_���fQQ z vov ; l a you j 00 �Encul,;p ^� J �26c�ec vJ2tJE. /ODCo ILIO 8/S G 13 �• Q.Cvo,,,; � J�n 1G9 CzCIE„n -Rood i yoL6 U�t-04,a -7/5 ADD �(JoC� c% CPae� lyL'D Oa�cPnu�� I MICROFILMED BV ,{( JCRM MICR+LAB , 1 CEDAR RAPIDS • DES MOINES 19iu(OiiLMEU BY JORM MICROLAB 1704 G LnClA /'7// /71CIACCt/1 A)e. a3a� 7�evada as/� Peif1Cd0n cczd 600 3/0 Re.A0 &6W y/S TZeacE /oa cciy � Salo Cd%In wood 1'l a� 3a�kEzi-) /a18 ©"CeL-P�t (pD3 6,eoc> 5 '16., 1�4.dy, 3/0 C oc. -RI-2o k 3/0 ,b. GcV6Rr)C2 T�Egao Cane. .,?a3 3 ZcdJL 34 Oove�e /o p(r//%i;2d 406'. -gz9 Ca111OAM;a qO ),�.ZL j& 3Uolc �rzoo�idi, CEDAR RAPIDS AND DES /o`l t E(l 20 /�07 C�e��b� Conte l7/l Cz PFa lon Sag ✓ju2Qt�7� DE2tven /o ao ca22cd 8�'�CU hpna.Qc�;e 9a 3 C`7od9 e, , 7e?&c y Zane cze6a. /a/ S/ % �GWEPc/ Z01'7 Si.�Ft fjG2. Q2 30 � C��Qe��. Cv«rely ,Seed �!l �'rzacL TC, ad / //(0 &cx: �� 3,e xA jooz7 l 7 7�, l"71 f ;�pl)o o .�9n � ;/jizoo,L-ads Y MICROFILMED BY 11 JORM MIC R+LAE3 CEDAR RAPIDS • DES MOINES Mjt i(Uf iLMLD BY JURM MICROLAB CEDAR RAPIDS AND UES �� �4c�2E.bA PI 8/3r/79 70 T- 6 6)6 606 AJ, C,'AM)L T 9// In /�'D9 y"// 7A 9/x/78 gay K;wood '77, 9/c/7� Ii 3/ CiacPe �iJ�nE) `7A /78 '45-09 �. �OSh✓n�i�/1 j umdj& /303 Ash 8/6 �zti 9/x/78 /3o3 Ca22o// 1% 9/,1/79 % S. 1,121)on De. F 9.1,29 -700 g/�/�8 91/0 /��a�l��erd �a�E F F/75 -�ooa CQa/Ed/ AF,zl- 1.'410 9li/JB /03 �cv�nc� Q&"l P&cz F 9/x/78 a//a F S�rzE�� F 9 i/78 3D/0 ScdEE'I-Lg Q2 F 9/s/78 303 PosfoQo/ F 9/5/78 60Y 915-1?8 030a :0/02 Zoe, F > Ca 11r-,4 A 2t - Y X338 - 00lop GIV *el G&W 141 el - no a su.Ez c/ uJ seks in a 2orc1 No 10ILZU10 3 cdids no P'4141 1140 no/pc'c�u� WEf�s no /0/;:�U/O .3r iu/(-7 p,; Lo i M 1 ss,'s:d `3 no a67 A =� wEFI s /hu abe.t svot �.1%/ -� wEf� put ewF serf Tu«. w// Ac� �• ss�, m . S�� f . s 9/s�78 soo S. �um�� /��sSEo�SfOFea i>7Fs OAX 3a7 LEE �S Fef T ALs.5iw z eoz'4s 14ICROFILMED BY JORM MICR+LAB 1 CEDAR RAPIDS • DES 140INES I•uulur iLi'!Lu BY JOR14 MICROLA6 CEDAR RAPIDS AND DES 4 �7EurJ 2i,'1�" (�r.�a 33B-0000 � J�Cc� M��/CffS P'cTEf, 9/5/7 S 9ya n7,%/E,e /j'1 /s/�s yon o/,,�4�f 4,r, T > Ca11gd Azle /- F 79 9/6/78 '2/S ROOE,e % /G/78 93s Guz- /%7 9l /78 /7/ 0,0. 1/9/7V , 8/`i "Aa2L 7/79 Calla A/2f 411'so 8 tea,,�//9 C7,%6�et 9/9/?, //5c ACV Po ad F 79 yob 0h,1"�f o/�7�� f // 6 41)01al� C6u2l 7/78 P,3/ F CO��yE (Ficaanc2 7A A) m A T F T l✓ W 1 LA/(,60l�,ef .-), YS 1/9/7V , 8/`i "Aa2L 7/79 ODD/ Aoca&L LA V's f 2s /B/7p /ao/ %y/fes Cau;el- 7/ 7s a aCb /%%ra.ml` ervf. %rI 8 /j,1so916602 y 1/8/75 SDS L', 41)UL �1 1& CLucas) AV 79 ac?03 &5&)aod Ze, F 718/79 7, ?,S AjXlX a�W TFGSOn I�,aSFC1� sof s lnl'�W i Seraz d /nr55Ed a �E�/s a cveE,�s mt`ssEd wEEK.b m,ssEC� yy�� (CaA!j� st✓tRa/ �iintt 6y � no.tir�n�., /t//SSEd �EVE,E'a/ Y7%rrEs Six 6 3 eoeds cL 20tJ ' /r`tssEd onE. M04'7% 'n?, "s sec o/ viJ, c'E, s�,4.� ,,3 wee �s wz&/ GJE fXS I �// wE�s PZ/Almd 4& 4e4l G-LfF�S /7Or.J /11�ssfd � wfE.�s I41CR0FILIdED BY JORM MICR+LAB CEDAR RAPIDS - DES MOINES Puu(Ui li-MrU BY JORM MICROLAB �I/s CEDAR RAPIDS AND D 338-DO6p /YC/cQ,Pf55 ���9 �ason Dst /,r�� Cu /rEd A/E2t /� �/o a, ," 5cr�L; ( 9/8/78 Sac/ F2;end�y wFdcs C/oom s sed b�s/78 /SUS 13,eoo,600c>d T�• �i7%);63ed M of ''�//s// �/817� a!o 51/ Cc.�Zsii�n fc �o� F �i, bSEd / l �'�l a18��8 d /9 CRos�cf Lang f %�l /l%, ssF�l 9/8/76 /33/ l7i2�G�i0A7 �E, �% c� cuF�KS i 9/x/78 /5/a9 Xwe/l 7A 3 wE s Ge65)V;Ery 9/s/78 �oa9 d ef. F o,e 3 c,JF&Ks 28/78 /8/5-fA J F In".5md slfvfea/ 7�in�s 9/�`�rp /d 3/ S/i62�O�an � l�i�sSFa i Cal/Ed 4197' 7/1il-V 8/a 0/607n;k1l T i1%,"ss& 16/9 G,9,5iy LanE � , /7s 5-19/ eJEst �a,� �a61 /r7 �✓EFk s �///7! X307/ J�ouq�ass cilia/7S a G;/n,aeL �ok2t /�? l%%'ss�oi �3 w-,4-5 ///o / lJE {454)/7 4/ IV/ !I 8/s CZ3/o�m/�9�on se� !),e. �1 1 a/7s mal N- C.,nA �',y c//l /7l4coa,y6 %1� �•ssf� ,.A� i NICROEILNED BY JORM MICR+LA13 1 CEDAR RAPIDS • DES MOINES I i Puu(Ui li-MrU BY JORM MICROLAB �I/s CEDAR RAPIDS AND D 338-DO6p /YC/cQ,Pf55 ���9 �ason Dst /,r�� Cu /rEd A/E2t /� �/o a, ," 5cr�L; ( 9/8/78 Sac/ F2;end�y wFdcs C/oom s sed b�s/78 /SUS 13,eoo,600c>d T�• �i7%);63ed M of ''�//s// �/817� a!o 51/ Cc.�Zsii�n fc �o� F �i, bSEd / l �'�l a18��8 d /9 CRos�cf Lang f %�l /l%, ssF�l 9/8/76 /33/ l7i2�G�i0A7 �E, �% c� cuF�KS i 9/x/78 /5/a9 Xwe/l 7A 3 wE s Ge65)V;Ery 9/s/78 �oa9 d ef. F o,e 3 c,JF&Ks 28/78 /8/5-fA J F In".5md slfvfea/ 7�in�s 9/�`�rp /d 3/ S/i62�O�an � l�i�sSFa i Cal/Ed 4197' 7/1il-V 8/a 0/607n;k1l T i1%,"ss& 16/9 G,9,5iy LanE � , /7s 5-19/ eJEst �a,� �a61 /r7 �✓EFk s �///7! X307/ J�ouq�ass cilia/7S a G;/n,aeL �ok2t /�? l%%'ss�oi �3 w-,4-5 ///o / lJE {454)/7 4/ IV/ !I 8/s CZ3/o�m/�9�on se� !),e. �1 1 a/7s mal N- C.,nA �',y c//l /7l4coa,y6 %1� �•ssf� ,.A� i NICROEILNED BY JORM MICR+LA13 1 CEDAR RAPIDS • DES MOINES 611L,iCUFiLHLU 8Y JURM MICROLAB CEDAR RAPIDS AND DES /y� 2/fit S JV -OD(a0 S '� 1acQc�Q 21f S 5 � a �Ettton op- /%� E 9/j3/7b' 9� 3 F, t-I/4S��il97on /y1/%iasf[i/ l tvfE� 9//3/76' 93S F. CO/{E�%/� /GJ, w /'/iSStA SfIJ�P<c�4iff/CS ry/iC/.78/ Ca//fl7 /`liE Y 7i5 �.mr i� /,3 9Vy/709 G/flldalL CJ %�S3Fd n Cirttn 9/Vv /SDS 3z;a%rjood avef�s callfd fixe- /. /,5- s9/ q/17 9 a7 �u2{7arn Cf• %% /Ylisstd moti' 6L;i'45on S7� /Y{�sSFd / moclT� �,7d 3oS (.�Es�in�ns%2 F SevEeal &1)1 s. 1''28 has �S, /r/f. �2�0� OA F wE��s �.2g 9/� S, ax r- �E v�ce�a f r �EEIc s j 'J, m , V 07�. /S s -ISS X39 Post Road 9//8/78 00W F Cou 1Z7L yn,'s sFd 7 al1Es 9/is�7S 1,53 91�1 9/ls/7� 303 Pod7Ll�oad F �liaoFa� wFf�d A1E2/ `1, 3LF /0-m 9�8/f !W/6 5k/7)601 A,`; /C 1�1,ssFd w���S 9�9 7s 6 � � 200 K.S ��� tea, F. /yJlssEd sFv�iza/ �f� lC7 903 S• /��1 �li�En /�?;e� y..-.�rnwnw F, �' IdIDROILIdED BY JORM MICR+LA6 CEDAR RAPIDS • DES MOINES I'llwiUFlLt-1LU BY JORM HICROLAB /ll�casP�;�� %h'Ecyc/ ny CEDAR RAPIDS AND y 3.sf3-C�IaC> � �Fl2SOf� 02 �M�-- c5�at'L, Q / Q was I�%lased �i SS�d �%iSSEd /� LJEt/is LJEEKs /%1.S sEcl 3 L�eF�s /rI r�SSFCI /'1%,sseal % mo/nd �iSSf p /nr ase J7 ssee (tJ /z r-onWIS In of LJEE��� /'ylia.sfd� s- 1V'ls.5zd 0 L)el. s Name/ a MICkOFl LMEO BY j{ 'I DORM MICR+LAB ,1 CEDAR RAPIDS • DES MOINES e7l'10 /0, m. /7Y a83-,) 7%i 9/aa/7�' l8 -z/8 -2 Iki, U. Yh ;)17$ /03 13odl,� C2F'p-A F 9/aa/78 —POS S. /71/ iU�on 01/2,9 7,?.3/0 F 9/aa/78 wo `,�r�dE,e In 91aaR/78 9/S 310 Ca Iq1P-2f /d -/s a, f'7, lf/-;�a/'V 0110 �Pk od �E�de�h//� F 9/a 2►178 3 a l OL c^PEJ %L U�/, /? /0@& Qt /& r�i��t 9-00 9/0-7178 So? S /V D EbL U& i 9/a -7/'78 &540 4/�7/7� 8/S CJyPde l-�i1t�n Woad /3 F. 3 9�a 7/79 /09/EnnoQd yob' Oaks F 5, N, Ca �ifCl d /i f 3' os 9/27/78 -7/5 A/ C,/6e2f T 9/O 7/ 9.W y 3.sf3-C�IaC> � �Fl2SOf� 02 �M�-- c5�at'L, Q / Q was I�%lased �i SS�d �%iSSEd /� LJEt/is LJEEKs /%1.S sEcl 3 L�eF�s /rI r�SSFCI /'1%,sseal % mo/nd �iSSf p /nr ase J7 ssee (tJ /z r-onWIS In of LJEE��� /'ylia.sfd� s- 1V'ls.5zd 0 L)el. s Name/ a MICkOFl LMEO BY j{ 'I DORM MICR+LAB ,1 CEDAR RAPIDS • DES MOINES giuiWi ILHru BY JURM MICROLAB CEDAR RAPIDS AND DES ��8-GOO _u P; lc3DA 0,1 '! C-Iled Ak-le - �: o5, N• � , �S�/o� �7 9/a7/�d 71s /) C, T 911,td c) 1 w/mss gay N. Zd9, i Z) coE,54r Cul�Ed AIEe-� y's-o /0 m, Q 9�a�/78 �49 S .Swrit7i4 � ✓ � w��,�5 9/a8/,2tI /640 maen i/O95 1,o1L✓ T7D/ cE, rs o;� � /(gyp 7�. CtL a wEE�s .�� wQy 9�a9�7� aG �d%2d C�ccef 7"h Af /easy` �rn� 9�a/�s �5w Z/oc� O -T- C/aalc J' 41av/�8 loo oak/awl T 9/ 9/78 /70V C/E:,o�lt-- W J%,ss -d 1/6/ (f, 7 L -"am T d 9/ /7b' aaa� alar„ OZOL 7 A /7// 44OCal%2,r, /Y%da�d a7 c,.L�E�Gd > cloid A&I �ryQ�, 079 /D•po 72 C wEds 9/a�7� �3 �a Evada 77 ��a9�7s x,5%9 %ice �o� �ocrC� � /�lri.>c�CJ✓ S w�E�c4 9/a178 �,PO l��i�d �d0 /X'Y,ny� 9/a9/V8 Q60-7 ;En(G1itr%J F `3 /79A S f �r F e s 0,71 Yifauo away r%/78 3/0 -FEna T 3 wmf s (/'f �otp,�Ffs��i r-/-)/78 76 IAI77 9',30 a, m! Ocy, /�/a/�8 yiS %t�reucf F k &sle o? wf�cs �/ Cu/lid 7asf will — na ac&', 7akt t /7 s? /7// /ln%uStGcy�AE 71L ��j wF��ksr-//0-/a blyr /b�a/78 3a3 rAsf �oaG� � /�1i55f�(CtT/�R t4/IA 7rvicE� .......... ------ CEDAR - ... T- �7 ICROE ILME 0 BY E ' DORM MICR+LAO I ' CEDAR RAPIDS • DES MOINES j !A, i i CEDAR RAPIDS AND DES ��8-GOO _u P; lc3DA 0,1 '! C-Iled Ak-le - �: o5, N• � , �S�/o� �7 9/a7/�d 71s /) C, T 911,td c) 1 w/mss gay N. Zd9, i Z) coE,54r Cul�Ed AIEe-� y's-o /0 m, Q 9�a�/78 �49 S .Swrit7i4 � ✓ � w��,�5 9/a8/,2tI /640 maen i/O95 1,o1L✓ T7D/ cE, rs o;� � /(gyp 7�. CtL a wEE�s .�� wQy 9�a9�7� aG �d%2d C�ccef 7"h Af /easy` �rn� 9�a/�s �5w Z/oc� O -T- C/aalc J' 41av/�8 loo oak/awl T 9/ 9/78 /70V C/E:,o�lt-- W J%,ss -d 1/6/ (f, 7 L -"am T d 9/ /7b' aaa� alar„ OZOL 7 A /7// 44OCal%2,r, /Y%da�d a7 c,.L�E�Gd > cloid A&I �ryQ�, 079 /D•po 72 C wEds 9/a�7� �3 �a Evada 77 ��a9�7s x,5%9 %ice �o� �ocrC� � /�lri.>c�CJ✓ S w�E�c4 9/a178 �,PO l��i�d �d0 /X'Y,ny� 9/a9/V8 Q60-7 ;En(G1itr%J F `3 /79A S f �r F e s 0,71 Yifauo away r%/78 3/0 -FEna T 3 wmf s (/'f �otp,�Ffs��i r-/-)/78 76 IAI77 9',30 a, m! Ocy, /�/a/�8 yiS %t�reucf F k &sle o? wf�cs �/ Cu/lid 7asf will — na ac&', 7akt t /7 s? /7// /ln%uStGcy�AE 71L ��j wF��ksr-//0-/a blyr /b�a/78 3a3 rAsf �oaG� � /�1i55f�(CtT/�R t4/IA 7rvicE� .......... ------ CEDAR - ... T- �7 ICROE ILME 0 BY E ' DORM MICR+LAO I ' CEDAR RAPIDS • DES MOINES r'Alw(UFil-HLU BY JORM MICROLAB • CEDAR RAPIDS AND DES M0 NES, 1041 338-W(oO V �c4cQ2�aa P ma y: 'pEa4r. art �a �o/a/7B loo n`�x�ySitvQe �,e, � I�llssed /ash o� wEf,� 10/3/78 9 a 6 Cowof) i oed � a coi eks t0/3/7p %clay OU eg S4 / GJEE/Ls 10/3/78 /��1a/� 04aysi I)%',`/Ss6w > Ca/!Ed 141 et �c7� 3 y 30 a n' , % /�iissfd / 7(a PEn o 'd —�f � �m �„c�Ed 3� rots j no acfion ;� /0/`//%9 / -7// /�u5CGc7)/1� //� a W@ f ks CRf leasf) T //%s. d Setme4l tJt4s Ca//ad Ll &4. -no ac/on /ak-m /0/1-hy /cia9 1/fc��l! %fi In"6sed Ao0a ? weeks to/5/7Y 3/0 9� 3Q 3. GougenoX l✓ %%��s5P0 � i s/S/78 to/s/7 f' ty as✓3 a"c. S. Z)CdyE / , W /1'lissEC7� /a vEe 711 3-5/ 6jtd.S Ca llEOl �%E27L C�/c7(, /0/S/7� /Oa(o %7l1"2d At, COn i� Sf� �%t / /nCritilii iO/5/78 3a3 PO�st ?bac! F /!i°ssEd to s/�s 0009 CO/,'�060 0 7� /0/5/�� .� �a S �ody� L) rrl,ss,d a > Ca/l�d /�/tet y 300(' /7s a//9 �. Cou2f F ca //t d 4lEet �o m l Dom` /� 308 Caw/ )c' Stiff` f 146 / c/cSSfd ,._ . ' r..... 'ail J. "✓N:a ' ................ a.rw...ra.u...L�r.w+4J:.41h..w r .._ :r�r1..N Y vr!. '.....Ir..a IJ.JYL�i1r:MbJ41r pr.a.._.. y 141CROFILMED BY � JCRMMICR+LAB I CEDAR RAPIDS • DES MOINES I;it,iiuriLMLU BY JURM MICROLAB CEDAR RAPIDS AND DE PckYL 3-,)3 A.51- F (t `�E� 1 n l GE�DkE %niSSEo/ v? �Eb" /T /wF 760 7 c�s�y l444- as -p 9�3 �, l�si,��y�n l✓ 7 7 // C/Ea sore uvEdc s { 314 -7 A /_ int 5 �9 tiLJCI C'Ji%� /'VA/ 4G 4 c ' Ort f JEt/nts�lay� 9{/a 111 la &/c . P?/S.�/ sea, �ffps 16 411 zhlewen /oa0 Ca,e2o Qom; /(o 411 /Kae y V6oE2,q/ Ge�EE�s /07 /��ir�oui ,5-/74 l� 4 80D Rona/ds 4/F2f 6-'00 P, M. /yoq YL0611 7� 30/7 1E4�ideia2 X07 Co/*71 IdICROEILMED BY ' JORM MICR+LAB i CEDAR RAPIDS • DES MOINES I•llw(Ur iLHi.0 BY JOM 141CROLAB CEDAR RAPIDS AND 'DES erg , io�i9/78 i9ia F S�QE�f '- ! > Ca-llEd �l�rr.� 1/• SSS,, m . r /D/JOl%8 //00 ` /ogG_.1C o/T a200Ku�0o /f� 73 h 9 YOill iCol�nraood� /o/ao7'r _ 1/6/ E, �ef�e b� �✓ seasonyr� I ;r,� ©c. /9 � wF� /�l isSEII4' �aSf uJPEL�/C , ���1/ noT/Oic,�i0 up ul7�zca/l,} lyiisSEG o� uJ//�EK� IdILROPILMED BY J .RM MICR+LAB CEDAR RAPIDS • DES MOINES I:Ii0tUrILNLU BY JORI4 MICROLAB CEDAR RAPIDS AND DES City of Iowa C�"' Date: November 1, 1978 To: Neal Berlin and City Council From: Eugene A. Dietz, City Engineer Re: Washington Street Bridge Over Ralston Creek Some months ago, while discussing the advisability of awarding a contract to repair the timber structure on the Washington Street bridge, the City Council asked that I engage Noel Willis to provide some alternatives similar to those he produced for the Summit Street bridge. Attached for your review is the result of that request in the form of a report dated October, 1978. The report on the Washington Street bridge reviews many of the alterna- tives that were available for the Summit Street project. The last page of the report gives a summary of the first costs as well as annual costs for the four solutions Mr. Willis examined. The second to the last page of the'report contains the recommendation of Mr. Willis. He has in fact recommended the reinforced concrete slab which has the lowest annual cost. City staff would concur with the recommendation as made by Noel Willis. If the City Council concurs, I will proceed with securing a design for the bridge project such that we may proceed with construction shortly after the beginning of FY80. bdw3/7 2060 IdICROFILMED BY y} JORM MICR+LAB CEDAR RAPIDS • DES MOINES M A' e C S i I:Ii0tUrILNLU BY JORI4 MICROLAB CEDAR RAPIDS AND DES City of Iowa C�"' Date: November 1, 1978 To: Neal Berlin and City Council From: Eugene A. Dietz, City Engineer Re: Washington Street Bridge Over Ralston Creek Some months ago, while discussing the advisability of awarding a contract to repair the timber structure on the Washington Street bridge, the City Council asked that I engage Noel Willis to provide some alternatives similar to those he produced for the Summit Street bridge. Attached for your review is the result of that request in the form of a report dated October, 1978. The report on the Washington Street bridge reviews many of the alterna- tives that were available for the Summit Street project. The last page of the report gives a summary of the first costs as well as annual costs for the four solutions Mr. Willis examined. The second to the last page of the'report contains the recommendation of Mr. Willis. He has in fact recommended the reinforced concrete slab which has the lowest annual cost. City staff would concur with the recommendation as made by Noel Willis. If the City Council concurs, I will proceed with securing a design for the bridge project such that we may proceed with construction shortly after the beginning of FY80. bdw3/7 2060 IdICROFILMED BY y} JORM MICR+LAB CEDAR RAPIDS • DES MOINES QlwWl-1LHLD BY JORM MICROLAB October, 1978 • CEDAR RAPIDS ANIJ UL IMPROVEMENT OF WASHINGTON AVENUE BRIDGE OVER RALSTON CREEK IOWA CITY. IOWA MICROFILMED BY J6RM MICR+LAB CEDAR RAPIDS •DES MOINES •' NNW, Inc. J h11LRU ILi4EU BY JURM I•IICROLAB CEDAR RAPIDS MID UES a Eugene A. Dietz, P.E. City Engineer civic Center 52240 Iowa CitY, Iowa Dear Mr. Dietz, This will transmit my report on several alternatives for improving the deck surface of Washington Street Bridge over Ralston Creek. ics which I have also diredsindthe connection witraulich newabridgetconstruction would be requ' and shown that a new structure would cost 8 to 10 times the deck upgrading proposals presented. Sincerely, Noel W. Willis# P.E. NWW/glb t ?MICROFILMED BY JRM MICR+LAB i CEDAR RAPIDS • DES MOINES t410WU 1LMEU BY JORM 141CROLAB n CEDAR RAPIDS AND Purpose The purpose of this report is to examine the various alternates for upgrading the bridge located at the intersection of Washington and Van Buren Streets in Iowa City, Iowa. The bridge spans Ralston Creek. General Description The bridge is situated on a diagonal path of about 450 across the intersection of the streets• The path is not a straight line, but rather approximates the arc of a circle with a radius of about 3001, The latest inspection report indicated the present bridge to have been built in 1910, The stone walls are about 26 feet apart and are spanned by 8x16 timbers with a 3x12 and 4x12 timber deck as an overlay. Timber decks are often nuisances in urban uses• They wear, they abrade, they deteriorate quickly and they are noisy. One would expect a timber deck to last 5 to 10 years in an urban setting. The 8x16 timber stringers are placed about radially, or at right angles to the walls. This means they are not parallel to any of the intersection's traffic flow, which produces cer- tain design complications. In spite of the design complications, this is probably the way the stringers should be placed as it minimizes the length. While the bridge has no great span (about 261) it does have a width of 190 feet and a surface area of about 4850 square feet, .MICROFILMED BY w DORM MICR+LAB CEOARRAPIDS DES MOINES 1-1jLoWFILMEU BY JORM 141CROLAD — 2 — CEDAR RAPIDS AND DES The stone abutment walls are in marginal condition. The Engineering Department took bids recently on a City-wide pro- gram which; among other things, provided improving the walls. The procedures and prices for upgrading contemplated by this letting have been incorporated in each of the following schemes. Since the bridge spans a water course and water runs down- hill, it is natural that the structure lies in a natural depres- sion. Van Buren Street from the south, and Washington Street from both the east and west have definite slopes down toward the bridge site. y i Hydraulics it Ralston Creek has flooded at regular intervals throughout 9 the course of recent years, and has attracted a good deal of study as a result of the inconvenience and damage. Some years ago, the Corps of Engineers computed that a flood control pro- ject for Ralston Creek had a benefit -cost ratio of less than one and abandoned further study. Recently, the U.S. Geological Survey completed a flood insurance study. In addition, a storm water management study is in the advanced planning stages. Combining this information with what is known by the Iowa Natural Resources Council gives one a good deal of insight into the problem at hand. The problem is that the structure being considered by this report is the major hydraulic bottleneck on Ralston Creek up- stream of the main line of the Rock Island Railroad. The Iowa Natural Resources Council's standards expect { new urban structures to be designed so as to pass the 100 year i I 141CR Y' • ? IdICROFILMED BY til1 JORM MICR+LA13 �..I CEDAR RAPIDS • DES MOINES 1 i s _ 1 _ I l V i { ! 1-1jLoWFILMEU BY JORM 141CROLAD — 2 — CEDAR RAPIDS AND DES The stone abutment walls are in marginal condition. The Engineering Department took bids recently on a City-wide pro- gram which; among other things, provided improving the walls. The procedures and prices for upgrading contemplated by this letting have been incorporated in each of the following schemes. Since the bridge spans a water course and water runs down- hill, it is natural that the structure lies in a natural depres- sion. Van Buren Street from the south, and Washington Street from both the east and west have definite slopes down toward the bridge site. y i Hydraulics it Ralston Creek has flooded at regular intervals throughout 9 the course of recent years, and has attracted a good deal of study as a result of the inconvenience and damage. Some years ago, the Corps of Engineers computed that a flood control pro- ject for Ralston Creek had a benefit -cost ratio of less than one and abandoned further study. Recently, the U.S. Geological Survey completed a flood insurance study. In addition, a storm water management study is in the advanced planning stages. Combining this information with what is known by the Iowa Natural Resources Council gives one a good deal of insight into the problem at hand. The problem is that the structure being considered by this report is the major hydraulic bottleneck on Ralston Creek up- stream of the main line of the Rock Island Railroad. The Iowa Natural Resources Council's standards expect { new urban structures to be designed so as to pass the 100 year i I 141CR Y' • ? IdICROFILMED BY til1 JORM MICR+LA13 �..I CEDAR RAPIDS • DES MOINES 1 l V i { ! 1-1jLoWFILMEU BY JORM 141CROLAD — 2 — CEDAR RAPIDS AND DES The stone abutment walls are in marginal condition. The Engineering Department took bids recently on a City-wide pro- gram which; among other things, provided improving the walls. The procedures and prices for upgrading contemplated by this letting have been incorporated in each of the following schemes. Since the bridge spans a water course and water runs down- hill, it is natural that the structure lies in a natural depres- sion. Van Buren Street from the south, and Washington Street from both the east and west have definite slopes down toward the bridge site. y i Hydraulics it Ralston Creek has flooded at regular intervals throughout 9 the course of recent years, and has attracted a good deal of study as a result of the inconvenience and damage. Some years ago, the Corps of Engineers computed that a flood control pro- ject for Ralston Creek had a benefit -cost ratio of less than one and abandoned further study. Recently, the U.S. Geological Survey completed a flood insurance study. In addition, a storm water management study is in the advanced planning stages. Combining this information with what is known by the Iowa Natural Resources Council gives one a good deal of insight into the problem at hand. The problem is that the structure being considered by this report is the major hydraulic bottleneck on Ralston Creek up- stream of the main line of the Rock Island Railroad. The Iowa Natural Resources Council's standards expect { new urban structures to be designed so as to pass the 100 year i I 141CR Y' • ? IdICROFILMED BY til1 JORM MICR+LA13 �..I CEDAR RAPIDS • DES MOINES 1 PiiwWFILMED BY JORM 141CROLAB CEDAR RAPIDS AND - 3 _ {to 3 feet of freeboard between the provide storm and ideally, is is to bridge. This ! high water and the underside of the top of drift being damaged by high velocity prevent the structure from ( dead elm trees) during periods of flood. / (such as to the US GS flood insurance The 100 year flow, according ' 4950 CFS. If, as a result of the storm study, would be about built (one in , both impoundments studiesare water management of Scott Boulevard) the Hickory Hill and one in the vicinity The bridge under flow would be reduced to 3140 CFS. 100 year 1500 CFS which is 30% of the 100 study will pass only about than 50% of the managed storm flow. year flow now and less be taken by i of the hydraulic problem also can The measure bed is at elevations. At the site, the Creek stream reviewing of the deck is 654.5' and the deck elevation 6471. The underside the 100 x 656.5 �, The flood insurance study slows surface is at level of 662.5'. The storm water year storm to produce a water 658.8 once management study calculates a surface water level of the detention basins are built. Council of the Iowa Natural Resources To meet the criteria t he creek grade of a new bridge over to the letter, profile would bei 658.8 Design high water 3.0 freeboard underside of deck 661.8 + 3.0 (a minimum) + thickness of deck struct. Profile Profile grade, new structure 656.5 top of deck, ex. struct. I Amount profile grade must be elevated to fulfill 8.3' INRC requirements precisely I i r•'+�( MICROFILMED By ,- -. t DORM MICR+LAB CEDAR RAPIDS • DES MOINES _ mo,KW IL4tU BY JORM MICROLAB CEDAR RAPIDS AND This should not suggest that one solution could not be developed which would require a less than 8.3' raise in elevation, but it does suggest that, whatever the solution, a new structure will have a considerably higher grade line. It is likely that this will have some effect on access to the Civic Center and to Chauncey Swann Plaza and require substantial approach grade work in all four directions. In summary, the impact of the hydraulic constraints on new bridge construction on this site is substantial. Alternate solutions Since the hydraulic requirements on new construction would necessitate a substantially larger structure (probably in the $800,000 to $1,000,000 construction cost range), it was decided to concentrate in detail on deck replacement alternates which would not require major grade changes. Four alternates were reviewed: 1. Timber deck on timber stringers 2. Preformed metal bridge plank on timber stringers 3. 7" concrete deck on steel stringers 4. Concrete slab Timber deck on timber stringers This alternate was developed by the City Engineering Division. It contemplated reusing 40 8"x16" creosoted timbers now in the structure, adding 47 new ones, and covering the deck surface with 4x12 timber planking. Certain repair and refurbishing work was specified on the stone abutments also, and the work and this cost have been carried through the study. This alternate was bid at about $80,000. 141CROFILMED BY - 4:� JCRM MICR+LAB CEDAR RAPIDS • DES MOINES k i f d y I mo,KW IL4tU BY JORM MICROLAB CEDAR RAPIDS AND This should not suggest that one solution could not be developed which would require a less than 8.3' raise in elevation, but it does suggest that, whatever the solution, a new structure will have a considerably higher grade line. It is likely that this will have some effect on access to the Civic Center and to Chauncey Swann Plaza and require substantial approach grade work in all four directions. In summary, the impact of the hydraulic constraints on new bridge construction on this site is substantial. Alternate solutions Since the hydraulic requirements on new construction would necessitate a substantially larger structure (probably in the $800,000 to $1,000,000 construction cost range), it was decided to concentrate in detail on deck replacement alternates which would not require major grade changes. Four alternates were reviewed: 1. Timber deck on timber stringers 2. Preformed metal bridge plank on timber stringers 3. 7" concrete deck on steel stringers 4. Concrete slab Timber deck on timber stringers This alternate was developed by the City Engineering Division. It contemplated reusing 40 8"x16" creosoted timbers now in the structure, adding 47 new ones, and covering the deck surface with 4x12 timber planking. Certain repair and refurbishing work was specified on the stone abutments also, and the work and this cost have been carried through the study. This alternate was bid at about $80,000. 141CROFILMED BY - 4:� JCRM MICR+LAB CEDAR RAPIDS • DES MOINES N f•tlL<WHU4ED BY JORM MICP.OLAB - 5 - CEDAR RAPIDS AND Preformed metal bridge plank on timber stringers In this alternate, 47 new 8°x16" timber stringers were supplied as in the first case. The deck surface was Provided by application of Armco preformed bridge planking which would be filled with asphalt to provide a smooth riding surface. Asphalt filling could be done by city forces. The panels come in rectangular shapes, but the skewed and ir- regular configuration of the bridge will mean much scrap, difficult fitting in the field, and therefore higher costs. Estimated cost for this alternates Timber stringers 29,500 Deck Plank 50,000 Asphalt 9,600 Removals, abt. work 18.000 $107,100 7" Reinforced concrete deck on steel stringers This alternate is a conventional bridge deck with 14" steel stringers spaced at 61 centers, and a 71, reinforced concrete deck constructed compositely with the steel. Advantages are simple construction techniques for the steel, and the variations in the shape of the structure being taken up by the concrete slab. A disadvantage is that as long as we continue to apply salt to streets in the winter, our bridge decks will con- tinue to last only about 10 years. This is the subject of a good deal of study and experimentation, but the present state of the technology has not yet overcome the problem of deck deterioration of thin slabs due to salt. III CROFILMEO BY 4 DORM MICR+LAB iCEDAR RAPIDS • DES MOINES ti I V J I'liw(OFiLMED BY JORM 14ICROLAB CEDAR RAPIDS AND 6 Cost estimate is as follows: Steel beams 33,600 Reinf, concrete slab 20,700 Reinf. steel 10,00018 000 Removals$ abut. work 9 $82,3UU ConcreteSlab. This alternate suggests itself because of the economics of current short span bridge practice. The best dollar for dolla is the standard r bargain in bridge construction today ous flat slab in which a continuous flat concrete slab bridge, the deck This structure is simple Y"0741CROFILMED BY J6RM MICR+ LAS CEDAR RAPIDS - DES MOINES of 18,, to 2411 thick f0rBIS to form, and easily adapts to irregular shapes. Another advantage is that this slab will have. main re inforcing in the bottom and not be as subject to salt solution thin slabs with major reinforcing close to the salted is attack as surface. t This system lends itself to the replacement of concrete surface readily similar to the method used on the Park Road Bridge deck. one qualification should be that a concrete slab is heavier than the present timber struture. Before undertaking this J1. have some foundation exploration made alternate, one should the additional load of .5 to .7/ton/square to determine whether foot loading might cause foundation settlement, and if so, how much. Y"0741CROFILMED BY J6RM MICR+ LAS CEDAR RAPIDS - DES MOINES i I•IIW(W ILMED BY JORM MICROLAB CEDAR RAPIDS AND DES MOINES, IOW r - 7 - Estimated cost of this alternate is: Slab and reinforcing 80,000 Removals and abut, repair 18,000 $98,000 Recommendations The writer has no indication that it is the present policy of the City of Iowa City to involve itself in a completely new bridge project at this location. This would involve a first cost in the range of $800,000 to $1,000,000 and carry an annual cost of 7 times the mainten- ance alternates examined. The annual costs of the concrete slab and thesteel stringer and concrete slab alternates are $7316 and $7570 per year respectively. The difference between these two is 3% which should not be taken literally given the precision of the estimates. In other words, the schemes should be viewed as comparable on an annual cost basis. If the foundation material is adequate, the slab alternate does provide for a reduced maintenance potential, and is pro- bably a little better solution. Costs and comparisons are shown in Table 1. MICROFILMED BY q� JORM MICR+L ABIllt CEDAR RAPIDS • DES MOINES j 1 I� I I j I j I i .I i I i i i l I•IIUNFILNED BY JORM I•IICROLAB CEDAR RAPIDS AND DES TABLE 1 PERFORMANCE CHARACTERISTICS AND COST ESTIMATES 4 BRIDGE DECK REPLACEMENT ALTERNATES -- i r rv4•. I Annual ternate u n bion `) er Deck ^=r Iber Stringer -.al Preformed idge plank ,ber Stringers "et Steel :.ringers inf. Conc, deck Concrete ab TABLE 1 PERFORMANCE CHARACTERISTICS AND COST ESTIMATES 4 BRIDGE DECK REPLACEMENT ALTERNATES -- i r rv4•. I Annual 141CROFILMED BY r JORM MICFt+LA13 I CEDAR RAPIDS • DES MOINES l u n 141CROFILMED BY r JORM MICFt+LA13 I CEDAR RAPIDS • DES MOINES i i I MiUitw iLMLU by JURM MICROLAb CEDAR RAPIDS AND UES " City of Iowa Cit MEMORANDUM Date: November 2, 1978 To: Neal Berlin, Members of the City Council, and Model Lease Committee Members From: Michael Kucharzak, Director of Housing and Inspection Services Re: Model Lease May this memo serve to clarify the understanding reached at the City Council meeting of October 30, 1978, regarding the inspection checklist and model lease being developed by a variety of tenant organizations including-P.A.T., I.P.E.R.G. and the Iowa City apartment owners as- sociation. The above mentioned groups have sent representatives to several meetings at which the City also had a representative to discuss the possibility of developing an inspection checklist to be utilized by tenants and owners in determining the condition of a premises prior to letting for occupancy and upon termination of occupancy. The representatives also spent considerable time discussing d model lease that would be in accord with the landlord -tenant provisions effective January 1, 1979. Considerable progress has been made on both the checklist and the lease provisions, with both owners and tenants developing their own version of a checklist and a lease. Each representative was allowed to present their checklist or lease for open discussion at the meetings. Comments then followed regarding suggested changes that should be considered in the.final draft of the documents. After several such meetings it became apparent that representatives could agree on several points and that a legally correct outline lease could easily be developed and mutually supported. Both tenant and landlord representatives wished to preserve their own philosophical identity and were hesitant to totally endorse the other's lease and would only accept a document that had certain basic provisions that they felt best served their position. Mike Kucharzak indicated the Council's interest in having the Committee finish the work on a model lease by November 1, 1978, and he further indicated that if we are at an impasse position that the skeletal lease be presented to the Council as the joint effort of the Committee and that each Committee person could attend an informal session of the Council to discuss what other provisions they would like in a model lease. Representatives of the various organizations carried this concept back to their parent groups and were to report back their findings on Thurs- day, October 26, 1978. MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES ao6 is MiUitw iLMLU by JURM MICROLAb CEDAR RAPIDS AND UES " City of Iowa Cit MEMORANDUM Date: November 2, 1978 To: Neal Berlin, Members of the City Council, and Model Lease Committee Members From: Michael Kucharzak, Director of Housing and Inspection Services Re: Model Lease May this memo serve to clarify the understanding reached at the City Council meeting of October 30, 1978, regarding the inspection checklist and model lease being developed by a variety of tenant organizations including-P.A.T., I.P.E.R.G. and the Iowa City apartment owners as- sociation. The above mentioned groups have sent representatives to several meetings at which the City also had a representative to discuss the possibility of developing an inspection checklist to be utilized by tenants and owners in determining the condition of a premises prior to letting for occupancy and upon termination of occupancy. The representatives also spent considerable time discussing d model lease that would be in accord with the landlord -tenant provisions effective January 1, 1979. Considerable progress has been made on both the checklist and the lease provisions, with both owners and tenants developing their own version of a checklist and a lease. Each representative was allowed to present their checklist or lease for open discussion at the meetings. Comments then followed regarding suggested changes that should be considered in the.final draft of the documents. After several such meetings it became apparent that representatives could agree on several points and that a legally correct outline lease could easily be developed and mutually supported. Both tenant and landlord representatives wished to preserve their own philosophical identity and were hesitant to totally endorse the other's lease and would only accept a document that had certain basic provisions that they felt best served their position. Mike Kucharzak indicated the Council's interest in having the Committee finish the work on a model lease by November 1, 1978, and he further indicated that if we are at an impasse position that the skeletal lease be presented to the Council as the joint effort of the Committee and that each Committee person could attend an informal session of the Council to discuss what other provisions they would like in a model lease. Representatives of the various organizations carried this concept back to their parent groups and were to report back their findings on Thurs- day, October 26, 1978. MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES ao6 9 Fi wtUi iLdi�u bf JURM MICROLAb CEDAR RAPIDS AND DES 2 W Following the presentation to representatives of the apartment owners' association, Bob Johnston called me indicating that his organization did not want the City Council to take any legislative action on a model lease, that this was not the intent nor the understanding of the of- ficers of the apartment association. And that if the City Council insisted on taking some action regarding the model lease, that the apartment association would be forced to withdraw their support and will not attend any more model lease developmental meetings. The above paragraphs are a summary of the comments I made at the Council meeting on Monday afternoon, October 30, 1978. Following my comments, the City Council clarified their position regarding the model lease and offered the following statements to be carried back to the members of the Model Lease Developmental Committee: The City Council does not intend to take legislative action regarding a model lease, but rather wishes to encourage both property owners and tenant groups to become aware of the changes in state law affecting landlord -tenant relationships and specifically contents of leases so that no one is caught in a legal problem after January 1, 1979. The Council respects the position of the landlords and the tenants in seeking to complete the lease development on their own, however, the City will provide staff support when requested in the form of repre- sentation from City staff, clerical support and other needs as requested by the Committee members. The City Council also wished to convey to the Committee members their interest in obtaining a jointly endorsed inspection checklist that could be distributed to owners and/or tenants requesting same as part of the code enforcement efforts of the City of Iowa City. The Council again made it clear that they were not saying that a specific checklist and certainly a specific lease is mandatory; nor will it be a condition of law to be utilized in Iowa City, rather, they are trying to perform the role of a facilitator in bringing together the private sectors of land- lord and tenant to help the greater Iowa City community understand the impact of the changes in Iowa law that will become effective January 1, 1979. I have contacted the tenant and apartment association members that have been active in the Model Lease Developmental Committee and they.have indicated an interest in meeting to again attempt to refine the docu- ments that they have been working on. As I indicated to you on October 30, 1978, I will provide the Council with a summary either verbally or in writing on November 7, regarding the success in again bringing the Model Lease Developmental Committee together. jm/sp MICROFILMED BY rs JORM MICR+LAB CEDAR RAPIDS • DES MOINES r;li L,[Wr ILALU 8Y JORM MICP.OLAB CEDAR RAPIDS AND 0 ^! City of Iowa Cit MEMORANDUM DATE: November 1, 1978 TO: City Council FROM: City Clerk Abbie Stolfus RE: Distribution of free copies of new municipal code. Previous staff memos address the question of who should receive free copies of the new municipal code. Because the City was ' directed to do so by the State Code, previous recodifications and supplements were given free to the news media. This provision is not in the Home Rule Code. Council also provided free copies of the Code &. supplements for the League of Women Voters office; Government Publications Dept. Univ. of Iowa Library; SUI Law Library; the University Legal Dept.; Hawkeye Area Legal Aid; Johnson County Board of Health; Johnson County, Attorney's office and to Judge Chapman. Legal staff suggests free copies of the Code F, supplements as follows: 1 copy to District Court Judge 1 copy to Judicial Magistrates 1 copy to State Law Library, Des Moines 1 copy U.I. Law School Library and, free copies of the Code only for the newspapers, television stations and other media. The City Manager requested that I write you a memo as Council should make the final decision. I-IICROFILIdEO 6Y ' JORM MIC R+LAB CEDAR RAPIDS • DES MOINES SLG ■ I, s d s 'r i; Q r;li L,[Wr ILALU 8Y JORM MICP.OLAB CEDAR RAPIDS AND 0 ^! City of Iowa Cit MEMORANDUM DATE: November 1, 1978 TO: City Council FROM: City Clerk Abbie Stolfus RE: Distribution of free copies of new municipal code. Previous staff memos address the question of who should receive free copies of the new municipal code. Because the City was ' directed to do so by the State Code, previous recodifications and supplements were given free to the news media. This provision is not in the Home Rule Code. Council also provided free copies of the Code &. supplements for the League of Women Voters office; Government Publications Dept. Univ. of Iowa Library; SUI Law Library; the University Legal Dept.; Hawkeye Area Legal Aid; Johnson County Board of Health; Johnson County, Attorney's office and to Judge Chapman. Legal staff suggests free copies of the Code F, supplements as follows: 1 copy to District Court Judge 1 copy to Judicial Magistrates 1 copy to State Law Library, Des Moines 1 copy U.I. Law School Library and, free copies of the Code only for the newspapers, television stations and other media. The City Manager requested that I write you a memo as Council should make the final decision. I-IICROFILIdEO 6Y ' JORM MIC R+LAB CEDAR RAPIDS • DES MOINES SLG ■ r;iL,t(Ok ILMLU BY JORM MICROLAB • CEDAR RAPIDS ANU ULS City of Iowa City MEMORAND DATE: October 3 1978 TO: Neal Berlin, City Manager FROM: Harvey D. Miller, Police Chief RE: Homecoming Costs A Council person inquired as to the costs to the local taxpayer of the City Police contribution to the State University of Iowa Homecoming, My estimate for the almost 100 hours of overtime is $1,075. The total for all home football games is around $2,500 for the season. 