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130 <br /> <br /> Mr. Brian Grogan, the City's cable television <br />consultant, discussed rate regulation issues with Council via <br />a speaker phone. Mr. Grogan explained that the City is the <br />only entity that can regulate the basic tier of cable <br />services, regulation of the expanded tier of services can be <br />done by the FCC if triggered by the City or a subscriber, and <br />no one regulates special movie channels, etc. Mr. Grogan <br />stated that Adelphia cable has stated that its benchmark rate <br />is $13.20 and Adelphia's current basic rate is $8.70 and in <br />Mr. Grogan's opinion, if Council does not become certified <br />prior to the end of the rate freeze on November 15th, then <br />the basic rate could become $13.~20 since Council could lose <br />it's ability to set a rate below the benchmark level. Mr. <br />Grogan stated that he felt Adelphia's argument that it will <br />have to initiate a rate increase proceeding should the City <br />become certified now is illogical. <br /> <br /> 'Responding to a question from Ms. Slaughter, Mr. Grogan <br />stated that no mechanism exists for the City to "decertify" <br />at this time, but Council could choose not to exercise its <br />power by taking no action when notified of a rate increase, <br />or the cable operator could challenge the City's ability or <br />right to regulate. Mr. Grogan added that the City could-take <br />either a very active or.~passive role in regulating rates.-- <br /> <br /> Rev. Edwards asked how Adelphia could legally justify <br />raising its rates up to the benchmark level and considered <br />Adelphia's comments regarding having to raise their rates to <br />be a threat against the City. Rev. Edwards asked whether <br />comments made by Adelphia's representatives at the previous <br />Council meetings that they did not intend to raise rates <br />could be legally binding. <br /> <br /> Mr. Grogan stated that the FCC would only consider "cost <br />of service" arguments when considering whether a rate <br />increase is justified and stated that he did not know if <br />the comments made by Adelphia about not raising rates would <br />be legally binding. <br /> <br /> With regard to regulation of the expanded tier of <br />service, Mr. Grogan stated that he felt the requirement to <br />state that the expanded tier rates are "unreasonable" is a <br />misnomer but felt the FCC's hands were tied by legislation. <br />Mr. Grogan stated that the form triggers regulation by the <br />FCC of these rates in a manner similar to that of the City's <br />regulating basic rates. Mr. Grogan stated that the deadline <br />for filing the form 329 is February 28th but he was <br />uncertain whether waiting until that date would prevent the <br />City from taking advantage of any rollbacks prior to that <br />date. <br /> <br /> Mr. Clyde Gouldman, City Attorney, asked what the <br />implications were if form 329 was filed after February 28th <br />and Mr. Grogan explained that after February 28th the <br />complaint could only be made for subsequent rate increases. <br /> <br /> Mr. Jim McKay, attorney for Adelphia Cable, stated that <br />if the City rushes into rate regulation it will be forcing <br />Adelphia to consider a rate increase. <br /> <br /> Mr. Vandever questioned how Adelphia can say that they <br />do not intend to raise rates if the City chooses not to <br />become certified but is also claiming that their basic rates <br />are unreasonable. <br /> <br /> Mr. McKay stated that Ade!phia's rates were set during <br />the rate freeze and are therefore low. <br /> <br /> Mr. Toscano expressed concern about Adelphia's arguments <br />and "threats." Mr. Toscano stated that he felt the City has <br />made efforts ~o try to compromise with Adelphia, but he'did <br />not feel the City should risk losing the ability to maintain <br />the current rate of $8.70 as the base rate. <br /> <br /> <br />