Approve Public Hearing Notice Covering (1) Establishing New Advanced Digital Cable Equipment Deposits, (2) Establishing New Rates for Premium Services, (3) Establishing Cable Card Rate for Digital and HDTV Service, (4) Establishing New Cable Advertising Rates for Spot Cable and Video Production and (5) Establishing New Residential and Business Cable Modem Rates:

(1) Establishing New Advanced Digital Cable Equipment Deposits

The current Tariff for deposits on Digital Cable Terminals (DCTs) is based on a $180 per unit cost. Staff proposes to the addition of Advanced Digital Cable Equipment Deposits for those customers electing to subscribe to services utilizing the HD/DVR DCTs. The unit cost on average is for the HD/DVR DCT is $500.

(2) Establishing New Rates for Premium Services

The current five-year budget calls for 3% increases in all pay services starting July 1, 2006. The reason for the increase is to offset in the cost of the programming which have increased by more than 10% since the last pay service rate increase in July 2003. Only the customers choosing the optional pay services will see the 3% rate increase.

This rate will take effect on July 1, 2006.

(3) Establishing Cable Card Rate for Digital and HD Service

TV Manufacturers have included cable card slots in TVs for three years. The cable card takes the place of a digital cable terminal (DCT) but does not provide two way services such as TV Guide Interactive or PPB. Staff recommends that cable cards be sold at a retail price of $80 (plus sales tax) to the customer and that the monthly programming service charge for digital cable services be set at $6 per subscriber per month. This amount would be consistent with current programming charges provided through a DCT.

This service is planned to rollout to customers in the fall.

(4) Establishing New Cable Advertising Rates for Spot Cable and Video ProductionServices

Staff proposes to (1) raise rates on the Cable Advertising Rate Card for all ad supported networks, (2) provide new discounts for customers purchasing advertising, (3) provideStaff the discretion to move ad support networks within the approved rate card structure without Board approval, (4) clarify existing video production service offerings and (5) establish new video production services. (See C-5/8-9)

(5) Establishing New Residential and Business Cable Modem Rates

Nearly six years ago, the Board established cable modem speeds and pricing for Residential/business customers. The acceptance of this service by our customers has been unprecedented. Today, FPB serves about 8,300 customers representing nearly 48% of our basic cable customer base. As online applications have progressed, customers have been vocal about the need for faster speeds and more user friendly service offerings. (See C-5/10-11)

Staff recommends that the following cable modem service offerings be considered by the Board:

(1) Divide the service between residential and business customers.
(2) On the residential offering, add five new speeds and pricing to include email and ISP services.
(3) On the business offering, add four new speeds and pricing to include email and ISP service.
(4) Allow customers to stay in current offering without price increases.

Staff is working on a mid-July rollout to customers on a planned node-by-node strategy.