0 141CROFILKED BY JORM MICR+ LAB CEDAR RAPIDS • DES MOINES t•iit,i(W ILNEu By JORM I•IICROLAD CEDAR RAPIDS AND DES RECEIVED OCT 3 1 1978 oa. •yr p'�.�`•;1� JoH� ISO I CUA. NTY HEA TSI UrPAR"rmu IT '�uEPGP 538 South Gilbert Street Iowa City, Iowa 52240 DoanoOFHrALrH Phone 351 • 3085 1 erlyn C. werber Chnlr, t -Prom. MU L. Graham Damnron, MPH Omit Yoder Diroctor Keith Ilanintay Jean brown CERTIFIED MAIL October 30, 1978 t Harry Ambrose dba Woodfields } 522 S. Van Buren I Iowa City, Iowa 52240 Re: Toilet Facilities Dear Mr. Ambrose: This department has received complaints concerning Woodfields' toilet facilities, both toilet fixtures and sinks, leaking water through the floor and draining into the barber shop located directly below your establishment. The last complaint was made October 25, 1978. It is understood that additional drains have been installed in i both r.estrooms. However, if valid complaints persist, we will urge the Board of Health to recommend to the City of Iowa City the revocation of your beer and liquor permits. Please do not hesitate to contact me if I can be of assistance. Sincerely, Lee G. Dameron, M.P.H., R.S. Director j I i Cc: Livery Barber Shop 225 E. Washington, Iowa City Chairman, Board of Health City Manager, City of Iowa City I LGD/mck j I I 141CROFILMED By JoRM MICR+LAB i - CEDAR RAPIDS a DES MOINES 2o6yf a I' :I r t•iit,i(W ILNEu By JORM I•IICROLAD CEDAR RAPIDS AND DES RECEIVED OCT 3 1 1978 oa. •yr p'�.�`•;1� JoH� ISO I CUA. NTY HEA TSI UrPAR"rmu IT '�uEPGP 538 South Gilbert Street Iowa City, Iowa 52240 DoanoOFHrALrH Phone 351 • 3085 1 erlyn C. werber Chnlr, t -Prom. MU L. Graham Damnron, MPH Omit Yoder Diroctor Keith Ilanintay Jean brown CERTIFIED MAIL October 30, 1978 t Harry Ambrose dba Woodfields } 522 S. Van Buren I Iowa City, Iowa 52240 Re: Toilet Facilities Dear Mr. Ambrose: This department has received complaints concerning Woodfields' toilet facilities, both toilet fixtures and sinks, leaking water through the floor and draining into the barber shop located directly below your establishment. The last complaint was made October 25, 1978. It is understood that additional drains have been installed in i both r.estrooms. However, if valid complaints persist, we will urge the Board of Health to recommend to the City of Iowa City the revocation of your beer and liquor permits. Please do not hesitate to contact me if I can be of assistance. Sincerely, Lee G. Dameron, M.P.H., R.S. Director j I i Cc: Livery Barber Shop 225 E. Washington, Iowa City Chairman, Board of Health City Manager, City of Iowa City I LGD/mck j I I 141CROFILMED By JoRM MICR+LAB i - CEDAR RAPIDS a DES MOINES 2o6yf i' ,Ll'iLU by JUAM 141CROLAb 1,;DA;< 2n, .3J 913E WALL. STREET JOURNAI, 7 DAY, OCTOBER Jt, 2978 Capping New Jersey's Taxes By SANrnao L JACa6s Fire trucks In Trenton respond to alarms with only mree.men aboard. Price- less shade trees in Montclair aren't being maintained. There's talk of widespread la• bor unrest across the state. Municipal officials In New Jersey blame such problems on the financial shackles the state put on municipal spending. React. ing to taxpayer unrest, the state legislature in 1976 enacted "caps" on state and local budgets. They set the loosest cap on the state budget. (No surprise there.) So far, It hasn't come close to hindering state spend. Ing. But county, school and municipal ofti- clals were handcuffed. For the most part, they can expand their budgets by no more than 5% a year. The spending limit of course was en• acted to provide relief for property taxpay. ers. Thus, New Jersey took a tack earlier and different than California where Proper sitlon 13 cut tax levies directly. Restricting the ability of state and local governments to levy taxes as California did seems loo severe to be a better prescription for re- lieving taxpayers. Which means there's a lot of Interest in New Jersey's spending limit; nearly a third of the states have some form of state or local budget or tax limitation measure on the ballot this fail. "We get calls from all over asking us how to do It the right way." says John E. laetza, the enthusiastic head of the state's Inial government services division which polices the municipal cap. Five per cent Isn't much with Inflation running more than that. Prices are rising closer to 10%, and it would be a rare em- ploye, whether on a private or government payroll, who would accept 576 as a fair wage Increase. So being able to increase spending by "only" 5% a year really has meaning for New Jersey's municipal offl• clah. Mn. Evan's Lament "It means I'm In the wringer," laments Betty Evans, one of five elected members of the Montclair town commission, and the commissioner In charge of revenue and fi. nance. a position that assures she feels pressures caused by the 576 cap, "There Is pressure to spend because everything is more expensive and our employes want more pay because they need more to live," Mrs. Evans says. The 57. limit means there Isn't enough to'cover all the demands on the town budget. So Mrs. Evans and her colleagues, and officials like them else. where In the stale, have to decide how to dole out what they have. Deciding how to spend what you have to spend Is a normal budget process. But for public officials with the power to levy taxes to cover spending at the Jot of a pen, being subject to a severe spending limit is a new experience. Before the cap, most lo• cal officials budgeted by the seats of their pants. About the only restraint was what their Instincts told them they could get away with. Election. years found th"m seized by tits of fiscal austerity. Now a measure of austerity is imposed on them every year. Too much austerity, municipal officials say. The 596 cap has squeezed town bud- gets a little tighter each year. Next year the squeeze will be too much, the New Jer• sey Mayors Association figures; It wants the state to grant some relief Immediately. If relief isn't granted towns won't be able to give their employes raises next year and there will be a rash of strikes, the assocla• tion says. Specifically, the mayors group wants to exempt from the cap such expert see as Insurance, utility and pension cal Increases. Towns can't do much about these expenses, officials argue. ' Pension and insurance Increases antici• pated next year worry Montclair comptrol- ler William H. Fraser. He expects these two expenses will consume much of the $495,000 the cap allows Montclair's budget to rise next year. He figures there will be About $100,000 of the permissible cap In. crease remaining after covering pension and Insurance Increases. However, Mont. clalr will lose $100,000 of federal aid In 1179, to that Will have to be covered, too. After that, only $8,329.17 of the cap In. crease will remain to apply to the rat of the budget, Mr. Fraser calculates. Obviously $8,329.47 can't begin to cover PAY .raises and other Increases in the Because of the budget gap, there are fewer work- ers in city hall, on the gar- bage -collection force and in the 'police and fire depart- ments. Promotions, which mean higher salaries, have been slowed, vacancies are lef t unf filled. town's $13.6 million budget. So, 1979 shapes up as a fiscal nightmare for Montclair ofti• clals. ;'It will be hell," predicts Mrs. 6v ans. She and her colleagues already have had a taste of the peculiar hell the cap puts elected officials through. It has forced them to shrink the municipal payroll, cur• tall maintenance and often act like dbcl• pies of Scrooge himself. Because of the cap there are fewer workers In city hall, on the garbage-coliec• Una force and In the police and fire depart. menu. Promotions, which mean higher salaries, have been slowed; vacancies are left unfilled. And the town has been forced to say "no" to social service agencies.the Child Guidance Center, which olds famines Y .. MICNOr ILMEO BY ' JORM MICR46LAB CEDAR pAP111S • DES MOINES with problem children, was cut to M,t10o this year from 116,000 a year ago. A drug abuse agency got IS,000 from Montclair a year ago, but nothing this year. Heightened competition for federal funds has made It hard for local social ser- vice agencies to get money from Uncle Sam, Mr. Fraser says. "When they don't get enough from Washington, they look to os. But we can't help them anymore." Some amounting tricks get around the cap. It doesn't apply to capital outlays. So Items which used to appear on the operat. Ing budget aro shifted to the capital budget H they can be. Only Items with a fiveyear life quality as capital Items. Montclair used this trick with garbage trucks. It used to buy a truck a year as a pay-as-you-go method to maintain Its Beet. That way the town could avoid being hit by a big ex• peruse one year to replace a lot of trucks. But to skirt the cap, the town commission• ers voted a bond ordinance to buy trucks. That made them a capital purchase outside the rap. Bonds weiaa't aetsally add; sur• plus handle were used. Each year part of the outlay appears as a deferred expense on the budget. But such maneuvers won't let spending rise enough next year, and E Mr. Fraser's dire expectations are realized services In Montclair probably will be severely cur. tailed. Suck curtailments loom across the state for towns squeezed between Inflation and the spending Amit. "Trying to operate against a 5% cap with 1% Inflation won't work," insists Trenton's Mayor Arthur T. Holland. Trenton, capital city of New Jersey, is an example of what happens to a city in need of money. To be sure, Is problems predate the cap. IJke other big cities, Trenton deteriorated as prosperous taxpay m fled to the suburbs, pulling with them many of the retail and commercial taxpay en who served them In the city. The cap Just makes It tougher for Trenton. "We would be spending more if It weren't for the cap," Mr. Holland asserts. As It Is, Trenton's fire trucks rut with three men, Its detective bureau recently lost five Investigators and the police U21 is unit was shrunk to 12 from 30 due to the cap "We can't put radar units out at night," Mr., Holland says. The city also greatly reduced park maintenance, "The parks show IU" he says. Montclair had to cut maintenance, too. It used to trim shade trees, which give Its streets charm, every three years. That was too costly and went to every 10 years. Now, - "it a tree falls down we'll take care of It," Mrs. Evans says. Scheduled street resur- facing also has been abandoned. Mainte. nance usually U the first thing to be cut be- cause the effects don't show at first. But neglect can be costly, too. 2065 utUriLilI U GI' JURM 1.11CROLAB �CDAR RAPIDS AND DES The Example of N.Y.C. New York City Iles only 16 miles em of j Montclair and Is a reminder of what oe- 16 glecting municipal assets like streets, 1 brWges and parks can mean. New York neglected these assets so long that the city can't afford the astronomical cost to re- store rstore Nem. That could happen In New Jer- sey In any event, the cap provided some tax i relief. The first year it took hold, 1977, property taxes statewide shrank 2.676, or $85.5 million. That dip reversed a trend of steady increases of about 107. a year in years Immediately before the cap. A state Income tax went Into effect in 1977, also. The state shares Income tax proceeds with local school districts. For many districts that has made the cap easier to lire with. But for others it hasn't because the school - budget cap was designed to force rich dis- .tricto to cut spending and to encourage poo ones to Increase theirs. The richer districts complain that the paltry budget Increases they are permitted each year 0force Nem to slowly degrade the quality I .. of education in their schools. State officials say It forces equality of education aeras the state. In the meantime, towns aren't getting big does of stab and federal aid like the schools. One thing that can help Nem with the cap is new construction. Tax revenue -� increases from new construction don't 4 count against the spending limit. Thus, growing towns aren't affected by the 51. spending Wnit as much as mature com- munities with no land for additional can• struction. The cap discriminates against common - Ides like Montclair which can't grow offi- cials complain, But favoring graft V an old practice In this country. Federal tax laws offer bigger Incentives to build anew than for holding onto the old. Only .re- `featly.�.. aWsI policy make to Oa11�aI taw Nlaeb tLk dlicefiIRS on traded older Wwicitles•,".��"" It would be. a bitter ItoW' Iceaarn at the tax relief to New Jersey, wboae motto Is "IAberty and Prosperity." were reapoo- alble for beginning the deterioration of fine 7 old suburban communities that have no c room for growth. As comylalning'taxpay- ion elsewhere contemplate ebackift ` elected officials with spending Botta, let i. them beware. yNr. Jacobs, a member of the Journal's New York bureau, covers tar maittm n TY �•�'µ MICROf ILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES . nut iL,+c.,: by JuWl MIMLi+ii • l,��i;i1 RnF i0'� Father of shopping centers turns his back on offspring By HEAL R. PEIRCE VIENNA — Rare is the man who conceives an idea that spreads around the world and then disowns his own progeny. Such a man is international ar- chitect and planner Victor Gruen, now retired to his native Austria after 30 years in America during which he conceived the idea of the modern shopping center and designed some of the United States' first large shopping centers. But now, Gruen declares, the Idea of the suburban shopping center, which he first sketched out in 19131 has been so perverted by "fast buck promoters and speculators" that he is no longer willing to acknowledge fatherhood. "I refuse to pay alimony W those bastard developments," he told me. Green is especially distraught by regional shopping malls, built in outlying locations that cause long, energy -wasting automobile trips, lack identification with existing com. munitles, and have no purpose save merchandising. His original pro- posal, he notes, was for centers that would be "more than just selling machines." They were to include medical offices, rooms for club ac- tivities, circulating libraries and post offices in addition to shops. He wanted them closely related to near- by housing — spots of urbanity in the long suburban stretches. But in profit -minded developers' - hands, Gruen says, "there was a tragic downgrading of quality." Even when other community facilities were built beside shopping centers, they were separated by roads and acres of asphalt parking lots, creating a non - walkable, inhuman environment. The conventional shopping center, Gruen predicts, will soon be "a thing of the past." Both In America and Europe, he notes, new shopping centers are becoming increasingly hazardous economic bets for developers. Cities increasingly recognize the threat which large regional malls pose to center city retailing and are fighting the construction of fresh outlying centers. Environmentalists have join- ed the struggle. And the shopping center, wed Irrevocably to the automobile, depends on an increas. ingly risky world supply of affordable gasoline. Even in semi -retirement, Gruen, now 75, Is doing all he can to make his Prediction of bleak times for new shopping centers come true. Though his health is fragile, he's considering s return trip to America to testify "Ost a Proposed mail outside Burl - L119013, Vt.. which he says would coo- stitute "premeditated murder of acb tyby bbing It of practically all Its As "ruinous" as many suburban malls have been in America, Gruen finds even worse the "thoughtless co- pying" of the U.S. model in Europe, "a small, crowded continent with a population density 10 times as high as America" where there is an "urgent need" to save land for such "life sus- taining purposes of agriculture, forestry and recreation." The recent cons ructlon of "a gigantic shopping machine" just outside Vienna's city border, he says, denuded many smaller Austrian towns of their local shopping facilities, undermined 25 neighborhood shopping districts of Vienna and even weakened the commercial base of that historic ci- ty's inner core. But the resistance to "shopping centers in cow pastures" is growing last in Europe, Gruen notes with satisfaction. Switzerland has not per- mitted a new center outside of beaviy-populated areas in the past three years; the French government and several German cities have laid down exceedingly strict conditions for new centers. Government opposition to shopping centers has not crystallized in America. But the Carter administra- tion has recently interceded to help two cities — Charleston, W.Va., and Duluth, Minn. — which found their plans for ambitious enclosed downtown malls threatened by competitive suburban developments. Following a strong expression of personal interest by the president, the White House Interagency I4ICROFILMLO BY JORM MICRO? LAB CEDAR RAPIDS • DES MOINES Coordinating Committee under Jack Watson unequivocally instructed federal agencies, inluding the Federal Higbway Administration and Army Corps of Engineers, to take steps which would thwart the suburban malls. The Department of Housing and Urban Development has offered urban development action grants to imperiled center city retail developments and urged the ez- scuttves of Sean and other big retail chains to pick center city over sulwr ban sites. Such coordinated federal action on a city-venusiuburb Issue Is virtually unprecedented. Gruen recalls that despite the "planning success" of his 19ft revitalization plan for Fresno, CAM., including a pfoneerhig center- city entercity automobile -free ►one, "we failed to attract big department "roc" which move instead into a large regional mall outside the city limits. While Washington helped Fresno with urban renewal moneys, says Gruen, it showed a "schizophrenic attitude" by simultaneously placing new federal facilities in its suburbs, not the center city — a pattern repeated across the nation. Gruen warns America, the land where he spent so many of his years: "In the long run it cannot afford the wastage of land, of time and of energy which. Its system of dispersed development creates." Our Interview concluded, Gruen took me on a walking tour through downtown Vienna where several pedestrian nulls have recently been created, an outgrowth of proposals he made 20 years ago. (Gruen is not quite satisfied with the solution: he would expand the malls te the entire inner city but permit electric or gar ppoowered mW -buses and taxis with humanxale ll-mlleyer-hour speed Ilmlta). We rode on Vienna's new subway, visited a successful pedestrian mail in a workingman's quarter, and end- ed our day in a typical Viennese cafe enjoying that grand city's ubiquitous "cafe and torte." Victor Gruen re- main& assertive, visionary, thoroughly human. One can almost forgive him for inventing the shoW hng center. 2066 A Fr 1,1it,iiW1Lv1 b BY JURM 141CROLAB CEDAR RAPIDS AND DES MOINES, TOW __ v 1-11, City of Iowa Cit. MEMORANDUM Date: November 2, 1978 To: City Council From: CATV Advisory Staff The staff and consultant have completed their evaluation of proposals to provide cable TV service to Iowa City. Attached are a proposed draft of a resolution and a brief report from the CATV staff presenting its analysis and findings. Additional support documents attached include: Fact Sheet Performance Record Survey CTIC Report Letter to HCC, Re: Exceptions to the Ordinance bj4/7 �-:•�. �`' MICROFILMED BY JORM MICR+LAB t CEDAR RAPIDS • DES MOINES 20671 i _Ii ,itUr iLi-ILu BY JURM 11ICROLAB CEDAR RAPIDS AND DES City of Iowa CE Date: November 3, 1978 To: City Council From: CATV Advisory Staff Re: Report on Proposals to Provide Broadband Telecommunications Services to the City of Iowa City On September 29, 1978 the City of Iowa City received two applications in response to the City's "Request for Proposals" to construct and operate a broadband telecommunications network. The two applicants are: Hawkeye Cablevision Corporation (HCC), a subsidiary of the American Television and Communications Corporation (ATC), and Eastern Iowa Cablevision, a subsidiary of Cox Cable Communications. The City requested that both proposals be evaluated by members of the City's CATV Advisory Staff and by the Cable Television Information Center, (CTIC), Washington D.C., and that the Staff then make a recommendation to Council concerning the acceptability and/or endorsement of one or both proposals. Evaluations considered the following general areas: 1) applicant's legal, financial and technical qualifications; 2) Adequacy and feasibility of appliant's technical design and construction arrangements; 3) applicant's performance record in other communities; 4) adequacy of proposed services in light of the needs and expectations of the community, and whether such services satisfy the spirit as well as the letter of the Broadband Telecommunications Ordinance #78-2917 of the Municipal Code of Iowa City, Iowa. ANALYSIS 1) Both companies are fully capable of providing the necessary funding to build and operate their proposed systems. 2) Both offer superior system designs which are fully capable of high quality service, with sufficient capacity for future needs of the community. There is no significant difference in the construction schedules of the two companies. 3) Both appear to have satisfactory performance records, overall, for their existing systems. 4) Both have submitted proposals which meet and frequently exceed the minimum service requirements as stated in the Ordinance.* Proposed services are the most significant aspect in evaluating the two proposals, given that both are virtually equal in all MICRO17ILMED BY DORM MICR+LAB-' CEDAR RAPIDS • DES MOINES N a _Ii ,itUr iLi-ILu BY JURM 11ICROLAB CEDAR RAPIDS AND DES City of Iowa CE Date: November 3, 1978 To: City Council From: CATV Advisory Staff Re: Report on Proposals to Provide Broadband Telecommunications Services to the City of Iowa City On September 29, 1978 the City of Iowa City received two applications in response to the City's "Request for Proposals" to construct and operate a broadband telecommunications network. The two applicants are: Hawkeye Cablevision Corporation (HCC), a subsidiary of the American Television and Communications Corporation (ATC), and Eastern Iowa Cablevision, a subsidiary of Cox Cable Communications. The City requested that both proposals be evaluated by members of the City's CATV Advisory Staff and by the Cable Television Information Center, (CTIC), Washington D.C., and that the Staff then make a recommendation to Council concerning the acceptability and/or endorsement of one or both proposals. Evaluations considered the following general areas: 1) applicant's legal, financial and technical qualifications; 2) Adequacy and feasibility of appliant's technical design and construction arrangements; 3) applicant's performance record in other communities; 4) adequacy of proposed services in light of the needs and expectations of the community, and whether such services satisfy the spirit as well as the letter of the Broadband Telecommunications Ordinance #78-2917 of the Municipal Code of Iowa City, Iowa. ANALYSIS 1) Both companies are fully capable of providing the necessary funding to build and operate their proposed systems. 2) Both offer superior system designs which are fully capable of high quality service, with sufficient capacity for future needs of the community. There is no significant difference in the construction schedules of the two companies. 3) Both appear to have satisfactory performance records, overall, for their existing systems. 4) Both have submitted proposals which meet and frequently exceed the minimum service requirements as stated in the Ordinance.* Proposed services are the most significant aspect in evaluating the two proposals, given that both are virtually equal in all MICRO17ILMED BY DORM MICR+LAB-' CEDAR RAPIDS • DES MOINES .1t.l(Ui-iLi•1LU by JURM MiCROLAB CATV Report Page 2 other respects. greater detail. to provide the programming and subscribers. Rates CEDAR RAPIDS AND D 11 Therefore, these aspects are analyzed below in Preference is given to the applicant proposing most reasonable subscriber rates, superior the widest range of allied services to the While HCC proposes a slightly higher rate structure and start-up cost for the home subscriber, it is the opinion of the Staff that the long term significance of these differences cannot be predicted with any certainty. It is felt that EIC's proposal has mis-calculated or omitted certain factors, such as converter replacement costs, pay cable penetration, and interest rates, which, given EIC's proposed rate of return, may necessitate a subscriber rate increase at an earlier date or at a higher level than proposed.** HCC offers a higher quality, remote control converter to subscribers, which justifies the converter deposit.*** Finally, the proposed service must be a stronger consideration than rates alone. Pay Cable EIC proposes a second, intermediately priced pay TV movie package, giving EIC a higher predicted penetration. It should be noted, however, that HCC proposes a family film series as part of the basic service on its local origination channel, at no extra charge. This may be more attractive to some subscribers than a two-tiered pay TV system. It should again be emphasized that the City's primary iterest is in range of services to meet a variety of community needs, not just to provide more popular movies already available elsewhere. Programming This particular aspect of the evaluation is of the greatest importance. Iowa City is a unique community as the cultural and educational center of the State; yet, Iowa City has no local television programming or news coverage, other than what is filtered through the network affiliates located in Cedar Rapids, Waterloo and the Quad Cities. Minimum programming requirements and desired services were stated in the Ordinance to stress the potential of cable television to meet Iowa City's unique needs. The applicant's responses are summarized below. Both companies propose to carry essentially the same broadcast television channels; however, HCC proposed a more complete package in response to community needs and interests as identified in the Ordinance and RFP, for example: Though both companies propose origination points at all specified location, HCC proposes additional origination points at the Recreation Center and Mercy Hospital. FILMED BY DORM MICR+LAB j 1 CEDAR RAPIDS • DES MOINES Y rain<UiiLMW by JORM MICROLAb CATV Report Page 3 CEDAR RAPIDS AND DES HCC indicates a greater commitment to community produced access programming. HCC's proposed production facilities are superior in both quantity and quality. Additionally, a greater commitment is made to make these facilities available to community users at little or no cost. HCC allows live access programming; EIC does not. HCC responds to the request for a second access facility to be located in the proposed new library or other downtown location. EIC does not. HCC proposes additional special equipment for library and government uses. EIC does not. HCC offers superior automated services such as Program Guide, Government DATA and Talking Books. Both proposals for University of Iowa services are technically feasible. The City Staff, however, feels that HCC's proposal is more flexible, and would provide service at a lower cost for Institutional uses, which will allow City residents to receive greater benefits from University programming. Although, EIC's proposal appears at first glance to offer grater levels of access and local programming, this is not necessarily the case. First, while EIC proposes more initial access channels, both applicants would be required by the Ordinance to provide as many access channels as need demonstrates. Both companies have sufficient capacity to do so. Second, while EIC proposes a greater level of operator -produced programming, the amount of production proposed seems unrealistic, given the proposed commitment of resources, even though they propose to allocate more overall expenses to locally produced programs. SUMMARY The basic difference between the two proposals is HCC's emphasis on community -produced local programming and special automated services vs. EIC's emphasis on more pay movies and operator -produced programming. Given the City's stated needs and interests, it is the finding of this staff that Hawkeye Cablevision Corporation has responded more specifically and more extensively to the spirit of the Ordinance and RFP. The basic services proposed by HCC include a greater variety of unique features and program sources which meet specific community characteristics. HCC makes an intensive commitment of all resources to facilitate community produced programming, including numerous access provisions and institutional service capabilities, at little or no cost to the average user. Further, HCC has demonstrated through its responsiveness, market research, local ownership (20%), and long term interest in the Iowa City franchise, a greater involvement with this community. Finally, HCC's proposal to the University offers greater flexibility at lower cost for the institutional uses which will in turn benefit City residents. Y `�Y Id ICROFIL14ED BY 1 JORM MICR+LA13 i CEDAR RAPIDS • DES MOINES i rain<UiiLMW by JORM MICROLAb CATV Report Page 3 CEDAR RAPIDS AND DES HCC indicates a greater commitment to community produced access programming. HCC's proposed production facilities are superior in both quantity and quality. Additionally, a greater commitment is made to make these facilities available to community users at little or no cost. HCC allows live access programming; EIC does not. HCC responds to the request for a second access facility to be located in the proposed new library or other downtown location. EIC does not. HCC proposes additional special equipment for library and government uses. EIC does not. HCC offers superior automated services such as Program Guide, Government DATA and Talking Books. Both proposals for University of Iowa services are technically feasible. The City Staff, however, feels that HCC's proposal is more flexible, and would provide service at a lower cost for Institutional uses, which will allow City residents to receive greater benefits from University programming. Although, EIC's proposal appears at first glance to offer grater levels of access and local programming, this is not necessarily the case. First, while EIC proposes more initial access channels, both applicants would be required by the Ordinance to provide as many access channels as need demonstrates. Both companies have sufficient capacity to do so. Second, while EIC proposes a greater level of operator -produced programming, the amount of production proposed seems unrealistic, given the proposed commitment of resources, even though they propose to allocate more overall expenses to locally produced programs. SUMMARY The basic difference between the two proposals is HCC's emphasis on community -produced local programming and special automated services vs. EIC's emphasis on more pay movies and operator -produced programming. Given the City's stated needs and interests, it is the finding of this staff that Hawkeye Cablevision Corporation has responded more specifically and more extensively to the spirit of the Ordinance and RFP. The basic services proposed by HCC include a greater variety of unique features and program sources which meet specific community characteristics. HCC makes an intensive commitment of all resources to facilitate community produced programming, including numerous access provisions and institutional service capabilities, at little or no cost to the average user. Further, HCC has demonstrated through its responsiveness, market research, local ownership (20%), and long term interest in the Iowa City franchise, a greater involvement with this community. Finally, HCC's proposal to the University offers greater flexibility at lower cost for the institutional uses which will in turn benefit City residents. Y `�Y Id ICROFIL14ED BY 1 JORM MICR+LA13 i CEDAR RAPIDS • DES MOINES au�i ur ILf4Lu 8Y JURM MICROLAD CATV Report Page 4 RECOMMENDATION • CEDAR RAPIDS AND While both companies have submitted applications which would result in excellent service to subscribers and users in Iowa City, Hawkeye Cablevision Corporation offers the superior proposal responding to the City's stated needs and interests for community-based programming and special services. It is the recommendation of this staff that the City Council endorse Hawkeye Cablevision Corporation as the preferred grantee for a Broadband Telecommunications Franchise, and that this recommendation be made to the voters prior to the November 28, 1978 franchise election. *It should be noted that neither company fully complies with the Ordinance intent concerning which channels must be carried on the first twelve channels available to all subscribers at no additional charge, because neither proposes a single tiered system to the University of Iowa. The intent of the Ordinance concerning channel assignments needs to fulfilled prior to the granting of the franchise; however this does not appear to be a significant problem, since both companies propose essentially single -tiered systems to the City subscribers. Both companies are advised that changes in channel lineup for the University should be negotiated with the University prior to the granting of a franchise. Further, HCC stated several exceptions to the Ordinance in its proposal. These exceptions have been addressed by the City in the form of a letter dated October 31, 1978. If awarded the franchise, NCC will be expected to comply with the Ordinance, as clarified in the letter, or will forfeit its proposal bond. **EIC bases its penetration (% of potential subscribers) projections on some of Cox's newest systems, and its projections are higher than the current national average. HCC bases its more conservative financial projections on a telephone survey of Iowa City residents, and a more realistic equipment depreciations policy. ***Converters are included in the basic monthly charge to subscribers, by both applicants, and allow subscribers to receive the full complement of available channels. Respectfully Submitted, T' Connie Tiffany, Staffo nato John Hayek, City Attorney MICROFILMED BY .., JORM MICR+LAB i CEDAR RAPIDS • DES MOINES A i au�i ur ILf4Lu 8Y JURM MICROLAD CATV Report Page 4 RECOMMENDATION • CEDAR RAPIDS AND While both companies have submitted applications which would result in excellent service to subscribers and users in Iowa City, Hawkeye Cablevision Corporation offers the superior proposal responding to the City's stated needs and interests for community-based programming and special services. It is the recommendation of this staff that the City Council endorse Hawkeye Cablevision Corporation as the preferred grantee for a Broadband Telecommunications Franchise, and that this recommendation be made to the voters prior to the November 28, 1978 franchise election. *It should be noted that neither company fully complies with the Ordinance intent concerning which channels must be carried on the first twelve channels available to all subscribers at no additional charge, because neither proposes a single tiered system to the University of Iowa. The intent of the Ordinance concerning channel assignments needs to fulfilled prior to the granting of the franchise; however this does not appear to be a significant problem, since both companies propose essentially single -tiered systems to the City subscribers. Both companies are advised that changes in channel lineup for the University should be negotiated with the University prior to the granting of a franchise. Further, HCC stated several exceptions to the Ordinance in its proposal. These exceptions have been addressed by the City in the form of a letter dated October 31, 1978. If awarded the franchise, NCC will be expected to comply with the Ordinance, as clarified in the letter, or will forfeit its proposal bond. **EIC bases its penetration (% of potential subscribers) projections on some of Cox's newest systems, and its projections are higher than the current national average. HCC bases its more conservative financial projections on a telephone survey of Iowa City residents, and a more realistic equipment depreciations policy. ***Converters are included in the basic monthly charge to subscribers, by both applicants, and allow subscribers to receive the full complement of available channels. Respectfully Submitted, T' Connie Tiffany, Staffo nato John Hayek, City Attorney MICROFILMED BY .., JORM MICR+LAB i CEDAR RAPIDS • DES MOINES A MiLilOtiLMEO BY JDRM MICROLAB CATV Report Page 5 • CEDAR RAPIDS Arm Ange Ryan, A�sy/ tant City Attorney DalAI �i / c.4 -Md.// y, Intern e�a Robert Pepper, d7iser XJ4rDavid RussellAdvise�� 141CROFIL14ED BY JDRM MICR+LAI3 CEDAR RAPIDS • DES MOINES ,I 's 1 d , 1 i l t 1:. J g '4 i , MiLilOtiLMEO BY JDRM MICROLAB CATV Report Page 5 • CEDAR RAPIDS Arm Ange Ryan, A�sy/ tant City Attorney DalAI �i / c.4 -Md.