SPECIAL UTILITY COMMITTEE

A Special Utility Committee meeting was held on January 2, 2008 at 6:31 p.m. with Chairman Ruane presiding. Members present were Mr. Leary, Mr. McGiffin, Mr. Cregar, and Mr. Snaman. Members of Council present were Mr. Slavin, Mr. Hogan (arrived at 7:20 p.m.), Mr. Salters, Council President Williams. Mayor Carey was also present.

AGENDA ADDITIONS/DELETIONS

Mr. McGiffin moved for approval of the agenda, seconded by Mr. Snaman and unanimously carried.

Public Hearing - Draft Cable Franchise Agreement – Verizon Delaware LLC

During their meeting of December 10, 2007, members scheduled a public hearing at this time and place for the purpose of reviewing the Franchise Agreement with Verizon Delaware LLC. Mrs. Mitchell, Finance Director/Treasurer, reminded members that in January 2007, the City received a request for a cable franchise from Verizon in order to offer FiOS TV services to the residents of Dover. A sub-committee was formed, consisting of Mr. Ruane, Mr. Carey, Mrs. Mitchell, Mr. Lunt, and Mr. DePrima to review the request. She advised members that the City obtained the services of Mr. Dan Cohen of Cohen Law Group to assist the City in negotiations with Verizon for the cable franchise. After several negotiation sessions and draft agreements, she stated that a final draft agreement has been developed that is felt to be fair and equitable to both the City and Verizon, as well as providing the citizens with an alternative provider.

Members reviewed the Executive Summary of the Cable Franchise Agreement with Verizon Delaware, LLC, dated December 21, 2007, prepared by Mr. Cohen. In response to questions previously raised by members of the committee and Council, Mr. Ruane noted the receipt of a memorandum from Mr. Cohen dated December 26, 2007 (Attachment #1). Since there was no request of members for further discussion regarding the responses, Mr. Ruane requested that the City Clerk enter the memorandum into the record.

After conducting a final review of the Agreement, Mrs. Mitchell advised members of the following corrections:

1)At the top of page 5, continuation of Section 1.20, third line, the word “Pennsylvania” should be replaced with “Delaware”.

2)At the bottom of page 7, Section 1.38.2, first sentence, the reference to subsections “1.37.1.1, 1.37.1.2 and 1.37.1.3" should be replaced with “1.38.1.1, 1.38.1.2 and 1.38.1.3”.

Mr. Ruane advised members that an engineer from Verizon will be meeting with representatives of the City to review any challenges that the connection may present in terms of setting up the government channel. He stated that there may be a need to include language in the final Agreement for any issues that may result from this technical review. He advised members that he has received questions regarding Exhibit A, which is the list of buildings that are to be provided with free cable service, and suggested that members re-review the list to assure its completeness. Responding, Mr. McGiffin stated that Campus Community High School is not included on the list. Mr. Salters stated that Because We Care is also not included on the list although it is considered a Chartered Alternative School that provides service to all school districts in Kent and Sussex Counties. Mr. Ruane suggested that members review Section 3.5 of the Agreement, as it relates to providing cable service, to determine if these types of concerns are addressed.

Mr. Ruane declared the public hearing open.

Mr. John Willson, 150 Turner Drive, advised members that he recently acquired FiOS services from Verizon, which included telephone and Internet services; however, he is lacking the television service through FiOS. He stated that the agreement will allow for the televison service to be included and allow him to pay for all three (3) services one (1) time each month. He noted that Comcast television service includes local stations and questioned if the FiOS cable would include the three (3) local stations (not Baltimore or Philadelphia). Mr. Willson also felt that he would realize a savings as a result of the combination of the bills.

Mr. John Endres, 252 Pine Street, relayed no objections to the FiOS service. As a retired telephone serviceman, he stated that he understands the operations of the telephone companies. As a current customer of FiOS, he advised members of recent trouble calls he made and the delayed response time received. Mr. Endres stated his only concern for this additional service is relative to the response time.

Mr. William R. Allen, President of Verizon Delaware, relayed appreciation to the City staff and the committee for their work on this Agreement. He gave a Power Point Presentation (Attachment #2) and explained that the FiOS family of services is the result of extensive upgrades to the telecommunication network for Verizon. He stated that the FiOS service is Verizon’s next generation broadband network, which delivers a high band with Internet, voice, and video services. The upgrade has already been completed for approximately 70%-75% of the homes in the City of Dover. With the approval of the Franchise Agreement, Mr. Allen stated that Verizon will be able to complete the triple play and bring FiOS television services to the City of Dover.

In response to concerns relayed by Mr. Willson regarding local television stations, Mr. Allen stated that FiOS service customers in the City of Dover will receive Philadelphia, Baltimore, and Saulsbury network channels. Specifically, Mr. Allen stated that WBOC, WMDT, and WTXF (Fox 29) are included in the channel line up. He reviewed other channels that will be made available to customers including various languages, diversity, international, etc.

Mr. Allen stated that Verizon looks forward to bringing this innovative new service and the benefits of cable choice to the citizens of Dover. He noted that FiOS truly is a premium service that will be provided by a company that has been serving the community for over 100 years.