// y, Intern e�a Robert Pepper, d7iser XJ4rDavid RussellAdvise�� 141CROFIL14ED BY JDRM MICR+LAI3 CEDAR RAPIDS • DES MOINES ,I 's 1 d , 1 i l t 1 14 1 i I I , I t•ilutUi iLi4�U by JURM 14ICROLAB N FIC CEDAR RAPIDS AND DES CATV FACT SHEET 1. Programming A. Broadcast 7 network, 2 independent channels + 1 late night independent B. Nonbroadcast/ 28 hra/week locally produced Nonautomated 4 hrs/day + C -Span + Madison Square Garden C. Nonbroadcast/ 5 channels Automated D. FM radio To be determined E. Pay cable $10 install, $7.00/month lockout free. Added family movies @ $5 install and $4/month 2. Allied Services HCC 7 network 2 independent 1 late night independent + 1 composite network: Davenport/Des Moines on local origination 3-5 hra/week locally produced; 8 hra/day (local origination includes Madison Square Garden, C -Span and family film series). Future: Medical, Foreign Language. 9 channels Unique: Program, Guide, Sports News, General News,-Slo-Scan, Weather Radar, Government Data. Future: Talking Book. 24 channels $15 install, $6.95/month lockout $25 A. Programming 6 5 minutes free to users, no live, 5 minutes free live, Production Assistance: subseq. charges @ $35/hr. and up 20 hra/month free tape, Rates 40 hrs/month free stuidio Equipment all orig. 6 van all orig 6 remote + gov't data + library document distribution Facilities studio b van 2 studios Funding origination budget origination budget + $5000/yr for 2 yrs matching �.MICROFILMED BY JORM MICR+LAB \ 'i CEDAR RAPIDS • DES MOINES , Y k F i I 1 I t•ilutUi iLi4�U by JURM 14ICROLAB N FIC CEDAR RAPIDS AND DES CATV FACT SHEET 1. Programming A. Broadcast 7 network, 2 independent channels + 1 late night independent B. Nonbroadcast/ 28 hra/week locally produced Nonautomated 4 hrs/day + C -Span + Madison Square Garden C. Nonbroadcast/ 5 channels Automated D. FM radio To be determined E. Pay cable $10 install, $7.00/month lockout free. Added family movies @ $5 install and $4/month 2. Allied Services HCC 7 network 2 independent 1 late night independent + 1 composite network: Davenport/Des Moines on local origination 3-5 hra/week locally produced; 8 hra/day (local origination includes Madison Square Garden, C -Span and family film series). Future: Medical, Foreign Language. 9 channels Unique: Program, Guide, Sports News, General News,-Slo-Scan, Weather Radar, Government Data. Future: Talking Book. 24 channels $15 install, $6.95/month lockout $25 A. Programming 6 5 minutes free to users, no live, 5 minutes free live, Production Assistance: subseq. charges @ $35/hr. and up 20 hra/month free tape, Rates 40 hrs/month free stuidio Equipment all orig. 6 van all orig 6 remote + gov't data + library document distribution Facilities studio b van 2 studios Funding origination budget origination budget + $5000/yr for 2 yrs matching �.MICROFILMED BY JORM MICR+LAB \ 'i CEDAR RAPIDS • DES MOINES , PIIU<UFiLMED BY JURM MICROLAB CEDAR RAPIDS AND DES V ykr? 'ILIdED DY '—K .; JORM MICR+LAB CEDAR RAPIDS • DES MOINES -p- a; Staff* 3' B. Converters no deposit, free monthly $15 deposit, free set-top box monthly; remote control � l C. University of downstream service to all downstream service to Iowa Instituonal campus points; activated all campus points; Services upstream capacity from 16 activated upstream locations capacity from all } campus locations on 'a full shadowcable _3. Rates Installation $10 $15 Monthly $7.50 $7.95 *No direct comparison of staff is possible, however, virtually equivalent staff commitments are proposed. EIC proposes four full-time equivalent staff in this category, but one position includes maintenance. HCC proposes three full-time staff in this category and one maintenance position under plant staff. V ykr? 'ILIdED DY '—K .; JORM MICR+LAB CEDAR RAPIDS • DES MOINES !•It �iturLLM4 U BY JURM MICROLAD CEDAR RAPIDS AND UES City of Iowa Cit MEMORANDUM Date: November 1, 1978 To: CATV Advisory Staff From: Dale COMMENT: After careful consideration of the past record of performance of the CATV applicants in other communities, it appears that Cox Cable Communications, Inc. and American TV Communication Corp. are performing in a satisfactory manner. Given that the selected applicant will be authorized to provide essential exclusive service in Iowa City for at least the next 15 years, the CATV advisory staff decided to carefully consider the past record of performance of the applicants in other communities. Accordingly, the 143 communities currently being served by both applicants listed in form C were mailed a survey. DATA COLLECTION: In collecting data from a large group of local officials, time saving methods must be considered. While it may be desirable to interview each official to be sure he or she understands the question and gives an adequate response, there is no certainty that the interviewers themselves will not unknowingly bias a response either directly or indirectly. So the most acceptable method for data collection was deemed to be a survey questionnaire. It was thought that this would insure that at least each local official would answer the same set of questions at his or her leisure at with as little exogenous bias as possible. In addition, complete anonymity and security for individual's data were guaranteed. Listed below are the questions that were asked of all local officials in communities currently being served by Cox and ATC. You will note that the questions are rather specific; they are intended to give you an understanding of the community's continuing involvement with the company as opposed to whether the company and the City are on good terms the day they respond to the questionnaire. A fairly high return rate averaging about 37% for both companies made the data fairly representative of communities currently being served and allowed generally sound conclusions. Response Rate: Y• •i, MICROFILMED BY ., DORM MICR+LAB i CEDAR RAPIDS • DES MOINES i !•It �iturLLM4 U BY JURM MICROLAD CEDAR RAPIDS AND UES City of Iowa Cit MEMORANDUM Date: November 1, 1978 To: CATV Advisory Staff From: Dale COMMENT: After careful consideration of the past record of performance of the CATV applicants in other communities, it appears that Cox Cable Communications, Inc. and American TV Communication Corp. are performing in a satisfactory manner. Given that the selected applicant will be authorized to provide essential exclusive service in Iowa City for at least the next 15 years, the CATV advisory staff decided to carefully consider the past record of performance of the applicants in other communities. Accordingly, the 143 communities currently being served by both applicants listed in form C were mailed a survey. DATA COLLECTION: In collecting data from a large group of local officials, time saving methods must be considered. While it may be desirable to interview each official to be sure he or she understands the question and gives an adequate response, there is no certainty that the interviewers themselves will not unknowingly bias a response either directly or indirectly. So the most acceptable method for data collection was deemed to be a survey questionnaire. It was thought that this would insure that at least each local official would answer the same set of questions at his or her leisure at with as little exogenous bias as possible. In addition, complete anonymity and security for individual's data were guaranteed. Listed below are the questions that were asked of all local officials in communities currently being served by Cox and ATC. You will note that the questions are rather specific; they are intended to give you an understanding of the community's continuing involvement with the company as opposed to whether the company and the City are on good terms the day they respond to the questionnaire. A fairly high return rate averaging about 37% for both companies made the data fairly representative of communities currently being served and allowed generally sound conclusions. Response Rate: Y• •i, MICROFILMED BY ., DORM MICR+LAB i CEDAR RAPIDS • DES MOINES QjutUl iLMLO BY JORM 1•IICROLAB CEDAR RAPIDS AND DE N. i RESPONSE QUESTIONNAIRES REC'O/ RATE TOTALi Hawkeye Cablevision 34% 34/101 Eastern Iowa Cablevision 44% 19/43 Combined Rate of Response 37% 53/144 CONCLUSIONS: The survey questionnaire was made up of questions regarding construction of the system, i.e. timely performance, subscriber complaints, rate increases and services offered. i There were only a few negative comments received concerning both companies. ' However, their numbers were not significant. One community was critical of construction of the system not being performed as proposed. The others were complaints about the company providing vague financial data to support the need for a rate increase, and subscriber complaints not being responded to promptly. From the above discussion, it would appear that both companies, Cox and ATC, are satisfactory regarding their past record of performance in the 53 communities that responded. I Find a copy of the questionnaire and cover letter attached. t be 141CROFILKED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES t.. ti is si Cyp$[4 E a c i f N QjutUl iLMLO BY JORM 1•IICROLAB CEDAR RAPIDS AND DE N. i RESPONSE QUESTIONNAIRES REC'O/ RATE TOTALi Hawkeye Cablevision 34% 34/101 Eastern Iowa Cablevision 44% 19/43 Combined Rate of Response 37% 53/144 CONCLUSIONS: The survey questionnaire was made up of questions regarding construction of the system, i.e. timely performance, subscriber complaints, rate increases and services offered. i There were only a few negative comments received concerning both companies. ' However, their numbers were not significant. One community was critical of construction of the system not being performed as proposed. The others were complaints about the company providing vague financial data to support the need for a rate increase, and subscriber complaints not being responded to promptly. From the above discussion, it would appear that both companies, Cox and ATC, are satisfactory regarding their past record of performance in the 53 communities that responded. I Find a copy of the questionnaire and cover letter attached. t be 141CROFILKED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES t.. Is IAlLIWFiLMcu BY JORM 141CROLAB CEDAR RAPIDS AND DE uKArI CITY OF IOWA CITY:, c-I\:IC. CI:NIP 410 L WASHINGTON Sl IOWA CI1Y I()WA `' 24'J (319),15" 1'.'Cc" October 5, 1978 Dear The City of Iowa City, Iowa, is conducting a comparative analysis of its current Cable TV Network franchise applicants. We would appreciate your completing the enclosed survey form, reporting requested information and any pertinent material you feel would be valuable to our study. The response deadline is October 20,1978. We would be happy to furnish the results of our review to you upon request. Should you need further information or clarification, please do not hesitate to call me. Until then, I remain Truly yours, Dale McGarry, CATV Intern Legal Department 354-1800, Ext. 228 bdw Enclosure 141CROFILMED BY ,1 DORM MICR+LAB ?, CEDAR RAPIDS • DES MOINES' ■ .. I•Iiu W iLMLu BY JORM MICROLAB • CEDAR RAPIDS AI) IOWA CITY CATV SURVEY OCTOBER 1976 Local Government Official Responsible for Cable Franchising Name of System Location .- r - Person Completing Survey Title Telephone Number Date 141CROFILMED BY JORM MICR+LAB CEDAR RAPIDS DES MOINES t: u 7 S 1[ y IA i k i 1% • CEDAR RAPIDS AI) IOWA CITY CATV SURVEY OCTOBER 1976 Local Government Official Responsible for Cable Franchising Name of System Location .- r - Person Completing Survey Title Telephone Number Date 141CROFILMED BY JORM MICR+LAB CEDAR RAPIDS DES MOINES i IA i �I Ia 1% s • CEDAR RAPIDS AI) IOWA CITY CATV SURVEY OCTOBER 1976 Local Government Official Responsible for Cable Franchising Name of System Location .- r - Person Completing Survey Title Telephone Number Date 141CROFILMED BY JORM MICR+LAB CEDAR RAPIDS DES MOINES tlllufUFil-MLU BY JURM t•IICROLAB • CEDAR RAPIDS AND DES Response to questions will be confidential. I 1. Was construction of system performed as proposed? (Timely performance) j 2. Subscriber complaints. A. Are they responded to promptly? B. Does the subscriber complain directly to the city? C. Are there any troublesome disputes? If so, how extensive are they? D. How cooperative has the company been in regards to complaints? I 3. Rate increases a. How long was service provided before company requested a rate increase? b. How frequently are they requested? C. If the city denied a rate increase, how did the company respond? i.e. was legal action taken? d. Has the company been cooperative in providing the necessary financial data to support the need for a rate increase? r'•, � 141CRDFILMED BY DORM MICR+LAB -' CEDAR RAPIDS • DES MOINES I-jjUQ1 iLA1eU BY JORM MICROLAB • CEDAR RAPIDS AND DES 2 4. Services Offered A. What did the company offer beyond the broadcast signals? i.e. any special services, local origination, public access? B. How well have these serVi'ces been provided? (promise vs. performance) 5. Any additional comments bc3/l r IUCROPILMED BY 1 DORM MICR+LAB f� I CEDAR RAPIDS • DES MOINES i 9 pCp (t x /A , ti , 1 I I • CEDAR RAPIDS AND DES 2 4. Services Offered A. What did the company offer beyond the broadcast signals? i.e. any special services, local origination, public access? B. How well have these serVi'ces been provided? (promise vs. performance) 5. Any additional comments bc3/l r IUCROPILMED BY 1 DORM MICR+LAB f� I CEDAR RAPIDS • DES MOINES ti i I 9 t'IIIJ(UI ILI1ILU BY JORN MICROLA?3 • CEDAR RAPIDS AND DES Y CITY OF IOWA CITY �; ; :;� �? +n :�;+• ,� lei ,4 T1 ; ! It VA C;IFY lclw.I\ .52240 (319) 354a800 r October 31, 1978 i t I R. Michael Kruger Hawkeye Cablevision Corporation I-80 8 N. Dubuque Street Iowa City, Iowa 52240 Dear Sir: 3 This letter is in response to your "exceptions to franchise ordinance" which was submitted with your proposal for a cable television franchise dated September 28, 1978. Before responding to your comments in detail, ( I would like to comment generally upon the broadband telecommunications franchise enabling ordinance. This ordinance, which was passed and adopted by the City Council in August, 1978, is the regulatory authority for operating a cable television franchise in Iowa City. It is not the I I franchise ordinance and should not be regarded as negotiable as to substantial items. The franchise ordinance will be submitted to the voters on November 28, 1978. One of the reasons for our desire to keep the ordinance in its present form, is that it was the basis for the "request for proposals" from potential franchise applicants. Accordingly, since proposals were received on the basis of the RFP and the broadband telecommunication s enabling ordinance, no substantive changes can be made in the regulatory ordinance. With respect to your comments, the City offers the following responses: (� RESPONSE I Section 14-67(10) provides for "same day service" for all complaints and requests for repair received prior to 2 P.M. each day and in no event 4 shall the response time for calls received subsequent to 2 P.M. exceed 27 hours. The failure to provide this service in itself is not designed to be a material breach of franchise. Instead, the ordinance states that should the franchisee be unable to correct total loss of customer service within 27 hours of the initial complaint, a 1/30 credit of the monthly charge is to be given for each 24 hours following loss of ser- vice to the grantee. The franchise will not be revoked nor other dis- ciplinary actions taken against the franchisee for occasional instances of non -service; however, excessive failure to provide service may be grounds for further action. Therefore, circumstances which exist beyond the control of the grantee, such as acts of God, storms, and strikes will not result in loss of franchise or other corrective measures. _ L I MICROFILMED BY JCRM MICR+LAB ' CEDAR RAPIDS • DES MOINES I•iL Li<Uf 1LMcU BY JURN h1ICROLAB CEDAR RAPIDS AND DES 2 Huwever, subscribers should not pay for services not rendered regardless of the reason of disruption of service. In addition, no credit shall be given for loss of service attributable to the customer. RESPONSE Section 14-43(2). Current estimates indicate that costs would be under $20,000. However, no guarantees are made nor given as to what the final cost would be. The City expects the franchisee to fully comply with provisions of 14-73(2). RESPONSE Section 14-71. Aoolirantic __ RESPONSE Section 14-76(1)(a). Applicant's interpretation of this section is correct. RESPONSE Section 14-76(3)(b). As I understand your billing procedures, your company would bill a customer two months prior to the month of service. Service would be not disconnected unless unpaid for the actual month of service. Thus, a customer would be billed on June 1 for service com- mencing August 1. Further, the customer would not be disconnected for non-payment until after August I. If this recitation is correct, it would be in conformity with this section. RESPONSE Section 14-76(3). The applicant is correct in its interpretation of this section. RESPONSE Section 14-76(3)(c). Your comments concerning this section in your proposal are satisfactory as far and as long as the applicant has a single tier system. However, where an additional charge is made for lease of a converter, the subscriber must have the option to purchase the converter from the grantee. RESPONSE Section 14-76. As noted in my introductory remarks, the provisions of 14-76 shall prevail. In drafting this provision, the City Council t' 141CROFILMED BY 1 :1 JORM MICR+LAB CEDAR RAPIDS • DES MOINES .t Y f .QLK h iGILU 8Y JORM MICROLAD 3 CEDAR RAPIDS AND 'DES solicited and requested input from citizens and potential applicants with respect to all aspects of the ordinance. Public hearings were held before the cable television advisory committee and the City Council. To change this section would be to substantively change the ordinance and cause a resubmission of the proposals. Applicant is correct in stating that the delays mentioned would be unlikely. The procedures set forth in the ordinance are to protect the grantee and the public and to pro- vide public input into the rule and rate making procedures. These procedures cover a variety of Council action ranging from rate increase to franchise revocation. Consequently, the dates provided with respect to deadlines for action are long enough to insure adequate public input yet assure a speedy and expedited decision. It is reasonable to expect that routine actions such as rate increases would be expedited. with due diligence and minimum delay. RESPONSE Section 14-78(2)(d). The City is unable to comment as to extension policy until it has seen the specific proposal. The regulatory ordin- ance provides a procedure for considering such proposals. RESPONSE Section 14-90. We are aware of the proposed merger between ATC and Time, Inc. We will be in contact with you with respect to the sub- mission of financial data on the proposed merger and a statement of relationship between the two entities. Except as stated herein as clarifications, the City does not recognize your exceptions to the regulatory ordinance which has already been enacted. Failure to accept a franchise should a grantee be awarded shall lead to forfeiture of bid bonds as set forth in said ordinance. Since P incer Joh Hayek Attorney jm2/4 MICROFILMED BY ;ji JORM MICR+LAB CEDAR RAPIDS • DES MOINES .L tt 'EI 4 .QLK h iGILU 8Y JORM MICROLAD 3 CEDAR RAPIDS AND 'DES solicited and requested input from citizens and potential applicants with respect to all aspects of the ordinance. Public hearings were held before the cable television advisory committee and the City Council. To change this section would be to substantively change the ordinance and cause a resubmission of the proposals. Applicant is correct in stating that the delays mentioned would be unlikely. The procedures set forth in the ordinance are to protect the grantee and the public and to pro- vide public input into the rule and rate making procedures. These procedures cover a variety of Council action ranging from rate increase to franchise revocation. Consequently, the dates provided with respect to deadlines for action are long enough to insure adequate public input yet assure a speedy and expedited decision. It is reasonable to expect that routine actions such as rate increases would be expedited. with due diligence and minimum delay. RESPONSE Section 14-78(2)(d). The City is unable to comment as to extension policy until it has seen the specific proposal. The regulatory ordin- ance provides a procedure for considering such proposals. RESPONSE Section 14-90. We are aware of the proposed merger between ATC and Time, Inc. We will be in contact with you with respect to the sub- mission of financial data on the proposed merger and a statement of relationship between the two entities. Except as stated herein as clarifications, the City does not recognize your exceptions to the regulatory ordinance which has already been enacted. Failure to accept a franchise should a grantee be awarded shall lead to forfeiture of bid bonds as set forth in said ordinance. Since P incer Joh Hayek Attorney jm2/4 MICROFILMED BY ;ji JORM MICR+LAB CEDAR RAPIDS • DES MOINES .L NOVEMBER 1, 1978 THE URBAN INSTITUTE • 2100 M STREET NW • WASHINGTON. D C. 20037 • 1202) 872.8888 t IdICROF ILMEB BY DORM MICR6LA6 CEDAR RAPIDS • DES MOINES LableTelevision i EVALUATION OF BROADBAND TELECOMMUNICATION PROPOSALS FOR IOWA CITY, IOWA NOVEMBER 1, 1978 THE URBAN INSTITUTE • 2100 M STREET NW • WASHINGTON. D C. 20037 • 1202) 872.8888 t IdICROF ILMEB BY DORM MICR6LA6 CEDAR RAPIDS • DES MOINES I I 1i u(UFILNLU BY JURM MICRDLAB CEDAR RAPIDS AND DES CableTelevision 1I1iormatilon CC[lfer Memorandum to: Iowa City Off icia a and FroKbise Applicants From: David Owen Korte` November 1, 1978 Regional Direct Subject: Errata regarding our report, Evaluation of Broadband Telecommunication Proposals for Iowa City, Iowa -------------------------------------------------------------' Subsequent to shipping our evaluation report, we noted ti First, the enclosed last page of the Table of Contents replace page of the Table of Contents contained in the submitted repro the enclosed page V-7 was not included with the submitted reps: therefore, should be added. We regret any inconvenience these errors may have caused, DOK: rb THE UROAN INSTITUTE . 21M IA STREET NW.- WASHI NO TON. OC, 2M?. 11021 822d t _ .MICROFILMED BY qI I JORM MICR+LAB (CEDAR RAPIDS • DES MOINES MittWtiLI4iU BY JOkM MICROLAB V-7 CEDAR RAPIDS AND 2. MAINTENANCE PROCEDURES Eastern and Hawkeye have both proposed excellent maintenance and testing procedures. However, Hawkeye listed far more test equipment than Eastern. Moreover, Eastern had budgeted only $35,000 for test equipment which appears to be less than half the amount necessary to purchase all of the equipment it had specified. An Eastern representative at the October 26 public hearing stated that all equipment listed would be purchased. 1 3. SYSTEM RELIABILITY System reliability is improved by the use of standby power to insure con- �. i h t -term utilit ower failures. Both 41 1 1 MittWtiLI4iU BY JOkM MICROLAB V-7 CEDAR RAPIDS AND 2. MAINTENANCE PROCEDURES Eastern and Hawkeye have both proposed excellent maintenance and testing procedures. However, Hawkeye listed far more test equipment than Eastern. Moreover, Eastern had budgeted only $35,000 for test equipment which appears to be less than half the amount necessary to purchase all of the equipment it had specified. An Eastern representative at the October 26 public hearing stated that all equipment listed would be purchased. 1 3. SYSTEM RELIABILITY System reliability is improved by the use of standby power to insure con- �. i h t -term utilit ower failures. Both tinued operation of the system ur ng s or y p 'have proposed standby power for all electronic equipment. Eastern has proposed to further improve reliability by equipping all pole - mounted power supplies with transient clipping zener diodes. This should re- duce the effect of any power surge which might normally cause system outages. F. CONCLUSION Although, in some instances, Eastern supplied more detailed technical in- formation and has offered more comprehensive technical standards, both appli- cants have offered systems of superior design which would be fully capable of providing high-quality broadband telecommunication services and have sufficient unused capacity for future requirements. Id ICROFILMED BY , ;5 JORM MICR+LAB ' I. CEDAR RAPIDS • DES MOINES 41 1 tinued operation of the system ur ng s or y p 'have proposed standby power for all electronic equipment. Eastern has proposed to further improve reliability by equipping all pole - mounted power supplies with transient clipping zener diodes. This should re- duce the effect of any power surge which might normally cause system outages. F. CONCLUSION Although, in some instances, Eastern supplied more detailed technical in- formation and has offered more comprehensive technical standards, both appli- cants have offered systems of superior design which would be fully capable of providing high-quality broadband telecommunication services and have sufficient unused capacity for future requirements. Id ICROFILMED BY , ;5 JORM MICR+LAB ' I. CEDAR RAPIDS • DES MOINES I•1iLR01 iLi9EU BY JORM MICROLAB CEDAR RAPIDS AND HICROFILMED DY...{ DORM MICR+LAEI ' CEDAR RAPins • DES MOINES Page VII -1 VII -2 VII -4 VII -5 ME f TABLE OF CONTENTS (continued) - VII. UNIVERSITY OF IOWA A. Comparison 1. Eastern 2. Hawkeye B. Conclusion VIII. FINAL ANALYSIS AND CONCLUSION A. Summary of Findings 1. Ownership and Ability to Finance Construction ' 2. Financial Analysis 3. Technical Analysis 4. Services -' -- 5. -Preliminary Conclusion !, B. Final Analysis 1. Minimum Service 2. Desired Features r 3. Final Conclusion APPENDIX A— "Satellite CATV Programming: A Special Report" APPENDIX B --Channel Allocation Charts 1 1 1 r , 1 HICROFILMED DY...{ DORM MICR+LAEI ' CEDAR RAPins • DES MOINES Page VII -1 VII -2 VII -4 VII -5 ME c ft M1utUfIL&U BY JORM MICROLAB • CEDAR RAPIDS ANO EVALUATION OF BROADBAND TELECOMMUNICATION PROPOSALS FOR IOWA CITY, IOWA NOVEMBER 1, 1978 Prepared by THE CABLE TELEVISION INFORMATION CENTER THE URBAN INSTITUTE 2100 M STREET, N.W. WASHINGTON, D.C. 20037 MICROFILMED BY ,yy i DORM MICR+LAB l CEDAR RAPIDS • DES M014ES .4 'i a � tl i i r , t4 i • CEDAR RAPIDS ANO EVALUATION OF BROADBAND TELECOMMUNICATION PROPOSALS FOR IOWA CITY, IOWA NOVEMBER 1, 1978 Prepared by THE CABLE TELEVISION INFORMATION CENTER THE URBAN INSTITUTE 2100 M STREET, N.W. WASHINGTON, D.C. 20037 MICROFILMED BY ,yy i DORM MICR+LAB l CEDAR RAPIDS • DES M014ES t1iuiiO I1UNEu by JORM 141CROLAB CEDAR RAPIDS AND DES ACKNOWLEDGEMENTS ', MICROFILMED BY .� JORM MICR+LAB CEDAR RAPIDS • DES MOINES r was by the staff of the Cable Television Information This report prepared y Center under the direction of David Owen Korte, regional director. The princi- pal contributors to this document were David Owen Korte, Henry del Castillo, f, Frederick G. Griffin, P.E., and A. J. Willis. As executive director of the $ Center, Harold E. Horn was in overall charge of the project. The primary function of the Center is to provide policy makers in local with the analytical tools necessary to arrive at optimum and state governments policies and procedures for the development and implementation of broadband M telecommunication systems that will serve the public interest. The Center welcomes the opportunity to provide assistance to the City of Iowa City; Iowa, in its decisionmaking process of awarding a broadband Cele- communication franchise. The decision, once made, will have both a short-term and long-term impact on the community—the net effect being the availability of a wide variety of entertainment and educational programming and services for the citizens of Iowa City. G, ieh yYy It 1• 1 V 1 S r MICROFILMED BY .� JORM MICR+LAB CEDAR RAPIDS • DES MOINES PliufUFILMEU BY JORM MICROLAB • CEDAR RAPIDS Am TABLE OF CONTENTS I. INTRODUCTION A. Format of Report B. Methodology 1. Regulatory Policies 2. Minimum Service Requirements 3. Desired Features C. Utilizing this Report II. SUMMARY OF PROPOSALS A. Eastern Iowa Cablevision, Inc. 1. Ownership 2. Services 3. System Design B. Hawkeye Cablevision Corporation 1. Ownership 2. Services 3. System Design III. OWNERSHIP AND ABILITY TO FINANCE CONSTRUCTION A. Ownership 1. Local Ownership 2. Fotma of Ownership a. Eastern b. Hawkeye B. Ability to Finance Construction 1. Eastern 2. Hawkeye 3. Summary IV. FINANCIAL ANALYSIS A. Penetration 1. Basic -Subscriber Penetration 2. Pay Cable Subscriber Penetration B. Revenue 1. Basic Service Revenues 2. Pay Cable Revenues 3. Total Revenues rl' 141CROFILMED BY 1 JORM MICR+LAB 6EDAR RAPIDS • DES MOINES Page I-1 I-2 I-3 I-3 I-4 I-5 IV -1 IV -1 IV -1 IV -4 IV -4 IV -6 IV -8 P1iLIWi IL&O BY JORM MICROLAB TABLE OF CONTENTS (continued) CEDAR RAPIDS AND C. Capital Expenditures 1. Miscellaneous Equipment ' 2. Drop Equipment and Converters 3. Origination Equipment 4. Distribution Plant 5. Total Capital Expenditure D. Operating Expenses 1. Plant Expenses 2, Origination Expenses 3. General, Selling and Administrative Expenses 4. Total Expenses 5, Capital Structure and Rate of Return E. Summary and Conclusions V. ENGINEERING ANALYSIS A. Construction B. System Design 1. Eastern 2. Rawkeye C. Local Signal Reception 1. Television Stations 2. PM Radio Stations D. Interconnection 1. Eastern 2. Rawkeye E. System Performance 1. Technical Standards 2. Maintenance Procedures 3. System Reliability F. Conclusion VI. SERVICES A. Comparison 1. Broadcast Signals a. Explanation of FCC Signal Carriage Rules b. Analysis 2. Origination Programming a. Automated Programming b. Nonautomated Origination Programming (1) Eastern (2) Rawkeye (3) Analysis C. Access Channels and Facilities (1) Eastern (2) Rawkeye (3) Analysis 3. Pay Cable 4. FM Radio and Other Audio Services 5. Miscellaneous Services B. Conclusions '' :MICROFILMED BY JORM MICR+LAB ) CEDAR RAPIDS • DES MOINES Page IV -8 IV -8 IV -12 IV -12 IV -14 IV -14 IV -16 IV -16 IV -18 IV -18 IV -21 IV -23 IV -24 V-1 V-2 V-2 V-3 V-4 V-4 V-5 V-5 V-5 V-6 V-6 V-6 V-7 V-7 V-7 VI -1 VI -1 VI -1 VI -2. VI -4 VI -4 VI -6 VI -11 VI -11 VI -12 VI -12 VI -13 VI -17 VI -20 VI -21 VI -23 VI -23 VI -25 P y. xr A t,. i• 1 v a� pG Y!; d� .I a c Y; F P1iLIWi IL&O BY JORM MICROLAB TABLE OF CONTENTS (continued) CEDAR RAPIDS AND C. Capital Expenditures 1. Miscellaneous Equipment ' 2. Drop Equipment and Converters 3. Origination Equipment 4. Distribution Plant 5. Total Capital Expenditure D. Operating Expenses 1. Plant Expenses 2, Origination Expenses 3. General, Selling and Administrative Expenses 4. Total Expenses 5, Capital Structure and Rate of Return E. Summary and Conclusions V. ENGINEERING ANALYSIS A. Construction B. System Design 1. Eastern 2. Rawkeye C. Local Signal Reception 1. Television Stations 2. PM Radio Stations D. Interconnection 1. Eastern 2. Rawkeye E. System Performance 1. Technical Standards 2. Maintenance Procedures 3. System Reliability F. Conclusion VI. SERVICES A. Comparison 1. Broadcast Signals a. Explanation of FCC Signal Carriage Rules b. Analysis 2. Origination Programming a. Automated Programming b. Nonautomated Origination Programming (1) Eastern (2) Rawkeye (3) Analysis C. Access Channels and Facilities (1) Eastern (2) Rawkeye (3) Analysis 3. Pay Cable 4. FM Radio and Other Audio Services 5. Miscellaneous Services B. Conclusions '' :MICROFILMED BY JORM MICR+LAB ) CEDAR RAPIDS • DES MOINES Page IV -8 IV -8 IV -12 IV -12 IV -14 IV -14 IV -16 IV -16 IV -18 IV -18 IV -21 IV -23 IV -24 V-1 V-2 V-2 V-3 V-4 V-4 V-5 V-5 V-5 V-6 V-6 V-6 V-7 V-7 V-7 VI -1 VI -1 VI -1 VI -2. VI -4 VI -4 VI -6 VI -11 VI -11 VI -12 VI -12 VI -13 VI -17 VI -20 VI -21 VI -23 VI -23 VI -25 t•tlLdUt 1Li4EU BY JORM 141CROLAB TABLE OF CONTENTS VII. UNIVERSITY OF IOWA I CEDAR RAPIDS ACID DES (continued) A. Comparison VII -1 1. Eastern VII -2 2. Bawkeye VII -4 B. Conclusion VII -5 w VIII. FINAL ANALYSIS AND CONCLUSION A. Summary of Findings VIII -1 1. Ownership and Ability to Finance Construction VIII -1 2. Financial Analysis VIII -1 3. Technical Analysis VIII -2 4. Services _ _ VIII -2 5. Preliminary Conclusion i� VIII -2 B. Final Analysis t•tlLdUt 1Li4EU BY JORM 141CROLAB TABLE OF CONTENTS VII. UNIVERSITY OF IOWA I CEDAR RAPIDS ACID DES (continued) A. Comparison VII -1 1. Eastern VII -2 2. Bawkeye VII -4 B. Conclusion VII -5 w VIII. FINAL ANALYSIS AND CONCLUSION A. Summary of Findings VIII -1 1. Ownership and Ability to Finance Construction VIII -1 2. Financial Analysis VIII -1 3. Technical Analysis VIII -2 4. Services _ _ VIII -2 5. Preliminary Conclusion VIII -2 B. Final Analysis VIII -2 1. Minimum Service VIII -2, 2. Desired Features VIII -4 3. Final Conclusion VIII -5 APPENDIX A --"Satellite CATV Programming: A Special Report" APPENDIX B --Channel Allocation Charts APPENDIX C—Public Broadcasting Service (Current Policy on Direct Feed Carriage of PBS Programming by cable television systems) �y T... MiCROFILME D DY JORM MICR+LAB CEDAR RAPIDS - DES MOINES 1 MiutUi ILi,IEu by JURM MICROLAG CEDAR RAPIDS AND UE I. INTRODUCTION MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES On September 29, 1978, the City of Iowa City, Iowa, received two applica- tions in response to a request for proposals to contruct and operate a broad- band.telecommunications network. Applications were received from Eastern Iowa Cablevision, Inc., and Rawkeye Cablevision Corporation. The city requested that the Cable Television Information Center of The Urban Institute conduct an analysis and evaluation of the applications. This report is our response to that request. A. FORMAT OF REPORT �t This report is divided into eight chapters which largely reflect the organization and structure of the application forms which the city required t all applicants to complete. Chapter II provides a brief summary of each cpm- r, tt�1t pany's proposal. Chapter III presents the ownership structure of each company and evaluates its abilities to obtain financing. Chapter IV analyzes the r " financial projections of each applicant. Chapter V evaluates the system de- sign and engineering aspects of each proposal. Chapter VI compares each appli- r; cant's proposed services for the city. Chapter VII describes the services each would provide to the University of Iowa. Chapter VIII summarizes our • findings and conclusions. w h ' MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I•[l�,KUI ILMLu 8Y JDRM MICROLAB W CEDAR RAPIDS AND DES I-2 B. METHODOLOGY The purpose of this report is to describe, compare and evaluate signifi- cant items in each application. Although each application was reviewed thor- oughly, no attempt was made to evaluate every line item. Instead, the Center chose to develop comparisons only on items of significance. Our comments focus on the strengths and weaknesses of the applicants in each area under review. During the course of the evaluation, certain problems became evident. Iowa City required that all applicants use the application forms provided in the Request for Proposals. This limitation was imposed to insure comparability among applicants, to facilitate the location of particular types of data and to facilitate the evaluation process. Occasionally, a particular form was unclear or was interpreted in different ways by the applicants. In such cases the Center supplied the correct information if it were available. When items were not comparable, they were noted but not evaluated. Also, there were occasional inconsistencies in information supplied by an applicant in various parts of its proposal. All significant inconsistencies were noted, and, if possible, resolved to our best judgment. In most instances, we favored information contained in the financial forms over data provided elsewhere in an application. On October 26, 1978, the city conducted a public hearing at which appli- cants summarized their proposed services and responded to questions posed by the city's cable television advisory staff members and a representative of the Center. All clarifications offered at this public hearing by the applicants regarding their proposals which we have judged to be significant have been incorporated into our evaluation. However, we have not incorporated any state- ment or offering by an applicant which, in our view, would result in a material change in its proposal as this would be contrary to the procedures established by the city as expressed in its Request for Proposals. 4 14ICPOFILMED BY i DORM MICR¢LA13 CEDAR RAPIDS • DES MOINES ■ N .,j ,AU1 16-ILU BY JURM 141CROLAB I-3 CEDAR RAPIDS AND DES rl� 1. REGULATORY POLICIES In its Request for Proposals, the city advised all prospective applicants of certain city policies with which any franchisee would be required to comply as contained in the city's Broadband Telecommunications Franchise Enabling Ordinance. These stated policies include media cross -ownership restrictions, line extension requirements, a prohibition against rate increases for two years and a nonnegotiable franchise fee of 3 percent of gross revenues. 2. .MINIMUM SERVICE REQUIREMENTS The city's ordinance also identified certain minimum services the city , would require. Further, the city's Request for Proposals advised applicants that its decision would be based, in part, on the extent to which an applicant proposes to exceed these requirements and can demonstrate its financial and technical ability to do.so. Following is a summary of these minimum service requirements. • A capacity of 35 channels forward (downstream) and 4 return (up- stream) channels. •, Carriage of all broadcast television signals permitted by the Federal Communications Commission (FCC). • One Public Access Channel at no cost plus minimal access produc- tion equipment and assistance provided at reasonable rates. • One access channel for government and educational use. • One University of Iowa Access Channel. • One Leased Access Channel. • One Local Origination Channel. • Time and Weather Programming. • A system design permitting program origination from specified locations. • Carriage of local FM stations. • Emergency Alert Audio Override Capability. T •��? MICROFILMED BY 'I JORM MICR+LAB i CEDAR RAPIDS • DES MOINES 5 N .,j ,AU1 16-ILU BY JURM 141CROLAB I-3 CEDAR RAPIDS AND DES rl� 1. REGULATORY POLICIES In its Request for Proposals, the city advised all prospective applicants of certain city policies with which any franchisee would be required to comply as contained in the city's Broadband Telecommunications Franchise Enabling Ordinance. These stated policies include media cross -ownership restrictions, line extension requirements, a prohibition against rate increases for two years and a nonnegotiable franchise fee of 3 percent of gross revenues. 2. .MINIMUM SERVICE REQUIREMENTS The city's ordinance also identified certain minimum services the city , would require. Further, the city's Request for Proposals advised applicants that its decision would be based, in part, on the extent to which an applicant proposes to exceed these requirements and can demonstrate its financial and technical ability to do.so. Following is a summary of these minimum service requirements. • A capacity of 35 channels forward (downstream) and 4 return (up- stream) channels. •, Carriage of all broadcast television signals permitted by the Federal Communications Commission (FCC). • One Public Access Channel at no cost plus minimal access produc- tion equipment and assistance provided at reasonable rates. • One access channel for government and educational use. • One University of Iowa Access Channel. • One Leased Access Channel. • One Local Origination Channel. • Time and Weather Programming. • A system design permitting program origination from specified locations. • Carriage of local FM stations. • Emergency Alert Audio Override Capability. T •��? MICROFILMED BY 'I JORM MICR+LAB i CEDAR RAPIDS • DES MOINES r•irui<Ur1L&u by JURM MICROLAB I-4 CEDAR RAPIDS AND DE 3. DESIRED FEATURES To further guide applicants in preparing their proposals, the city iden- tified certain additional desired features and services which if offered, and demonstrated to be within the financial and technical capability of the system, would be given special consideration in its evaluation. These desired features may be summarized as follows: • A proposal for present and future origination from and intercon- nection of specified agencies and institutions. • A proposal for allowing occasional, simultaneous cablecasting of different programming on the same channel to different parts of the city. • A proposal for inclusion of converters as part of basic service. • A proposal for interconnecting the city's network with the Univer- sity of Iowa. • Additional funding, facilities and equipment in support of local programming development to be available to access channel users at no cost on a fair and nondiscriminatory basis. In particular, the city is interested in commitments in support of a second access production facility to be located at the proposed new pub - Lie library or another downtown location. These minimum service and desired features criteria became the basis of our evaluation. In addition, the city included within its Request for Proposals, a general summary of services desired by the University of Iowa. Although any franchise awarded by the city would not be applicable to the University of Iowa, it is expected that any company selected to serve the city would also be granted the ♦ right to serve the university campus assuming satisfactory arrangements between the company and the university can be negotiated. Accordingly, each applicant was required to describe separately the services it would offer the university. i, Although Chapter vII summarizes each applicant's proposed services to the uni- Cvarsity, we offer no evaluation of this aspect of each proposal because we believe that only university officials can properly make such an evaluation. i ti MICROFILMED BY iJORM MICR+LAB "r ! CEDAR RAPIDS • DES MOINES 1 r r•irui<Ur1L&u by JURM MICROLAB I-4 CEDAR RAPIDS AND DE 3. DESIRED FEATURES To further guide applicants in preparing their proposals, the city iden- tified certain additional desired features and services which if offered, and demonstrated to be within the financial and technical capability of the system, would be given special consideration in its evaluation. These desired features may be summarized as follows: • A proposal for present and future origination from and intercon- nection of specified agencies and institutions. • A proposal for allowing occasional, simultaneous cablecasting of different programming on the same channel to different parts of the city. • A proposal for inclusion of converters as part of basic service. • A proposal for interconnecting the city's network with the Univer- sity of Iowa. • Additional funding, facilities and equipment in support of local programming development to be available to access channel users at no cost on a fair and nondiscriminatory basis. In particular, the city is interested in commitments in support of a second access production facility to be located at the proposed new pub - Lie library or another downtown location. These minimum service and desired features criteria became the basis of our evaluation. In addition, the city included within its Request for Proposals, a general summary of services desired by the University of Iowa. Although any franchise awarded by the city would not be applicable to the University of Iowa, it is expected that any company selected to serve the city would also be granted the ♦ right to serve the university campus assuming satisfactory arrangements between the company and the university can be negotiated. Accordingly, each applicant was required to describe separately the services it would offer the university. i, Although Chapter vII summarizes each applicant's proposed services to the uni- Cvarsity, we offer no evaluation of this aspect of each proposal because we believe that only university officials can properly make such an evaluation. i ti MICROFILMED BY iJORM MICR+LAB "r ! CEDAR RAPIDS • DES MOINES hiiLi<UtiL;,kU BY JORM MICROLAB • CEDAR RAPIDS AND I-5 !"`y 14ICROFIL14EO BY Q JORM MICR+LAB '% iCEDAR RAPIDS • DES MOINES 9 C. UTILIZING THIS REPORT - In this report, the Center has applied the priorities for evaluating the applications as established by the city in its ordinance and Request for Pro - l= aF posals. To complete the evaluation process, certain additional tasks should be undertaken by the city. In particular, the city should investigate the quality a of cable service in other municipalities where the applicants operate cable systems in order to assess the commitment of a company to meeting its promised level of performance. It should also check the accuracy of the legal and char- acter qualification statements contained in the applications. Finally, the city should request clarifications on issues, questions or problems which have arisen as a result of statements in the proposals, this report or the appli- r cants'resentations at the p public hearing. 4s ti+ K i t r, r { f. a j f 14ICROFIL14EO BY Q JORM MICR+LAB '% iCEDAR RAPIDS • DES MOINES 9 r•ta,i<UriLi•ILU BY JURM MICROLAB CEDAR RAPIDS AND UL rl II. SUMMARY OF PROPOSALS Because of the difficulty of keeping in mind the specifics of two lengthy proposals, this chapter will briefly summarize each proposal. These summaries are not intended to be all inclusive. Only the major features of each applica- tion are noted. Furthermore, this summary does not review the financial pro- jections because of the complexity of the subject matter. Financial data are fully discussed in Chapter IV. Finally, the summaries do not include any judg- ments with regard to the substance of the proposals. Such judgments are more appropriately left to the subsequent chapters of this report. A. EASTERN IOWA CABLEVISION, INC. 1. OWNERSHIP Eastern Iowa Cablevision, Inc., (Eastern) is a wholly owned subsidiary of Cox Cable Communications, Inc., which in turn is a wholly owned subsidiary of Cox Broadcasting Corporation. Cox Cable currently holds a major interest in 66 cable systems in 18 states and is currently seeking franchises in other communities as well. 2. SERVICES Eastern proposes a wide range of broadband telecommunication services for Iowa city. Basic service would include full-time carriage of eight broadcast television stations, five automated channels, a local origination channel of- fering programming produced by the operator, three channels offering satellite programming and ten dedicated access channels. This basic service costs $7.50 I41CROFILI4ED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I l i n g e n1• c e I, d r•ta,i<UriLi•ILU BY JURM MICROLAB CEDAR RAPIDS AND UL rl II. SUMMARY OF PROPOSALS Because of the difficulty of keeping in mind the specifics of two lengthy proposals, this chapter will briefly summarize each proposal. These summaries are not intended to be all inclusive. Only the major features of each applica- tion are noted. Furthermore, this summary does not review the financial pro- jections because of the complexity of the subject matter. Financial data are fully discussed in Chapter IV. Finally, the summaries do not include any judg- ments with regard to the substance of the proposals. Such judgments are more appropriately left to the subsequent chapters of this report. A. EASTERN IOWA CABLEVISION, INC. 1. OWNERSHIP Eastern Iowa Cablevision, Inc., (Eastern) is a wholly owned subsidiary of Cox Cable Communications, Inc., which in turn is a wholly owned subsidiary of Cox Broadcasting Corporation. Cox Cable currently holds a major interest in 66 cable systems in 18 states and is currently seeking franchises in other communities as well. 2. SERVICES Eastern proposes a wide range of broadband telecommunication services for Iowa city. Basic service would include full-time carriage of eight broadcast television stations, five automated channels, a local origination channel of- fering programming produced by the operator, three channels offering satellite programming and ten dedicated access channels. This basic service costs $7.50 I41CROFILI4ED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I Mli,<UriLMLU BY JORM MICROLAB CEDAR RAPIDS AIIU r") II -2 per month Eastern would also offer two levels of pay cable service: Home Box Office at $7 per month and Cox Cable Rome Theatre at $4 per month. FM radio service would also be available. Eastern's two-way system would be initially activated to allow remote origination and access cablecasting from most locations within the city and the University of Iowa. A fully equipped color studio would be provided in a central location as well as a remote production van for local origination - andaccess program production. Additional color portable equipment would be provided for access users. 3. SYSTEM DESIGN Eastern proposed a single -trunk, single -feeder system with 35 downstream channels (54-300 MHz) to subscribers and 4 initially activated upstream chan- nels (5-30 MHz) at points along its trunk cable. A second institutional net- work cable with an initially activated upstream capacity of 12 channels (5-110 MHz) would be provided that would permit program origination from specified locations. All subscribers would receive set-top converters. H. RAWKEYE CABLEVISION CORPORATION 1. OWNERSHIP Hawkeye Cablevision Corporation (Hawkeye) would be a subsidiary of Amer- ican Television and Communications Corporation (ATC). ATC would retain 80 percent interest and two local individuals would each own 10 percent of the system. ATC holds an interest in 101 cable systems in 33 states and is cur- rently seeking franchises in other communities as well. 1 tdI CROPILMEO BY JORM MICR+LAB ! CEDAR RAPIDS • DES MOINES I � i CEDAR RAPIDS AIIU r") II -2 per month Eastern would also offer two levels of pay cable service: Home Box Office at $7 per month and Cox Cable Rome Theatre at $4 per month. FM radio service would also be available. Eastern's two-way system would be initially activated to allow remote origination and access cablecasting from most locations within the city and the University of Iowa. A fully equipped color studio would be provided in a central location as well as a remote production van for local origination - andaccess program production. Additional color portable equipment would be provided for access users. 3. SYSTEM DESIGN Eastern proposed a single -trunk, single -feeder system with 35 downstream channels (54-300 MHz) to subscribers and 4 initially activated upstream chan- nels (5-30 MHz) at points along its trunk cable. A second institutional net- work cable with an initially activated upstream capacity of 12 channels (5-110 MHz) would be provided that would permit program origination from specified locations. All subscribers would receive set-top converters. H. RAWKEYE CABLEVISION CORPORATION 1. OWNERSHIP Hawkeye Cablevision Corporation (Hawkeye) would be a subsidiary of Amer- ican Television and Communications Corporation (ATC). ATC would retain 80 percent interest and two local individuals would each own 10 percent of the system. ATC holds an interest in 101 cable systems in 33 states and is cur- rently seeking franchises in other communities as well. 1 tdI CROPILMEO BY JORM MICR+LAB ! CEDAR RAPIDS • DES MOINES h I•ti L1WriLi,!LU by JORM MICROLAb II -3 CEDAR RAPIDS AND 2. SERVICES Hawkeye also proposes a wide range of broadband telecommunication services for Iowa City. Basic service would include full-time carriage of eight broad- cast television stations, nine automated channels, a local origination channel offering programming produced locally by the operator and certain satellite programming, a separate channel offering additional satellite programming and seven dedicated access channels. This basic service would be offered for $7.95 per month. Hawkeye would offer one pay cable channel: Home Box Office at $6.95 per month. FM radio service would also be available. Hawkeye's two-way system would be initially activated to allow remote orig- ination and access cablecasting from numerous origination points within the city and the University of Iowa. One fully equipped color studio would be installed at the proposed new library or, if preferred, at a central location for local orig- ination and rig-inationand access program production. A separate, smaller studio would be pro- vided at a central location that would be reserved exclusively for access channel users. Additional color portable equipment would be provided for access users as well as special equipment for the library and government access channels. 3. SYSTEM DESIGN Hawkeye proposed a single -trunk, single -feeder system with 34 downstream channels (54-300 MHz) to subscribers and 3 initially activated upstream channels (5-30 MHz) from specified locations. A second institutional network cable with an initially activated upstream capacity of 5 channels (frequency spectrum to be determined) would be provided that would permit program origination from specified locations. All subscribers would receive remote control converters. �• MICROFILMED By JORM MICR+LA13 i CEDAR RAPIDS • DES MOINES { i i h I•ti L1WriLi,!LU by JORM MICROLAb II -3 CEDAR RAPIDS AND 2. SERVICES Hawkeye also proposes a wide range of broadband telecommunication services for Iowa City. Basic service would include full-time carriage of eight broad- cast television stations, nine automated channels, a local origination channel offering programming produced locally by the operator and certain satellite programming, a separate channel offering additional satellite programming and seven dedicated access channels. This basic service would be offered for $7.95 per month. Hawkeye would offer one pay cable channel: Home Box Office at $6.95 per month. FM radio service would also be available. Hawkeye's two-way system would be initially activated to allow remote orig- ination and access cablecasting from numerous origination points within the city and the University of Iowa. One fully equipped color studio would be installed at the proposed new library or, if preferred, at a central location for local orig- ination and rig-inationand access program production. A separate, smaller studio would be pro- vided at a central location that would be reserved exclusively for access channel users. Additional color portable equipment would be provided for access users as well as special equipment for the library and government access channels. 3. SYSTEM DESIGN Hawkeye proposed a single -trunk, single -feeder system with 34 downstream channels (54-300 MHz) to subscribers and 3 initially activated upstream channels (5-30 MHz) from specified locations. A second institutional network cable with an initially activated upstream capacity of 5 channels (frequency spectrum to be determined) would be provided that would permit program origination from specified locations. All subscribers would receive remote control converters. �• MICROFILMED By JORM MICR+LA13 i CEDAR RAPIDS • DES MOINES Qt LK FiLNEu BY JORM MICROLAB CEDAR RAPIDS AND 41CROFIL14ED BY DORM MICR+LAB 1 I CEDAR RAPIDS • DES MOINES Ay OWNERSAIP AND AEILITY TO - Z FINANCE CONSTRUCTION 'y A. oNNERSHIP 1. LOCAL OWNERSHIP competing bidders for a franchise, some members of In its evaluation of the degree of local ownership as a factor. Those the city council may consider local ownership as a plus factor generally reason that local owners who consider economic benefits to the community through local would tend to generate more and profits. It is also generally believed that spendjug of operating expenses be more sensitive and responsive to the community's needs local owners would and preferences. operators (MSos) whose corporate offices are gener- Some multiple system located outside the communities they serve argue that operating expenses ally employee benefits and local services so that, by and are spent for salaries, be spent within the local community regardless large, operating expenses will system is owned by an MSO. It is also argued that much of the of whether the the operation of a cable TV system is reinvested into the profit derived from system for expansion and rebuild of plant. d 4g the arguments in behalf of, or counter to, local ownership The merits of P in the case of Iowa City. Eastern Iowa Cablevision, Inc., are largely moot and managed by an MSO and Hawkeye Cablevision Corpora- would be totally owned and completely controlled and managed by an MSO . u tion would be EO percent owned' 41CROFIL14ED BY DORM MICR+LAB 1 I CEDAR RAPIDS • DES MOINES MiLl(Ui IL14Lu BY JOR14 HICROLAB • CEDAR RAPIDS AND DLS r 2. FORMS OF OWNERSHIP a. EASTERN Eastern is a wholly owned subsidiary of Cox Cable Communications, Inc. (Cox Cable) which, in turn, -is a wholly owned subsidiary of Cox Broadcating Corporation of Atlanta, Georgia. Cox Cable currently holds a major interest in 66 cable systems in 18 states and is currently seeking franchises in other communities. b. HAWEEYE Hawkeye would be an 80 percent owned subsidiary of American Television and Communications Corporation (ATC). ATC currently holds a major interest in 101 cable systems in 33 states. Ten percent of the stock would be sub- scribed to by Eugene Claussen and another 10 percent will be assigned to Elliot Full, both of Iowa City. Eugene Claussen and Elliot Full jointly own Johnson County Broadcasting, which operates a local FM radio station. ATC would manage and operate Hawkeye through a management contract and is cur- rently seeking franchises in other communities as well. B. ABILITY TO FINANCE CONSTRUCTION 1. EASTERN Eastern did not submit a balance sheet for Cox Cable, but from other sourceal we note that the assets of Cox Cable was reported at $73 million by year-end 1976. Fortune Magazine lists assets of Cox Broadcasting Corpor- ation as $284 million. There is clearly adequate financial resources from these two companies to guarantee the construction of a cable system in Iowa City. 1. CATV Industry—Warburg Paribas Becker, Inc. i" 141CROEILME0 BY JORM MICR+LAB 'rvt I CEDAR RAPIDS • DES MOINES h i j f 1 x MiLl(Ui IL14Lu BY JOR14 HICROLAB • CEDAR RAPIDS AND DLS r 2. FORMS OF OWNERSHIP a. EASTERN Eastern is a wholly owned subsidiary of Cox Cable Communications, Inc. (Cox Cable) which, in turn, -is a wholly owned subsidiary of Cox Broadcating Corporation of Atlanta, Georgia. Cox Cable currently holds a major interest in 66 cable systems in 18 states and is currently seeking franchises in other communities. b. HAWEEYE Hawkeye would be an 80 percent owned subsidiary of American Television and Communications Corporation (ATC). ATC currently holds a major interest in 101 cable systems in 33 states. Ten percent of the stock would be sub- scribed to by Eugene Claussen and another 10 percent will be assigned to Elliot Full, both of Iowa City. Eugene Claussen and Elliot Full jointly own Johnson County Broadcasting, which operates a local FM radio station. ATC would manage and operate Hawkeye through a management contract and is cur- rently seeking franchises in other communities as well. B. ABILITY TO FINANCE CONSTRUCTION 1. EASTERN Eastern did not submit a balance sheet for Cox Cable, but from other sourceal we note that the assets of Cox Cable was reported at $73 million by year-end 1976. Fortune Magazine lists assets of Cox Broadcasting Corpor- ation as $284 million. There is clearly adequate financial resources from these two companies to guarantee the construction of a cable system in Iowa City. 1. CATV Industry—Warburg Paribas Becker, Inc. i" 141CROEILME0 BY JORM MICR+LAB 'rvt I CEDAR RAPIDS • DES MOINES HiwK01iLMLU BY JURM MICROLAB CEDAR RAPIDS AND In addition, Cox Broadcasting Corporation is proposing to merge with General Electric, the ninth largest industrial corporation in the country with assets of over $13.7 billion. Whether this proposed merger is consum- mated is of minor importance to Iowa City. With Cox Broadcasting Corpora- tion's assurance of financial backing, Eastern should not have any problem in raising the necessary funds for constructing its proposed Iowa City cable system. A potential problem lies in Eastern's proposal to fund the initial $2.3 million capital requirement for Iowa City totally out of equity funds. In the long run, this plan may not be the best financing arrangement for Iowa City. In view of Eastern's stated financial goal of a 15 percent return on equity, an all equity financed cable system would normally require a higher return requirement, and consequently, higher subscriber rates than an identi- cal system financed partially with debt capital. This is because the portion of revenue requirement (which determines the subscriber rates that would be charged) that goes towards paying the interest on the debt portion of capital would normally be lower than the 15 percent return Eastern now seeks as their desired return -on -equity portion of total capital. Cox Cable now has $15 mil- lion in debt at 8 3/4 percent and another $15 million at 10 7/8 percent. Applying the interest payment on this debt would be less costly to subscrib- ers in Iowa City than the 15 percent return -on -equity. There is the added advantage of being able to deduct interest payments from the income tax lia- bility. This would further reduce the amount of net income necessary to satisfy Eastern's goal of a 15 percent return on equity. It is possible that Cox Cable could go out of its way and make a special effort to earmark the investment in Iowa City and make sure it comes from some of its equity sources such as net income or depreciation funds. Iowa City on the other hand can also insist on a capital structure more favorable to the city— ' JIICROFI LIdED BY JORAA MICR+LAB III CEDAR RAPIDS - DES MOINES I a,ucur iLl•ILU BY JURM 141CROLAB III -4 CEDAR RAPIDS AND DES a capital structure with some debt capital invested. In its proposal, Eastern claimed that Cox Cable has a debt-to-equity ratio of 0.7, and that it has the capacity to borrow more. Certainly, Iowa City can request chat the capital in- vested in Iowa City be of the same proportion of debt and equity as the parent corporation. Judging from its stated commitment to build new plant in other communities and to rebuild existing plant, Cox Cable may very well have to bor- row additional funds if it succeeds in winning some of the new franchises for which it is applying.2 At the city's October 26,1978 public hearing, an Eastern representative indicated that, for purposes of future rate increases in Iowa City, Eastern would compute its rate of return on a 0.7 debt-to-equity ratio basis. This would alle- viate the return on investment problem discussed above. However, this still leaves Eastern with a higher return on investment requirement in comparison with Hawkeye which proposed a capital structure with 1.5 debt-to-equity ratio. In short, Eastern would have a greater portion of its net investment in equity and, therefore, a greater portion of its investment subject to its expected 15 percent return on equity. This 15 percent expected return is higher than any interest rate that would normally be applicable and tax deductable. 2. BAWKEYE ATC, the parent corporation of Hawkeye has reported assets of $161.5 million as of June 30, 1978, and expect to internally generate $27.5 million this year. 2. Eastern'a report of Cox Cable's national building commitment for new plant and rebuilds may be understated. To start with, the total for the year one column fy ItsFortWayneproposal calledforCoxCableto sdbe bnohSi llion appears ginthe summarinvest $5.5 million for preoperating and year one capital. Among its rebuilds, pre- vious reports filed by Cox Cable contains rebuild commitments that are different from what are shown on page 5 of Form E. For example, Cox Cable has previously reported that it is committed to rebuild 700 miles of its San Diego system before tem is uled 80. One hundred ebuilt in 1979.m Its alsoihas Wother rebuild commitments, i of such ass100dto miles beas; H4iong Beach, Oregon; none of which O in whichwere were included i in Form E. and 45 miles inL �' ��•f�• IUCRDFILMED BY DORM MICR+LAB i CEDAR RAPIDS - DES MOINES MiLKUYiUlr-U By JORM MICROLAB • CEDAR RAPIDS A11u or 10."1E5, 1061 Y III -5 ATC is also further along in its proposed merger with Time, Inc., a corporation with assets in excess of $1 billion. The capital structure prepared by ATC calls for an equity investment of only $850,000 in equity funds in Iowa City. The equity contribution of the two local owners would be part of this fund so • that ATC's equity contribution would be somewhat less than $850,000. While ATC expects to generate $27.5 million internally this year, ATC probably has the largest commitment to build new plant and rebuild existing plants of any MSO. ATC also has many other applications pending including Queens, New York City, which could cost ATC $80 million in the next eight years. Although Hawkeye listed ATC as having total rebuild commitments of about $2 million per year, this may also be understated.3 3. SUMMARY We do not expect that either Eastern or Hawkeye would have any problem raising the capital necessary to build a system in Iowa City. The differences in debt-to-equity ratios as it may affect each applicant's expected net income is discussed more fully in the following chapter. 3. In a similar form submitted recently to Kansas City, Missouri, ATC's rebuild commitment was reported to be about $8 million annually. }i IIICROFI LI-0ED 6Y JORM MICR+LAB CEDAR (RAPIDS • DES MOINES h1iTiWriLMi.J BY JORM MICROLAB LtJAR RAPIDS AMD DE i IV. FINANCIAL ANALYSIS A. PENETRATION The term penetration refers to the percentage of the homes subscribing to cable service out of the total number of homes that are passed by the cable company. 1 BASIC SUBSCRIBER PENETRATION Of the presently estimated 18,600 homes in Iowa City, Table IV -1 gives the applicants' projections for number of homes passed and the number of basic sub - 5i scribers each expects to have over a ten-year period. Eastern does not anticipate any growth in Iowa City homes and signs on its subscribers more slowly, but its forecast of basic subscribers begins to exceed }a Hawkeye's by the end of the fourth year of operation. Eastern'a forecasted rate of penetration also begins to exceed Hawkeye's by the end of the fourth year. �i F' Vi 2. PAY CABLE SUBSCRIBER PENETRATION FTable IV -2 compares the anticipated growth in pay cable subscribers and penetration for each of the ten years. k There is also a sharp contrast in the Forecast of pay cable subscribers between Eastern and Hawkeye. By the fourth year of operation, Eastern expects I to have 75 percent more pay cable subscribers than Hawkeye. Over the full ten }' years, Eastern projects approximately 50 percent more pay cable subscribers I i �? than Hawkeye. i I I' I 1 MICROFILMED BY I j6RM MICFI+LAB CEDAR RAPIDS • DES MOINES I.1ii.M01 iLNEO BY JURM MICROLAB • CEDAR RAPIDS AND IIICROEl LMEO 8Y AA)� I JORM MICR+LAB I•'1 I CEDAR RAPIDS • DES MOINES TABLE IV -1: PENETRATION --BASIC SERVICE l�Year 2�Year31Year 41Yeac 51Year 61Year 71Year 81Year 9lYear 10 Items Year Homes Passed (in 0008) 18.6 18.6 18.6 18.6 18.6 18.6 18.6 18.6 18.6 18.6 --Eastern 15.8 16.8 17.7 18.6 19.3 19.5 19.7 19.9 20.1 20.3 --Ilawkeye Basic Subscribers (in OOOs) 3.4 7.3 8.2 9.3 9.7 9.9 10.1 10.2 10.4 10.5 --Eastern 7.1 8.1 8.5 8.9 9.3 9.4 9.5 10.0 10.0 10.1 __Hawkeye Penetration 30X 39% 44% 50% 52% 53% 54X SSX 56X 56X ,.I. Eastern tsz 48% 48% 48% 48% 48% 48% SOX SOX SOX IIICROEl LMEO 8Y AA)� I JORM MICR+LAB I•'1 I CEDAR RAPIDS • DES MOINES QiwO ILHEU BY JURM MICROLAB CEDAR RAPIDS AND 141CROFILMED BY JORM MICR#LAB CEDAR RAPIDS - DES MOINES 0 TABLE IV -2: PENETRATION—PAI CABLE SERVICE 31Year 41Year 51year 61Year 71Year BlYear 91Year 10 Year IlYear 21Year 5.8 6.5 6.7 6.B 6.9 7.0 7-1 7.24.9 2.4 5.1 3.5 3.7 3.9 4.3 4.3 4.8 4.8 2.8 3.4 35% 36% 37% 37% 38% 38% 39% 22% 27Z 31Z 20% 22% 22% 24% 24% 24% 18% 20% 20% 20% 141CROFILMED BY JORM MICR#LAB CEDAR RAPIDS - DES MOINES 0 hIi LRUi iL& U BY JORM MICROLAB IV -4 CEDAR RAPIDS AND 141CROFILMED BY `I JORM MICR+LAB CEDAR RAPIDS • DES MOINCS Such a wide discrepancy in the outlook for pay cable in Iowa City must g reflect a basic difference in marketing philosophy between the applicants. A, :4 believes in the "new -build" phenomenon whereby a "full -pay" service Eastern � Box Office (HBO) when offered from the beginning along with a such as Home "mini -pay" package results in pay cable penetration that is much higher than for older cable systems where pay service was not offered initially. This has been experienced by its parent corporation, Cox Cable in four or five of their . as Washington. Eastern has not reported on all of new systems such Spokane, Cox Cable's new builds; only those four or five systems where pay cable gene- tration is much higher than the national average for both new builds and add is assuming that the Iowa City cable system will follow the new ons. Eastern build phenomenon observed in some newly built systems. Hawkeye is relying primarily on the result of a telephone survey of the ti Iowa City market. The pay cable penetration forecasted by Hawkeye starts out national average and will probably be running below, the national at about the by its third year. The national average for pay cable penetra- average about tion is currently 17 percent and is forecasted to grow to 25 percent by 1985. B. REVENUE kk BASIC SERVICE REVENUES �j - Table IV -3 shows the annual revenues from basic service and each appli- cant's projected monthly rate for each of the ten years. We observe from the table on subscribers that Hawkeye forecasts a more rapid growth in subscribers than does Eastern. This rapid signing on results in Hawkeye's forecast of 7,100 basic subscribers by the end of year one is perhaps due, in part, to Hawkeye's somewhat faster construction schedule. 141CROFILMED BY `I JORM MICR+LAB CEDAR RAPIDS • DES MOINCS IyiutUFILMED BY JORM MICROLAB • CEDAR RAPIDS APIU DL) ti ' MICRO FILMED BY JCRM MICR+LAB CEDAR RAPIDS • DES MOINES 1 i ' - TABLE IV -3: BASIC SUBSCRIBER REVENUE --MONTHLY RATE llYear 2lYear 3lYear 4lYear 51Year 61Year 71Year 81Year 9lYear lOITOTAL m I Year ubscriber FB - nueOOs)--rn 808 S. 1,024 1,044 1,059 1,075 1,090 8,344 157 493 716 1,085 1,118 1,152 1,163 9,546 e ' --llewkeye 541 769 838 924 966 990 N Monthly Rate $7.50 $7.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.05* --Eastern $7.50 $7.50 $7.50 l $7.95 $7.95 $7.95 $8.25 $8.25 $8.25 $8.95 $8.95 $8.95 $8.95 $8.65* --Hawkeye *To estimate the effective monthly average subscriber that rates over ten the total added years, during we haviventiesreiathe any g Y I, of subscribers by assuming annual average number added at an even rate. ' MICRO FILMED BY JCRM MICR+LAB CEDAR RAPIDS • DES MOINES 1 H ILKOr iLALU BY JURM MICROLAB CEDAR RAPIDS AND Iv -6 Eastern forecasts that only 3,400 basic subscribers will be hooked up by the end of the first year. Combined with a higher monthly rate, Hawkeye's assump- tion of a quick buildup results in much higher revenues in the first year. However, for Hawkeye to realize $541,000, in the first year, the equivalent of 5,671 basic subscribers would have to be on for the full 12 months assuming one outlet per subscriber. This appears unlikely in the first year when the system is under construction and customers can only be hooked up after the distribution lines are installed. Eastern proposes to initiate service with a basic monthly rate of $7.50. Eastern expects to increase this rate after five years to $8.50. Over the ten- year projection period, Eastern's effective average monthly rate for basic ser- vice would be $8.10. Hawkeye's initially proposed monthly rate for basic service is $7.95—$.45 higher than Eastern's rate. Hawkeye expects to increase this rate after three years to $8.25. After three more years, it expects to increase its rate to $8.95. over the ten-year period, Hawkeye's anticipated effective monthly rate for basic service is $8.65. Computing the average subscriber revenues from basic service over the ten-year projection period (including second sets but excluding installation fees, we find that Eastern's average monthly revenue per basic suberiber would be $7.81 and Hawkeye's would be $8.75—a difference of $.94. This assumes, of course, that each applicant's projections would hold true. 2. PAY CABLE _REVENUES The projected revenues from pay cable service of each applicant is com- pared in Table IV -4. The monthly charges for pay cable services are not regulated at the fed- eral, state or local level and function pretty much as a market determined rate. Eastern's much higher revenue from pay cable services results from its expectation of a much higher penetration of the market. I41CROFILMED BY �JORM MICR+LAB i CEDAR RAPIDS • DES MOINES I 1 $i i !i 3 v 1 i Y Y. i i ii H ILKOr iLALU BY JURM MICROLAB CEDAR RAPIDS AND Iv -6 Eastern forecasts that only 3,400 basic subscribers will be hooked up by the end of the first year. Combined with a higher monthly rate, Hawkeye's assump- tion of a quick buildup results in much higher revenues in the first year. However, for Hawkeye to realize $541,000, in the first year, the equivalent of 5,671 basic subscribers would have to be on for the full 12 months assuming one outlet per subscriber. This appears unlikely in the first year when the system is under construction and customers can only be hooked up after the distribution lines are installed. Eastern proposes to initiate service with a basic monthly rate of $7.50. Eastern expects to increase this rate after five years to $8.50. Over the ten- year projection period, Eastern's effective average monthly rate for basic ser- vice would be $8.10. Hawkeye's initially proposed monthly rate for basic service is $7.95—$.45 higher than Eastern's rate. Hawkeye expects to increase this rate after three years to $8.25. After three more years, it expects to increase its rate to $8.95. over the ten-year period, Hawkeye's anticipated effective monthly rate for basic service is $8.65. Computing the average subscriber revenues from basic service over the ten-year projection period (including second sets but excluding installation fees, we find that Eastern's average monthly revenue per basic suberiber would be $7.81 and Hawkeye's would be $8.75—a difference of $.94. This assumes, of course, that each applicant's projections would hold true. 2. PAY CABLE _REVENUES The projected revenues from pay cable service of each applicant is com- pared in Table IV -4. The monthly charges for pay cable services are not regulated at the fed- eral, state or local level and function pretty much as a market determined rate. Eastern's much higher revenue from pay cable services results from its expectation of a much higher penetration of the market. I41CROFILMED BY �JORM MICR+LAB i CEDAR RAPIDS • DES MOINES I 1 QULRUFILHED BY JDRM MICROLAB CEDAR RAPIDS AND DES .. .., - .ww:. w.r.'-a:w's: rte. .;; .9. : .. . ..:... . . :•.;:.. ... .. ..._..,,. , ........ ... _ _...... .�. ... .. C I �i 4 TABLE IV -4: PAY CABLE REVENUES (in $0008) ` Year 1lYear 2lYear 31Year 4lYear SlYear 61Year 71Year BlYear 91Year 101TOTAL Applicant t 101 315 458 517 554 567 575 584 592 601 4,864 -Eastern 177 259 288 302 316 341 360 380 400 404 3,227 --Nawkeye it I4ICROFILMED BY I ' JORM MICR+LA6 .� CEDAR RAPIDS • DES MOINES I -Ai ui(riLALu by JORM MICROLAB CEDAR RAPIDS AND DES MICROFILMED BY JORM MICR+LOMB CEDAR RAPIDS . DES MOINES 1 i IV -8 fi 3. TOTAL REVENUES { Revenues from all sources for each of the ten years forecasted are sum- J marized in Table IV -5. Over the ten-year projection period, the average monthly revenue per subscriber from all sources including second sets, installations and especially pay cable is $13.83 for Eastern and $30.05 for Hawkeye--a dif- ference of $.78. As shown in Table IV -3, Eastern projects lower monthly basic service rates throughout the ten-year period. Obviously, it is Eastern's pro- jected revenues from pay cable that brings its total average revenue per sub- scriber to $.78 per month above Hawkeye's. Eastern's more optimistic forecasts for pay cable service resulting in much higher revenues from pay cable is only partly offset by Hawkeye's pro- jected rapid buildup and higher monthly rate. C. CAPITAL EXPENDITURES Capital expenditure is divided and analyzed in four main categories. • Miscellaneous Equipment • Drop Equipment and Converters . - • Origination Equipment • Distribution Plant 1. MISCELLANEOUS EQUIPMENT t The expenditures for miscellaneous equipment includes the following items ` from page 5 of Form G. • Antennas and Towers F • Microwave • Headend • Earth Station • Buildings • Leasehold Improvements, Furniture and Fixtures • Land i • Test Equipment, Tools, Spare Parts, Inventories MICROFILMED BY JORM MICR+LOMB CEDAR RAPIDS . DES MOINES i hliLKUFiLMEU BY JORM 141CROLAB CEDAR RAPIDS AND DES '10141S, IOW Y TABLE Iv -5: TOTAL REVENUE (in $OOOs) Applicant Year 1lYear 21Year 31Year 41Year �jYear 61Year 71Year BlYear 91Year 101TOTAL --Eastern 266 873 1,244 1,404 1,510 1,669 1,699 1,723 1,749 1,773 13,910 —Ilawkeve 748 1,103 1,194 1,296 1,353 1,405 1,514 1,580 1,625 1,639 13,457 MICROFILMED BY `1 DORM MICR+LAB CEDAR RAPIDS • DES MOINES PiLLIWFiLALU BY JORM MICROLAB IV -10 CEDAR RAPIDS ASID DES • Vehicles • Preoperating • Engineering • Capitalized Overhead and Interest Table IV -6 shows the comparable expenditures for each of these items of capital over the ten-year projection period. Hawkeye's forecast of expenditures for miscellaneous capital equipment is 2.6 times greater than Eastern's. Major discrepancies may be found in the forecast of headend, test equipment, vehicles and preoperating expenses. Hawk - eye forecasts capital expenditures for headend equipment amounting to $200,000. Eastern's forecasts for this very same category amounts to only $63,000 which does not appear realistic. The difference in test equipment capital expenditures forecast is even more significant than the difference in headend equipment. Eastern forecasts only $35,000 in ten years whereas Hawkeye forecasts $269,000. Actually, Hawk - eye's forecast represents two sets of test equipment purchased eight years apart. In its depreciation life estimates on page 8 of Form G, Hawkeye reports an estimated life of eight years for test equipment. Therefore, in their pro- jection of test equipment capital expenditures, the entire amount spent for their capital item is replaced, at inflated prices, eight years after their initial purchases. Also, the list of test equipment shown by Hawkeye in Form I is considerably more extensive than a similar list provided by Eastern. Nevertheless, we doubt that Eastern could purchase all of its listed test equipment for $35,000. For vehicles, Eastern does not show any capital expenditures, presumably because it has decided to lease all vehicles, whereas Hawkeye forecasts the expenditure of $181,000. Again, true to its depreciation policy, this expendi- ture represents three sets of vehicles purchased every four years. The difference in preoperating capital expenditures may be due to varying company policy regarding preoperating expenses. ATC generally capitalizes early MICROFILMED BY JORM MICR+LAB i CEDAR RAPIDS • DES MOINES Miu<UriLHLU BY JORM MICROLAB • CEDAR RAPIDS AND TABLE IV -6: MISCELLANEOUS EQUIPMENT CAPITAL EXPENDITURES (in $0008) Equipment Eastern Bawkeye Antennas and Towers 24 25 Microwave 45 15 Readend 63 200' Earth Station 50 30 -- 10 Buildings Leasehold Improvements 50 45 -- 10 Land Test Equipment 35 269 -- 181 Vehicles Preoperating 60 208 Engineering 49 — Total Miscellaneous 376 993 i MICROFILMED BY... JORM MICR+LAB .