Responding to Mr. Snaman, Mr. Allen stated that the monthly fees will be dependent upon what the customer wishes to purchase. However, he stated that the basic premium package provided by Verizon, which includes 200+ channels of digital FiOS television, will be made available at a monthly fee of $47.99. As Verizon begins to provide this service to residents of Dover, he stated that there will be promotions offered for customers that sign up for service with terms, combining services, etc. He assured members that Verizon will offer competitive prices.

In response to Mr. McGiffin, Mr. Allen reminded members that Verizon was once known as Diamond State and Bell Atlantic and has been in existence for over 100 years. In the last three (3) years, in Delaware, the philanthropy giving from Verizon has averaged $250,000 per year. Verizon, as its foundation, has approximately $70M in philanthropy that it offers internationally. In addition, Mr. Allen stated there is a network of 150 employees in Dover and over 1,000 in the State of Delaware and this group of employees volunteered over 3,330 hours of their time in 2007. He explained that Verizon offers programs whereby, depending upon where the employees volunteer, for every so many hours that they volunteer, the Verizon Foundation will make grants to those organizations, which allow employees to direct where some of the Foundation dollars are contributed. Mr. Allen stated that the Verizon Foundation is very much committed to improving literacy and preventing and raising awareness on issues such as domestic violence, explaining that it is the belief of Verizon that technology can improve lives.

Referring to the concerns raised by Mr. Endres, Mr. Leary requested an explanation of the customer service that will be offered. Mr. Allen stated that FiOS services has presented a problem due to its tremendous success. He stated that, as a company that has served customers for over 100 years, Verizon knows how to offer quality customer service and assured members that they will continuously strive to improve in this area.

Ms. Denise Reidy, Franchise Manager with Verizon Communications, advised members that in accordance with the Agreement, Verizon has agreed to conduct Service Availability Meetings with representatives of the City twice each year. In addition, Verizon is assigning a Franchise Service Manager who the City can contact anytime and who will be able to address any concerns or issues that may arise relative to the Franchise Agreement or franchise service availability. Ms. Reidy stated that it was felt that these components, combined with their services, will ensure that Verizon will provide great services to the City of Dover. Responding to Mr. Ruane, Ms. Reidy indicated that the Franchise Service Manager for Dover will be Mr. Darien Gill and stated that contact information will be provided to Mrs. Mitchell.

Mr. Ruane noted that the most popular question being asked by residents is in regards to the service becoming available to them. Responding, Mr. Allen stated that customers should be referred to www.verizon.com/fiostv and explained that the customer would enter their telephone number which will generate a response within 30 seconds as to the availability of the service. He stated that 3/4 of the residents of the City of Dover will receive a positive response and that the remaining 1/4 of the residents will be provided approximate dates of when the service will become available. Mr. Ruane requested that Verizon provide a telephone number for those residents that do not have Internet service.

With the numerous African Americans in this country, Mr. Salters suggested that Verizon direct their attention to provide more programming for these customers.

Mr. John Kerns stated that he resides outside the City limits and relayed his concern that the residents of Kent County will not be provided quality service as a result of the Agreement. He felt that Verizon is “cherry picking” their customers and that such a split will cause problems. He explained that his observation is that Verizon tends to take “the lesser approach” which has made commercial development difficult. Mr. Kerns stated that if Verizon provides nothing better than Comcast, the City will be adding another problem rather than creating a solution. He questioned if Verizon would truly keep their promise in terms of the service they will provide to the City of Dover.

Responding, Mr. Ruane suggested that Mr. Kerns contact the Public Service Commission regarding his concerns, explaining that Verizon has an agreement with the Public Service Commission for those customers that do not reside within a municipality. Mr. Ruane also noted that there are representatives from Verizon, as well as Comcast, in attendance who may be willing to meet with Mr. Kerns after the meeting to further discuss his concerns.

There being no one else wishing to speak, Mr. Ruane declared the public hearing closed.

Mr. Ruane referred to correspondence received from several residents and requested that the City Clerk make them a part of the record (Attachments #3).

Responding to Mr. Salters, Mr. Ruane stated that upon confirmation that the Because We Care alternative school is within the definition provided in Section 3.5 of the Agreement, it will be added to the list provided as Exhibit A.

Mr. Ruane noted that the only remaining issues that would need to be finalized prior to Council’s consideration of the Agreement would be the list provided as Exhibit A and the connection issue regarding the government channel.

Mr. Leary moved to recommend approval of the Franchise Agreement, as amended (Attachment #4), with the understanding that Exhibit A and the connection issue will be resolved prior to its presentation to Council on January 14, 2008. The motion was seconded by Mr. Snaman and unanimously carried.

Mr. Leary moved for adjournment, seconded by Mr. McGiffin and unanimously carried.

Meeting Adjourned at 7:25 P.M.

                                                                                    Respectfully submitted,

                                                                                    Eugene B. Ruane

                                                                                    Chairman

EBR/TM/jg

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Attachments

Attachment #1 - Memorandum from Mr. Cohen dated December 26, 2007 (to Original Minutes and File Copy)

Attachment #2 - Verizon Presentation (to Original Minutes and File Copy)

Attachment #3 - Correspondence Received (to Original Minutes and File Copy)

Attachment #4 - Cable Franchise Agreement with Verizon Delaware LLC