� CEDAR RANDS • DES MOINES 0. I 6ii�JWI ILA U by JURM MICROLAB IV -12 CEDAR RAPIDS AND UES start-up operating losses while Cox does not give any indication that it pro- poses to capitalize any start-up expenses. 2. _DROP EQUIPMENT AND CONVERTERS This expenditure covers the material cost and labor installation of drop wires and the material price and installation costs of converters at the sub- scriber terminal. Table IV -7 compares the capital expenditure for drop equip- ment and converters over the total ten-year period. The difference of approximately $150,000 in drop equipmement cost over ten years must lie in Eastern's assumption on "churn" of subscribers; that is, the turnover ratio. Eastern's cost assumption per drop may be lower than Hawkeye's, but Eastern assumes an annual expenditure of about $65,000 for drops even when the net addition to subscribers is minimal. At its assumed cost of $20 per drop, Eastern must assume the installation of 3,250 new subscribers to add 100 or 200 net subscribers to its system. Hawkeye appears to assume a much lower turnover after installing its initial customers and, therefore expects an average expenditure of $38,000 per year would be needed to maintain the system. On expenditures for converters, Hawkeye's consistency with its declared depreciation policy causes it to replace its entire stock of converters after eight years. Eastern has an estimated life of only five years for converters but does not show the scale of replacement clearly evident in Hawkeye's capital expenditure projection. We also note that Hawkeye proposes to provide sub- scribers with a remote control converter, a more expensive item than Eastern's proposed set-top converter. 3. ORIGINATION EQUIPMENT This capital item is for studio equipment used for local origination and access program production. Table IV -8 shows the ten-year capital projection of I41CROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I I41LtWri[-HLJ BY JOR14 MICROLAB CEDAR RAPIDS AND DES F1C "iES, I0�1 IV -13 TABLE IV -7: DROP EQUIPMENT AND CONVERTERS (Ten Years) (in $0008) Equipment Eastern Rawkeye Drop Equipment 702 u; Converters 728 1,125 Pay Cable Converters 33 90 Total 1,463 1,771 H l' S 1! G o. Y Y I I41LtWri[-HLJ BY JOR14 MICROLAB CEDAR RAPIDS AND DES F1C "iES, I0�1 IV -13 TABLE IV -7: DROP EQUIPMENT AND CONVERTERS (Ten Years) (in $0008) Equipment Eastern Rawkeye Drop Equipment 702 556 Converters 728 1,125 Pay Cable Converters 33 90 Total 1,463 1,771 TABLE IV -8: ORIGINATION EQUIPMENT (Ten year) (in $0005) Item Eastern Rawkeye Originating Equipment 190 95 ILMED BY.. Y� JORM MICR+LAB CEDAR RAPIDS • DES MOINES NitWiiLMLO BY JURM MICROLAB CEDAR RAPIDS AND IV -14 each applicant for originating equipment. Although Hawkeye proposed to provide substantially more production equipment, Eastern has budgeted twice the amount. Neither applicant, however, has provided for reasonable depreciation and replace- ment of this equipment. 4. DISTRIBUTION PLANT This category is for the cables, amplifiers, pole rearrangement and in- stallation of the network that distributes the signals from the headend to the subscriber terminal. Table IV -9 compares the distribution plant and its pro- jected cost. Eastern shows a lower cost per mile of distribution plant but considerably more miles than Hawkeye. This is one area of cable system planning that contin- ues to puzzle us. Cox Cable's experience leads them to estimate eventual strand miles based on 90 percent of street miles: ATC claims that its experience has been that -70 percent of street miles is a good estimate of eventual strand miles. How two of the largest MSos in the country have such a varying basis for estima- ting strand miles is difficult to explain. Obviously, Eastern will not build 132 strand miles or 178 cable miles if all the homes in Iowa City can be served with Hawkeye's projected 103 strand miles or 112 cable miles. 5. TOTAL CAPITAL EXPENDITURE Capital expenditure for miscellaneous, drop equipment, originating equip- ment and distribution plant may be totaled from Tables IV -6 through IV -9. This is summarized in Table IV -10. The significant difference between the forecasts of capital expenditure is explained by Hawkeye's replacement of converters, test equipment and vehicles. T- MICROFILMED BY JORM MICR+LAB I . CEDAR RAPIDS • DES MOINES 1^ t v fi t L i NitWiiLMLO BY JURM MICROLAB CEDAR RAPIDS AND IV -14 each applicant for originating equipment. Although Hawkeye proposed to provide substantially more production equipment, Eastern has budgeted twice the amount. Neither applicant, however, has provided for reasonable depreciation and replace- ment of this equipment. 4. DISTRIBUTION PLANT This category is for the cables, amplifiers, pole rearrangement and in- stallation of the network that distributes the signals from the headend to the subscriber terminal. Table IV -9 compares the distribution plant and its pro- jected cost. Eastern shows a lower cost per mile of distribution plant but considerably more miles than Hawkeye. This is one area of cable system planning that contin- ues to puzzle us. Cox Cable's experience leads them to estimate eventual strand miles based on 90 percent of street miles: ATC claims that its experience has been that -70 percent of street miles is a good estimate of eventual strand miles. How two of the largest MSos in the country have such a varying basis for estima- ting strand miles is difficult to explain. Obviously, Eastern will not build 132 strand miles or 178 cable miles if all the homes in Iowa City can be served with Hawkeye's projected 103 strand miles or 112 cable miles. 5. TOTAL CAPITAL EXPENDITURE Capital expenditure for miscellaneous, drop equipment, originating equip- ment and distribution plant may be totaled from Tables IV -6 through IV -9. This is summarized in Table IV -10. The significant difference between the forecasts of capital expenditure is explained by Hawkeye's replacement of converters, test equipment and vehicles. T- MICROFILMED BY JORM MICR+LAB I . CEDAR RAPIDS • DES MOINES Mi'LKUFiLHEu BY JOR14 141CROLAB CEDAR RAPIDS AND IV -15 TABLE IV -9: DISTRIBUTION PLANT r�, Item Eastern Aawkeye 5� 366 993 Expenditure IA j 1,771 (in $0003) 190 y Kms. 890 687 n+ 175 414 Total 1,065 5.� i i 157 96 t i F I 21 C t Total 1 S Mi'LKUFiLHEu BY JOR14 141CROLAB CEDAR RAPIDS AND IV -15 TABLE IV -9: DISTRIBUTION PLANT r�, Item Eastern Aawkeye Distribution Plant 366 993 Expenditure 1,463 1,771 (in $0003) 190 95 Aerial 890 687 Underground 175 414 Total 1,065 1,101 Niles of Plant Aerial 157 96 Underground 21 16 Total 178 112 Cost Per Mile (in $0008) Aerial 5,669 7,156 Underground 8,333 25,875 TABLE IV -10: TOTAL CAPITAL EXPENDITURE (Ten Year) (in $OOOs) Item Eastern . Aawkeye Miscellaneous 366 993 Drop Equipment 1,463 1,771 Originating Equipment 190 95 Distibution Plant 1.065 1.101 Total 3,084 3,960 i MICROFILMED BY JORM MICR+LAB + CEDAR RAPIDS • DES MOINES I•IiuKUhili•ItU BY JURM MICROLAB • CEDAR RAP105 AIIU IV -16 D. OPERATING EXPENSES There are three categories of operating expenses: plant expenses; orig- ination expenses; and general, selling and administrative expenses. The number of employees, their salaries and associated benefits are frequently the largest component of these expenses. 1. PLANT EXPENSES Plant expenses cover the following items. • Salaries • Employee Benefits • Maintenance • Pole and Site Rental • Microwave Service • Power • Vehicle Expense • Rent • Capitalized Expenses • Other Table IV -11 compares the plant expenses of the applicants in the third year of operation. Hawkeye's projection of maintenance expenses, especially for converters, is double Eastern's estimates probably due to the more sophisticated converters Hawkeye would provide. Microwave service is being accounted for only by Hawk - eye. Hawkeye plans to import Chicago independent stations WON and WSNS via common carrier microwave at an estimated annual expense of $26,000. On October 25, the FCC approved satellite carriage of WON for delivery to cable systems. Since Hawkeye plans to have a television receive only (TVRO) earth station, it would have the option of receiving this station via satellite and thus save an estimated $5,000 per year. i MICROFILMED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES i' ;F i ' to n 3 t iM $ G E 1; I•IiuKUhili•ItU BY JURM MICROLAB • CEDAR RAP105 AIIU IV -16 D. OPERATING EXPENSES There are three categories of operating expenses: plant expenses; orig- ination expenses; and general, selling and administrative expenses. The number of employees, their salaries and associated benefits are frequently the largest component of these expenses. 1. PLANT EXPENSES Plant expenses cover the following items. • Salaries • Employee Benefits • Maintenance • Pole and Site Rental • Microwave Service • Power • Vehicle Expense • Rent • Capitalized Expenses • Other Table IV -11 compares the plant expenses of the applicants in the third year of operation. Hawkeye's projection of maintenance expenses, especially for converters, is double Eastern's estimates probably due to the more sophisticated converters Hawkeye would provide. Microwave service is being accounted for only by Hawk - eye. Hawkeye plans to import Chicago independent stations WON and WSNS via common carrier microwave at an estimated annual expense of $26,000. On October 25, the FCC approved satellite carriage of WON for delivery to cable systems. Since Hawkeye plans to have a television receive only (TVRO) earth station, it would have the option of receiving this station via satellite and thus save an estimated $5,000 per year. i MICROFILMED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES rilu(UFiLi1EU BY JORM MICROLAB • CEDAR RAPIDS AND UES MOINES, IOW IV -17 TABLE IV -11: PLANT EXPENSES --THIRD YEAR (in $OOOs) Expense Eastern Hawkeye Salaries 198.1 107.0 Employee Benefits 29.7 20.0 Maintenance 24.3 49.0 ,v 21.2 31.0 Microwave Service - 26.0 _ t 9.5 8.0 Vehicle Expense 37.7 11.0 Rent - 9.0 Capitalized Expenses (52.9) (28.0) Other r 6.0 Total 267.6 N 239.0 ^ p M� 13 Ett - f. i' F i 4. i , I • CEDAR RAPIDS AND UES MOINES, IOW IV -17 TABLE IV -11: PLANT EXPENSES --THIRD YEAR (in $OOOs) Expense Eastern Hawkeye Salaries 198.1 107.0 Employee Benefits 29.7 20.0 Maintenance 24.3 49.0 Pole and Site Rental 21.2 31.0 Microwave Service - 26.0 Power 9.5 8.0 Vehicle Expense 37.7 11.0 Rent - 9.0 Capitalized Expenses (52.9) (28.0) Other r 6.0 Total 267.6 N 239.0 ^ Number of Employees M� 13 8 � Id IDROFILMEO BY ..,j DORM MICR+LAB i CEDAR RAPIDS • DES MOINES i d r } 1 i 7 j i i NIL10 iLMLU BY JORM MICROLAB IV -18 CEDAR RAPIDS AND DE Eastern plans to import the signals of the two Chicago independent sta- tions via its own CARS Band microwave system between Moline and Cedar Rapids and, therefore, we expect that the associated expenses to deliver these signals to Iowa City should not be more than about $3,000 per year. Nevertheless, these expenses should have been included in Eastern's projections As expected, vehicle expense will be greater for Eastern because they show no capital expense planned for vehicles. Rent expenses identified by Hawkeye but not by Eastern are probably a matter of placement. Eastern has all rent expenses under general, selling and administrative expenses. Total rent expenses in all categories are approximately the same. 2. ORIGINATION EXPENSES Origination expenses include: • Salaries • Benefits • Mobile Van Expenses • Other Miscellaneous • Program Materials and Supplies • News Service • Film Service •, Other Program Materials • Pay Cable Expenses Table IV -12 details the originating expenses of the applicants in the third year of operation. The most obvious explanation for the difference in the total originating expenses is, of course, explained by the variation in pay cable expenses. We have observed earlier how Eastern forecasts many more pay cable subscribers than does Rawkeye. Consequently, pay cable expenses which are normally charged per subscriber would be correspondingly higher. 3. GENERAL, SELLING AND ADMINISTRATIVE EXPENSES All of the general office, selling, administrative and other overhead expenses are placed in this category. The specific items of expenses included are listed in the first column of Table IV -13. 141CROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES FIOINES i. i NIL10 iLMLU BY JORM MICROLAB IV -18 CEDAR RAPIDS AND DE Eastern plans to import the signals of the two Chicago independent sta- tions via its own CARS Band microwave system between Moline and Cedar Rapids and, therefore, we expect that the associated expenses to deliver these signals to Iowa City should not be more than about $3,000 per year. Nevertheless, these expenses should have been included in Eastern's projections As expected, vehicle expense will be greater for Eastern because they show no capital expense planned for vehicles. Rent expenses identified by Hawkeye but not by Eastern are probably a matter of placement. Eastern has all rent expenses under general, selling and administrative expenses. Total rent expenses in all categories are approximately the same. 2. ORIGINATION EXPENSES Origination expenses include: • Salaries • Benefits • Mobile Van Expenses • Other Miscellaneous • Program Materials and Supplies • News Service • Film Service •, Other Program Materials • Pay Cable Expenses Table IV -12 details the originating expenses of the applicants in the third year of operation. The most obvious explanation for the difference in the total originating expenses is, of course, explained by the variation in pay cable expenses. We have observed earlier how Eastern forecasts many more pay cable subscribers than does Rawkeye. Consequently, pay cable expenses which are normally charged per subscriber would be correspondingly higher. 3. GENERAL, SELLING AND ADMINISTRATIVE EXPENSES All of the general office, selling, administrative and other overhead expenses are placed in this category. The specific items of expenses included are listed in the first column of Table IV -13. 141CROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES FIOINES I•IiyWti0IEU BY JORM MICROLAB • CEDAR RAPIDS AMU UL5 PlUlrit�,, y IV -19 TABLE IV -12: ORIGINATION EXPENSES --THIRD YEAR (in $OOOs) Expense Eastern Hawkeye Salaries 47.0 37.0 Benefits 7.2 5.0 Mobile Van 2.4 - Other Local Origination 10.2 5.0 Program Materials 3.5 - New Service 6.0 7.0 Film Service 3.5 11.0 Other Program Material 7.0 - Pay Cable 222.8 124.0 Total Origination Expenses 309.6 189.0 Number of Employees 4 3 Id ICROFILMEO BY JCRM MICR+LAB ; CEDAR RAPIDS • DES MOINES I.11L1Wi iLi4cU BY JORM 141CROLAB t • CEDAR RAPIDS MID DLS IV -20 TABLE IV -13: GENERAL,. SELLING AND ADMINISTRATIVE EXPENSES --THIRD YEAR (in $OOOs) Item Eastern Hawkeye Salaries 70.8 72.0 Benefits 10.2 11.0 Light, Heat 6 Power 4.8 4.0 Vehicle Expense 3.0 z! Rent 10.0 2.0 Travel 6 Entertainment 4.0 y Contributions .1 �s Professional Services 1.2 2.0 Stationery 6 Supplies 4.4 3.0 Postage 6 Freight 3.6 1.0 Advertising 6 Promotion 20.0 f Telephone 6 Telegraph 7.2 3.0 Sundry Office Expenses - 2.0 Insurance 10.0 5.0 Bad Debts 24.9 18.0 a 17.3 33.0 Franchising Fees 7. 36.0 Copyright 8.6 8.0 Services from Parent 24.0 60.0 +4r�f 24.0 Total General, Selling p and Administrative 261.4 323.0 General, Selling and i Administrative Per L $38.92 Basic Subscriber / ---------------- Number of Employees --------------------- fi 6 }f k� k� I k is t • CEDAR RAPIDS MID DLS IV -20 TABLE IV -13: GENERAL,. SELLING AND ADMINISTRATIVE EXPENSES --THIRD YEAR (in $OOOs) Item Eastern Hawkeye Salaries 70.8 72.0 Benefits 10.2 11.0 Light, Heat 6 Power 4.8 4.0 Vehicle Expense 3.0 1.0 Rent 10.0 2.0 Travel 6 Entertainment 4.0 1.0 Contributions .1 1.0 Professional Services 1.2 2.0 Stationery 6 Supplies 4.4 3.0 Postage 6 Freight 3.6 1.0 Advertising 6 Promotion 20.0 36.0 Telephone 6 Telegraph 7.2 3.0 Sundry Office Expenses - 2.0 Insurance 10.0 5.0 Bad Debts 24.9 18.0 State S Local Taxes 17.3 33.0 Franchising Fees 37.3 36.0 Copyright 8.6 8.0 Services from Parent 24.0 60.0 Other 24.0 Total General, Selling and Administrative 261.4 323.0 General, Selling and Administrative Per $33.73 $38.92 Basic Subscriber --- ----- ---------------- Number of Employees --------------------- fi 6 `II MICROFILMED BY -� JORM MICR+LAB CEDAR RAPIDS • DES MOINES Pi, LRUI iL EU BY JORM MLCROLAB IV -21 CEDAR RAPIDS AND DE The variation in rent expense was discussed previously. It was formerly , z j;. j noted that Eastern accounts for rent expenses under general, selling and admin - laced it under plant expenses. istrative expenses, whereas He eye p With substantially higher pay cable subscribers and revenues, one would expect Eastern to be spending more for advertising and promotion. That does not seem to be the case, as shown in Table IV -13. Hawkeye projects.80 percent more advertising expenditure than does Eastern. Bad debt expenses vary from one community to another. This expense is frequently related to total revenues. Eastern's estimate is probably based on Cox's experience of 2 percent. Eawkeye's estimate of a 1.5 percent bad debt expense probably reflects ATC's assessment of Iowa City relative to other sys- terns. ATC has used a range of 1 percent to 3 percent of total revenue as its i estimate of bad debt expense. We cannot explain why there,should be such a disparity in the estimate of s? state and local taxes. Since the taxes are normally based on the value of the property in the community, there ought not to be that much variance in what ' either Eastern or Hawkeye should be paying. A The most significant variation in general, selling and administrative j �? expenses can be found in services purchased from the parent corporation and in data processing. Practically all of the $24,000 reported by Hawkeye under the "other" category of expenses is for data processing. Most MSoa would also purchase data processing from the parent corporation. If we were then to combine both categories of expenses into one, Eastern's projection would total $24,000 and Hawkeye's would total $84,000• 4. TOTAL_ EXPENSES Combining the totals from Tables IV -11, IV -12 and IV -13 results in total operating expenses as compared in Table IV -14. Y MICROFILMED DY JORM MIC R+LAEI I CEDAR RAPIDS • DES MOINES I•ii.LKUFiLMEU BY JORM MICROLAB CEDAR RAPIDS AND IV -22 TABLE IV -14: TOTAL OPERATING EXPENSES—THIRD YEAR (in $OOOs) Expenses Eastern Ravkeye Plant" 367.6 349.0 Origination 309.6 189.0 General, Selling and Administrative 261.4 323.0 Total, Operating 891.6 751.0 Total Operating Expenses Per Basic Subscriber $108.21 $ 90.48 Number of Employees 23 �~y17 ~ r 1 c i F { ii c i 1 CEDAR RAPIDS AND IV -22 TABLE IV -14: TOTAL OPERATING EXPENSES—THIRD YEAR (in $OOOs) Expenses Eastern Ravkeye Plant" 367.6 349.0 Origination 309.6 189.0 General, Selling and Administrative 261.4 323.0 Total, Operating 891.6 751.0 Total Operating Expenses Per Basic Subscriber $108.21 $ 90.48 Number of Employees 23 �~y17 ~ MICROFILMED BY ' it JORM MICR+LAB CEDAR RAPIDS • DES MOINES ti Mi�d(W iLALU BY JORM MICROLAB CEDAR RAPIDS AND D IV -23 In summary, Eastern's employment of six more personnel causes Eastern to spend $80,000 more in salaries and benefits as projected for the third year of operation. Eastern also has to spend $100,000 more for pay cable programming because Eastern projects many more pay cable subscribers and would offer two pay services. These extra expenses of Eastern are partially offset by Hawkeye's much higher projected expenses for services purchased from its parent corporation. 5. CAPITAL STRUCTURE AND RATE OF RETURN In the previous chapter on ownership, we discussed some potential prob- lems that may arise from Eastern's capital structure wherein the total capital investment in the Iowa City cable system is to be financed solely from equity funds. If all other factors remained equal (i.e., given two competing appli- cants with the same capital investment, expenses and the same financial goal) more revenue would be required to satisfy that same goal for the applicant with an all equity capital structure. As it turns out, the financial goals of both applicants are similar in that Eastern seeks a 15 percent return on its equity investment and Hawkeye seeks a return of 13 percent to 17 percent on its equity investment. Taking the middle of the range given by Hawkeye would yield identical 15 percent rates of return on equity sought by both applicants. Taking the average of the ten years as they appear in the pro forma • financial statements submitted by both applicants, we can derive the follow— ing information: MICROFILMED BY I JORM MICR+LAS 1 CEDAR RAPIDS • DES MOINES t9iuWl lLi•ILU BY JORM 141CROLAB • Average Rate of Return: Item Average annual net income (in $OOOs) Average net investment (in $OOOs) Average rate of return on net investment CEDAR RAPIDS AND DES IV -24 1� Eastern Hawkeye 166 128 1,454, 1,642 11.4% 7.8% In the above example, which considers only the net investment projected by the companies, neither company would achieve its desired rate of return. However, as noted in the previous chapter, Eastern's representative stated at the October 26 public hearing that the company would apply Cox Cable's 0.7 debt-to-equity ratio for determining any future rate increases., Thus, if only 59 percent of the average $1.454 million in net investment is considered as equity and all net income is considered as return on equity, Eastern could have an effective 19.3 percent return on equity. Hawkeye proposes to invest 40 percent of its capital requirements in equity funds. Thus, if 40 percent of the average $1.642 million in net investment represents equity and all net income were considered as return on equity, Hawkeye could have a 19.5 percent return on equity. In other words, if we assume both applicants' capital and revenue projections would hold true, both would receive a comparable rate of return which is in excess of their stated goals. E. SUMMARY AND CONCLUSIONS Our observation regarding the revenue estimates is that Eastern hopes to realize much more revenue from pay cable. Hawkeye made a market study of Iowa r •`�1 41CROFIL14ED BY E JORM MICR+LAE3 i CEDAR RAPIDS • DES MOINES r n a))i Ei hi s ti 9' 3� V F c !C 7 t9iuWl lLi•ILU BY JORM 141CROLAB • Average Rate of Return: Item Average annual net income (in $OOOs) Average net investment (in $OOOs) Average rate of return on net investment CEDAR RAPIDS AND DES IV -24 1� Eastern Hawkeye 166 128 1,454, 1,642 11.4% 7.8% In the above example, which considers only the net investment projected by the companies, neither company would achieve its desired rate of return. However, as noted in the previous chapter, Eastern's representative stated at the October 26 public hearing that the company would apply Cox Cable's 0.7 debt-to-equity ratio for determining any future rate increases., Thus, if only 59 percent of the average $1.454 million in net investment is considered as equity and all net income is considered as return on equity, Eastern could have an effective 19.3 percent return on equity. Hawkeye proposes to invest 40 percent of its capital requirements in equity funds. Thus, if 40 percent of the average $1.642 million in net investment represents equity and all net income were considered as return on equity, Hawkeye could have a 19.5 percent return on equity. In other words, if we assume both applicants' capital and revenue projections would hold true, both would receive a comparable rate of return which is in excess of their stated goals. E. SUMMARY AND CONCLUSIONS Our observation regarding the revenue estimates is that Eastern hopes to realize much more revenue from pay cable. Hawkeye made a market study of Iowa r •`�1 41CROFIL14ED BY E JORM MICR+LAE3 i CEDAR RAPIDS • DES MOINES o-ilwtU'r iLMLU by JOR14 I.IICROLAB IV -25 CEDAR. RAPIDS AND DE City through telephone interviews and came to the conclusion that pay cable would be about equal to or lower than the national averages. Hawkeye proposes higher monthly rates for basic service and expects to increase its rates sooner than Eastern.- Over the ten-year period, Hawkeye's average revenue per subscriber per month from basic service is $.94 greater than Eastern's. But looking at the total revenue per subscriber, Eastern is shown to project $.69 more per month from each subscriber over the same ten years. This springs from Eastern's projection that a higher percentage of its subscribers will be subscribing to pay cable. With fewer subscribers, but with more of them presumed to be paying for pay cable, Eastern projects more revenue and more net income over the ten years than does Hawkeye. In their projections of capital expenditures, it appears that Hawkeye antic- ipates spending more on capital. This, however, is consistent with its projec- ted depreciation policy which in most cases, appears more realistic. For exam- ple, Eastern claims to depreciate converters over five years but shows no capital expenditure for their replacement. There is also a significant difference in the test equipment budget of each applicant with Hawkeye estimating over seven times more in this category. At the October 26 public hearing, Eastern's representative stated that the company would provide all test equipment that it had listed which would result in an increase in its capital expenditures in this area. Eastern budgeted twice the amount for origination equipment al- though it has proposed to provide significantly less equipment. Neither appli- cant adequately allowed for replacement of origination equipment. There remains a sizable difference in the applicants' estimates of the number of miles of cable plant needed for Iowa City and the cost per mile as reflected in their estimation of capital expenditures for distribution plant. Either applicant Y MICROFILMED BY DORM MICR+LAB CEDAR RAPIDS • DES MOINES jj i ■ hiit,ItUf ILiILU BY JORM MICROLAB CEDAR RAPIDS AND DES M0,"IES, IOW. ti 1 ' � IV -26 to adjust its capital expenditure for distribution plant after a more - might have study is made and the real number of plant miles and comprehensive engineering the costs per mile are determined. y, cable results in the projection of higher ex- ' Eastern's optimism on pay for cable programming. Eastern also forecasts the employment of penses pay k employees than Hawkeye resulting in greater expenses for salaries and 4y six more Only Hawkeye's expenses for corporate overhead narrows the difference ' benefits. '. in the expense forecasts. "f financial objectives of both applicants are almost identical # 4 The long-range V on equity of approximately 15 percent. However,' { in that both expect a return d to invest only equity funds (no debt) would require more not t Eastern's proposal to satisfy the same 15 percent return objective. Even when we consider =' income `- to apply Cox Cable's .7 debt-to-equity ratio to any calcula EasternIa promise increases, it would still require a greater net income tions for future rate " in comparison Co Hawkeye's applicable 1.5 debt-to-equity ratio. The effective 3 li ILI ;irate of return on equity, however, would be about the same. in competitive franchising process, subscriber rates become !Y Typically, any . P Eastern's proposed rates for installation and basic service ; an important issue. Hawkeye's and given the city's two-year moratorium on 3 µ are certainly lower than this difference would remain constant for at least the short term. rate increases, Y. initial rates that each applicant has proposed. In cam- { Table IV -15 compares the .,. the city must also consider the services that subscribers paring these rates, Fi in light of the city's service expectations. Services are dis- t would receive cussed in Chapter VI. k we simply cannot predict with any certainty whether Over the long term, differences would remain relatively constant. Throughout this these rate i i NICROFI LIdEU BY �- _,..c� DORM MICR+LAB 'CEDAR RAPIDS • DES MOINES hll ufUi'!LMLU BY JORM 141CROLAB IV -27 • CEDAR RAPIDS AND UL 1� TABLE IV -15: SUBSCRIBER RATES Item I Eastern Basic_ SS (t'�nthly) --First Outlet —Extra Outlets (with converter) —Extra Outlets (without converter) Installation --First Outlet -Extra Outlets (each) Underground Installation —Reconnect Charge pay Caber 1e Service --Home Box Office —Installation —Home Theatre —Installation —Lockout Device* $ 7.50 $ 2.00 N/0 $10.00 $ 7.50 Z $10.00 $ 7.00 $10.00 $ 4.00 $ 5.00 N/0 Hawkeye $ 7.95 $ 2.00 $15. *Lockout device (or parentsal control o temporarilyideletespay 1 service hourpermitting ffec p ming without effecting other cable services. Nawkeye repurchase lockout device for $20.00 if returned in g tition and working order. N/0 - Not offered• S� MICROFILMED DY ' JCRM MICR+LAB l j . CEDAR RAPIDS • DES MOINES c �1 k G V k` "K I y fa d^ tj y I s S 1 hll ufUi'!LMLU BY JORM 141CROLAB IV -27 • CEDAR RAPIDS AND UL 1� TABLE IV -15: SUBSCRIBER RATES Item I Eastern Basic_ SS (t'�nthly) --First Outlet —Extra Outlets (with converter) —Extra Outlets (without converter) Installation --First Outlet -Extra Outlets (each) Underground Installation —Reconnect Charge pay Caber 1e Service --Home Box Office —Installation —Home Theatre —Installation —Lockout Device* $ 7.50 $ 2.00 N/0 $10.00 $ 7.50 Z $10.00 $ 7.00 $10.00 $ 4.00 $ 5.00 N/0 Hawkeye $ 7.95 $ 2.00 $15. *Lockout device (or parentsal control o temporarilyideletespay 1 service hourpermitting ffec p ming without effecting other cable services. Nawkeye repurchase lockout device for $20.00 if returned in g tition and working order. N/0 - Not offered• S� MICROFILMED DY ' JCRM MICR+LAB l j . CEDAR RAPIDS • DES MOINES 141LAUFILNLU BY JORM MICROLAB • CEDAR RAPIDS AWU 141CROPILMED BY , .t JORM MICR+LAB CEDAR RAPIDS • DES MOINES A .. IV -28 ;i Y: chapter, we have noted major differences in each applicant's estimates for capital, expenses and revenues. Overall, the most significant difference is Eastern's far more optimistic projections for pay cable revenues. It is cur— ions that two major, experienced MSOs differ so widely in their pay cable projections. Given the relatively short period of time that pay cable service has been offered by the cable industry, and the uncertainty of consumer accep— tance in Iowa City, there is no way to accurately predict which company's projections for pay cable would prove to be more realistic. L . .. it y� i n 1: h h i 141CROPILMED BY , .t JORM MICR+LAB CEDAR RAPIDS • DES MOINES A PltujwF iLi•lcu BY DORM MICROLAB CEDAR RAPIDS AND DES V. ENGINEERING ANALYSIS This chapter summarizes and compares the construction, design and per- formance aspects of the systems proposed by Eastern and Hawkeye. A. CONSTRUCTION atern an Haw eye are both major MSOs with extensive experience in constructing and operating cable television systems. Eastern's system will - be built by the operator. Hawkeye's system will be built by an outside con- tractor on a turnkey basis. In theory, operator construction permits the operator better control over the quality of work. On the other hand, using outside contractors may result in more efficient use of corporate resources. In practice, both methods of construction have resulted in excellent cable television systems. Eastern stated in its proposal that it would build 60 percent of its sys- tem by the end of the first year with the remainder completed in the following year. At the October 26 public hearing, Eastern representatives stated its construction timetable would be triggered by the award of the franchise and it expects to complete all construction within 14 to 16 months. Hawkeye proposed to construct its entire system within one year. At the public hearing, Hawkeye representatives stated its construction period would begin following receipt of necessary pole attachment agreements. The net result of these clarifications is that there would probably be no significant difference in the construction schedule of the applicants and both 1 MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES s ft A A PltujwF iLi•lcu BY DORM MICROLAB CEDAR RAPIDS AND DES V. ENGINEERING ANALYSIS This chapter summarizes and compares the construction, design and per- formance aspects of the systems proposed by Eastern and Hawkeye. A. CONSTRUCTION atern an Haw eye are both major MSOs with extensive experience in constructing and operating cable television systems. Eastern's system will - be built by the operator. Hawkeye's system will be built by an outside con- tractor on a turnkey basis. In theory, operator construction permits the operator better control over the quality of work. On the other hand, using outside contractors may result in more efficient use of corporate resources. In practice, both methods of construction have resulted in excellent cable television systems. Eastern stated in its proposal that it would build 60 percent of its sys- tem by the end of the first year with the remainder completed in the following year. At the October 26 public hearing, Eastern representatives stated its construction timetable would be triggered by the award of the franchise and it expects to complete all construction within 14 to 16 months. Hawkeye proposed to construct its entire system within one year. At the public hearing, Hawkeye representatives stated its construction period would begin following receipt of necessary pole attachment agreements. The net result of these clarifications is that there would probably be no significant difference in the construction schedule of the applicants and both 1 MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES s t9iu(utiLMLU BY JORM MICROLAB V-2 CEDAR RAPIDS AND DES would complete construction well within the three-year period specified in the city's ordinance. B. SYSTEM DESIGN The system design proposed by an applicant is of prime importance because the design will ultimately determine what services can be provided, whether the signals received by subscribers will be of sufficient quality and whether the system can be adapted to take advantage of new technologies. EASTERN ' Eastern proposes a single -trunk, single -feeder subscriber distribution I: system with an activated capacity of 35 downstream (54-300 MHz) and four of stributed from a central hub in the downtown area.. The upstream channels diAll upstream channels would be activated along the trunk and, in the future, F q V could be activated from subscriber locations by inserting inexpensive modules ?a , in the line extenders. The central hub would be connected via cable to its Fy to be located within the city north of the downtown area. t Eastern would also construct a separate, nine -mile institutional network t9iu(utiLMLU BY JORM MICROLAB V-2 CEDAR RAPIDS AND DES would complete construction well within the three-year period specified in the city's ordinance. B. SYSTEM DESIGN The system design proposed by an applicant is of prime importance because the design will ultimately determine what services can be provided, whether the signals received by subscribers will be of sufficient quality and whether the system can be adapted to take advantage of new technologies. modules in the amplifier housings. 0 MICROFILMED BY JCRM MICR+LAB CEDAR RAPIDS • DES MOINES ■ EASTERN ' Eastern proposes a single -trunk, single -feeder subscriber distribution system with an activated capacity of 35 downstream (54-300 MHz) and four of stributed from a central hub in the downtown area.. The upstream channels diAll upstream channels would be activated along the trunk and, in the future, q V could be activated from subscriber locations by inserting inexpensive modules ?a , in the line extenders. The central hub would be connected via cable to its Fheadend to be located within the city north of the downtown area. t Eastern would also construct a separate, nine -mile institutional network cable connecting the University of Iowa's hub, the public access center, board of education offices, city and county buildings, schools ("to be named when the need arises") and the public library. Twelve upstream channels would be activated initially on this cable for program origination from these locations. F "When communication aver the institutional network is required on a two-way basis," 21 downstream channels could be activated on this cable by inserting modules in the amplifier housings. 0 MICROFILMED BY JCRM MICR+LAB CEDAR RAPIDS • DES MOINES ■ fll wwi ilt4cu BY JORM MICROLAB V-3 CEDAR RAPIDS AND DE I41CROFILMED BY 1 DORM MICR+LABi CEDAR RAPIDS • DES MOINES 2. HAWKEYE Hawkeye also proposes a single -trunk, single -feeder subscriber distribu- tion system from a central hub in the downtown area. Thirty-four downstream channels would be initially activated on this system. Three upstream channels v; (5-30 MHz) would be initially activated so as to permit program origination ' y from Southeast Junior High School and the city's three senior high schools. Fi Additional origination points anywhere along this cable are possible and Hawk- ' eye stated it would add the necessary modules at its own cost. The hub would �i be connected via cable to the headend to be located within the city west of $ the downtown area. Hawkeye has proposed a separate, estimated 2.5 -mile institutional network which would allow program origination from the present public library, the pro- posed new library (where Hawkeye proposes to establish its origination studio), ;t the Civic Center, the County Court House, the Community Recreation and Youth Center, Central Junior High School and Mercy Hospital. Initially, Hawkeye would activate five upstream channels (frequency spectrum to be determined) on this institutional network with a large number of additional upstream and downstream `yyy channels possible depending on future needs. The university would be interconnected with Hawkeye's central hub by a 1 separate cable which would deliver all city channels to the university's hub. One upstream channel on this cable will be activated initially to deliver university programming to the main hub for distribution throughout the city. Hawkeye stated that additional upstream and downstream channel capacity 1s possible on its subscriber distribution system but that this additional 0 i capacity will not be used initially "to avoid any possible interference to 1 the 108 to 118 MHz Aircraft Navigation Band or interference to (its) system by Citizen's Band transmitters...." We believe this conservative approach to } i I41CROFILMED BY 1 DORM MICR+LABi CEDAR RAPIDS • DES MOINES PAiLiWi iLi•icu by JURM 141CROLAB V-4 CEDAR RAPIDS MID DES channelization is,commendable. However, Hawleye (as well as Eastern) does ' plan to initially activate other channels which, if improperly used, could cause interference to the remaining portions of the total 108 to 136 MHz and 225 to 400 MHz Aircraft Navigation frequencies. All cable operators should apply special care in using these frequencies. (See, 47 C.F.R. 9 76.610.) C. LOCAL SIGNAL RECEPTION I. TELEVISION STATIONS Eastern and Hawkeye both plan to receive all local broadcast signals at their headend tower and retransmit them via cable to their central hub for dis- tribution to city subscribers and the university. Hawkeye further stated that to "minimize direct pickup" (primarily cochannel interference), it would offset all local television signals carried on its system and relabel its converters so that, in most cases, the local broadcast station would be identified on the converter according to its regular channel number. For example, KWWL-Channel 7, would be carried on the systems Channel 8 but properly identified on the sub- scriber's converter as Channel 7. In view of the fact that, with the exceptions of KCRG-Channel 9 and KIIN- Channel 12, no broadcast station places a Grade A signal over Iowa City and, moreover, the use of converters on a cable system generally reduces if not elim- inates such problems, anyway, we do not expect this plan to be of significant benefit. However, it would be beneficial regarding cable reception of KCRG and KIIN if the city were to permit Hawkeye to install extra cable outlets without converters as it has proposed or if converters are not used on the university campus. I4ICROF ILMED BY r� JORM MICR+LAB CEDAR RAPIDS - DES MOINES i I PAiLiWi iLi•icu by JURM 141CROLAB V-4 CEDAR RAPIDS MID DES channelization is,commendable. However, Hawleye (as well as Eastern) does ' plan to initially activate other channels which, if improperly used, could cause interference to the remaining portions of the total 108 to 136 MHz and 225 to 400 MHz Aircraft Navigation frequencies. All cable operators should apply special care in using these frequencies. (See, 47 C.F.R. 9 76.610.) C. LOCAL SIGNAL RECEPTION I. TELEVISION STATIONS Eastern and Hawkeye both plan to receive all local broadcast signals at their headend tower and retransmit them via cable to their central hub for dis- tribution to city subscribers and the university. Hawkeye further stated that to "minimize direct pickup" (primarily cochannel interference), it would offset all local television signals carried on its system and relabel its converters so that, in most cases, the local broadcast station would be identified on the converter according to its regular channel number. For example, KWWL-Channel 7, would be carried on the systems Channel 8 but properly identified on the sub- scriber's converter as Channel 7. In view of the fact that, with the exceptions of KCRG-Channel 9 and KIIN- Channel 12, no broadcast station places a Grade A signal over Iowa City and, moreover, the use of converters on a cable system generally reduces if not elim- inates such problems, anyway, we do not expect this plan to be of significant benefit. However, it would be beneficial regarding cable reception of KCRG and KIIN if the city were to permit Hawkeye to install extra cable outlets without converters as it has proposed or if converters are not used on the university campus. I4ICROF ILMED BY r� JORM MICR+LAB CEDAR RAPIDS - DES MOINES It4LIWi iLMLu BY JURM MICRULAB V-5 CEDAR RAPIDS AND 2. FM RADIO STATIONS FM radio signals carried on a cable system may be processed on a broad- band or individually processed basis. Individual processors, although more • expensive, allow the signal level of each station to be controlled indepen- dently and prevents FM interference to various video signals on the system. Such interference results from unwanted amplification in the broadband device and from uncontrolled FM signal levels in the distribution system. Eastern stated in. its proposal that its FM signals would be individu- ally processed. Hawkeye gave no response to this question. However, at the October 26 public hearing, a Hawkeye representative stated that its does in- tend to individually process FM signals. In view of the fact that Hawkeye's parent corporation usually proposes individual processing, we have accepted this clarification. D. INTERCONNECTION Interconnection refers to two separate functions: importation of distant signals via terrestial microwave and satellite, and interconnection with other cable systems. I. EASTERN Eastern's sister company, Quint Cities Cablevision, operates a system in Moline, Illinois. Recently, Eastern was awarded a franchise to service Cedar Rapids, Iowa, and plans to construct a CARS Band microwave system be- tween those two cities to deliver Chicago signals to Cedar Rapids. If Eastern receives an Iowa City franchise, it would "power split" these signals at a repeater station along this path and relay them to its Iowa City headend tower T �� 141 CROFILMED BY ! ! DORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES 1i ,e It4LIWi iLMLu BY JURM MICRULAB V-5 CEDAR RAPIDS AND 2. FM RADIO STATIONS FM radio signals carried on a cable system may be processed on a broad- band or individually processed basis. Individual processors, although more • expensive, allow the signal level of each station to be controlled indepen- dently and prevents FM interference to various video signals on the system. Such interference results from unwanted amplification in the broadband device and from uncontrolled FM signal levels in the distribution system. Eastern stated in. its proposal that its FM signals would be individu- ally processed. Hawkeye gave no response to this question. However, at the October 26 public hearing, a Hawkeye representative stated that its does in- tend to individually process FM signals. In view of the fact that Hawkeye's parent corporation usually proposes individual processing, we have accepted this clarification. D. INTERCONNECTION Interconnection refers to two separate functions: importation of distant signals via terrestial microwave and satellite, and interconnection with other cable systems. I. EASTERN Eastern's sister company, Quint Cities Cablevision, operates a system in Moline, Illinois. Recently, Eastern was awarded a franchise to service Cedar Rapids, Iowa, and plans to construct a CARS Band microwave system be- tween those two cities to deliver Chicago signals to Cedar Rapids. If Eastern receives an Iowa City franchise, it would "power split" these signals at a repeater station along this path and relay them to its Iowa City headend tower T �� 141 CROFILMED BY ! ! DORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES 1i hliwWriLiicU BY DORM MICROLAB V-6 CEDAR RAPIDS AND T '�i���1 MICROFILMED DY JORM MIC R+LAa CEDAR RAPIDS • DES MOINES To receive satellite programming, Eastern plans to construct a Television -- Receive Only (TYRO) earth station at its headend site. l Any interconnection with other cable systema would be accomplished with Z., 0 CARS Band microwave. s � 2. AAWEEYE - Hawkeye stated it was negotiating with United Video, a microwave common carrier, to arrange delivery of Chicago stations to its proposed Iowa City system. Hawkeye would also construct a TYRO earth station near its headend tower to receive satellite programming. Hawkeye provided no information regarding how it would interconnect with other cable systems. _ E. SYSTEM PERFORMANCE The technical performance of a cable system must ultimately be measured r b ualit and reliability of service to subscribers and users. This will Y quality the E depend not only upon the design and quality of components of the system but also the operator's technical standards and maintenance procedures. r. 1. TECHNICAL STANDARDS The FCC's technical standards require at least minimal performance of a: P the distribution system and are compulsory for all cable systems • However, to deliver pictures and data without noticeable degradation, even better Stan- dards are necessary. Eastern and Hawkeye both proposed standards in excess f' of FCC requirements and the city's ordinance. Although Eastern's standards r were more comprehensive, both would result in excellent service to subscribers. T '�i���1 MICROFILMED DY JORM MIC R+LAa CEDAR RAPIDS • DES MOINES 11-11u<UhILMLU BY JORM MICROLAB CEDAR RAPIDS AND UES f. VI. SERVICES A. COMPARISON 1. BROADCAST SIGNALS f a. EXPLANATION OF FCC SIGNAL CARRIAGE RULES Broadcast television signal carriage, to a significant extent, is dictated by the requirementa of the Federal Communications Commission. Essentially, for any given community, there are certain television signals that "must" be carried and a limited number of additional television signals that "may" be carried on any cable system. For Iowa City, the following signals must be carried: • WMT Channel 2(CBS) Cedar Rapids/Waterloo • WHBF Channel 4(CBS).Davenport/Rock Island • WOO Channel .6(NBC) Davenport/Rock Island @ 0 KWWL Channel 7(NBC) Cedar Rapids/Waterloo • KCRG Channel 9(ABC) Cedar Rapids/Waterloo tF KIIN Channel 12(PBS) Iowa City F• The FCC rules also specify other types of television broadcast signals 1 which may be carried on a cable system depending in part on its market loco- tion. The selection of these additional stations are left to the operator's i 54 discretion; FCC rules only speak in terms of the types and number of additional tions ns or rogramming which may be carried. In Iowa City, FCC rules permit ata p two additional independent stations, any noncommercial educational station operated by the state and any other noncommercial educational station if there is no objection by the local noncommercial educational station or a state or local educational television authority. A system may also carry any number of specialty stations defined as one which broadcast specified amounts of foreign t...�«Y 141CROFILMED DY _ JORM MICR+LAB i CEDAR RAPIDS • DGS MOINES 1 i y i i e 1.11 ur(Ur ILMLU By JORM 141CROLAB VI -2 CEDAR RAPIDS AND 'DES language, religious or automated programming. Additionally, FCC rules allow part-time carriage of other signals in special situations. Permissable signal carriage in these situations includes: • the carriage of any station during blackout time of a normally carried station as a result of the FCC syndi- cated exclusivity protection rules; • any network program not broadcast by a network affiliate station normally carried on the system; and • carriage of any station, after all local stations have signed -off for the night or from 12:00 A.M. in the Central Time Zone, whichever occurs first, until the sign -on of the first local station. b. ANALYSIS A major objective, of any cable television system is to provide subscribers with an increase in programming density., One method of reaching that goal is to carry a multiplicity of broadcast television signals. of course, the quality of any particular station or program carried is important but qualitative judg- ments of that nature are highly subjective. Table VI -1 compares the proposed signal carriage complement of both applicants. In this case, both have proposed an identical set of television signals; that is, all "must" carries, full-time carriage of two Chicago independent stations and WTCG, an independent station from Atlanta, Georgia, which would be carried only during the late-night hours. In addition, Eastern would substitute WTCG programming at any time a parti- cular program on one of the Chicago stations must be "blacked -out" as a result of FCC syndicated exclusivity requirements. Hawkeye, on the other hand, has proposed to install a "search" antenna which will be used "as feasible" to re- ceive and carry selected network programming from Davenport and Des Moines stations when such network programming is not carried by a local network affil- iate. i lalc¢DEnI•¢D BY •,1 JORM MICROLAB CEDAR RAPIDS • DES MOINES hl1utUFiLi,1r.0 BY JURM MICROLAB CEDAR RAPIDS AND DES MOINES, 106 MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES ' �,oq.Speeaw,crehjs"J?f+ (' TABLE VI -1: PROPOSED SIGNAL CARRIAGE COMPLEMENT '�✓ .KCRC WID1p I NOC I I I KIIN I MCN IND I NSNS IND I WICG IND 66 t - WmT . CBS ICedar Rapidal I CBS Davenport/ NBC . I Dave"port/ NSC. NDC NBC ICedar Rapldal Cedar Rapider PBS Iota I Chice o City B I Chicago I. Atlanta /Waterloo Rock Island Not Island /Waterloo /Waterloo •,:�.. • • • L l Eastern • • • • • e� "� • • • L Itawkeye• L Late night cerclage only. pp K .qty. MICROFILMED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES A i t._IwWtii-iIEU BY JORM 14ICROLAB VI -4 CEDAR RAPIDS AND DES Although the applicants have each proposed a slightly different approach to adding additional broadcast television programming within the limits of FCC restrictions, we cannot objectively conclude that there is any significant difference in the proposed signal carriage complements. 2. ORIGINATION PROGRAMMING Another method of increasing programming diversity on cable systems is to provide additional nonbroadcast local origination programming and services. This section discusses and compares such origination programming divided into the following categories: automated origination programming, nonautomated origination programming, and dedicated access channels and production assis- tance. We begin with a comparison of 'both applicants' estimated expenses for origination programming for the first, third and fifth years of operation as summarized in Table VI -2. In terms of the total yearly estimated expense for all local origination programming, Eastern has allocated roughly 25 percent more than Hawkeye. A direct comparison of separate expense estimates for nonautomated origination and access assistance is not possible because Hawkeye did not provide a breakdown of these estimates stating such separation would be "artificial" given its overall plans for local programming as will be discussed more fully later in this chapter. Moreover, although expense allo- cations are important, of greater importance to subscribers and users of the system is the actual proposed services that the operator would provide as a result of such expenditures. a. AUTOMATED PROGRAMMING Automated programming channels are channels offering alphanumeric (printed) data information of general or special interest. Occasionally, such informs - tion is complemented with visuals as background. The information is supplied III CROFILMED BY .+} JORM MICR+LAB CEDAR RAPIDS • DES MOINES j i A i t._IwWtii-iIEU BY JORM 14ICROLAB VI -4 CEDAR RAPIDS AND DES Although the applicants have each proposed a slightly different approach to adding additional broadcast television programming within the limits of FCC restrictions, we cannot objectively conclude that there is any significant difference in the proposed signal carriage complements. 2. ORIGINATION PROGRAMMING Another method of increasing programming diversity on cable systems is to provide additional nonbroadcast local origination programming and services. This section discusses and compares such origination programming divided into the following categories: automated origination programming, nonautomated origination programming, and dedicated access channels and production assis- tance. We begin with a comparison of 'both applicants' estimated expenses for origination programming for the first, third and fifth years of operation as summarized in Table VI -2. In terms of the total yearly estimated expense for all local origination programming, Eastern has allocated roughly 25 percent more than Hawkeye. A direct comparison of separate expense estimates for nonautomated origination and access assistance is not possible because Hawkeye did not provide a breakdown of these estimates stating such separation would be "artificial" given its overall plans for local programming as will be discussed more fully later in this chapter. Moreover, although expense allo- cations are important, of greater importance to subscribers and users of the system is the actual proposed services that the operator would provide as a result of such expenditures. a. AUTOMATED PROGRAMMING Automated programming channels are channels offering alphanumeric (printed) data information of general or special interest. Occasionally, such informs - tion is complemented with visuals as background. The information is supplied III CROFILMED BY .+} JORM MICR+LAB CEDAR RAPIDS • DES MOINES hLL,iWU iLALU BY JURM MICMULAB CEDAR RAPID., ,,JD DES '10 !1 10W VI -5 ar z; k y;; e Fy TABLE VI -2: ESTIMATED ANNUAL EXPENSES FOR ORIGINATION PROGRAMMING Applicants i Year 1 Year 3 Year 5 Eastern. --Automated Origination $19,000 $20,000 $22,000 -Nonautomated Origination $33,100 $40,760 $48,000 —Access Programming Assistance $22.400 2$ 6,040 2$ 9.200 $ Total $74,500 $86,800___— $99-200 t Hawkeye --Automated Origination $16,000 $18,000 $18,000 —Nonautomated Origination $43,000 $47,000 $55,000 —Access Programming Assistancel - - Total $59,000 $65,000 $73,000 1. Hawkeye did not breakdown its nonautomated origination and access expenses ' I { stating such separation would be artificial (see text). i i t MICROFILMED BY ., A JORM MICR+LAB { CEDAR RAPIDS DES MOINES 4_ miL;Q iLNLii BY JOR14 MIGROLAB 1. • �rDAR RAPIDS AND 'DES !10 i vi -6 by national and regional organizations such as national news wires and the National Oceanic Atmospheric Administration (NOAA) as well as locally by the operator and community organizations. The primary advantage of those automated channels is that they are usually programmed on a 24-hour basis permitting subscribers to view such inforamtiou at any convenient time. Table vI-3 compares the automated channels proposed by the applicants. In summary, Rawkeye has proposed a greater number as well as a wider variety of such channels. we further note that Eastern did not propose a national news data channel, a very common cable service offering. b. NONAUTOMATED ORIGINATION PROGRAMMING Nonautomated origination is programming either produced locally by the operator or obtained by the operator from other sources for local presentation including the wide variety of national nonbroadcast programming distributed to cable system via two satellites.) Receipt of satellite programming is conditioned on the operator constructing one or more Television Receive Only (TVRO) earth stations and, in some cases, payment of fees based on the number of subscribers receiving such programming - Table VI -4 compares the programming and channels for origination program- ming proposed by the applicants. Respective staffing commitments for local programming are compared in Table VI -5• Table VI -6 compares the proposed orig- ination production facilities of both applicants. To simplify comparison, we have listed the equipment by basic major components rather than a detailed listing of specific brands and models. Also, we have not included such miscel- laneous but essential items as microphones, tripods and associated electronic equipment. 1. See, Appendix A for a summary of satellite programming currently available to cable systems. MICROFILMED BY fl t JORM MICR+LAB CEDAR RAPIDS • DES MOINES t'JILI(UFILMLU BY JORM MICROLAD CEDAR RAPIDS AND ti OA mlorlrcd digital acaoo•r rhnWing Pr•clOtatlon rod •tmapherie mature ••II.F.P. audio nm auurdnr With visual illustration r.c.lW.d v11 rate t. I 1 1 - Time/ I Nsath•r I Color I Radar I $.-Pat I National I Nm I I "NeWti... I as I �. state I NewI I iri..ctal/ Sporty I ( Financial ( New I I Sport. I He- I I Program I Guide 1 Co.. It I Bulletin Igoard/Shap- IPlns Guide I Community I lull•tln I bard I Shopping I Guide burn Ilavkay • • • • • • • • OA mlorlrcd digital acaoo•r rhnWing Pr•clOtatlon rod •tmapherie mature ••II.F.P. audio nm auurdnr With visual illustration r.c.lW.d v11 rate t. I 1 1 htiudUriLMEU BY JURM MICROLAB CEDAR RAPIDS AND v VI -8 TABLE VI -4: NONAUTOMATED ORIGINATION PROGRAM14ING I Origination Programming Received Via Satellite Number of Estimated Christian C-Sve Madison Broadcasting) coverage of Dedicated Nonautomatedl Hours of Weekly Pro- Network JU.S. Nouse of]S4uare Card (Sports) Origination] gramming (24-hour Represents- tives)* Channels, Produced Religious Locally Programming 4 28 • • • 2 3_g • (minimum) *Expected to be available in 1979. MICROFILMED BY { JORM MICR+LAB � i '.CEDAR RAPIDS • DES MOINES IigwiW ILMcu BY JORM 14ICROLAB • CEDAR RAPIDS AIOJ VI -9 TABLE VI -5: LOCAL ORIGINATION AND ACCESS STAFFING COMMITMENTS Item Year 1 I Year 5 Eastern i i --Full-time staff 2 2 2 . —Part-time staffl 1 1 1 Access --Full-time staff. 1 A 1 —Part-time staff l 1 1 1 P Full-time staff 4 4 4 Hawkeye Origination —Full-time staff 2 2 2 —Part-time staff 40hrs/week 40 hrs/week 40 hrs/week ti Accessi --Full-time staff - - - —Part-time staff — — Equivalent Total N Full-time staff 3 3 3 f E 9 g s t, • CEDAR RAPIDS AIOJ VI -9 TABLE VI -5: LOCAL ORIGINATION AND ACCESS STAFFING COMMITMENTS Item Year 1 Year 3 Year 5 Eastern i Origination --Full-time staff 2 2 2 . —Part-time staffl 1 1 1 Access --Full-time staff. 1 1 1 —Part-time staff l 1 1 1 Equivalent Total Full-time staff 4 4 4 Hawkeye Origination —Full-time staff 2 2 2 —Part-time staff 40hrs/week 40 hrs/week 40 hrs/week Accessi --Full-time staff - - - —Part-time staff — — Equivalent Total Full-time staff 3 3 3 1. Eastern stated two part-time positions equal one full-time position. 2. Although Rawkeye listed only one full-time position in Form L, its pro forma statements allocated wages for two full-time positions plus part-time staff. We have accordingly credited them with the higher staffing level herein. 3. Hawkeye did not breakdown its staff into origination and access staff stating such a breakdown would be artificial. MICRUf ILMED BY , DORM MICR+LAB ' CEDAR RAPIDS • DES MOINES i MICRUf ILMED BY , DORM MICR+LAB ' CEDAR RAPIDS • DES MOINES raiwWi 1LMEu BY JORM MICROLAB • CEDAR RAPIDS AND DE VI -10 TABLE VI -6: LOCAL ORIGINATION STUDIO AND EQUIPMENT Equipment I Eastern Hawkeye Studio Studio Equipment --Color Cameras —Switcher/SEG —Monitors —Video Tape (or Cassette) Recorders —Editing Controller —Audio Mixer --Film/Slide Chain —Production Character Generator -Time Base Corrector --Lighting Equipment Package —Automated Channel Programmer/Player --Remote Production Van 625 sq/ft 2 1 8 4 1 1 1 1 1 1 1 375 sq/ft1 2 1 9 5 1 1 1 1 1 1 F �A NOTE: Both applicants stated that origination equipment will be available to access users. 1. Hawkeye offered to install their equipment in the proposed new city library -studio (625 sq/ft) if desired. K~` r MICROFILMED BY _sq JORNI MICR+LAE , CEDAR RAPIDS • DES MOINES I al�lUiiLAlLu by JURM I.1ICROLAb VI -11 CEDAR RAPIDS AND DES r. (1) EASTERN: Eastern has allocated four channels for its nonautomated origination programming. Three of these are reserved for carriage of satel- lite programming: the Christian Broadcasting Network (CBN), "Madison Square i -' Garden," and "C -SPAN." CBN is a 24-hour religious programming service orig- inating from Virginia. Madison Square Garden offers at least 140 live sport- ing and other specials each year direct from New York City. C -SPAN is a .proposed new service offering live coverage of the U.S. House of Representa- tives. Its availability is subject to congressional approval which,, according to our information, may be forthcoming sometime in 1979. Eastern's remaining channel would be devoted to its own locally produced programming. Although Eastern was not specific regarding the types of local programs it would offer, it estimated approximately 26 hours of such program- ming would be produced locally by its staff for this channel. With only two full-time and one part-time staff positions budgeted for origination program- ming, we suspect that Easters would have a difficult time meeting this commit- ment. Eastern has budgeted for a full-color, two -camera studio plus a remote production van for its local productions. (2) HAWKEYE: Hawkeye's nonautomated programming would be presented on two channels. Like Eastern, one would be reserved for full-time carriage of CBN. Its other channel would offer live carriage of Madison Square Garden sporting events plus "a package of movies not currently being shown on local broadcast stations." Hawkeye estimated that it will offer a minimum of three to five hours per week of its own programming on this channel. Hawkeye stated it was also "considering" carriage of other satellite programming including C -SPAN and "Calliope," a new children's programming service, as well as special foreign language programming. "- 4 41CR0FILMED BY i I JORM MICR¢LAS I CEDAR RAPIDS • DES MOINES ..v al�lUiiLAlLu by JURM I.1ICROLAb VI -11 CEDAR RAPIDS AND DES r. (1) EASTERN: Eastern has allocated four channels for its nonautomated origination programming. Three of these are reserved for carriage of satel- lite programming: the Christian Broadcasting Network (CBN), "Madison Square i -' Garden," and "C -SPAN." CBN is a 24-hour religious programming service orig- inating from Virginia. Madison Square Garden offers at least 140 live sport- ing and other specials each year direct from New York City. C -SPAN is a .proposed new service offering live coverage of the U.S. House of Representa- tives. Its availability is subject to congressional approval which,, according to our information, may be forthcoming sometime in 1979. Eastern's remaining channel would be devoted to its own locally produced programming. Although Eastern was not specific regarding the types of local programs it would offer, it estimated approximately 26 hours of such program- ming would be produced locally by its staff for this channel. With only two full-time and one part-time staff positions budgeted for origination program- ming, we suspect that Easters would have a difficult time meeting this commit- ment. Eastern has budgeted for a full-color, two -camera studio plus a remote production van for its local productions. (2) HAWKEYE: Hawkeye's nonautomated programming would be presented on two channels. Like Eastern, one would be reserved for full-time carriage of CBN. Its other channel would offer live carriage of Madison Square Garden sporting events plus "a package of movies not currently being shown on local broadcast stations." Hawkeye estimated that it will offer a minimum of three to five hours per week of its own programming on this channel. Hawkeye stated it was also "considering" carriage of other satellite programming including C -SPAN and "Calliope," a new children's programming service, as well as special foreign language programming. "- 4 41CR0FILMED BY i I JORM MICR¢LAS I CEDAR RAPIDS • DES MOINES Q1t,,Wr iLMLL) BY JOR14 141CROLAB VI -12 CEDAR RAPIDS AND 'DES r�1 t Hawkeye would establish its full color, two -camera studio equipment pack- age at the proposed new library (if available and desired). If the library is not funded, Hawkeye would establish the studio at its central offices or at another "convenient" location. Given the small quantity of local programming it intends to produce, it appears that this studio will be used primarily for access program production as is discussed in the next section of this chapter. (3) ANALYSIS: In consideration of the respective levels of satellite programming firmly committed, as well as origination programming to be produced locally by the applicants, we must conclude that Eastern has clearly offered the greater level of nonautomated origination programming for Iowa City- We qualify this conclusion, however, by urging the city council to consider not only what has been promised but also the past record of their parent companies in delivering on such promises in the other communities they serve. c. ACCESS CHANNELS AND FACILITIES Access channels are those channels on a cable system reserved for pre- sentation of nonprofit programming produced by local individuals, groups, educational institutions and governments as well as channels available for commercial purposes on a leased basis. Minimum requirements for access are contained in the rules of the FCC. In a decision released on February 21 of this year, the U.S. Circuit Court for the Eighth Circuit held invalid all the FCC access rules. 2, This decision is now being reviewed by the supreme Court and pending its decision, the FCC access rules remain in effect. Should the Supreme Court uphold the lower court's decision and the FCC access rules are eliminated, one thing is clear: local governments may no longer rely on the FCC's rules to insure that it and its residents will have some access to the system. It will be the responsibility of the local 2. See, Midwest Video Cor v. Federal Communications Commission, No. 76-1496, F. 2d _. t�•�MICROFILMED BY JORM MICR+LAB I . CEDAR RAPIDS • DES MOINES 'I 1 Q1t,,Wr iLMLL) BY JOR14 141CROLAB VI -12 CEDAR RAPIDS AND 'DES r�1 t Hawkeye would establish its full color, two -camera studio equipment pack- age at the proposed new library (if available and desired). If the library is not funded, Hawkeye would establish the studio at its central offices or at another "convenient" location. Given the small quantity of local programming it intends to produce, it appears that this studio will be used primarily for access program production as is discussed in the next section of this chapter. (3) ANALYSIS: In consideration of the respective levels of satellite programming firmly committed, as well as origination programming to be produced locally by the applicants, we must conclude that Eastern has clearly offered the greater level of nonautomated origination programming for Iowa City- We qualify this conclusion, however, by urging the city council to consider not only what has been promised but also the past record of their parent companies in delivering on such promises in the other communities they serve. c. ACCESS CHANNELS AND FACILITIES Access channels are those channels on a cable system reserved for pre- sentation of nonprofit programming produced by local individuals, groups, educational institutions and governments as well as channels available for commercial purposes on a leased basis. Minimum requirements for access are contained in the rules of the FCC. In a decision released on February 21 of this year, the U.S. Circuit Court for the Eighth Circuit held invalid all the FCC access rules. 2, This decision is now being reviewed by the supreme Court and pending its decision, the FCC access rules remain in effect. Should the Supreme Court uphold the lower court's decision and the FCC access rules are eliminated, one thing is clear: local governments may no longer rely on the FCC's rules to insure that it and its residents will have some access to the system. It will be the responsibility of the local 2. See, Midwest Video Cor v. Federal Communications Commission, No. 76-1496, F. 2d _. t�•�MICROFILMED BY JORM MICR+LAB I . CEDAR RAPIDS • DES MOINES III l a<Oi iLi4cu BY JORM 141CROLAB VI -13 CEDAR RAPIDS AND government to negotiate a reasonable access package and enforce the availa- bility of access. It is, therefore, very important that the Iowa City City Council carefully ascertain each applicant's commitment to access. The development of access channels is really a shared responsibility be- tween the cable operator and the community. Access channels and production facilities, however extensive, are of no value if groups and individuals fail to make effective use of the opportunity that access offers. Nevertheless, the cable operator can greatly influence the development of access depending on the extent to which he or she provides not only channels and facilities but also training, production assistance and encouragement. Ultimately, if the access channels become a true community asset, the public benefits and the operator benefits in that access programming becomes an additional incen- tive for ncen-tivefor people to subscribe to the cable service. Table VI -7 compares the access channel allocations that the applicants have proposed to offer. Table vI-8 compares the separate access production equipment which the applicants would make available to access channel users on a priority basis in addition their respective local origination facilities. (1) EASTERN: Eastern has allocated six free access channels: one each for the public, the school system and city government plus three channels for the University of Iowa. In addition, Eastern has reserved four channels for leased access purposes. Although Eastern did not provide specific leased access channel rates, it stated it would "be extremely flexible in its policies so as to encourage full use of these channels." Five additional channels would be available for future use. Access program production would be accomplished in its local origination studio to be established at its offices in a central location within the city. i MICROFILMED BY DORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES is n; fI y` i �d ;S ;Pf t: a III l a<Oi iLi4cu BY JORM 141CROLAB VI -13 CEDAR RAPIDS AND government to negotiate a reasonable access package and enforce the availa- bility of access. It is, therefore, very important that the Iowa City City Council carefully ascertain each applicant's commitment to access. The development of access channels is really a shared responsibility be- tween the cable operator and the community. Access channels and production facilities, however extensive, are of no value if groups and individuals fail to make effective use of the opportunity that access offers. Nevertheless, the cable operator can greatly influence the development of access depending on the extent to which he or she provides not only channels and facilities but also training, production assistance and encouragement. Ultimately, if the access channels become a true community asset, the public benefits and the operator benefits in that access programming becomes an additional incen- tive for ncen-tivefor people to subscribe to the cable service. Table VI -7 compares the access channel allocations that the applicants have proposed to offer. Table vI-8 compares the separate access production equipment which the applicants would make available to access channel users on a priority basis in addition their respective local origination facilities. (1) EASTERN: Eastern has allocated six free access channels: one each for the public, the school system and city government plus three channels for the University of Iowa. In addition, Eastern has reserved four channels for leased access purposes. Although Eastern did not provide specific leased access channel rates, it stated it would "be extremely flexible in its policies so as to encourage full use of these channels." Five additional channels would be available for future use. Access program production would be accomplished in its local origination studio to be established at its offices in a central location within the city. i MICROFILMED BY DORM MICR+LAB 1 CEDAR RAPIDS • DES MOINES MiuWriLMLu BY JOR1414ICROLAB • CEDAR RAPIDS Arlu UL r VI -14 TABLE VI -7: DEDICATED ACCESS CHANNELS Access Eastern Hawkeye 11 1 Public 2 Educational 1 1 University 3 13 14 Government 1 Library 1 Leased 4 25 Available for 5 4 Future Use 1. Eastern stated it would not permit live programming on the public access channel. 2. Hawkeye stated that Live access programming was per- mitted 9:00-5:00; taped programming from 3:00-11:00. 3..Eiawkeye stated it would also offer the university this or another channel on a "nominal fee" leased basis, if desired. 4. Hawkeye stated it would provide a character generator for programming the government channel. 5. Hawkeye stated one leased access channel would be re- served for medical use. Y�•�t±.. 141CROFILMED BY 'I JORM MICR+LAB CEDAR RAPIDS • DES MOINES I I y� .e 1^ kl k is G i• • CEDAR RAPIDS Arlu UL r VI -14 TABLE VI -7: DEDICATED ACCESS CHANNELS Access Eastern Hawkeye 11 1 Public 2 Educational 1 1 University 3 13 14 Government 1 Library 1 Leased 4 25 Available for 5 4 Future Use 1. Eastern stated it would not permit live programming on the public access channel. 2. Hawkeye stated that Live access programming was per- mitted 9:00-5:00; taped programming from 3:00-11:00. 3..Eiawkeye stated it would also offer the university this or another channel on a "nominal fee" leased basis, if desired. 4. Hawkeye stated it would provide a character generator for programming the government channel. 5. Hawkeye stated one leased access channel would be re- served for medical use. Y�•�t±.. 141CROFILMED BY 'I JORM MICR+LAB CEDAR RAPIDS • DES MOINES .Ii Ug OF iLNLU BY JURM MICROLAB i • CEDAR RAPIDS ANU UL VI -15 TABLE VI -8: ACCESS EQUIPMENT 'e (Additional equipment reserved exclusively for access users) Equipment Eastern Hawkeye* 0 P Separate Access No � Studio Studio Equipment J Ie (Portable) 2 —Switcher I —Monitors 3 -Video Tape (or Cas- sette) recorders 1 —Audio Mixer I Portable Equipment P� B (included --Color Camerae 2 above) --Video Tape (or Cas- sette) Recorders 2 2 —Monitor 1 -Audio Mixer B —Lighting Kit 1 1 r c Library Channel --B & W Camera I —Monitor 1 --Copy Stand 1 Special Equipment for Government Channel --Character Generator 1 r L A .s 1 is d ' r s ti r r C f i Equipment Eastern Hawkeye* Separate Access No 180 sq/ft Studio Studio Equipment --Color Cameras (Portable) 2 —Switcher I —Monitors 3 -Video Tape (or Cas- sette) recorders 1 —Audio Mixer I Portable Equipment (included --Color Camerae 2 above) --Video Tape (or Cas- sette) Recorders 2 2 —Monitor 1 -Audio Mixer 1 —Lighting Kit 1 1 Special Equipment for Library Channel --B & W Camera I —Monitor 1 --Copy Stand 1 Special Equipment for Government Channel --Character Generator 1 *Hawkeye's access studio equipment may also be used for remote productions. 141CROFILRED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES 1 FiiliWrlLMLU by JORM MICROLAB CEDAR RAPIDS AND DES VI -16 In addition, Eastern would provide two sets of portable color camerae/record- - ers (portapaks) plus lighting and audio equipment on a priority basis to access ra i FiiliWrlLMLU by JORM MICROLAB CEDAR RAPIDS AND DES VI -16 In addition, Eastern would provide two sets of portable color camerae/record- - ers (portapaks) plus lighting and audio equipment on a priority basis to access users. Eastern's proposed rates for staff assistance and use of its equipment are rather complex, making a concise summary difficult. The amount an access, } user would pay would depend, to a large extent, upon Eastern's judgment re- garding the value of the user's proposed program or series of programs to subscribers. It would also depend upon whether Eastern or the user would F supply a qualified production crew. In some cases, access users may produce programs at no cost. In others, users would pay rates in accordance with a sliding scale which favors users who make efficient use of the facilities; } that is, the longer the time of use, the greater the average cost per hour.y Upon award of a franchise, Eastern stated it would establish an "Iowa City Cablevision Advisory Group" to coordinate use of the access channels. This group would include representatives from the university, the school sys- tem, city government and the library. Eastern's stated access policies are in accordance with current FCC requirements. One of its stated policies, 1 however, is of particular importance in assessing its access philosophy: "All public access program presentations shall be made over the public channel from tI a prerecorded video tape source" (Eastern's emphasis). In other words, East- ;i ern will not permit live programming on the public access channel. Eastern's main trunk distribution cable would be initially capable of i permitting program origination from any point along this cable using up to four available upstream channels. If future needs warrant, return capability ' could be activated from specific institutions and subscribers homes by in- setting inexpensive modules in each line extender. Eastern has also proposed a second, nine -mile institutional network (cable) which would interconnect the following institutions. �r MICROFILMED BY JoRM MICR+LAB CEDAR RAPIDS • DES MOINES lei iwfUriLALu BY JURM MICROLAB 1 VI -17 CEDAR RAPIDS AND 'DES • The University of Iowa • City and County Buildings • The Public Library • The Board of Education Offices • The Access Center It would also interconnect certain public, parochial and nonprofit private schools "when (the) need arises." Initially, 12 upstream channels would be activated on this institutional network. "When communications over the in- stitutional network is required on a two-way basis," Eastern stated up to 21 downstream channels could be activated by inserting active modules in the amplifier housings. (2) HAWEEYE: Hawkeye has allocated five free access channels: one each for the public, the school system, city government, the university and the library. Hawkeye allocated two channels for leased access initially, one of _which is reserved specifically for the medical community. As an op- tion, Hawkeye further p-tion,Hawkeyefurther stated it would be willing to offer the allocated uni- versity access channel or a -separate channel to the University on a "nominal fee" leased basis. This would permit the university to include commercials with its programming if it so desires. Hawkeye did not propose any specific rates for leased access channels stating "tariffs will be developed when leased channel operations become a reality in Iowa City." Four additional channels on Hawkeye's system would be available for future use including leased access. In addition to its primary production studio, Hawkeye proposed a second, smaller studio at its central offices exclusively for access channel users. This studio would contain less sophisticated equipment than Hawkeye's main studio including a basic lighting and audio set-up. Hawkeye would also pro- vide two sets of portable color cameras/recorders (portapaks) for use in the studio as well as for field productions. Further, Hawkeye would provide the MICROFILMED BY 'i DORM MICR+LA13 CEDAR RAPIDS • DES. MOINES 3 IN r. f v, ;r k Q _ r ti it 1 y r f i lei iwfUriLALu BY JURM MICROLAB 1 VI -17 CEDAR RAPIDS AND 'DES • The University of Iowa • City and County Buildings • The Public Library • The Board of Education Offices • The Access Center It would also interconnect certain public, parochial and nonprofit private schools "when (the) need arises." Initially, 12 upstream channels would be activated on this institutional network. "When communications over the in- stitutional network is required on a two-way basis," Eastern stated up to 21 downstream channels could be activated by inserting active modules in the amplifier housings. (2) HAWEEYE: Hawkeye has allocated five free access channels: one each for the public, the school system, city government, the university and the library. Hawkeye allocated two channels for leased access initially, one of _which is reserved specifically for the medical community. As an op- tion, Hawkeye further p-tion,Hawkeyefurther stated it would be willing to offer the allocated uni- versity access channel or a -separate channel to the University on a "nominal fee" leased basis. This would permit the university to include commercials with its programming if it so desires. Hawkeye did not propose any specific rates for leased access channels stating "tariffs will be developed when leased channel operations become a reality in Iowa City." Four additional channels on Hawkeye's system would be available for future use including leased access. In addition to its primary production studio, Hawkeye proposed a second, smaller studio at its central offices exclusively for access channel users. This studio would contain less sophisticated equipment than Hawkeye's main studio including a basic lighting and audio set-up. Hawkeye would also pro- vide two sets of portable color cameras/recorders (portapaks) for use in the studio as well as for field productions. Further, Hawkeye would provide the MICROFILMED BY 'i DORM MICR+LA13 CEDAR RAPIDS • DES. MOINES 3 IN hIiLHUFILNLU BY JORN 141CROLAB CEDAR RAPIDS AND .� /^i e VI -18 library with a black -and -white camera, monitor and copystand. This would assist the library in providing a "video reference service" on its separate access channel which would permit subscribers to telephone the library and .request that certain documents be presented on the library channel for viewing in the home. To assist the city in programming the government access channel, Hawkeye would provide a character generator for use by the city in programming the government access channel. As with Eastern, Hawkeye's proposed rates are complex and difficult to summarize. To a certain extent, it appears that Hawkeye's access staff and facilities would be available to access users at no charge. At least one four-hour training session each month would be provided free of charge. It also. appears that production assistance and use of the facilities would be provided at no cost unless a particular user is requesting a disproportionate amount of studio or channel time. Likewise, a user may be charged if a par- ticular user's request requires that Hawkeye's staffing would have to be avail- able beyond 40 -hours per week. Charges may also be applicable if Hawkeye's staff are directly involved in the production of an access program. Since Hawkeye would not be doing any significant amount of local origination produc- tion, it appears that all its origination staff would be available to assist access channel users as needed. Hawkeye has suggested that the Iowa City Broadband Telecommunications Commission establish a separate "Program Advisory Committee" to deal solely with access development. Hawkeye "pledges its full cooperation to (this pro- posed) committee, and would hope to be appointed a working member...."The access channel operating rules would be developed by this committee. Hawkeye did state, however, that any live programming would be cablecast on the access channel from 9:00 until 5:00; taped programming would be presented from 3:00 to 11:00. I4ICROPILMED BY JORM MICRO LAB CEDAR RAPIDS • DES MOINES i i i j I I f iI 1 1 hIiLHUFILNLU BY JORN 141CROLAB CEDAR RAPIDS AND .� /^i e VI -18 library with a black -and -white camera, monitor and copystand. This would assist the library in providing a "video reference service" on its separate access channel which would permit subscribers to telephone the library and .request that certain documents be presented on the library channel for viewing in the home. To assist the city in programming the government access channel, Hawkeye would provide a character generator for use by the city in programming the government access channel. As with Eastern, Hawkeye's proposed rates are complex and difficult to summarize. To a certain extent, it appears that Hawkeye's access staff and facilities would be available to access users at no charge. At least one four-hour training session each month would be provided free of charge. It also. appears that production assistance and use of the facilities would be provided at no cost unless a particular user is requesting a disproportionate amount of studio or channel time. Likewise, a user may be charged if a par- ticular user's request requires that Hawkeye's staffing would have to be avail- able beyond 40 -hours per week. Charges may also be applicable if Hawkeye's staff are directly involved in the production of an access program. Since Hawkeye would not be doing any significant amount of local origination produc- tion, it appears that all its origination staff would be available to assist access channel users as needed. Hawkeye has suggested that the Iowa City Broadband Telecommunications Commission establish a separate "Program Advisory Committee" to deal solely with access development. Hawkeye "pledges its full cooperation to (this pro- posed) committee, and would hope to be appointed a working member...."The access channel operating rules would be developed by this committee. Hawkeye did state, however, that any live programming would be cablecast on the access channel from 9:00 until 5:00; taped programming would be presented from 3:00 to 11:00. I4ICROPILMED BY JORM MICRO LAB CEDAR RAPIDS • DES MOINES �5 i'Ii LI(DF iLMLU BY JORM MICROLAB VI -19 CEDAR RAPIDS AND DES Hawkeye has promised to offer "matching funds" of up to a total of $10,000 during the first two years of system operation to "defray labor and material costs of qualified access users." Allocations of such matching funds would be the responsiblity of the proposed advisory committee. As proposed, Hawkeye's main distribution system would be initially in— stalled to permit live origination using three activated upstream channels from the following schools. • Iowa City Senior High • Regina Senior High • Southeast Junior High • Westside.Junior High Hawkeye stated it did not propose additional origination points on its main distribution cable for initial activation, pending a further understanding of the city's needs, because of possible "noise" problems with the downstream signals delivered to subscribers. However, Hawkeye did state that "(a)t such time as programming from selected additional locations becomes technically and economically feasible, we will work with the city to activate necessary return paths." Hawkeye further stated that it would install the necessary additional modules in the appropriate amplifiers at its own expense. Hawkeye has also proposed a separate institutional network cable 2.5 miles in length, which would permit program origination using five initially activated upstream channels from the fallowing locations. • Origination Studios • Civic Center • Court House • Public library • Community Recreation and Youth Center • Central Junior High School • Mercy Hospital This cable would be capable of providing additional upstream and downstream channels if such additional capacity is desired. •�? MICROFILMED BY " 1 '"1 1 JORM MICR#LAB } CEDAR RAPIDS • DES MOINES V I•IiUWr 1LHLu BY JOW 141CROLAB CEDAR RAPIDS AND VI -20 If institutions have need for additional channels, Hawkeye stated, "...we will work with those institutions to meet those needs. Presently, we envision doing so under the provisions of channel lease agreements for the additional requirements." The university would be interconnected with the Iowa City system by a separate "super -trunk" cable. (3) ANALYSIS: Both applicants, in our view, have proposed rather im- pressive access services and facilities considering the size of Iowa City. Eastern has dedicated more access channels but, under the city's ordinance, any operator would be required to provide additional access channel if needed. In terns of activated access channels and activated return capability on both its primary distribution cable and its institutional network cable, Eastern offers the most. Also, the length of Eastern's proposed institutional cable is nearly four times the length of Hawkeye's institutional cable. Hawkeye, however, was more specific regarding the locations at which it would estab- lish origination points. Moreover, the design and capacity of the systema proposed by both appear more than adequate to satisfy the present and fore- seeable future channel capacity needs of Iowa City. Hawkeye's proposed production facilities, in terms of quantity and qual- ity of components, are superior. In general, Hawkeye also appears more will- ing to make its facilities available and provide training to access users at little or no cost. We also believe Hawkeye's stated policy of permitting live ci public access programming, in contrast with Eastern's stated policy of pro- hibiting live public access programming, is of significance. Finally, Hawkeye was more responsive to the city's stated interest in a second access produc- tion facility to be established at the proposed new public library (if funding for the library is approved) or at another central location. Y --tet; MICROFILMED BY 16RM MICR+LAB CEDAR RAPIDS • DES MOINES i miLi(W ILMLU By JORM MICROLAB `1 CEDAR RAPIDS AND n }' VI -21 k 'Y aIt is our conclusion, therefore, that Hawkeye's proposed level of access y support in response to Iowa City's stated interest in this area is clearly superior. This conclusion, however, is subject to certain qualifications. In this section we have summarized and compared two very complex access ser- e y� vice packages. To fully understand what they have proposed in support of S� access, and in particular, the rates both would charge access users, we urge the city councilmembers to carefully review, in total, what the applicants have stated in their applications.3 Also, we urge the councilmembers to consider not only what has been proposed but also the track record of both applicants in support of access in the other communities they serve. 3. PAY CABLE In recent years, pay television channels on cable systems have proven to be an extremely popular subscriber service. By paying an additional fee, cable subscribers may receive one or more pay cable channels which offer recent movies, uncut and without commercials, plus, in some cases, additional entertainment specials not offered on broadcast television. f Table VI -9 compares the pay cable services as proposed by the applicants. 444' Both would offer Home Box Office received via satellite. In addition, Eastern has proposed a second, mini -pay channel, Cox Cable Home Theatre, which would present a fewer number of exclusively G- and GP -rated films at a lower monthly charge. In terms of diversity of choice, therefore, we conclude that Eastern " has proposed the better level of pay cable service. i Although we have included the rate structure for the proposed pay cable # services of the applicants in Table VI -9, we advise against drawing any 3. See, Form J: Cable System Narrative; Form K: Proposed Signal Carriage and Allocations; Form L: Local Programming; and Form M: Proposed Rates. S- �} MICROFILMED BY I i JORM MICR+LAB CEDAR RAPIDS • DES MOINES QI uiWO ib"ILU BY JORM MICROLAB • CEDAR RAPIDS AIIU VI -22 (71 TABLE VI -9: PAY CABLE CHANNELS Applicant First Channel Second Channel Home Box Office (8-10 new movies per month, plus entertainment specials Eastern 6 selected sporting events. No X-rated films.) $7.00/month Installation: $10.00 Home Box Office (8-10 new movies per month, plus entertainment specials S selected sporting events. Hawkeye No X-rated films.) $6.95/month Installation: $15.00 Lockout Device: $25.00* Cox Cable Home Theatre (4-5 new G- and GP - rated films per month. $4.00/month Installation:$5.00 v *Lockout device (or "parental control device") is an optional service per- mitting parents to temporarily delete pay programming without affecting other cable services. Hawkeye would repurchase lockout device for $20.00 if returned in good condition and working order. n i x t f i i F T' MICROFILMED BY •,•� j JORM MICR+LAB CEDAR RAPIDS - DES MOINES I -Alli Ur rLHcO BY JORM MICROLAB W VI -23 CEDAR RAPIDS AND DES MO NES. [041 conclusions based on these proposed rates. Pay cable rates, unlike basic 4 his time be regulated by local officials subscriber rates, cannot at t tea at will. Any Cable operators are free to raise or lower pay cable ra assumption that the proposed pay rates would remain constant is, at beat, speculative. The council should try to ascertain each applicant's commit- meat to the pay rates listed in its proposal* ' 4. TEER AUDIO SERVICES -cable In addition to broadcast and nonbroadcast video programming, many systems offer an optional FM radio service. The same cable that connects to a subscriber's television set may also be connected to a subscriber's PM radio permitting reception of all audio signals carried by the system - Table VI -LO compares the applicants' proposed level of PH radio service. Eastern has offered PM service although it did not identify which stations Y. Eastern also stated it would carry pending the results of a signal surve regarding local interests in various for it would survey Iowa City residents - mats and specific stations before it makes a final selection. Nawkeye listed � 24 specific stations although it noted that seven of these may besubject offercom- C to interference. We expect that both app licants would ultimately parable PM service. 5. MISCELLANEOUS SERVICES Both applicants proposed an "Emergency Alert system as required the city's ordinance. This service would allow a city or civil defense official ' to override the audio of all channels on the cable system and make emergency 4. See, Brookhaven Cable TV Inc. v. Ke11v, 428 F- Supp. 1216 (N.D.N-Y-, 1977). I41CROFILMED BY JORM MICR+LAB CEDAR RAPIDS - DES MOINES t1iL<U1 iLMED BY JURM MICROLAB • CEDAR RAPIDS A."IU vi -24 TABLE VI -10: FM RADIO SERVICE Number of IIndividuallyl FM Monthly Applicant I Stations I Processed I Broadband I Charge* $5.00 To be Eastern • determined $1.50, $7.95 Hawkeye 241 • $1.50 *Higher rates for PM service alone; lower rate if subscriber also takes television service. 1. Hawkeye states carriage of seven of its proposed PM signals subject to possible reception problems. 'y MICROFILMEO DY JORM MICR+LAB CEDAR RAPIDS • DES MOINES s Ff a r, p %I 7 ?j i t, E _ _ 111 1 r • CEDAR RAPIDS A."IU vi -24 TABLE VI -10: FM RADIO SERVICE Number of IIndividuallyl FM Monthly Applicant I Stations I Processed I Broadband I Charge* $5.00 To be Eastern • determined $1.50, $7.95 Hawkeye 241 • $1.50 *Higher rates for PM service alone; lower rate if subscriber also takes television service. 1. Hawkeye states carriage of seven of its proposed PM signals subject to possible reception problems. 'y MICROFILMEO DY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I•ILIWIiLMLU BY JORM MICROLAB CEDAR RAPIDS AND 9 i announcements such as a tornado alert. Eastern's system would beactivated from a specific location selected by the city. Hawkeye's system could be activated from any telephone. In addition, both applicants identified certain additional services that would be possible pending future technical developments and economic feasi- bility. Since no specific commitments or timetables were offered regarding these services, we have not addressed them in our analysis. B. CONCLUSIONS In summary, both applicants have offered a wide variety of broadband telecommunication services. Both have proposed essentially the same comple- ment of broadcast television and FM radio signals. Eastern has proposed a superior level of satellite programming, pay cable service and operator produced local programming. Hawkeye has proposed a superior level of auto- mated channels and access support. Therefore, our evaluation of the two: services packages boils down to one basic but highly subjective choice be- tween Eastern's emphasis on nonautomated origination programming and Hawkeye's emphasis on automated channels and access. 141CROFILKED BY DORM MICR+LAB j CEDAR RAPIDS • DES MOINES 1 PiIwO iLALU BY JURM MICROLAB CEDAR RAPIDS AND DE n vII. UNIVERSITY OF IOWA A. COMPARISON Although the University of Iowa is located, in part, within the corporate limits of. Iowa City, no franchise rights granted by the city would be applicable to the university campus. Any rights to provide broadband telecommunications services on the campus must be negotiated separately with the university. It is expected, however, that any company selected to serve Iowa City would also be granted the right to serve the university provided satisfactory arrangements be- tween the company and the university can be negotiated. Therefore, the manner and extent to which applicants would be willing to serve the university was iden- tified as an important factor in the city's evaluation of franchise proposals. As stated in the city's request for proposals, the university was essentially interested in the following services. • Basic service to all campus dwelling units, selected class- rooms, and support and office buildings. Such service would be provided on a bulk -rate basis, or in the case of the married housing units, either a bulk or individual -rate x basis. Wherever possible, existing master antenna systems k within campus buildings would be utilized. Y ti • Program origination capability from a minimum of 16 iden- tified campus locations. Further, the campus system should be designed so as to permit university programming to be 1= distributed either exclusively on campus or throughout the G Iowa City system including the campus. p Beyond these minimum requirements, applicants were invited to propose any t additional services to the university they believed were feasible and appropriate f in light of their understandings of the needs and interests of the university. r- ?� MICROFILMED BY If i JORM MIC R+LAB CEDAR RAPIDS • DES MOINES I.1,utD1 iLALu by JORM MICROLAB CEDAR RAPIDS AND DES VII -2 I. EASTERN Eastern proposes to install a 6.8 -mile primary distribution cable (A Cable). This cable would have an activated downstream capacity of 35 chan- nels plus 4 unactivated upstream channels available for future use. Eastern has offered two basic alternatives for the university to consi- der in providing on -campus basic service. The university could either pur- chase the campus system or permit Eastern to retain ownership and operate the system as an integral part of its entire Iowa City operations. Eastern estimates that the maximum total capital cost to the university if it elects to purchase the system would be $253,152 ($210,960 + 20 percent) assuming all dormitory units require rewiring. If the two dormitory buildings wired for 30 -channel, two-way service do not require any additional modifica- tions, this total amount would be reduced by an estimated $35,826 ($29,855 + 20 percent). If the university elects to purchase the system, Eastern would offer the following three options for delivery of its basic service channels. Under "Option A" Eastern would supply the signals but the university would assume all responsibilities regarding internal distribution, customer installations, system maintenance and customer billing. Eastern would provide sevice at a rate of $.80 per customer per month. It appears that under this option the university also would be responsible for purchasing, supplying and maintaining converters, if full service is desired. Under "Option B," Eastern would supply the signals and assume responsi- bility for maintenance, installation and disconnection of customers. The university would pay Eastern one check per month based on the total number of subscribers served as well as reimburse the company for all replacement parts. The rate would be $3.30 with converter or $2.15 without converter per subscriber per month. MICROFILMED BY JORM MICR+LAB I CEDAR RAPIDS • DES MOINES ,n Jnr i I.1,utD1 iLALu by JORM MICROLAB CEDAR RAPIDS AND DES VII -2 I. EASTERN Eastern proposes to install a 6.8 -mile primary distribution cable (A Cable). This cable would have an activated downstream capacity of 35 chan- nels plus 4 unactivated upstream channels available for future use. Eastern has offered two basic alternatives for the university to consi- der in providing on -campus basic service. The university could either pur- chase the campus system or permit Eastern to retain ownership and operate the system as an integral part of its entire Iowa City operations. Eastern estimates that the maximum total capital cost to the university if it elects to purchase the system would be $253,152 ($210,960 + 20 percent) assuming all dormitory units require rewiring. If the two dormitory buildings wired for 30 -channel, two-way service do not require any additional modifica- tions, this total amount would be reduced by an estimated $35,826 ($29,855 + 20 percent). If the university elects to purchase the system, Eastern would offer the following three options for delivery of its basic service channels. Under "Option A" Eastern would supply the signals but the university would assume all responsibilities regarding internal distribution, customer installations, system maintenance and customer billing. Eastern would provide sevice at a rate of $.80 per customer per month. It appears that under this option the university also would be responsible for purchasing, supplying and maintaining converters, if full service is desired. Under "Option B," Eastern would supply the signals and assume responsi- bility for maintenance, installation and disconnection of customers. The university would pay Eastern one check per month based on the total number of subscribers served as well as reimburse the company for all replacement parts. The rate would be $3.30 with converter or $2.15 without converter per subscriber per month. MICROFILMED BY JORM MICR+LAB I CEDAR RAPIDS • DES MOINES P1 ucUriLALU by JURM MICROLAB VII -3 CEDAR RAPIDS AND r�, NES, Eastern's "Option C" provide that the company would \provide signals as well as perform all maintenance work, installations and disconnections. Sub- scribers would be billed directly by Eastern. The university would reimburse Eastern for all replacement parts. Rates under this option would be $4.40 with converter and $3.25 without converter per subscriber per month. If the university should elect to have Eastern retain ownership and oper- ate the campus system, Eastern would deal directly with customers and provide it as an optional service to on -campus residents and facilities. In other words, cable service would only be provided to those who pay the agreed-upon rate. Eastern stated that "there is no economic justification as to why campus cus- tomers should have a lower rate than other customers in the city." To the ex - taut that this arrangement may result in an oncampus subscriber penetration rate comparable to that for the rest of the city, we concur. Nevertheless, Eastern stated it would agree to provide individual service on -campus at a sub- scriber rate of $5.90 with converter or $4.75 without converter per month. In considering Eastern's offer to allow the university to purchase the campus sytem, we suggest that the university considers not only the purchase price of the plant but also the need to establish an allowance for deprecia- tion for future replacement of the plant. Although it cannot actually be predicted when the plant would have to be rebuilt, the cable industry generally allows for a plant depreciation life of 10 to 15 years. If this is considered, there may be no significant overall expense difference to the university be- tween the two alternatives Eastern has proposed. Regardless of which alternative the university might choose, Eastern would provide at no cost, a second three-mile "R Cable" interconnecting all 16 campus locations indentified by the university. Initially, 12 upstream channels will be activated for return feed from these origination points to the campus subheadend. MICROFILMED BY JORM MICR+LAB -I CEDAR RAPIDS - DES MOINES NiL,i(W iLMmU BV JORM MICROLAB VII -4 CFDAR RAPIDS AND DES Twenty-one additional downstream channels could be activated when "(d)iscrete communication is required by the university on a two-way basis." 2. HAWKEYE Hawkeye proposed to construct a 7.5 -mile primary distribution cable (A Cable) with an activated capacity of 35 downstream and 4 upstream channels for return signals from all 16 origination points requested by the university. These upstream channels would be available free or, if desired, on a "nominal fee" leased basis - Service to married housing units would be provided on an individual sub- scriber basis at rates identical to those proposed for the city. Service to academic buildings would be provided on a fixed bulk -rate basis. Service to dormitory units would be on a bulk -rate basis based on $3 per month per unit and (if desired) $1.50 per month per unit for converters plus a $15 converter deposit. However, the first service connection at each building would be at no cost. Based on information supplied by Hawkeye, we calculate that the following monthly rates would be charged for service to these buildings. • Monthly Charge "Portal Drop" (first drop to all academic and No charge dormatory buildings) .. • • • • • ........... Bulk rate to all academic buildings ................... $13,000 Equivalent bulk rate to all dormatory rooms, * $ 7,665 TV viewing rooms, and dormitory staff apartments Total monthly bulk rate 2$ 0.665 without converters........... Monthly charge for converters (Dormitory units only)**..... " " " " " " " " " $ 3,843 Total Monthly charge with converters in dormitory units........ 2S 4,508 ,562 total dormitory units - 7 portal drops x $3 per _562 total dormitory units x $1.50 per month.) ± 14ICROFIL14ED By JCRM MICR+LAB ! CEDAR RAPIDS • DES MOINES 1 ) NiL,i(W iLMmU BV JORM MICROLAB VII -4 CFDAR RAPIDS AND DES Twenty-one additional downstream channels could be activated when "(d)iscrete communication is required by the university on a two-way basis." 2. HAWKEYE Hawkeye proposed to construct a 7.5 -mile primary distribution cable (A Cable) with an activated capacity of 35 downstream and 4 upstream channels for return signals from all 16 origination points requested by the university. These upstream channels would be available free or, if desired, on a "nominal fee" leased basis - Service to married housing units would be provided on an individual sub- scriber basis at rates identical to those proposed for the city. Service to academic buildings would be provided on a fixed bulk -rate basis. Service to dormitory units would be on a bulk -rate basis based on $3 per month per unit and (if desired) $1.50 per month per unit for converters plus a $15 converter deposit. However, the first service connection at each building would be at no cost. Based on information supplied by Hawkeye, we calculate that the following monthly rates would be charged for service to these buildings. • Monthly Charge "Portal Drop" (first drop to all academic and No charge dormatory buildings) .. • • • • • ........... Bulk rate to all academic buildings ................... $13,000 Equivalent bulk rate to all dormatory rooms, * $ 7,665 TV viewing rooms, and dormitory staff apartments Total monthly bulk rate 2$ 0.665 without converters........... Monthly charge for converters (Dormitory units only)**..... " " " " " " " " " $ 3,843 Total Monthly charge with converters in dormitory units........ 2S 4,508 ,562 total dormitory units - 7 portal drops x $3 per _562 total dormitory units x $1.50 per month.) ± 14ICROFIL14ED By JCRM MICR+LAB ! CEDAR RAPIDS • DES MOINES 1 61iLAUh ILNILU BY JORM 11ICROLAB VII -5 CEDAR RAPIDS AND DES B. CONCLUSION Eastern and Hawkeye have proposed markedly different service packages for the University of Iowa. While Eastern's proposal may not have been fully responsive to the university's request in that Eastern did not offer bulk -rate service unless the university purchased the distribution plant, we believe �f MICRDPILMED BY ,,.•� JORM MIC R+LA9 � CEDAR RAPIDS • DES MOINES Service to the campus hospital rooms, Parklawn apartments and Iowa House rooms would be in addition to the above. We calculate from Hawkeye's supplied �i information the initial cost of modifying the existing dormitory master antenna systems in order to permit delivery of the full 35 -channel service would be � 5 i $29,791. Hawkeye identified several options for the university's consideration. If the university prefers, it could itself perform the necessary master antenna modification. Hawkeye would also consider negotiating a higher monthly service charge in exchange for a partial or total waiver of the installation charges. Hawkeye proposed a separate monthly charge for converters in the event the university would prefer to have only 12 channels of service, which would also reduce the cost of modifying the master antenna systems. The university could also purchase its own converters for some or all of its connections. Mainten- ance of the university's converters could be performed by the university or by ' Hawkeye at an estimated charge of $.60 per month per unit depending upon the type of converter selected and the scope of the negotiated service contract. Hawkeye would also construct a second 7.5 -mile "B Cable." This cable would be installed without electronics; activation would be accomplished in the future in accordance with the needs of the university. Use of channels I on this cable would be provided on a leased basis. B. CONCLUSION Eastern and Hawkeye have proposed markedly different service packages for the University of Iowa. While Eastern's proposal may not have been fully responsive to the university's request in that Eastern did not offer bulk -rate service unless the university purchased the distribution plant, we believe �f MICRDPILMED BY ,,.•� JORM MIC R+LA9 � CEDAR RAPIDS • DES MOINES PAI.,KW iLMEU BY JORM MICROLAB VII -6 CEDAR RAPIDS AND 4 proposals are worthy of the university's full and careful consideration. { Further, both have expressed a willingness to discuss any modifications desired by the university. / / ! Due to the uniqueness of the two proposals, side-by-side comparison is i 1 simply not possible. Moreover, it would be inappropriate for the Center to offer any conclusions regarding these proposed service packages other than to state that both appear to be technically feasible. Ultimately, such judg- ments must be made by university officials who are in the best position to consider these offerings in light of the present and future requirements of the university. We, therefore, urge the university to carefully review each proposal and advise the city councilmembers and Iowa city voters of its recom- mendation regarding whether both, one or none of these proposals are accept- able to the university. � PPP k i i a I IdICROFILMED BY { JORM MICR+LAB I� CEDAR RAPIDS • DES MOINES IQ1W<Or iLMEU BY JORM I.IICROLAB CEDAR RAPIDS AND DE VIII. FINAL ANALYSIS AND CONCLUSION s , have compared and analyzed the ownership, ' In the previous chapters, we • and service aspects of the applications submitted by financial, technical and Hawkeye. It is advisable that those chapters be reviewed for Eastern of this chapter is to provide an overview of detailed findings. The purpose and a final conclusion regarding the applications in our findings present accordance with the evaluation criteria established by the city. A. SUMMARY OF FINDINGS 1. OWNERSHIP AND ABILITY TO FINANCE CONSTRUCTION ' wholly owned subsidiary of Cox Cable Communications, Inc., Eastern is a operator. Hawkeye would be an 80 percent owned sub a major multiple system— American Television and Communications Corporation, also a major sidiary of The remaining 20 percent Of Hawkeye's stock would multiple system operator. local broadcasters. Both parent corporations are fully be assigned to two the necessary funding to build and operate a cable system capable of providing in Iowa City. 2. FINANCIAL ANALYSIS financial analysis revealed sign ificant differences in the applicants' + Our Eastern has proposed lower rates but capital, expense and revenue projections. to expect a greater net income. Whether it can achieve its expacted appears maintaining ratea lower than those projected by Hawkeye rate of return while 1 i I MICROr ILMED..BY DORM MICR+LAB CEDAR RAPIDS DES MOINES 1-11UKUt iLi4LU BY JORM 1'IICROLAB VIII -2 CEDAR RAPIDS AND rAW would depend to a great extent on the accuracy of its pay cable penetration projections which are significantly higher than both Hawkeye's projections 1 and the current national average for pay cable penetration. �i i 3. TECHNICAL ANALYSIS v Eastern and Hawkeye have both offered systems of superior design, which would be fully capable of providing high quality broadband telecommunication services and have sufficient unused capacity for future requirements. 4. SERVICES Eastern and Hawkeye have both offered a wide variety of broadband tele- communication services. Eastern has placed a greater emphasis on nonautomated origination programming and pay cable services. Hawkeye has placed a greater emphasis on automated channels and access support. 5. PRELIMINARY CONCLUSION Iowa City is faced with the enviable task of choosing between two excel- lent proposals. Based on our analysis so far, we simply cannot objectively conclude that either is clearly superior. For our final determination, there- fore, we must refer back to the city's own evaluation criteria. I B. FINAL ANALYSIS 1. MINIMUM SERVICE As stated in Chapter I of this report, the city's ordinance specified certain minimum services it would require. Applicants were advised that the city's decision would be based, in part, on the extent to which an applicant MICROFILMED BY JORM MICR+LAB t CEDAR RAPIDS • DES MOINES f rgiuiUFiLALU BY JORM NICROLAii VIII -3 CEDAR RAPIDS AND 'DES 1_ - proposes to exceed these requirements and can demonstrate its technical and financial ability to do so. We again list these minimun service requirements. • A capacity of 35 channels forward (downstream) and 4 return (up- stream) channels. • Carriage of all broadcast television signals permitted by the Federal Communications Commission (FCC). • One Public Access Channel at no cost plus minimal access produc- tion equipment and assistance provided at reasonable rates. • One access channel for government and educational use. • One University of Iowa Access Channel. • One Leased Access Channel. • One Local Origination Channel. • Time and Weather Programming. • A system design permitting program origination from specified locations. • Carriage of local PH stations. • Emergency Alert Audio Override Capability. Eastern and Hawkeye have both proposed to meet and/or in some cases exceed these requirements and both are fully capable of delivering on such promises. Eastern has dedicated a greater number of access channels. Any company, how- ever, would be obligated under the city's ordinance to add access channels as needed and both applicants would have sufficient surplus channel capacity to satisfy such future needs. Further, although both have proposed significantly more than "minimum" production equipment and assistance for access, Hawkeye has proposed a greater quantity of such equipment and has proposed to provide such equipment and assistance at lower cost to the average access channel user. T Irl 41CROPILMED BY - I ..r 1 JORM MICR+LAB CEDAR RAPIDS • DES MOINES i f rgiuiUFiLALU BY JORM NICROLAii VIII -3 CEDAR RAPIDS AND 'DES 1_ - proposes to exceed these requirements and can demonstrate its technical and financial ability to do so. We again list these minimun service requirements. • A capacity of 35 channels forward (downstream) and 4 return (up- stream) channels. • Carriage of all broadcast television signals permitted by the Federal Communications Commission (FCC). • One Public Access Channel at no cost plus minimal access produc- tion equipment and assistance provided at reasonable rates. • One access channel for government and educational use. • One University of Iowa Access Channel. • One Leased Access Channel. • One Local Origination Channel. • Time and Weather Programming. • A system design permitting program origination from specified locations. • Carriage of local PH stations. • Emergency Alert Audio Override Capability. Eastern and Hawkeye have both proposed to meet and/or in some cases exceed these requirements and both are fully capable of delivering on such promises. Eastern has dedicated a greater number of access channels. Any company, how- ever, would be obligated under the city's ordinance to add access channels as needed and both applicants would have sufficient surplus channel capacity to satisfy such future needs. Further, although both have proposed significantly more than "minimum" production equipment and assistance for access, Hawkeye has proposed a greater quantity of such equipment and has proposed to provide such equipment and assistance at lower cost to the average access channel user. T Irl 41CROPILMED BY - I ..r 1 JORM MICR+LAB CEDAR RAPIDS • DES MOINES Id 1 LiWr iLi4Eu by JOkM MICROLA6 VIII -4 CEDAR RAPIDS AND DE 2. DESIRED FEATURES In the city's Request for Proposals, applicants were further advised of certain additional desired features and services as expressed in the city's ordinance which, if offered, and demonstrated to be within the financial and technical capability of the system, would be given special consideration in its evaluation. We will now examine the responses of the applicants to these expressed desired features. • A proposal for present and future origination from and intercon- nection of specified agencies and institutions. Eastern and Hawkeye have both proposed to establish origination points at all locations specified by the city and would have sufficient capacity to establish additional origination points and allow interconnection of city agencies and institutions in the future as needed. • A proposal for allowing occasional, simultaneous cablecasting of different programming on the same channel to different parts of the city. Neither applicant addressed this desired feature. • A proposal for includious of converters as part of basic service. Hawkeye and Eastern have both proposed to include converters as part of basic service. Hawkeye's remote control converters offer subscribers addi- tional convenience over Eastern's set-top converters. • A proposal for interconnecting the city's network with the Uni- sity of Iowa. Hawkeye and Eastern have both offered a system design permitting inter- connection of the city's network with the University of Iowa. • Additional funding, facilities and equipment in support of local programming development to be available to access channel users at no cost on a fair and nondiscriminatory basis. In particular, the city is interested in commitments in support of a second access production facility to be located at the proposed new public library or another downtown location. 41CROPIL14ED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES ppS 4 t» I i i i Id 1 LiWr iLi4Eu by JOkM MICROLA6 VIII -4 CEDAR RAPIDS AND DE 2. DESIRED FEATURES In the city's Request for Proposals, applicants were further advised of certain additional desired features and services as expressed in the city's ordinance which, if offered, and demonstrated to be within the financial and technical capability of the system, would be given special consideration in its evaluation. We will now examine the responses of the applicants to these expressed desired features. • A proposal for present and future origination from and intercon- nection of specified agencies and institutions. Eastern and Hawkeye have both proposed to establish origination points at all locations specified by the city and would have sufficient capacity to establish additional origination points and allow interconnection of city agencies and institutions in the future as needed. • A proposal for allowing occasional, simultaneous cablecasting of different programming on the same channel to different parts of the city. Neither applicant addressed this desired feature. • A proposal for includious of converters as part of basic service. Hawkeye and Eastern have both proposed to include converters as part of basic service. Hawkeye's remote control converters offer subscribers addi- tional convenience over Eastern's set-top converters. • A proposal for interconnecting the city's network with the Uni- sity of Iowa. Hawkeye and Eastern have both offered a system design permitting inter- connection of the city's network with the University of Iowa. • Additional funding, facilities and equipment in support of local programming development to be available to access channel users at no cost on a fair and nondiscriminatory basis. In particular, the city is interested in commitments in support of a second access production facility to be located at the proposed new public library or another downtown location. 41CROPIL14ED BY JORM MICR+LAB CEDAR RAPIDS • DES MOINES I•iiwtUFiLilcu GY JORM MICROLAB VIII -5 CEDAR RAPIDS AND D Only Hawkeye proposed to establish a second access production facility to be established at the proposed new public library or its own offices. r Further, Hawkeye offered additional equipment for establishing a video refer- ence service on the library access channel and a character generator for programming the government access channel. 3. FINAL CONCLUSION When we consider the minimum service requirements and desired features as contained in the city's Broadband Telecommunications Franchise Enabling Ordinance, we conclude that the proposal submitted by Hawkeye Cablevision. Corporation is more responsive to the stated needs and interest of Iowa City. Although we welcome any statement of clarification that might be offered by either appli— cant, we do not expect that any such clarification would alter our conclusion. Again we must state that both companies have submitted an application that, if accepted, would result in excellent broadband telecommunication service to. subscribers and users in Iowa City. Should the city councilmembers choose to also consider other factors of which we were not advised, it may reach a dif- ferent conclusion. Quite simply, Iowa City would benefit by accepting either application. d ROPILMED BY DORM MIC R¢LAB t CEDAR RAPIDS • DES MOINES hI1�ItOF1Li4�0 BY JORM MICROLAB i • CEDAR RAPIDS ANU APPENDIX A "Satellite CATV Programming: a Special Report" TV Communications August 1978 MICROFILMED BY - ;I DORM MICR+LAB CEDAR RAPIDS DES MOINES I P 1�. F k P r l� f s 6 j f • CEDAR RAPIDS ANU APPENDIX A "Satellite CATV Programming: a Special Report" TV Communications August 1978 MICROFILMED BY - ;I DORM MICR+LAB CEDAR RAPIDS DES MOINES I I•I,-utWf il.rlcu bf JURN t•iICROLAb A-1 CEDAR RAPIDS A!ID D From HBO to UPI NEWSTIME, satellite services have come a long way and given cable TV viewers a new perspective on entertainment. By John Barrington TVC Northeast Correspondent II Tush anchors a local news show in Atlanta. The Braves are ... well, a team that, aesthetic- ally speaking, only a hometown loyalist would be expected to love. Nevertheless, the Austin letter and others arriving daily in WTCG's mailbags with postmarks such as Jamestown, N.D., Mesa, Ariz, Rock Springs, Wyo., and Brookings, Ore., tell how cable TV systems, inter- connected by satellite and terres- trial microwave, are rearranging historic television viewing pat- terns. Call It a "super -station" or a budding "network", WTCG is one of the dozen or more additional cable services that are operating or poised for flight on RCA's Sat. corn I or Western Union's Westar II. From the original pioneer in satellite distribution; Home Box Office, to the newest user, United Press International's NEWSTIME, the products and purposes of these networks or quasi -networks are wide-ranging. Although subject to frequent and sudden change, they can be arbitrarily grouped in these categories: • Premium, or pay-cable, enter- tainment — HBO... Showtime... and, on a regional basis, PRISM (distributed by microwave) and Fan- fare, both sports -oriented and al- lied with Hollywood Home Theatre for film product. • Religiously -influenced — Chris - Ilan Broadcasting Network (CBN), PTL Television Network and Trinity Broadcasting Network, Inc. • Super -stations — WTCG-TV, Atlanta; awaiting FCC go-aheads, WGN, Chicago, and KTVU, Oak- land -San Francisco. • Sports — Madison Square Gar - Facing page: Photos from HBO and Showtime specials including "Pinups 2001," "Spice on ice," "On Location" end "Tribute fo Neil Simon." IVC den, distributed by UA -Columbia Cablevision, • News—UPI NEWSTIME. (In a category of its own, the Americom Satellite Network pro- poses, once FCC clearances can be obtained, to become the first cable TV programming service on Westar 11 with four channels of premium movies and super-sta. tions.) Here's a quick look at these services: Home Box Office, Inc. A wholly-owned subsidiary of Time Inc., HBO not only was the first operating pay-cable service, but also the first to use "real- time" transmission. Employing ter- restrial microwave in the Northeast, HBO pieced together a network of 65 affiliates and 195,000 subscrib- ers in nearly three years before it began satellite distribution on Sept. 30, 1975. Illustrative of the boost supplied by omnidirectional, distance and cost insensitive sat- ellite transmission, HBO had spurt• ed to more than a million viewer homes in 435 affiliated systems by the end of 1977. Although it no longer releases arunning sub- scriber box score, HBO had an• nounced through the end of May start ups by an additional 119 systems this year with 666,000 basic cable connections. HBO programs about 60 hours a week on each of the Saloom I transponders. A third leased trans• ponder is held in reserve for back- up protection and development of future services. With nearly six years of experience, supported by extensive audience research, HBO feels it has settled upon a depend- able programming format that runs to an average of 28 film titles each month, accounting for about 80 percent of program hours. 141CROIIL141D By JORM MICR+LAB CEDAR RAPIDS - DES MOINES HBO also introduces monthly an "On Location" special, spot- lighting popular comedians, and a "Standing Room Only" feature, which takes the form of revues, variety shows or theme programs built around such topics as magic, ventriloquism or nostalgic flash- backs. Since its expansion into a national service, HBO has ended heavy reliance on routine sports events and now is scheduling sports on the basis of broad appeal. Weekly major league base- ball highlight programs are sched- uled down the homestretch of the pennant races, and the network will carry a midweek "Inside the NFL" pro football review/preview for the second straight season. The schedule now stresses a consistent pattern for viewer con- venience and heightened percep- tion of value. New programs — films orspeclals — are premiered every Friday, Saturday and Sunday. Thursday night has become sports night. Feature films are played off generally over a four-week period, with far fewer and more selective encores than once was its practice. After several changes in content and format, HBO's program guide has settled down to a "tool" de- signed to make it as easy as pos- sible for subscribers to find pro- gram Information. Showtime Entertainment, Inc. As the television industry's most prominent program syndicator, Via- com International, Inc., was doing what comes naturally by estab- lishing a pay-cable service. Al- though Its Showtime subsidiary did not begin satellite transmission until March of this year, it was created in January 1976. Supplying programming via videocassettes 25 r f!kulWr ILri�u GY JORN I•IICROLAii and terrestrial microwave, Show- time came to the satellite wars already battle tested and with a programming strategy differing from HBO's in several aspects. Playing catch-up against HBO's formidable head start, Showtime reported in early July a total of 180,000 pay-cable subscribers, with 125 systems offering or preparing to offer the service. Like HBO, Showtime uses two RCA Satcom I transponders, one covering the Eastern and Central time zones, the other serving the Mountain and Pacfic zones. Many of Showtime's early affiliates are expected to switch over to satellite feeds. While motion pictures are the bone and sinew of Showtime's programming, its policy is to offer two specials each month but no sports. Although its original pro- duction, "Spice on Ice", won an NCTA programming award (as did HBO's "On Location" with George Carlin), Showtime is less insistent on exclusivity than HBO. It buys or co -produces specials with other pay-TV programmers or independ- ent producers including Colum- bia Pictures Pay Television, War- ner Cable's Oube project, Holly- wood Home Theatre, Charles Brav- erman and Quinn -Martin. Showtime premieres a mix of 14 movies and specials each month, and it differs substantially from HBO in its LLDAii RAPIDS AND DES 'Ir: A-2 policy on playing off films. Fea- tures usually are given eight or nine showings during a two-week period, and only a few outstanding movies are brought back — after six -or eight-month rest periods. Showtime charges range from $8.95 to $10.95 per month, some- what more than HBO's average of slightly over S8. Al the NCTA con- vention in May, however, Show- time announced plans for a mini - pay service in a bid to capture a portion of the potential audience that has not accepted the higher rate. PRISM, Fanfare and Hollywood Home Theatre Both PRISM and Fanfare are regional sports pay-cable services. A common factor to both is Holly- wood Home Theatre, the film dis- tribution company formed by Twen- tieth Century -Fox and United Art- ists to grab at least a wedge of the motion picture product pie that seemed In danger of being gob. bled up by HBO, Showtime and other middlemen. PRISM is a limited partnership between HHT and Ed Snider, owner of the National Hockey League Flyers and the Philadelphia Spec- trum. It has contractual arrange- ments with the Phillies (baseball) i i r f!kulWr ILri�u GY JORN I•IICROLAii and terrestrial microwave, Show- time came to the satellite wars already battle tested and with a programming strategy differing from HBO's in several aspects. Playing catch-up against HBO's formidable head start, Showtime reported in early July a total of 180,000 pay-cable subscribers, with 125 systems offering or preparing to offer the service. Like HBO, Showtime uses two RCA Satcom I transponders, one covering the Eastern and Central time zones, the other serving the Mountain and Pacfic zones. Many of Showtime's early affiliates are expected to switch over to satellite feeds. While motion pictures are the bone and sinew of Showtime's programming, its policy is to offer two specials each month but no sports. Although its original pro- duction, "Spice on Ice", won an NCTA programming award (as did HBO's "On Location" with George Carlin), Showtime is less insistent on exclusivity than HBO. It buys or co -produces specials with other pay-TV programmers or independ- ent producers including Colum- bia Pictures Pay Television, War- ner Cable's Oube project, Holly- wood Home Theatre, Charles Brav- erman and Quinn -Martin. Showtime premieres a mix of 14 movies and specials each month, and it differs substantially from HBO in its LLDAii RAPIDS AND DES 'Ir: A-2 policy on playing off films. Fea- tures usually are given eight or nine showings during a two-week period, and only a few outstanding movies are brought back — after six -or eight-month rest periods. Showtime charges range from $8.95 to $10.95 per month, some- what more than HBO's average of slightly over S8. Al the NCTA con- vention in May, however, Show- time announced plans for a mini - pay service in a bid to capture a portion of the potential audience that has not accepted the higher rate. PRISM, Fanfare and Hollywood Home Theatre Both PRISM and Fanfare are regional sports pay-cable services. A common factor to both is Holly- wood Home Theatre, the film dis- tribution company formed by Twen- tieth Century -Fox and United Art- ists to grab at least a wedge of the motion picture product pie that seemed In danger of being gob. bled up by HBO, Showtime and other middlemen. PRISM is a limited partnership between HHT and Ed Snider, owner of the National Hockey League Flyers and the Philadelphia Spec- trum. It has contractual arrange- ments with the Phillies (baseball) "No Cover, No minimunt" series, me group Known as-rormeny or me Harleftes" Is one of the latest specials on cable. 26 MICROHLMED BY 1. JORM MICR+LAS CEDAR RAPIDS • DES MOINES and the 76ers (basketball). It oper• ates a terrestrial microwave network with 35,000 subscribers in 24 cable systems in eastern Pennsylvania and New Jersey. Begun in 1976, PRISM is providing an alternative pay package in half of the sys- tems, which also offer HBO. Indi- cations are that the sports -oriented service carves out a market of its own without significantly affecting a co -inhabitant such as HBO. Fanfare, launched on Satcom I in June, now has seven operating affiliates in Texas. Like PRISM, it expects to coexist with nationally distributed pay-cable services by tailoring its product to the five Southwestern states — Texas, New Mexico, Oklahoma, Arkansas and Louisiana — that it has se. lected as its market. Fanfare offers six G and PG movies booked by HHT, 10 "encore" titles and a selection of specials such as country and western concerts, horse racing, rodeos, demolition derbies and theatrical productions. Its centerpiece, however, will be major sports in season: Selected Houston Astros baseball games, Southwest Conference football (tape -delayed until 10:30 p.m. to conform to National Collegiate Athletic Association rules), and professional and college basket. ball. Fanfare is owned by Holly- wood Home Theatre; Ken Schnitzer (chairman of Century Development Corp. and an owner of the National Basketball Association), and two entertainment companies, Pace Management and MCI Productions. Affiliates return $4.75 per month (with volume discounts for MSO's) per subscriber to Fanfare. Hollywood Home Theatre, in addition to Its PRISM and Fanfare Involvement, is marketing the mo- tion picture portion of those ser- vices as a separate package, and It acts as film booker for the Tele- prompter Corporation -Hughes Air- craft Company's Los Angeles Sys. tem's 12" channel, for Cox Cable's MDS system in Pittsburgh and others. On July 23 It began sup- plying films for American sub. scripton TV, Los Angeles' second over -the -air pay service. Although not a "network" In the concept of this article, HHT now serves about 130,000 subscribers, and Ills in. volved in co -production of enter. AUg1A11918 r .r Performing at the Bilou Cate in Philadephia and taped for Columbia's "No Cover, No minimunt" series, me group Known as-rormeny or me Harleftes" Is one of the latest specials on cable. 26 MICROHLMED BY 1. JORM MICR+LAS CEDAR RAPIDS • DES MOINES and the 76ers (basketball). It oper• ates a terrestrial microwave network with 35,000 subscribers in 24 cable systems in eastern Pennsylvania and New Jersey. Begun in 1976, PRISM is providing an alternative pay package in half of the sys- tems, which also offer HBO. Indi- cations are that the sports -oriented service carves out a market of its own without significantly affecting a co -inhabitant such as HBO. Fanfare, launched on Satcom I in June, now has seven operating affiliates in Texas. Like PRISM, it expects to coexist with nationally distributed pay-cable services by tailoring its product to the five Southwestern states — Texas, New Mexico, Oklahoma, Arkansas and Louisiana — that it has se. lected as its market. Fanfare offers six G and PG movies booked by HHT, 10 "encore" titles and a selection of specials such as country and western concerts, horse racing, rodeos, demolition derbies and theatrical productions. Its centerpiece, however, will be major sports in season: Selected Houston Astros baseball games, Southwest Conference football (tape -delayed until 10:30 p.m. to conform to National Collegiate Athletic Association rules), and professional and college basket. ball. Fanfare is owned by Holly- wood Home Theatre; Ken Schnitzer (chairman of Century Development Corp. and an owner of the National Basketball Association), and two entertainment companies, Pace Management and MCI Productions. Affiliates return $4.75 per month (with volume discounts for MSO's) per subscriber to Fanfare. Hollywood Home Theatre, in addition to Its PRISM and Fanfare Involvement, is marketing the mo- tion picture portion of those ser- vices as a separate package, and It acts as film booker for the Tele- prompter Corporation -Hughes Air- craft Company's Los Angeles Sys. tem's 12" channel, for Cox Cable's MDS system in Pittsburgh and others. On July 23 It began sup- plying films for American sub. scripton TV, Los Angeles' second over -the -air pay service. Although not a "network" In the concept of this article, HHT now serves about 130,000 subscribers, and Ills in. volved in co -production of enter. AUg1A11918 I'10.KLJ1 ,LIVIw by JUKM i•11MI-Ab • LEDAR RAPIDS AIID DE tainment specials with Columba. Pictures Pay Television, Showtime and others. Madison Square Garden Unlike PRISM and Fanfare, UA - Columbia Cablevision offered Mad. ison Square Garden sports as an advertiser -supported basic cable package last fall and winter. The 132 -event service currently reaches over 1.4 million viewers in 100 cable systems in 40 states. Included are home games of the New York Knickerbockers (National Basket- ball Association) and Rangers (Na- tional Hockey League), profes. sional boxing and wrestling, college basketball, track and field, the Na. tional Horse Show and Westminster Kennel Club dog show. The pack. age will be expanded to 160 events for 1978.79 with additions that Include Notre Dame basketball games. This fall, too, UA -Colum. bia will begin transmission of "Calliope," a children's program of films and educational features. The Madison Square Garden chan. nel is supported both by national advertisers, including Home Box Office, Holiday Inns and Gallo Bros. Wineries, and by charges to systems (50¢ per subscriber for first 20,000, 25¢ thereafter in the Eastern time zone, 35c and 15c in other zones). Systems also have availabilities for local sponsors. CBN, PTL and Trinity The three religious program ser- vices on Satcom I share the objec. tive of providing alternatives to trends In television and film enter- tainment that they feel are objec- tlonable to Increasing numbers of Americans. For all three, the pro- gramming, which is not denomin- ational or sectarian, Is an exten- sion of other broadcast activities In which they have long been en- gaged. The program services are available without charge to cable operators and depend for support upon on -air solicitations. The Christian Broadcasting Net- work (CBN) began 24 -hour -a -day satellite programming on April 28, 1977, from Its own uplink earth station at Virginia Beach, Va. To- day, It estimates that 400 cable ivC A-3 systems with 3.5 million subscrib- ers are on the receiving end. Although station WYAH-TV, li- censed to the Portsmouth -Norfolk - Newport News area, is the flagship of CBN's television and radio activities, the satellite network is in no sense merely a relay of WYAH-TV schedules. "The 700 Club", CBN's 90 -minute daily talk and variety show, is a WYAH-TV production and has featured such guests as Malcolm Muggeridge, Eldridge Cleaver, Charles Colson, former heavyweight champion George Foreman and Roy Rogers and Dale Evans. The program day also includes shows of interest to women and minorities, Bible classes, the "Ross Bagley Show", billed as a video disc jockey pro- gram, and syndicated religious programs. The PTL (People That Love) Television Network began satellite transmission on April 3 of this year from its own facility at Heritage Village in Charlotte, N.C. The sat- ellite service was inaugurated with live transmission from six coun- tries on four continents, and in addition to Its domestic program. ming, PTL feeds shows abroad to Guatemala, Brazil, South Korea, Nigeria and Belgium. Jim Bakker, president of PTL, also hosts a two-hour daily show, "The PTL Club", featuring interviews with Inspirational guests. Prior to the beginning of satellite distrib. ution, that program was distributed to over 100 cable TV systems and 190 broadcast stations, and is es. lfmated to be seen by between 10 and 20 million viewers in North America. Around-the-clock satel. Ilte transmission is looked upon as a way to expand its programs to appeal to a broad range of ages and Interests. PTL reports that 130 cable sys. tems already have begun receiving the satellite service and that It has "across the board" agreements with several large MSO's. A strong effort is being made to cross promote programs and person. alities appearing on PTL in com- munities receiving this service. Trinity Broadcasting Network, Inc., owns stations KLXA-TV, Los Angeles, and KPAZ-TV, Phoenix. It began distributing KLXA-TV by satellite In April, and Frank Sanders, Ross Bagley, who appears regularly on the Christian Broadcasting Plet- work, can be seen by satellite in more than three million homes nationwide. a 15 -year cable veteran came aboard in July to head the cable marketing effort. The non-commercial station claims that it originates more programming dally than the three Los Angeles network -owned sta. tions combined. It is conducting a survey project with Telepromp- tar's Iron Mountain, Mich., system to ascertain how much Trinity pro- gramming may be responsible for adding new cable subscribers. WTCG In late July, WTCG, Atlanta's Channel 17, was closing in on Its 300th cable system and two mil- lionth subscriber. What makes a local Independent television sta- tion popular In Austin, Tex., Rock Springs, Wyo., and Anchorage, Alaska? Sports and movies, the staples of the WTCG program diet, and a "personality" of Its own — one reflecting that of Its prin. cipal owner, colorful and contro. versial sportsman -entrepreneur Ted Turner — are part of the answer. So are time differences that make live Atlanta Braves' baseball and Atlanta Hawks' basketball games available in the wee small hours to distant viewers. So is Southern Satellite Systems, Inc., a common - carrier service spun off from Turner Communications. As the lessor of the RCA Satcom I 141CROFIL14ED BY .� ' JCRM MICR+LAB CEDAR RAPIDS • DES MOINES 27 wwrlLALu by JURN I-1ICROLAB I CEDAR RAPIDS MID 'DES A-4 y r Carmen McRae, /elf, with Mel forme ana saran vaugnan ,,, Pictures special "Sarah and Carmen," from Columbia's "in Session" series. c transponder 3 of Satcom I and is Southern Satellite Systems col- competing with Southern Satellite lects fees based on subscriber for the FCC carriage rights. With totals from system operators, while a favorable nod from the govern- WTCG relies upon increased ad- ment, UV expects to begin service vertising'revenues generated by the new national Identity of the in October. It filed for KTVU only under the station. SSS also finds room on the threat of competition for WGN, WTCG transponder for UPI NEWS. which UV executive vice president TIME, and it is committed to lease Roy Bliss considers to be the best another channel for the introduc- independent station available any tion, tentatively on Sept. 4, of Home Theatre Network, a Maine- where. UV is now offering a 20 percent based mini -pay or second-tier ser• r vice offering four movies a month, for the service before it begins one showing nightly, for which its and an additional 15 percent dis• president, Peter Kendrick, plans to count for a yearly prepayment. charge $3.95. With HTN utilizing Bliss says systems representing only a small segment of trans- 100,000 subscribers have already ponder time, SSS also has pend- taken advantage of the early sign - Ing at the FCC applications to turn up offer. both KTVU, Oakland, Calif., and WGN, Chicago, into super-stations UPI NEWSTIME l SSS president Ed Taylor hopes The first 24-hour audiolvisual that both applications will be news channel on cable TV — or approved before year-end, but in anywhere else, for that matter — view of the slow progress that was launched July 3 by United, has been experienced, he already Press International. Making an Is planning to present the Com- end run around the impractically " mission with paperwork for two I CEDAR RAPIDS MID 'DES A-4 y r Carmen McRae, /elf, with Mel forme ana saran vaugnan ,,, Pictures special "Sarah and Carmen," from Columbia's "in Session" series. transponder that carriers WTCG, transponder 3 of Satcom I and is Southern Satellite Systems col- competing with Southern Satellite lects fees based on subscriber for the FCC carriage rights. With totals from system operators, while a favorable nod from the govern- WTCG relies upon increased ad- ment, UV expects to begin service vertising'revenues generated by the new national Identity of the in October. It filed for KTVU only under the station. SSS also finds room on the threat of competition for WGN, WTCG transponder for UPI NEWS. which UV executive vice president TIME, and it is committed to lease Roy Bliss considers to be the best another channel for the introduc- independent station available any tion, tentatively on Sept. 4, of Home Theatre Network, a Maine- where. UV is now offering a 20 percent based mini -pay or second-tier ser• discount to systems who sign up vice offering four movies a month, for the service before it begins one showing nightly, for which its and an additional 15 percent dis• president, Peter Kendrick, plans to count for a yearly prepayment. charge $3.95. With HTN utilizing Bliss says systems representing only a small segment of trans- 100,000 subscribers have already ponder time, SSS also has pend- taken advantage of the early sign - Ing at the FCC applications to turn up offer. both KTVU, Oakland, Calif., and WGN, Chicago, into super-stations UPI NEWSTIME a Ia WTCG. SSS president Ed Taylor hopes The first 24-hour audiolvisual that both applications will be news channel on cable TV — or approved before year-end, but in anywhere else, for that matter — view of the slow progress that was launched July 3 by United, has been experienced, he already Press International. Making an Is planning to present the Com- end run around the impractically " mission with paperwork for two high costs of a full television ser - other stations he'd like to Intro- vice, UPI utilizes "slow -scan" tech - duce In 1979 and 1980. nology to Integrate still newspholos with voice newscasts. A slgnifl- cant step forward from character United Video Inc. generated CATV news channels, Long a common carrier on mi- UPI NEWSTIME falls somewhere crowave, UV has applications pend- between an all -news radio station ing before the FCC to carry WGN with pictures and the often envi- Chicago and KTVU Oakland on sioned "electronic newspaper". JO r Supported by per -subscriber pay- ments from participating cable systems and by advertising reve- nues, UPI NEWSTIME has provi- sions for local news and advertis. ing inserts. Using only 15 kilo - Hertz of transmission space, the UPI NEWSTIME signal is piggy- backed on the WTCG transponder and thus has a theoretical market potential immediately equivalent to WTCG's. American Satellite Network, Inc. A subsidiary of Digital Commu- nications, Inc., ASN is (a) different, (b) controversial, and (c) apparently stymied temporarily at the FCC. Prepared to go it alone on Westar II, while all other cable services are concentrated on RCA Satcom I, ASN proposes to fill four chan- nels with a premium first -run movie package, three commercial sta- tions, WGN, Chicago, WOR, New York, and KTTV, Los Angeles, and other elements such as stock and commodities market reports. Affil- iating cable systems could choose different mixes of service to offer their subscribers. Challenged at the FCC by SSS on Its plans to carry the independ- ent TV station signals without common carrier authorization, a start-up date for ASN presently is indefinite. ASN Insists the com- mon carrier status is not neces• sary, and says that systems with 500,000 subscribers are affected by the delay. From HBO to UPI NEWSTIME, cable TV's networks have come a long way, have a longer way to go. None of them can, as yet, be taus. Ing sleepless nights for NBC, CBS or ABC executives. There is, how• ever, the glimmer of an answer to FCC chairman Charles Ferris' im. precise criticism of cable's per. formance In his NCTA convention address in May. An "echo" of con. ventional TV? Lacking in "foresight in designing new services and fa- cilities?" Viewers like Glenn Rei4 in Austin, enjoying all-night televi- sion for the first time, or cable subscribers in Des Moines, tuning in for Instant, illustrates news up- dates, just might disagree with the chairman's pat putdowns. MICROFILMED BY 1 JORM MICR+LAB CEDAR RAPIDS • DES MOINES August 1978 f�iy<UFiLMLU BY JORM 141CROLAB CEDAR RAPIDS AND DES MO NES, 101olA APPENDIX B CHANNEL ALLOCATION CHARTS (As prepared by Applicants) 141CROFILMED BY j6RAA MICR+LAB CEDAR RAPIDS - DES MOINES I A APPENDIX B CHANNEL ALLOCATION CHARTS (As prepared by Applicants) 141CROFILMED BY j6RAA MICR+LAB CEDAR RAPIDS - DES MOINES I r111cufiL6tiu BY JORM 141CROLAB CEDAR RAPIDS AND DES MO IES, IOW I EXHIBIT A-1: EASTERN--CHANNRI. ALLOCATTON I — On the chart below, briefly describe the designated allocation of each channel on the proposed system (e.g., KXYZ-TV, Ch. 7, ABC; 24 -hr. sports, automated; educational access; CON; Pay, HBO; etc.). Indicate with an asterisk (+) any channel(s) that will not be activated or available initially. WMT -TV Ch. 2 CBS 111 HBO First- run Movies Pay -TV 71 _ i Madison Square Garden MSG Sports UI WMT -TV Ch. 2 CBS 111 HBO First- run Movies Pay -TV 71 _ WHBF-TV Ch. 4 CBS NI Madison Square Garden MSG Sports UI WOC-TV Ch. 6 NBC pl KWWL-TV Ch. 7 NBC UI CBN. Religiou (24 -hr) 1e) KCRG-TV CH.9 ABC 191 Consumer Shopping Guide (24 -hr) (to) State. News (24 -hr) (It) KIIN-TV Ch. 12 PBS nil Communit Bulletin Board (24 -hr) - lU) 16 11 16.. U 11 19 70 11 11 71 16 23 t, -WSNS-TV C -Span Family- W9CG-TV Weather WGN-TV Financia Public Educa- Local Local Univ Ch. 44 Live Theatre Ch. 17 and Ch. 9 6 Sports Access tional Gov't Origins- of Ind. Coverag Pay -TV Ind. Time Ind. News Access Access tion Iowa of US (Late (24 -hr) (24 -hr) Various . Access'.: House o night) Local Represe - Programin tatives 1/1 UI (C) t0) (9) (r) IG) INI 111 UI INI IU 16 It 1/ 79 10 TI 11 11 14 I1 16 Univ Univ Leased Leased Leased Leased Reserved Reserved Reserved Reserved Reserved of of Access Access Access Access for for for for for 'Iowa Iowa Future Future Future Future Future Access Access Use Use Use Use Use 1111 (x1 - (0) (rl I01 1/) .__ Ifl (T) IUI (YI l41 s- MICROFILMED BY 1 DORM MICR+LAB I CEDAR RAPIDS • DES MOINES I hliutut1L14Li/ BY JURM MICROLAB CEDAii RAPIDS AND 10 ."IES. IC Y EXIIIBIT B-2: IIAWKF.YE--CHANNEL ALLOCATION On the chart below, briefly desc rihe the designated allocation of each channel on the proposed system (e.g., KKY'L-TV, Ch. 7, AUC; 24 -hr. sports, au Lomated; educational acceas; CON; 1'ay, TIDO; etc.)• Judicate with an asterisk (r) any channel(s) that. will uoL be activated or available initially. I' I plus audio "Emergency Alerl:" on all channu n. �' MICROFILMED By p� JORM MICR+LAB I, CEDAR RAPIDS • DES MOINES 0 4 _ WSNS-44 Chicago 1ndgan1e11: S Irwal OrlgLtation G Tine/ Weather Data/ MONA Audio 7 Kim,7 Cedar Itapld_ NUC 0 Sports Wire 9 LO KCW,-9 aCabr Rapids W�1-9 dBC ileago I1 Matiewl Ncwswlre L2 u-12 town City 1 Program Vulde/ Talkin Hooks 2 W41'-2 Cedar Falls CBS l University Origination for He Blind 2 1 (3) (4) l5) 1G Public Access/ Canmarity tssllotin hoord/ Sho(4sing IGl 17 tdOY'-4 Rock Island CIJS I71 IO Goverment Amens/ Data l0) 19 Christian Broad- rasUrg tloLwork 191 20 ]dbrary 1101 21 Netxurk Cher Pick nes shines 6lhllne 0 (ABC) ZZl) S10 -Scan tows 1'21 Financial Newswire 243) .lather Radar 11 lune....' - Ibx Of(1Le L•1 Caomtnity h011otln Board/ ShoijIbig Guide, 15 WO(: -G Davent,ort NIC .. Guide (A) (n) ha lD) 20. lean Clumtra7 lel 29 Reserved - Nt:ure Application: (F) 30 Reserved - Future AppllcaLiuu (GI 31 Medical Chvmol DD 12 teserved - lea'rivs a h) 33 nascrvel - false WI 14 Peservcvl - lease te IK) 35 Reserved- leasPrivate ltd I4uservoal - lbreiyn IurxiuvJo State mus+ire 27 ulucatimmi Aca:as (r+l UIl lot N'1 IOh 'nl lsl Prl (u) (v) (tri I' I plus audio "Emergency Alerl:" on all channu n. �' MICROFILMED By p� JORM MICR+LAB I, CEDAR RAPIDS • DES MOINES 0